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1. Does the use of external resources like contractors and vendors increase project risk or decrease it?
Increases risk. Contractors and vendors can create delays and quality problems.
Both. The external resources are often used to decrease risk of technical capability or resource availability, but it does add a risk associated with procurement management.
Neither, it has no impact on risk.
2. What is a Make versus Buy analysis on a project?
A comparison of the complete project impact if a project activity is accomplished by internal resources and if it is accomplished by external resources.
A cost trade-off between potential suppliers for conducting project activities.
Make versus Buy is not a project analysis. It only applies to production raw materials and components.
3. Under what conditions would you use a Cost Reimbursable contract for project work?
Use a cost reimbursable contract when the project activity cannot be defined and therefore the supplier is unable to provide a fixed price quotation.
Use a cost reimbursable contract when you know what the costs will be ahead of time and therefore everyone understands what the costs are.
Never use a cost reimbursable contract, it is too risky.
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