During a project assessment, a project manager determines the initial project cost estimates were incorrect, and there is not enough budget left, including reserves, to complete the project.
Which of the following actions should the project manager take?
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A. B. C. D.A.
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The correct action for the project manager to take when it is determined that the initial project cost estimates were incorrect, and there is not enough budget left, including reserves, to complete the project, is to alert the project sponsor of the situation (option A).
Option A: Alert the project sponsor of the situation. The project sponsor is ultimately responsible for the success of the project and should be notified of any issues or risks that could impact the project's success. By alerting the project sponsor, the project manager can work with the sponsor to develop a plan to address the budget shortfall, such as reducing scope, extending the project timeline, or securing additional funding.
Option B: Contact the customer and request more funding. While securing additional funding may be necessary to complete the project, the customer may not have the authority to provide additional funding. Additionally, approaching the customer before consulting with the project sponsor may undermine the project sponsor's authority and create confusion.
Option C: Announce the project will end early due to lack of funds. This option should only be considered as a last resort if all other options have been exhausted. Terminating a project prematurely could have significant financial and reputational impacts on the organization.
Option D: Attempt to save money in downstream activities. While attempting to save money may be a viable option, it may not be enough to address the budget shortfall, and it may impact the quality of the project's deliverables. Additionally, downstream activities may be dependent on earlier activities, and attempting to save money in later activities could cause delays or quality issues.
In conclusion, the project manager should alert the project sponsor of the situation (option A) and work with the sponsor to develop a plan to address the budget shortfall.