Market studies projected a 28% year over year growth for five (5) years for commercial...

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Market studies projected a 28% year over year growth for five (5) years for commercial vehicle loans. A company that provides lending for commercial vehicles wanted to keep up with industry demand; however, their applications were not capable of scaling to the increased demand for loan processing and billing. The company is deploying a new system to meet the demand. The project started five (5) years ago and cost S2 million USD. The project metrics are to be evaluated after five (5) years. The return on investment (ROI) for the project is calculated at 11%. The project sponsors are upset that the desired ROI for the project was not met. The actual demand for commercial vehicle loans for the past five (5) years is as follows:

Risk planning

flowed assumptions

Demand forecasting

Capability planning

Explanation:

The issue that caused the project sponsors to be upset that the desired ROI for the project was not met is flawed assumptions. Assumptions are statements that are accepted as true or certain without proof or evidence. Assumptions can affect the planning, estimation, and execution of a project or a solution. In this case, the project sponsors assumed that the market studies projected a 28% year over year growth for five years for commercial vehicle loans, but the actual demand was lower than expected.

The other options are incorrect because:

Option A is incorrect because risk planning is not an issue that caused the project sponsors to be upset that the desired ROI for the project was not met. Risk planning is a process of identifying, analyzing, and responding to potential threats or opportunities that may affect a project or a solution. Risk planning can help to mitigate or avoid negative risks and exploit or enhance positive risks.

Option C is incorrect because demand forecasting is not an issue that caused the project sponsors to be upset that the desired ROI for the project was not met. Demand forecasting is a process of estimating or predicting the future demand for a product, service, or solution based on historical data, market trends, customer behavior, etc. Demand forecasting can help to optimize resource allocation, inventory management, pricing strategy, etc.

Option D is incorrect because capability planning is not an issue that caused the project sponsors to be upset that the desired ROI for the project was not met. Capability planning is a process of determining and developing the capabilities or skills that an organization needs to achieve its goals or outcomes. Capability planning can help to enhance organizational performance, competitiveness, and innovation.

References:

BABOK Guide v3, section 10.2: Assumptions and Constraints

CCBA Exam Questions, question 13

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