huge cost variance

Submitted by al.zo on Wed, 04/03/2013 - 19:48

 Hi,

 

You have huge cost variance in your project from milestone to milestone. 

Which of the following will not be an action you will take?

1. you will rebase line the project

2. you will do variance analysis

3. you will report cost variance to sponsor on regular basis and corrective actions you plan to take

4. cost variance can be serious and project funding can be at jeopardy, so you will put this as a high risk item in your risk register.

Answer given is 1. 

But is not that if there are "huge cost variance" rebaseline is likely to be an option?

Thanks

Regards

 

Forums: 
PMP / CAPM exam Question bank
  • Log in to post comments
  • 1047 reads

sspawar

Thu, 04/04/2013 - 00:12

 yes you are right, in line of PMBOK.

What is explanation given for 1st option?

al.zo

Thu, 04/04/2013 - 02:03

 explanation for 1st option was:

"rebaselining of a project is not always required. Because of cost variance, if there is an impact then you will look at changing scope or schedule or leveling resources. But the question does not mention any impact, so just because there is cost variance there is no need to rebaseline the project".

But, as said, question mention "huge cost variance" so rebaseline is definitevely an option.

Renji2013

Thu, 04/04/2013 - 03:34

Hi Pawarji,


Let me know what pmbok says regarding this ? which page ?


 


Renji

sspawar

Thu, 04/04/2013 - 04:34

 P56(PDF87)

During project execution, results may require planning updates and re-baselining. This can include changes to expected activity durations, changes in resource productivity and availability, and unanticipated risks. Such variances may affect the project management plan or project documents and may require detailed analysis and development of appropriate project management responses. The results of the analysis can trigger change requests that, if approved, may modify the project management plan or other project documents and possibly require establishing new baselines. A large portion of the project's budget will be expended in performing the Executing Process Group processes. The Executing Process Group includes the following project management processes

 

P188(PDF219)

• Cost performance baseline. Changes to the cost performance baseline are Incorporated In response to approved changes In scope, activity resources, or cost estimates. In some cases. cost variances can be so severe that a revised cost baseline Is needed to provide a realistic basis for performance measurement. • Cost management plan.

 

Renji2013

Thu, 04/04/2013 - 05:00

Pawarji .


Thank you.


I have a related query . The pmbok mentions the word: " unanticipated risks" which I understand are changes made to perform work arounds.  Does the changes required for work around also needs to follw the CR process ?. I visualise it like the work around related CR will go from M&C Risk to the  Int. C Control and it will either approve or reject it. Other Control processes wont be consulted. Please enlighten me ..


Renji

bkthakkar

Thu, 04/04/2013 - 07:06

thanks pawar