PMI CAPM (Certified Associate in Project Management) Examination Content OutlinePredictive, Plan-Based MethodologiesHard
A project manager is leading a construction project where heavy machinery is required. Due to unforeseen market demand, the cost of renting the specialized equipment has significantly increased, impacting the project's budget. To address this, the project manager decides to explore alternative, less expensive equipment providers and adjust the project schedule slightly to accommodate new delivery times. Which cost management process is the project manager primarily performing?
- APlan Cost Management
- BEstimate Costs
- CControl Costs
- DDetermine Budget
Show answer & explanationAnswer & explanation
Correct answer: C. Control Costs
Control Costs is the process of monitoring the status of the project budget and managing changes to the cost baseline. The scenario describes the project manager actively responding to a cost variance by seeking alternatives and adjusting the schedule, which falls under controlling costs.
Why the other options are wrong
- A. Plan Cost Management establishes policies and procedures for planning, managing, expending, and controlling project costs, not responding to an actual variance.
- B. Estimate Costs involves developing an approximation of the monetary resources needed to complete project activities, which occurs earlier in planning.
- D. Determine Budget aggregates the estimated costs of individual activities or work packages to establish an authorized cost baseline, also a planning process.
Control Costs
The process of monitoring the status of the project to update the project budget and managing changes to the cost baseline.
- Tracks actual costs against planned costs.
- Identifies and analyzes cost variances.
- Manages changes to the cost baseline.
- Ensures project stays within budget.
Memory trick: Costs: Plan, Estimate, Budget, Control – PEBCAC.