CIPS L6M5 Exam With Confidence Using Practice Dumps

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Project 1 - Full Turnkey & Top-down Pricing

The project is a full turnkey contract because XYZ is responsible for both design and construction, and ownership is transferred to the client upon completion.

The pricing mechanism is top-down, as it is determined based on past experience of similar projects.

Project 2 - Design and Operate & Rolling Pricing

This is a design and operate contract since XYZ is managing the facility for 6 years after construction.

The rolling pricing mechanism applies because the budget changes continuously over the years due to industry volatility.

Project 3 - Management Contracting & Zero Pricing

Management contracting applies because XYZ was involved early but does not carry design risk.

The pricing mechanism is zero, meaning the budget resets at the beginning of each new accounting period.

Project 4 - Partial Turnkey & Activity-Based Pricing

This is a partial turnkey contract because XYZ is responsible for only certain aspects of the design and build, while another contractor is also involved.

Activity-based pricing is used since XYZ is paid upon milestone completion.

Project 5 - Design Build Operate and Ownership & Bottom-up Pricing

This project follows a Design Build Operate and Ownership (DBOO) model because XYZ is responsible for construction and will operate the toll bridge for 6 years before transferring full control.

The pricing is bottom-up, as it includes raw materials, labor costs, and a profit margin.

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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.

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]