The risk manager evaluates two contractors, contractor A and contractor B, for a project with a finish date of 15 December. The contractors’ bids are the same, including the cost. After performing a Monte Carlo assessment on the contractors’ schedules, the risk manager returns the following information:
In order for contractor A to meet the finish date of 15 December, it will cost an additional US$750,000, and will not change the confidence level.
In order for contractor B to meet the finish date of 15 December, it will cost an additional US$600,000, and will increase the confidence level by 10%.
Which contractor should the risk manager select?
A. Contractor A, based on the probability and confidence levels, as there is a higher cumulative probability of completion by 15 December.
B. Contractor B, based on the probability and confidence levels, as there is a higher cumulative probability of completion by 15 December.
C. Contractor B, based on costing US$150,000 less than contractor A.
D. Contractor A, based on the confidence level.
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