Confused with this cost Question

Submitted by RaviDatt on Sun, 07/08/2012 - 21:53

Question from Rita Fast Track.


 


Halfway through the exeuting processes of your project, a team member alerts you to a potential cost overrun for a specific deliverable. What do you do FIRST


 


A Determine the projected actual cost.


B implement a change control.


C Inform the customer.


D Determine the cause of the overage.


Answer is D but I am not convienced how? My explaination.


It should be A because first we should know our projected cost before we decide if we are on track or variance and if we found the variance then we can look for cause of overage.


any comments Please?


thanks

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krantikumar50

Sun, 07/08/2012 - 23:20

What are you confused about Sir? Its very simple! Whenever a new problem is approaching, are we not supposed to do the RCA or Root Cause Analysis of the problem before coming out with the immediate plan of action? Well, in this case a PM should ideally get into doing the analysis and then planning for the next logical step. First, analyse the cause for overage, so that it does not come back again, secondly, determine the AC. Problems should be analysed first, afterall, they have a knack of recurrence. However, Saket Sir will explain this far better. Let's see what SS has to say on this. Warmly, KK:)

sspawar

Mon, 07/09/2012 - 00:17

there is no term in  pmp as projected AC.

AC is always a happened figure.

krantikumar50

Mon, 07/09/2012 - 03:17

Point Taken.


 


Otherwise what do you think is the right answer and why respected Pawarji Sir?


 


Warmly, KK....

saket_pmp

Mon, 07/09/2012 - 05:52

As a rule of thumb, if you get such type of questions try to categorize choice given under “Analysis” and “Action” events. Don’t use any PM knowledge, just use common sense and think real life what amoung the choice given is an “Action” and what are “Analysis”. DO NOT go outside question choices.


Choice A, B, C sounds like its “Action”. Even A is action as it has cost calculations. The only choice D seems to be non qualitative “Analysis”.


Finally, when it comes to choose “Analysis” vs “Action” go with “Analysis”, as you ALWAYS do impact analysis first before taking any action.


Saket, PMP
 

RaviDatt

Mon, 07/09/2012 - 12:37

Thanks all of you for your time on this discussion.


My doubt was since it was just a alert from a team member so should  not I confirm that myself by actually looking at the projected cost and then go for RCA if required?  I do not want to spent my valuable time doing RCA if alert proves to be false.


I also never heared about Projected Actual Cost before. What do you guys think about this?

krantikumar50

Mon, 07/09/2012 - 12:48

As informed by respected Pawrji Sir before hand, it is a made-up term.


 


Dont worry about this. You may encounter few in the actual.


 


Warmly, KK....