Project Management Professional (PMP) — Question 287

A company operates on a 2-year budgeting cycle. The project manager has been assigned a high-visibility project to deliver a brand new, innovative capability. While the requirements for the new capability are defined, the solution design is only beginning. The project manager's boss is concerned that the final solution will exceed the budget for the project.

What should the project manager do next to anticipate the budget impacts of the solution?

Answer options

• A. Apply earned value techniques that compare planned to actual value delivered at key points in the project.
• B. Develop a work breakdown structure (WBS) and perform activity-based cost estimating.
• C. Perform scenario planning on each of the solution designs and incorporate estimates into the next budgeting cycle.
• D. Consult colleagues at other companies and use historical information to predict the final cost.

Correct answer: B

Explanation

The correct answer is B because developing a work breakdown structure (WBS) and performing activity-based cost estimating allows the project manager to break down costs in detail, which is essential for accurate budgeting. Other options, while useful in certain contexts, do not provide the immediate financial foresight needed for this early stage of solution design.