Question

1 You are the project manager in an engineering project and have recently signed a contract with a software vendor for the development of a complicated control solution. The software will be used to control machinery equipment which your project team is currently developing. The contract is a lump-sum contract. The contractor has target cost estimated which seem rather low to you. Which of the following statements is not true for this situation?

a It is the contractor's risk in this type of contract that their profit may vanish if costs have been underestimated.

b This form of contract should only be chosen when all the requirements for the building of the product are well-known by all parties involved.

c In a fixed-price contract, change requests can cause issues regarding additional time and extra costs for the changes to be applied.

d It is likely that your organization may have to assume any unexpected additional costs for the software development.

2 A review to determine whether of project activities comply with organizational and project policies, processes, and procedures is commonly called

a Quality auditing

b Inspection

c Quality testing

d Reject screening

Answer 1

1)Option D. since there might be additional changes or requirements in future which may alter the costs of development.

2) Option A. Quality Auditing which is done to review compliances of the existing policies and procedures and provide suggestions for improvements.