PMP · Question #236
In the past year, a company paid US$60,000 to an external subcontractor for an ongoing project. The project manager has been asked to evaluate if the project can be delivered more cost effectively…
The correct answer is A. US$35,000. PERT formula is (Pessimistic value + Optimistic Value+ 4 Most likely)/6 = [4+6+(45)]/6= 5 Months . 5 months * total cost (1400+1600+2000) = 25000 is the actual cost. So, the savings will be 60000-25000= 35000.
Question
In the past year, a company paid US$60,000 to an external subcontractor for an ongoing project. The project manager has been asked to evaluate if the project can be delivered more cost effectively this year by using internal labor. The project manager used an optimistic term of 4 months, a pessimistic term of 6 months, and a most expected term of 5 months, and has concluded that the service can be delivered with the following resources:
- Two engineers (monthly salary of US$700 each)
- One project manager (monthly salary of US$1,600)
- Additional estimated monthly expenses of US$2,000
The project manager used the program evaluation and review technique (PERT) to calculate the savings if the project is delivered with in-house resources. How much money will the project manager estimate the company can save?
Options
- AUS$35,000
- BUS$20,000
- CUS$40,000
- DUS$30,000
How the community answered
(66 responses)- A79% (52)
- B14% (9)
- C5% (3)
- D3% (2)
Explanation
PERT formula is (Pessimistic value + Optimistic Value+ 4* Most likely)/6 = [4+6+(4*5)]/6= 5 Months . 5 months * total cost (1400+1600+2000) = 25000 is the actual cost. So, the savings will be 60000-25000= 35000.
Topics
Community Discussion
8
Yusuf A.Jul 5, 2026A is correct. PERT gives you (4 + 4x5 + 6) / 6 = 5 months, then multiply by the total monthly cost of 3400 (two engineers at 700 plus PM at 1600 plus 2000 expenses) to get 17000, and subtract that from 60000 for 43000 saved.
Anjali D.Jul 7, 2026Good breakdown Yusuf, but our group got tripped up on whether to use the standard PERT divisor of 6 or the sigma variant, so if anyone else weighed that option, chime in.
Samuel O.Jul 5, 2026A is right, PERT gives 5 months so 35K saved. Saw this on my exam last month.
Ingrid P.Jul 7, 2026Confirmed A on my exam two weeks ago, and PERT is exactly the kind of formula you should flashcard with a short recall interval since people blank on the weighted average under time pressure.
Ingrid P.Jul 5, 2026Confirmed A. PERT gives 4.83 months, monthly cost is 5000, savings over 60000 is about 35000.
Bao N.Jul 4, 2026Saw this exact PERT question on my exam last month and the trick is the formula gives you 5 months, then you multiply the monthly costs (1400 + 1600 + 2000 = 5000) by 5 to get 25,000, and subtract that from 60,000 to land on A. People pick D because they forget to include the additional expenses in the monthly cost.
Ingrid P.Jul 5, 2026Agreed on A, and the extra step is what makes this card-worthy: I would put the formula on the front, and the full arithmetic chain on the back so you do not freeze on whether to include the 1400 and 1600.
Anjali D.Jul 5, 2026Our group landed on A after working through the PERT formula: (4 + 4*5 + 6) divided by 6 gives 5 months, which means total in-house cost comes to 5 months times the combined monthly rate of US$5,000 (two engineers at US$1,400, PM at US$1,600, plus US$2,000 expenses), equaling US$25,000. Subtract that from the US$60,000 external cost and you get US$35,000 in savings. A few folks in our study circle initially skipped