Project Management Professional (PMP) Practice Exam

Your management is applying the 10 percent solution: It has requested that you reduce the budget for the project which you are currently initiating by 10%. What will this probably mean for your project?

1. If the budget is cut by 10%, then the project will have an accompanying degradation of quality by 10%.

2. If the project budget is an honest one, then a reduction in budget must be accompanied by a trade-off in either time or performance.

3. A 10% reduction in budget will be accompanied by a loss of performance much less than the target reduction in cost.

4. Most projects have 'padded' estimates, and the budgetary reduction will force out the padding from the project.

The correct answer is: If the project budget is an honest one, then a reduction in budget must be accompanied by a trade-off in either time or performance.

By reducing the project budget by 10%, it is likely that there will have to be a trade-off in either time or performance. This is because with a reduced budget, there may not be enough resources or funds to complete the project to its full extent. A 10% reduction in budget could also mean that certain features or tasks may need to be cut in order to stay within the budget constraints. It is not accurate to say that there will be a degradation of quality by 10%, as the project team may find ways to maintain the same level of quality with a reduced budget. It is also not accurate to assume that the reduction in budget will result in a loss of performance much less than 10%. While some projects may have padded estimates, it is not guaranteed that this is the case for all projects, and forcing out padding may not be the best way to reduce the budget. Therefore