PMP Process — Managing Technical Aspects Practice Question
Your project is running 15% over budget at the midpoint. The cost variance is due to higher-than-expected material costs. What is the BEST action?
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
✓
Analyze the variance and implement corrective actions such as reducing scope or using cheaper materials
The PM should analyze the variance, determine root cause, and develop corrective actions, then communicate to stakeholders.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
Reduce the quality of deliverables to cut costs
Why it's wrong here
Reducing the quality of deliverables unilaterally is a critical violation of project management principles and the project management plan. Any alteration to the project's quality baseline or scope must be formally processed through the Integrated Change Control process, involving a thorough impact analysis and stakeholder approval. Implementing such a change without proper authorization can lead to non-conformance, stakeholder dissatisfaction, and ultimately compromise the project's objectives and success.
- ✓
Analyze the variance and implement corrective actions such as reducing scope or using cheaper materials
Why this is correct
As a project manager, the primary and most responsible action when facing a significant cost overrun is to conduct a thorough variance analysis to identify the root causes of the deviation from the cost baseline. Based on this understanding, the PM should then develop and propose corrective actions, such as re-evaluating scope elements for potential reductions or exploring alternative, more cost-effective materials, always adhering to the project's change management procedures if baselines are impacted. This proactive approach demonstrates effective control and problem-solving.
- ✗
Request additional budget from the sponsor
Why it's wrong here
While requesting additional budget might become a necessary step, it is not the initial or sole appropriate response to a significant cost overrun. A project manager's professional responsibility dictates first performing a comprehensive variance analysis to understand the underlying causes and exploring all possible internal corrective actions within the project's existing authority. Presenting a request for more funds without demonstrating exhaustive efforts to manage within the current budget or without a clear plan for how additional funds will resolve the issue is unprofessional and lacks due diligence.
- ✗
Inform the sponsor of the overrun and wait for instructions
Why it's wrong here
Merely informing the sponsor of a problem and passively awaiting instructions demonstrates a lack of proactive project management and accountability. A project manager is expected to be a problem-solver and a leader, not just a reporter of issues. The appropriate course of action involves analyzing the situation, identifying potential solutions, assessing their impacts on project constraints, and then presenting a recommended course of action, along with supporting data, to the sponsor for an informed decision.
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