PMP Practice Question: Business Environment: strategy and project benefits
A project is running 15% over budget at its midpoint. The project manager determines that the variance is due to unexpected price increases in raw materials. The project sponsor asks the project manager to reduce the project scope to bring costs back in line. What should the project manager do first?
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
✓
Submit a change request to reduce scope and assess the impact on the project.
The correct first step is to submit a change request to formally propose the scope reduction. This follows the change control process outlined in the PMBOK Guide, ensuring that scope changes are evaluated for impact on cost, schedule, quality, and risks before approval. Option B is incorrect because instructing the team to reduce scope without formal approval bypasses the change control board and may lead to unauthorized changes. Option C is incorrect because updating the risk register without addressing the cost variance does not resolve the issue. Option D is incorrect because asking for additional budget should only be considered after analyzing alternatives through a change request; the sponsor's request to reduce scope should be pursued first.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✓
Submit a change request to reduce scope and assess the impact on the project.
Why this is correct
When a project faces a significant budget overrun, such as 15% at its midpoint, a formal change request is the appropriate first step to address the variance. This initiates the Integrated Change Control process, allowing for a structured evaluation of potential solutions like scope reduction. Before any changes are implemented, a thorough assessment of the impact on other project constraints, including schedule, quality, and risks, is mandatory to ensure informed decision-making and maintain project objectives. This systematic approach prevents uncontrolled changes.
- ✗
Instruct the team to reduce scope immediately.
Why it's wrong here
Directly instructing the team to reduce scope immediately bypasses the critical Integrated Change Control process, which is a fundamental aspect of project management. Such an informal directive can lead to unauthorized changes, potential quality compromises, and a lack of proper documentation or stakeholder approval. Without a formal assessment of impacts, this action risks creating new problems or failing to adequately address the underlying budget issue in a controlled manner.
- ✗
Update the risk register and continue as planned.
Why it's wrong here
A 15% budget overrun at the project's midpoint represents a significant issue, not merely a potential risk to be passively monitored. While the risk register should be updated to reflect any new risks identified during problem analysis, simply updating it and continuing as planned fails to address the current, active variance. This approach neglects the need for immediate corrective or preventive actions, allowing the budget deviation to persist and potentially worsen without intervention.
- ✗
Ask the sponsor for additional budget.
Why it's wrong here
Immediately asking the sponsor for additional budget without first exploring other corrective actions or formally analyzing the root cause of the overrun is generally not the most responsible initial step. A project manager's primary duty is to manage within established constraints, and seeking more funds without first attempting to optimize resources, reduce scope, or re-baseline through a formal change process can indicate a lack of proactive management. This approach places the burden solely on the sponsor without demonstrating due diligence in managing the existing project parameters.
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Introduction to the PMP Exam and Project Management Basics
Key term
Change Control Process
A formal, structured procedure used to manage any changes to a project's scope, schedule, budget, or requirements, ensuring every modification is reviewed, approved, tested, and documented before implementation.
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