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Oliver 75 - 37th Question

jyotimayank
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Oliver 75 - 37th Question

Postby jyotimayank Wed May 04, 2016 11:00 am

Question 37. You have recently been assigned as a project manager to a new B-O-T (build, operate, transfer) capital project. Reviewing the initial documentation you found out that it has been calculated with a very small margin during operations of its product for the shareholders. What should you do?

A. As you are not responsible for lifecycle costing, you don't have to worry about operation profits. Focus on project costs from initiation through handover.
B. Ensure maximum profits by buying the best and cheapest items, components and modules―potentially from a big number of different suppliers―and integrating them.
C. Create a realistic plan broken down to a sufficient level of detail. Perform all risk management processes. Ensure real-time communications with all stakeholders.
D. Try to get a second project manager assigned to share decision making and accountability to shareholders with the person.
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Re: Oliver 75 - 37th Question

Postby sarthy Wed May 11, 2016 6:41 am

I think C
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Re: Oliver 75 - 37th Question

Postby jyotimayank Wed May 18, 2016 12:16 pm

Yes Option C is the right answer.

BOT (Build/Own/Transfer) projects are public infrastructure projects which employ a particular form of structured financing. The lead time of a BOT project is very long, and associated up-front costs are significant. Such projects are complex by virtue of the number of parties involved and the corresponding number of contracts, which must all interlock. Furthermore, each party is dependent upon the performance of not only its counterpart, but also the performance of all parties to the project.


BOT projects are generally structured on a project basis requiring all parties to share the risks of the project. Project risk sharing is necessary because the sponsor, a joint venture of one sort or another, will have a limited worth being substantially less than the aggregate net worth of the equity parties.

Refer to page 309-317 of PMBOK® Guide Fifth Edition

For more insight of this topic refer to the following video

http://www.izenbridge.com/videogallery/ ... zenbridge/
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Re: Oliver 75 - 37th Question

Postby abhavisetty Tue Dec 06, 2016 10:44 pm

May I ask if Project manager is responsible for Life cycle costing ? which includes the Operations too ? If not how is the option C valid ? where it says , the PM is creating the realistic plan for operations !!
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Re: Oliver 75 - 37th Question

Postby saket Fri Dec 09, 2016 1:50 am

The questions says that project is BOT (B-O-T (build, operate, transfer) so project manager does have to pick risks related to operations.
In general now a days project managers are expected to develop understanding of project by looking at life cycle cost. if you see some risks coming in Operate , as project manager you have to raise and mitigate it.

If you are Project Manager of launching the new car for TATA, will you not consider risk which can come when car is in production ?
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