A decision chart can help a project manager decide which contractor to choose for a project's critical path activities. In this example, there are two contractors being considered for the same project, both of which promise successful delivery and high-quality work. However, it is necessary to consider the cost of each contractor as well as the potential penalty for any delays before making a decision. Contractor 1 bid $250,000 but carries a 30% risk of delivering 60 days late. Contractor 2 bids $320,000 but carries a 10% risk of delivering 20 days late. Both contractors carry a penalty of $5,000 per day if the project is delivered late.
