Team members are having a discussion with the project manager. In the last retrospective meeting, the team realized that the obsolete equipment could affect the next iteration of the project. The team recommends buying new equipment because it is critical to the success of the final deliverable.
What should the project manager do next?
When faced with the need for new equipment due to obsolete ones affecting the next iteration of a project, the project manager should first review the cost management plan. This plan provides the necessary guidelines and procedures on how to manage project costs, including how to handle unexpected expenses or changes in resource requirements. By reviewing this plan, the project manager can determine the most appropriate course of action, whether it involves using contingency reserves, reallocating existing budget, or submitting a change request.
Gonna go with A. This is a contingency, so its an unplanned cost. The cost management plan will only cover planned costs, when someone asks you "We need something thats not been planned for" you should first ask them why, in this case they've given you why and thats not an option, so A is the absolute best answer here.
I was going to go with B but from your explanation it's clear that A is the answer. Thanks for this huge eye-opener!
I agree! hope you passed your exam already. I really appreciate your explanations.
Contingency reserves are more specific and are based on current budget line items. A management reserve is added to cover additional uncertainty not foreseen in the budget. So A contingency reserve is not for that
You are absolutely correct with your explanation.
What do you do FIRST... The cost management plan will tell you if you have a contingency reserve.
What if no more contingency reserves are there ? reviewing the cost management plan must be done first.
A. Check the project budget to verify if there is enough contingency reserve
PM always "review xx plan " first
It's so confusing...we have 2 most voted answers A & B and B as highlighted correct answer. As a student, not sure about my answer, I don't know which one to consider as the right one... I'm bawling.
In Agile we don't have Cost mgmt plan, so Answer should be A
B - because we need to check the budget on cost management plan document to address solution for the issue
The cost management plan outlines the procedures and guidelines for managing project costs, including addressing unexpected expenses or changes in resource requirements.
Contingency reserve is allocated for the pre-defined risks only, while the management reserve is allocated for the un-defined risks. the question didn't indicate if this a pre defined risk or not.. therefore, i can't cosume the contengency reserve. the cost managment plan has all the answers on what, how, when the project budget will be spent.
Check if contingency funds are available first.
B. Review the cost management plan to determine how to address this issue. B then A
2.8.5.3 Management and Contingency Reserve Reserve is an amount of time or budget set aside to account for handling risks. Contingency reserve is set aside to address identified risks should they occur. Management reserve is a budget category used for unknown events such as unplanned, in-scope work.
According to Chat GPT: The correct answer is D. Submit a change request to increase the budget and buy new equipment. If the team has identified that obsolete equipment could negatively affect the project's final deliverable, it is the responsibility of the project manager to take action to mitigate the risk. In this case, the team has recommended purchasing new equipment, which suggests that it is the most appropriate solution to the problem. Therefore, the project manager should submit a change request to increase the project budget and buy new equipment. Options A and B suggest that the project manager should review the project budget or cost management plan, which is a good practice but doesn't address the issue at hand. Option C is not a viable solution since it ignores the team's recommendations and risks the success of the final deliverable.
Actually, I think it is the answer is A. Chat GPT missed the point of the question of what should the project manager do NEXT (which is to verify a reserve exists)
I think you're right. Chat GPT gave me a long answer, I am not going to paste the whole thing, but here are the first two steps. 1. Evaluate the recommendation: Review the team's concerns regarding the obsolete equipment and assess the potential impact on the project's success. Consider the team's expertise and the significance of the equipment in delivering the final product. 2. Assess the budget: Determine whether there are sufficient funds available to invest in new equipment. Evaluate the cost implications, including procurement, installation, training, and maintenance expenses. If the budget is limited, explore alternative options such as leasing or renting the equipment.
I will go with A
I will go with B