Cost management questions

Hello frens,

Please help me with this.

 

To protect your project from cost overruns, which of the following can you do in the planning phase of the project?

A) Pad high risk activities with extra cost buffer

B) Provide extra time for each activity in the schedule

C) Monitor each activity closely

D) Apply Earned Value Forecasting Formulae, such EAC and ETC

gomsy's picture

hi Nisha,

The answer to your question is A) Pad high risk activities with extra cost buffer

Ref

http://www.brighthubpm.com/risk-management/56539-protect-your-project-ag...

 

Hi..Thank you for the reply..

But as per Project managment best pracitices,we arae not allowed to pad any cost or other measurment.So adding anything as pad would be right?

It has sbeen stated that we can estimate and then add buffer(Which is not guesse as pad but the calculated one).

Please correct me If I am wrong.

Nisha..

gomsy's picture

Hi Nisha,

I completely agree with you that Padding (cost, schedule) is not the best practicies in Project Management. However, the above question is talking about how to save your project from cost overrun in planning phase. You can definately add buffers to your cost based on the risk priorities with margins (10%, 20%, etc) which is totally acceptable (ie Reserves).  

 

Unless anybody has any other or better explanation....

What is the source of this question ?

dpakam's picture

Answer is A) Pad high risk activities with extra cost buffer

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