CPM Risk Management & Procurement Flashcards
6 cards from real CPM practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 CPM Risk Management & Procurement flashcards as text
In CPM risk management, the contingency reserve is BEST described as:
Answer: Budget allocated to address known-unknown risks identified in the risk register
Contingency reserves cover identified risks (known-unknowns) and are part of the project cost baseline, managed by the project manager.
Which procurement document is used when the buyer needs standardized products or services at the lowest possible price?
Answer: Invitation for Bid (IFB)
An IFB (also called Invitation to Tender) is used when requirements are clearly defined and price is the primary selection criterion.
A secondary risk in CPM project management is BEST defined as:
Answer: A risk that arises as a direct result of implementing a risk response
Secondary risks emerge as unintended consequences of risk response actions and must be assessed and managed in the risk register.
According to CPM best practices, which contract type provides the MOST incentive for the seller to control costs?
Answer: Fixed Price Incentive Fee (FPIF)
FPIF contracts allow the seller to earn additional fee when costs come in below target, directly incentivizing efficient cost management.
A CPM project manager is creating a risk register. Which of the following is NOT typically included in a risk register?
Answer: Project sponsor's annual salary
The risk register contains risk descriptions, owners, ratings, and responses — personal compensation data is not a risk management artifact.
Which risk analysis technique uses computer modeling to simulate thousands of possible project outcomes to assess schedule and cost risk?
Answer: Monte Carlo Simulation
Monte Carlo Simulation runs thousands of iterations using probability distributions for uncertain variables to produce a range of possible project outcomes.