An organization whose previous components have been historically over budget by a significant amount has hired a portfolio manager to develop a charter for a new portfolio. The portfolio manager shoul

The correct answer is B. Contingency reserve. Because the organization has a documented history of significant cost overruns, the portfolio manager must account for this pattern when developing the portfolio charter. A contingency reserve analysis quantifies the additional funding buffer needed to absorb likely cost overruns

Portfolio Governance

Question

An organization whose previous components have been historically over budget by a significant amount has hired a portfolio manager to develop a charter for a new portfolio. The portfolio manager should perform which type of analysis?

Options

AOrganizational structure
BContingency reserve
CScenario
DPrioritization

How the community answered

(36 responses)

A
11% (4)
B
81% (29)
C
3% (1)
D
6% (2)

Explanation

Because the organization has a documented history of significant cost overruns, the portfolio manager must account for this pattern when developing the portfolio charter. A contingency reserve analysis quantifies the additional funding buffer needed to absorb likely cost overruns based on historical data. This analysis directly addresses the risk of budget exceedance. Organizational structure analysis (A) addresses roles and reporting, not cost risk. Scenario analysis (C) explores different future states but does not specifically target the over-budget pattern. Prioritization analysis (D) ranks components but does not address cost risk.

Topics

#Portfolio Charter#Budget Management#Contingency Reserves#Financial Risk

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