In the context of software development projects, a program manager was faced with the following choice last year:He had to option of going with a vendor who proposed a bid which was partly based on future integration costs that were beyond their control. Analysis suggested that total final cost for the program would come somewhere between 70K and 200K, based on the program managers’ past-experiences. He commissioned an internal study to determine whether an in-house development effort (which would not be subject to any uncertainty due to integration) would cost more than 165K, thinking that he would take his chances with the vendor if the in-house work would cost more than 165K.
Determine the manager’s risk tolerance based on the above information.