Setting Tolerances for Plan Levels

A.

The correct answer is A. Manage by stages.

PRINCE2 (PRojects IN Controlled Environments) is a project management methodology that provides a framework for managing projects. It is based on seven principles, one of which is "Manage by Stages."

Managing by stages means that a project is divided into manageable and controllable stages, each with its own set of objectives, deliverables, and plans. The principle of Manage by Stages ensures that the project is broken down into smaller, more manageable parts or stages, which makes it easier to plan, monitor, and control.

In PRINCE2, there are three levels of plan: Project Plan, Stage Plan, and Team Plan. Each plan sets tolerances for time, cost, scope, quality, risk, and benefits. Tolerances are the permissible deviation from the plan and are set at each level of plan. The tolerance level is used to monitor and control the project, and any deviation from the plan that exceeds the tolerance level triggers a management intervention.

The Manage by Stages principle requires that the project manager sets tolerances for each level of plan, which enables the project to be monitored and controlled at each stage. By setting tolerances for each level of plan, the project manager can ensure that the project is progressing as planned, and any deviations are identified and addressed promptly.

In summary, the principle of Manage by Stages is being applied when tolerances are set for the three levels of plan in PRINCE2. This principle ensures that the project is broken down into smaller, more manageable parts or stages, which makes it easier to plan, monitor, and control.