PRINCE2F People: organizations, teams, and leadership Practice Question
A project is forecast to exceed its stage cost tolerance. What should the Project Manager do?
Answer choices
Why each option matters
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
Raise an Exception Report to the Project Board
According to PRINCE2's management by exception, if a tolerance is forecast to be exceeded, the Project Manager must escalate to the Project Board via an Exception Report.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
Increase the stage budget using contingency reserves
Why it's wrong here
The Project Manager cannot increase tolerances without Project Board approval.
- ✓
Raise an Exception Report to the Project Board
Why this is correct
This is the correct escalation mechanism when tolerances are forecast to be exceeded.
- ✗
Close the project as the Business Case is no longer viable
Why it's wrong here
The Project Board must decide on viability; the PM does not close the project unilaterally.
- ✗
Continue with the current plan and report the overrun in the next Highlight Report
Why it's wrong here
Continuing without escalation violates management by exception.
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Written by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
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