Cost Management Question: Download Cost Management PDF

A manufacturing project has a schedule performance index (SPI) of 0.89 and a cost performance index (CPI) of 0.91. Generally, what is the BEST explanation for why this occurred?

A. The scope was changed
B. A supplier went out of business and a new one needed to be found
C. Additional equipment needed to be purchased
D. A critical path activity took longer and needed more labor hours to complete

Answer:

D. A critical path activity took longer and needed more labor hours to complete

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You are managing a project with AC = $25,100 , ETC = $45,600 , VAC = -$2,600, BAC = $90,000, and EAC = $92,100. Your sponsor asks you to forecast how much money you expect to spend on the remainder of the project. Which is the BEST estimate to use for this forecast?

A. $45,600
B. $87,400
C. $90,000
D. $92,100

The customer responsible for overseeing your project asks you to provide a written cost estimate that is 30 percent higher than your estimate of the project's cost. He explains that the budgeting process requires managers to estimate pessimistically to ensure enough money is allocated for projects. What is the BEST way to handle this?

A. Add the 30 percent as a lump sum contingency fund to handle project risks
B. Add the 30 percent to your cost estimate by spreading it evenly across all project activities
C. Create one cost baseline for budget allocation and a second one for the actual project management plan
D. Ask for information on risks that would cause your estimate to be too low