Procurement Management Question 24

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The sponsor and the project manager are discussing what type of contract the project manager plans to use on the project. The buyer points out that the performing organization spends out a lot of money hiring a design team to come up with the design. The project manager is concerned that the risk of the buyer is as small as possible. An advantage of the fixed price contract for the buyer is :-

a) Cost risk is lower
b) Cost risk is higher
c) There is little risk
d) Risk is shared by all parties

[admin]

The correct answer is A.

If you had trouble with this one, you need to remember that the questions are asked from the buyer’s perspective unless otherwise noted. In this case the seller has the most cost risk, and the buyer’s risk is lower.

Pass PMP in the First Attempt : PMP Strategy

Revise Procurement Management Concepts: Project Procurement Management

Quiz:
20 Questions Challenge
50 Questions Challenge

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