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CAPM Practice: Demonstrate an understanding of a project management plan schedule

Question 63 of 85 in Demonstrate an understanding of a project management plan schedule

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A project manager is told to reduce the project schedule by 3 weeks. The critical path has 15 activities. After analysis, she finds: Activities X, Y, Z can each be crashed by 1 week for $5,000, $8,000, and $12,000 respectively. Activity W can be fast-tracked with another activity to save 2 weeks but carries a 30% rework risk worth $20,000. What is the OPTIMAL recovery strategy?
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Correct answer: Crash Activity X for 1 week and fast track Activity W for 2 weeks: certain cost $5,000 + expected rework cost $6,000 = $11,000 expected vs crashing all three for $25,000

Explanation

To save 3 weeks: Crash X (1 week, $5,000 certain) + Fast track W (2 weeks, $0 direct cost but 30% × $20,000 = $6,000 expected rework cost) = $11,000 expected total. Compare to crashing all three: X ($5,000) + Y ($8,000) + Z ($12,000) = $25,000 certain. The X + fast track W strategy has a much lower expected cost ($11,000 vs $25,000), making it optimal if the rework risk is acceptable. This requires risk tolerance discussion with the sponsor.

**Why not A:** This answer presents the same strategy as the correct answer but with a less clear breakdown of costs. While the total expected cost is the same, option C provides a more precise separation of certain costs ($5,000 crash) versus expected costs ($6,000 rework risk), making it the better-articulated analysis for decision-making.

**Why not B:** Only crashing Activity X saves 1 week but the project needs 3 weeks of recovery. Accepting a 2-week delay fails to meet the schedule requirement. The project manager should evaluate all available options to achieve the full 3-week recovery before accepting a partial solution.

**Why not D:** Crashing all three activities costs $25,000 with certainty, compared to the X + fast-track-W strategy at $11,000 expected cost. While crashing all three eliminates the rework risk, the $14,000 cost difference makes it the less optimal strategy when the risk trade-off is considered.

Key Concept

This question covers Demonstrate an understanding of a project management plan schedule under Demonstrate an understanding of a project management plan schedule (Predictive, Plan-Based Methodologies).

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