In this scenario, where there's concern about a supplier overestimating its planned volume, the most effective action for the program manager to monitor and control the supplier is:
C. Examine performance reports, audits, and inspections.
This option involves closely monitoring the supplier's performance and output. By regularly reviewing performance reports, conducting audits, and performing inspections, the program manager can verify the supplier’s capacity and output against their commitments. This approach provides tangible data and evidence to assess the supplier's performance and address potential issues proactively.