CIPS L6M5 Exam With Confidence Using Practice Dumps

Open-Book Costing (p.2.1) ensures visibility into supplier costs and margins, which matches the CEO’s request.

Cost Reimbursable (B) covers unknown costs, but does not provide transparency.

Bottom-Up Pricing (C) estimates project costs from smaller parts.

Activity-Based Costing (D) assigns costs per activity, but does not guarantee supplier transparency. [P.2.1]

A Payback Analysis (p.72) calculates how long it takes for a project to recover its initial investment. It accounts for project duration but does not provide a rate of return (Option C). Discount factors (Option D) are used in Net Present Value (NPV) analysis, not Payback Analysis. [P.72]

A screenshot of a computer Description automatically generated

Project 1 - Parametric & Positional Power

Parametric estimation uses an algorithm based on existing data to estimate project costs.

Positional power applies because the leader is the founder of the organisation.

Project 2 - Analogous & Expert Power

Analogous estimation uses historical project data to estimate costs, aligning with the Head of R&D using past projects.

Expert power applies since the project lead is a PhD-qualified Data Scientist.

Project 3 - Bottom-up & Positional Power

Bottom-up estimation involves creating a Bill of Materials and summing up individual costs, which matches this project.

Positional power applies because the project leader is a key stakeholder.

Project 4 - 3-Point Estimate & Negative Power

3-Point Estimation calculates the best, worst, and most likely cost scenarios, matching the given description.

Negative power applies because the leader has the authority to cancel the project at any time.

Project 5 - Expert Judgement & Personal Power

Expert Judgement applies because the leader used his own research to determine the budget.

Personal power applies because the project leader is well-liked and selected a team he is comfortable with.