posted 2¾years ago by Illia
© Copyright: Rita Mulcahy, PMP Exam Prep, Rita's Course in a Book for Passing the PMP Exam, Fifth Edition, RMC Publications Inc. (2005), page 224, question 39
Cost Estimate | Cost Management | Scope Management
You provide a project cost estimate to the project sponsor. He is unhappy with the estimate, because he thinks the price should be lower. He asks you to cut 15 percent off the project estimate. What should you do?
A. Start the project and constantly look for cost savings.
B. Tell all the team members to cut 15 percent from their estimates.
C. Inform the sponsor of the activities to be cut.
D. Add additional resources with low hourly rates.
george (2¾years ago):
I think it's C: Cut scope in order to cut cost.
A: I don't think the project sponsor will sign the Charter. He/she already asked for 15% decrease. Why would he/she approve the Charter with current estimate? And how you can start the project without an approved Charter?
B: That's a big mistake to do this. Such an action will ruin the entire process of estimation.
D: The estimates were made having in mind the resources with higher rates. Now you change the resources. You should re-estimate the cost, right? It may become even bigger.
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