1. You are planning to manufacture a new product. Your project estimate is $350,000 & 180 days. In addition, your risk management team has come up with the following risks:

10% chance of a major change to the project, costing the project $60,000 and a 30 day delay. 5% chance of hiring an expert resource saving the project $20,000 and expediting the work by 10 days. 25% chance a software will be delayed from the vendor, resulting in an extra $10,000 cost and a 5 day delay For the above scenario, please choose the correct choice from the following:

A. Baseline Case is $330,500

B. EMV Case is $375,500

C. Worst Case is $440,000 D. Base Case is $370,000 E. Best Case is $330,000

Q 2. Technology Systems (TS) Inc. is planning to embark on a large strategically significant project that is estimated to cost $250 Million. The success of this initiative could result in the company becoming one of the primary suppliers of nuclear power to the Province of Ontario and the owner of proprietary technology. However, the management team is very concerned about the potential risk profile of the project, public reaction and the negative publicity received so far.

The Steering Committee has asked David Jefferson, the Project Manager, to develop and present a comprehensive risk plan for presentation to the Board of Directors in two weeks. Jayne Meeks, the V.P. of Strategic Projects and Project Sponsor, has indicated that the risk assessment should go beyond the traditional methods used by TS in order to give the board greater confidence in the company's ability to assess and manage threats. She feared that the traditional methods may be largely based on personal judgment and therefore tended to be subjective. One concern is whether the estimate for completion of the project (14 months) was realistic, and since this project is a major priority based on provincial government requirements, it is critical to get it right.

Jayne was also very interested in the strategies that would be adopted to address the identified risks and how the team planned to ensure that these were carefully monitored to ensure immediate and appropriate corrective action.

David immediately called his team together for an urgent risk planning session. He knew that this was the single most important assignment of his career and that success was dependent on a strong team, adopting best practice processes and tools and the ability to respond to risk in a proactive way. He is concerned that completing the project on time, within budget and scope while minimizing threats and improving public perception, maybe quite a challenge.

Based on the Technology Systems (TS) Inc. scenario, answer the following question:

David knows that the sponsor would like a detailed analysis of options presented to determine the consequence of choosing one alternative over another. Management is clearly very concerned about potential profit or loss from this investment. David believes the best way of doing is to use:

A. Expected Value Analysis

B. Computer Modeling Techniques

C. Probability Distribution D. Decision Tree Analysis E. Brainstorming techniques

Q. 3 Tom is a project manager for an accounting project. His company wants to streamline its payroll system. The project is intended to reduce errors in the accounts payable system and has a 70% chance of saving the company $200,000 over the next year. It has a 30% chance of costing the company $100,000. What's the project's Expected Value?

A. $200,000

B. $100,000

C. $170,000

D. -170,000

E. -$110,000