PMP Practice Questions #66
You are a project manager working on a new software development project. The project’s scope has been defined, but the team members are not yet allocated. You need to quickly estimate the project’s budget for high-level planning. You recall similar past projects and consider incorporating lessons learned from them to improve your budget estimation. Which of the following options should you select to find the right budget estimation input in this situation?
A) Wait until the project team is fully allocated and then use their input to create a detailed bottom-up estimate.
B) Use historical information from past similar projects and expert judgment to create an analogous estimate, adjusting for project-specific variables.
C) Create a detailed Work Breakdown Structure (WBS) and identify activities, using standard resources to create a bottom-up estimate.
D) Allocate a flat percentage increase to the budget of the most similar past project, assuming this will cover any unforeseen costs in the new project.
Analysis:
The project manager of a new software development project is faced with the challenge of estimating the project’s budget at an early stage. While the project scope has been defined, team members have not been allocated yet. In this context, the project manager is considering various approaches to estimate the budget effectively and expediently, drawing upon available resources and methods.
Analysis of Options:
Option A: Wait Until the Project Team is Fully Allocated and Then Use Their Input to Create a Detailed Bottom-Up Estimate. While this approach would likely result in a more accurate and detailed estimate, it does not align with the need for a quick, high-level budget estimation. Waiting for full team allocation would delay the estimation process, which is not feasible in the given situation.
Option B: Use Historical Information from Past Similar Projects and Expert Judgment to Create an Analogous Estimate, Adjusting for Project-Specific Variables. Here, the project manager would use data and experiences from similar past projects, supplemented by expert judgment, to formulate an analogous estimate. This method can provide a quick yet reasonably informed budget estimation, factoring in specific aspects of the current project. It is a pragmatic choice given the urgency and the availability of historical data.
Option C: Create a Detailed Work Breakdown Structure (WBS) and Identify Activities, Using Standard Resources to Create a Bottom-Up Estimate. Crafting a detailed WBS and identifying activities for a bottom-up estimate is a thorough approach that can result in a precise budget. However, it’s a time-intensive method and might not be practical for immediate, high-level budgeting needs, especially in the absence of a fully formed project team.
Option D: Allocate a Flat Percentage Increase to the Budget of the Most Similar Past Project, Assuming This Will Cover Any Unforeseen Costs in the New Project. This approach is a simpler form of analogous estimating, where a flat percentage increase is applied to a past project’s budget. While faster than Option B, it lacks the specificity and adjustment for project-specific variables that Option B offers. It may result in a less accurate estimate due to its overly simplistic nature.
Conclusion: Option B (Use historical information from past similar projects and expert judgment to create an analogous estimate, adjusting for project-specific variables) is the most suitable choice for the project manager in this situation. It balances the need for a quick, high-level estimate with the benefit of leveraging past project data and expert insights, providing a reasonably accurate budget estimation while considering project-specific nuances. The other options, while valid in different contexts, do not align as well with the requirement for a rapid and high-level estimation approach.
PMP Exam Content Outline Mapping
| Domain | Task |
|---|---|
| Process | Task 5: Plan and manage budget and resources |
Topics Covered
- Project Estimation (Analogues , Parametric and Bottom up)
