Better-Business-Cases-Practitioner Better Business Cases Practitioner Exam Questions and Answers

The assertion is that the conversion of the Old Fire Station Headquarters site should be considered as a non-standard building project for deriving the optimism bias adjustment factor because non-standard building projects involve significant planning and construction risks. This isTrue, and the reason given is alsoTrueand explains the assertion because the presence of significant risks is precisely why it would be categorized as non-standard and why an optimism bias adjustment would be needed.

Correct Option: A

The assertion states that the optimism bias should be set midway between the upper and lower works duration limit to reflect the identified timescale risks becauseoptimism bias should be reduced as each risk is mitigated. This isTrue; however, the reason isTruebut does not correctly explain the assertion. Optimism bias is related to underestimation of risks, not their mitigation.

Correct Option: B

The assertion here is that opposition of staff and students to the move should be categorized as a decant risk because a decant risk arises in accommodation projects related to moving staff and clients. This isTrue, and the reason isTrueand directly explains why such opposition should be considered a decant risk.

Correct Option: A

The assertion that risks to the timetable should be used as the basis for scenario analysis isTrue. The reason given is that sensitivity analysis of Economic Appraisal findings should identify reasons for variances in project assumptions and estimates, which is alsoTrueand provides a correct explanation for using risks in scenario analysis.

Correct Option: A

The final assertion is that the preferred option must consider developing on the Pittville University site to manage all 16-18 education because it has the highest net present social value. This assertion isFalsebecause the preferred option should be the one with the best value for money overall, considering both quantitative and qualitative benefits. The reason is alsoFalsebecause it incorrectly suggests that the option with the highest net present social value automatically demonstrates the best value for money, without consideration of costs or other factors.

Correct Option: E

Therefore, the correct options for each line are A, B, A, A, and E, respectively

The additional on-going cost of electricity for the Pittville University development should be included in the Economic Appraisal as it represents aC. Variable cost. This is because the cost of electricity will vary depending on the level of usage, which is likely to fluctuate with the operational activities of the university development.

The money spent to date on the Old Fire Station Headquarters site feasibility study and legal advice should be included in the Economic Appraisal as aB. Fixed cost. These are costs that have already been incurred and will not change regardless of the scale of the project moving forward.

The cost of a stand-alone technology cabin with a separate contract for specialist call-out support, paid on an as-needed basis, should be included as aD. Semi-variable cost. The base cost of the cabin is fixed, but the call-out support costs will vary depending on the frequency of the need for specialist support.

The Highways Department's upgrade of the access road to the Old Fire Station Headquarters site, even though it will not count against the Pittville project budget, should still be considered in the Economic Appraisal to understand the full economic impact of the project. However, since it does not impact the project budget directly, it could be argued that it isA. NOT included in the Economic Appraisalfrom the project's budget perspective but might be acknowledged in a broader economic impact analysis.

The use of the Old Fire Station Headquarters site, which is owned by the Council and was to be sold but will now be used for the new campus, represents an opportunity cost but not a direct financial cost to the project. Therefore, it might beA. NOT included in the Economic Appraisalas a direct cost but could be considered in terms of forgone revenue or alternative use value in a broader economic analysis.

The need to expand the car park at Pittville University if over 1,500 students attend represents aE. Step cost. This cost will not occur until a certain threshold (in this case, student numbers) is reached, at which point it will increase in a step-like manner.

Let's evaluate each assertion and reason to identify the appropriate options from A to E:

The assertion is that the PPP costs for Marshgate High are NOT relevant to estimating costs for the development of Pittville University. The reason given is that the Reference Project is used to provide an estimate of how much it will cost the public sector using procurement through conventional approaches. This reason does not logically support the assertion because using a reference project like Marshgate High could be relevant for cost estimation by comparison, so the option that applies here isB. True, BUT the reason does not explain the assertion.

The assertion is that the OBC must include the value for money assessment of the PPP schemes to support the Pittville University project details. The reason is that the procurement strategy for how the required services or works can best be procured should be determined in an Economic Appraisal. This reason supports the assertion because part of determining the procurement strategy involves assessing the value for money of different schemes, including PPP. Thus, the option here isA. True, AND the reason explains the assertion.

The assertion is that it would be appropriate for the PPP option to be carried forward to the shortlist, along with the 'BAU/status quo', do minimum and preferred option for the development of Pittville University. The reason is that any form of private project finance should be appraised using the Options Framework filter. This is a correct reason, as all financing options should be appraised to determine the best approach. Therefore, the option isA. True, AND the reason explains the assertion.

The assertion is that the data from the Marshgate High School project should be used to derive the optimism bias adjustment factor for the new Pittville University campus. The reason is that the Economic Appraisal should research accurate costings and review all contributory factors that could lead to cost and time over-runs. This reason supports the assertion because using data from similar projects can help in adjusting for optimism bias, which is part of ensuring accurate costing. Therefore, the correct option isA. True, AND the reason explains the assertion.

The assertion is that the bespoke technology cabin planned for Pittville University should be considered as a non-standard building project for deriving the optimism bias adjustment factor. The reason given is that each project type should be considered as a separate project for the purpose of applying an optimism bias adjustment factor. This reason supports the assertion because if the technology cabin is indeed a non-standard project, it should be evaluated on its own to ensure the adjustment factor is accurately applied. The correct option isA. True, AND the reason explains the assertion.

