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Exam PgMP topic 1 question 74 discussion

Actual exam question from PMI's PgMP
Question #: 74
Topic #: 1
[All PgMP Questions]

You are the program manager for your organization and you're trying to determine if you buy or build a software solution for your organization. If you build the solution it'll cost you $75,000 to create and it'll cost you $12,000 per month to support. If you hire a vendor they can build the solution for $63,000 but their solution will cost you $15,500 per month to support. How many months would you have to use your in-house solution to equate to the cost of the vendor's solution?

  • A. Approximately 6 months
  • B. You'll never be able to equate to the cost of the vendor's solution.
  • C. Approximately 3.5 months
  • D. Approximately 10 months
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Suggested Answer: C 🗳️
by Stu1900 at July 7, 2021, 3:06 p.m.

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yuencool
9 months, 3 weeks ago
Keep it short: ( 75000 – 63000 ) / ( 15500 - 12000) = ~3.5
upvoted 4 times
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UHS
1 year, 2 months ago
Build year 1 (75000+12000) = 87000, yr 2 87000+12000 = 99000; yr 3 99000+12000= 111000; Yr 4 111000+12000 =123000 Buy year 1 (63000+15500)=78500; yr 2 78500+15500 = 94000; yr 3 94000+15500 = 109500; yr 4 109500+15500 =125000 as you can see year 4 build is less than buy and if you do the calculation for 6 months you'll see it's about 3.5 months for the build cost to be lesser than buy cost. Hope that helps. Maybe there's an actual formula for it too
upvoted 1 times
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UHS
1 year, 2 months ago
Build year 1 (75000+12000) = 87000, yr 2 87000+12000 = 99000; yr 3 99000+12000= 111000; Yr 4 111000+12000 =123000 Buy year 1 (63000+15500)=78500; yr 2 78500+15500 = 94000; yr 3 94000+15500 = 109500; yr 4 109500+15500 =125000 as you can see year 4 build is less than buy and if you do the calculation for 6 months you'll see it's about 3.5 months for the build cost to be lesser than buy cost. Hope that helps. Maybe there's an actual formula for it too
upvoted 1 times
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UHS
1 year, 2 months ago
Build year 1 (75000+12000) = 87000, yr 2 87000+12000 = 99000; yr 3 99000+12000= 111000; Yr 4 111000+12000 =123000 Buy year 1 (63000+15500)=78500; yr 2 78500+15500 = 94000; yr 3 94000+15500 = 109500; yr 4 109500+15500 =125000 as you can see year 4 build is less than make and if you do the calculation for 6 months you'll see it's about 3.5 months for the build cost to be lesser than buy cost. Hope that helps. Maybe there's an actual formula for it too
upvoted 1 times
...
Stu1900
2 years, 10 months ago
Please can you show the workings for this answer
upvoted 1 times
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