PRINCE2F Overview of PRINCE2 and Principles Practice Question
A project manager is leading a project to implement a new customer relationship management (CRM) system. The project board has defined tolerances for cost and time, and the project manager is authorized to manage the project within these tolerances. During a stage, the project manager discovers that a key supplier has increased prices, which will cause the stage to exceed its cost tolerance. According to PRINCE2 principles, what should the project manager do?
⚠ Common exam trap
The trap here is thinking that the project manager can take any action necessary to stay within tolerance, but the principle requires escalation when tolerances are threatened.
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
✓
Escalate the issue to the project board immediately.
Manage by exception empowers the project manager to run the project within agreed tolerances, but when a tolerance is forecast to be exceeded, the issue must be escalated to the project board. This ensures that the board can make an informed decision about how to proceed, whether by providing additional funds, changing scope, or stopping the project.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
Adjust the project plan to absorb the cost increase within the stage.
Why it's wrong here
Adjusting the plan might be possible if there is contingency, but the scenario states that the stage will exceed its cost tolerance. The project manager cannot unilaterally change the plan to exceed tolerances; that would violate the manage by exception principle. Escalation is required when tolerances are forecast to be breached.
- ✓
Escalate the issue to the project board immediately.
Why this is correct
The principle of manage by exception requires the project manager to escalate to the project board as soon as it is forecast that a tolerance will be exceeded. Since the cost tolerance is at risk, the project manager must inform the board and seek a decision, rather than attempting to resolve it independently or amending the business case without authority.
- ✗
Ask the supplier to honor the original price to avoid exceeding tolerance.
Why it's wrong here
Negotiating with the supplier is a reasonable action, but if the cost increase is unavoidable and tolerance will be exceeded, the project manager must escalate. The principle of manage by exception mandates that the board is informed when tolerances are forecast to be breached, regardless of attempts to mitigate.
- ✗
Update the business case to reflect the increased costs and continue.
Why it's wrong here
The project manager may need to update the business case, but only after the project board has been informed and has decided how to proceed. Updating the business case unilaterally and continuing would bypass the board's authority and the manage by exception principle, which requires escalation when tolerances are threatened.
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Written and reviewed by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
Last reviewed September 2026 · checked against the official PeopleCert exam blueprint
This PRINCE2F practice question is part of Courseiva's free PeopleCert certification practice question bank. Courseiva provides original exam-style practice questions with explanations, topic-based practice, mock exams, readiness tracking, and study analytics to help learners prepare for the PRINCE2F exam.