For each assertion and reason given, the appropriate option from options A to E that applies is as follows:

The option to 'Develop a new campus on the site of the Old Fire Station Headquarters' should be captured on the long list within the Strategic Case.

Reason: The purpose of the long list is to identify a wide range of options that meet the spending objectives, potential scope and benefits criteria.

Appropriate Option: A (True and the reason explains the assertion)

'Underachieving on success rates for qualifications' should be captured under the business need heading in the Strategic Case.

Reason: The business needs in a Strategic Case should include deficiencies in current provision.

Appropriate Option: A (True and the reason explains the assertion)

'Development of learning provision for 14-19-year-olds in Pittville' should be recorded as a key service requirement.

Reason: The key service requirements in a Strategic Case should set out the existing arrangements and explain how services are currently organized, provided and supplied.

Appropriate Option: C (True but the reason is false)

The number of students accommodated by each of the current learning providers should be detailed in the Strategic Case.

Reason: The critical success factors essential to the successful delivery of a scheme should be included in a Strategic Case

Appropriate Option: B (True but the reason does not explain the assertion)

Here are the appropriate options for each line based on the assertions and reasons provided:

Option C: True (Assertion) / False (Reason) - It is appropriate that the contract includes price variations dependent on the LEA's ability to downsize. However, the reason given is false because a Commercial Case outlines how payments will be made but does not necessarily include contract price variations based on downsizing capacity.

Option E: False (Assertion) / False (Reason) - The assertion is false because the duration of a construction contract usually does not cover the lifetime of the asset; it covers the period of the construction. The reason is also false because a Commercial Case explains the delivery timescales, not necessarily the duration covering the asset's lifetime.

Option A: True (Assertion) / True (Reason) - It is true that the source of funding should be described in the Commercial Case, and the reason is true because the Commercial Case does explain the financial implications to an organization of a negotiated deal.

Option E: False (Assertion) / False (Reason) - The assertion is false; while it is important to identify and cost individual risks, encouraging a service provider to take on risks is not the primary function of the Commercial Case. The reason is also false because optimizing the transfer of risk is not the sole purpose of a Commercial Case; it's about outlining the commercial viability and arrangements.

Option A: True (Assertion) / True (Reason) - It is true that the chosen service provider for the construction should agree to the procurement strategy, and the reason is true because a Commercial Case involves agreeing to the commercial transaction and procurement strategy.

Option A: True (Assertion) / True (Reason) - It is true that the Commercial Case should explain the staff redistribution and redundancies as these are key elements of the commercial terms and conditions of the project which will affect the financial and commercial implications of the scheme.

QUESTION NO 1 HOTSPOT

Using the Scenario, answer the following question.

The following items have been included in the draft risk management strategy, framework and plans.

Lines 1 to 5 in the table below consist of an assertion statement and a reason statement. For each line identify the appropriate

option, from options A to E, that applies. Each option can be used once, more than once or not at all.

A white sheet with black text Description automatically generated

A group of black ovals Description automatically generated

Answer:

Let's evaluate each assertion and reason to identify the appropriate option for lines 1 to 5:

Assertion: It is appropriate that the risk management strategy outlines a series of risk workshops. Reason: The risk management strategy outlines the methods used to identify and mitigate project risks.

Appropriate Option:A(True, True, AND the reason explains the assertion)

Assertion: It is appropriate that the risk management framework describes types of risk: business and service. Reason: The risk register shows the approach to managing project risks.

Appropriate Option:B(True, True, BUT the reason does not explain the assertion)

Assertion: It is appropriate that any risk which could impact workplace health and safety is to be escalated to the SRO. Reason: The risk management strategy shows details of who will be responsible for managing each risk.

Appropriate Option:A(True, True, AND the reason explains the assertion)

Assertion: It is appropriate for the details of individual risks to be included as part of the relevant Strategic, Economic or Commercial Case, rather than maintain a separate risk register. Reason: A risk register is only necessary where risks are NOT specified in the relevant case.

Appropriate Option:E(False, False)

Assertion: It is appropriate that each risk is to be assigned a probability and impact value. These should use the scales defined in the risk management strategy for the Western Area Learning Improvements programme. Reason: Planning for risk management involves putting arrangements in place for the on-going management of risk.

Appropriate Option:A(True, True, AND the reason explains the assertion)

These options were chosen based on the logical connection between the assertions and the reasons provided, considering the typical content of risk management strategies and frameworks in project and program management.

D. Benefit

C. Business need

E. Risk

B. Existing arrangement

The statement about proposed changes being attractive to teachers and leading to improvements in retention addresses the benefits that the project could deliver, hence it is best described as a Benefit.

The mention of past underachievement on success rates for qualifications highlights a requirement or necessity that the project must address, which aligns with a Business need.

The potential for contractual issues and difficulties in remodeling the teaching staff points to possible challenges that could affect project execution, which is indicative of a Risk.

The existence of Pittville University and secondary schools with further education units describes the current setup before project implementation, which is an Existing arrangement.

References:

These associations are made with the context of scoping the proposal and preparing the Strategic Outline Case (SOC) for the Pittville project, where it is crucial to align gathered