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Oliver 75 - 55th Question

Posted: Thu Apr 21, 2016 7:25 am
by jyotimayank
55. You are the project manager in an engineering project and have recently signed a contract with a software vendor for the development of a complicated control solution. The software will be used to control machinery equipment which your project team is currently developing. The contract is a lump-sum contract. The contractor has target cost estimated which seem rather low to you. Which of the following statements is not true for this situation?

A. It is the contractor's risk in this type of contract that their profit may vanish if costs have been underestimated.
B. This form of contract should only be chosen when all the requirements for the building of the product are well-known by all parties involved.
C. In a fixed-price contract, change requests can cause issues regarding additional time and extra costs for the changes to be applied.
D. It is likely that your organization may have to assume any unexpected additional costs for the software development.

Re: Oliver 75 - 55th Question

Posted: Fri Apr 22, 2016 9:34 am
by sarthy
B

Re: Oliver 75 - 55th Question

Posted: Fri Apr 22, 2016 11:36 am
by Ananyapmp
I think its D

Re: Oliver 75 - 55th Question

Posted: Mon Apr 25, 2016 1:27 pm
by jyotimayank
Yes the correct answer is D.
Most of the PMP® aspirants get confused in the middle of the study of Procurement contract which reduces their chances of clearing the PMP® exam with a good score.

“When we talk about procurement, we are required to think like a buyer even though we are a seller”
The 3 types of contracts are
1. Fixed price- having a fixed scope upfront
2. Cost reimbursable- it is a type of contract where in buyer has to pay the cost involved in their service or goods plus any fee- whatever is the seller spending is reimbursable
3. Time and material- where a seller provides timely and professional service or some goods at a specified rate

Refer to Page 393-396 0f PMBOK® Guide 5th Edition

For more insight of this topic refer to the following blogs/videos

http://www.izenbridge.com/blog/pmp-proc ... e-webinar/
http://www.izenbridge.com/videogallery/ ... webinar-2/

Re: Oliver 75 - 55th Question

Posted: Thu Jun 28, 2018 10:01 am
by leon
Hello,

It's still hard for me to understand on this. Can someone help me to simply on this? Thank you.