CPM CPM Risk Management & Procurement 2 — Questions and Answers
Question 1: A CPM project manager is evaluating two vendors using a weighted scoring model. Vendor A scores 85 on quality (weight 40%) and 70 on cost (weight 60%). What is Vendor A's weighted score?
- 76 (Correct answer)
- 77.5
- 78
- 75
Correct answer: 76
Weighted score = (85 × 0.40) + (70 × 0.60) = 34 + 42 = 76.
Question 2: Which type of contract places the GREATEST financial risk on the buyer?
- Cost Plus Percentage of Cost (CPPC) (Correct answer)
- Firm Fixed Price (FFP)
- Fixed Price Incentive Fee (FPIF)
- Time and Materials (T&M)
Correct answer: Cost Plus Percentage of Cost (CPPC)
CPPC reimburses all costs plus a percentage of those costs as profit, giving the seller no incentive to control spending — maximizing buyer risk.
Question 3: The risk response plan for a CPM project identifies a residual risk. What is a residual risk?
- A risk that remains after risk response strategies have been implemented (Correct answer)
- A newly identified risk discovered during execution
- A risk that has been fully transferred to a third party
- A risk with zero probability after mitigation
Correct answer: A risk that remains after risk response strategies have been implemented
Residual risks are those that persist after planned risk responses have been applied and must be monitored throughout the project.
Question 4: In CPM procurement, a Request for Proposal (RFP) is BEST used when:
- The buyer needs both a price and a detailed technical solution from sellers (Correct answer)
- The buyer only requires a price quote for commodity items
- The contract will be cost-plus with no technical requirements
- The project scope is fully defined and non-negotiable
Correct answer: The buyer needs both a price and a detailed technical solution from sellers
An RFP solicits comprehensive responses including technical approaches, methodologies, and pricing for complex or non-standard requirements.
Question 5: Which risk management process involves reviewing risk trigger conditions and determining whether risk responses are working effectively?
- Monitor Risks (Correct answer)
- Identify Risks
- Perform Qualitative Risk Analysis
- Plan Risk Responses
Correct answer: Monitor Risks
Monitor Risks tracks identified risks, identifies new risks, evaluates risk response effectiveness, and updates the risk register throughout the project.
Question 6: A CPM project manager uses a decision tree to evaluate two project paths. Path A has a 60% chance of a $100,000 gain and a 40% chance of a $40,000 loss. What is the EMV of Path A?
- $44,000 (Correct answer)
- $60,000
- $56,000
- $40,000
Correct answer: $44,000
EMV = (0.60 × $100,000) + (0.40 × -$40,000) = $60,000 - $16,000 = $44,000.
CPM CPM Risk Management & Procurement 2
A CPM project manager is evaluating two vendors using a weighted scoring model.
Vendor A scores 85 on quality (weight 40%) and 70 on cost (weight 60%).
What is Vendor A's weighted score?