PMP Question #532: Real Exam Question with Answer & Explanation

Question

An organization is initiating a project that will be using new technology. The complexity of the project requires excellent technical skills. After reviewing the proposed project management plan, the project sponsor asks for options to reduce the labor cost without introducing risk to the project delivery. What should the project manager do first?

Options

• AReview the risk register and assign functional managers as resources.
• BPerform an analysis of the key cost drivers and present alternatives.
• CAnalyze the resource pool and assign internal resources who participated in past projects.
• DReview the work breakdown structure (WBS) to ensure there are adequate resources.

Explanation

When a project sponsor requests labor cost reduction without increasing risk, the project manager's initial action should be to conduct a detailed analysis of the project's key cost drivers. This analysis provides the necessary data to identify potential areas for cost optimization and formulate viable alternatives.

Common mistakes.

• A. Assigning functional managers as resources is a specific action that might or might not reduce costs or be appropriate; it should only be considered after understanding the cost drivers.
• C. While analyzing the resource pool and assigning internal resources can be a cost-saving measure, it's a specific alternative that should emerge from a broader analysis of cost drivers, not the first step in identifying options.
• D. Reviewing the WBS to ensure adequate resources is part of planning for project execution, but it doesn't directly address the request to identify options for reducing labor costs, which requires a cost-centric analysis.

Concept tested. Project cost management and optimization

Reference. https://www.pmi.org/pmbok-guide-standards/foundational/pmbok

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