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PMP Practice: Balance competing resource demands

Question 5 of 5 in Plan and Manage Budget and Resources

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Katarina Petrović-Jovanović is managing a hybrid project for Sabai Sabai Digital to implement a new client portal. The project uses two-week iterations for software development and a predictive approach for infrastructure deployment. During the third iteration, the development team's velocity drops significantly, and the product owner adds several unplanned features that were not in the iteration backlog. At the end-of-iteration review, Lila discovers the team has consumed 85% of the iteration budget but completed only 40% of planned story points. The infrastructure deployment is still on track with its original budget. Lila needs to understand what caused the budget variance before the next iteration begins in three days. Which approach would be MOST effective for Lila to address this situation?
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Correct answer: Conduct a retrospective with the development team to identify what led to the reduced velocity and unplanned work, then review the findings with the product owner to realign priorities and budget expectations for future iterations

Explanation

In a hybrid project using iterative development, when budget variance occurs alongside reduced velocity and scope changes, the project manager should first understand the root cause before taking corrective action. Conducting a retrospective allows the team to openly discuss what happened—why velocity dropped and how unplanned features entered the iteration without proper prioritization. This creates transparency and enables collaborative problem-solving. Following up with the product owner ensures alignment on backlog management and prevents similar issues in future iterations. This approach addresses both the budget variance and the underlying process breakdown, which is essential in adaptive work where the team must continuously inspect and adapt. The scenario's closing fact—that this happened mid-project with another iteration starting in three days—makes understanding and correcting the process the clear priority before committing to the next iteration.

**Why not B:** Requesting additional budget treats the symptom rather than the cause and does not address why velocity dropped or how unplanned work entered the iteration. Extending iteration length fundamentally changes the agreed cadence without understanding whether that would actually solve the problem. This reactive approach bypasses the governance process for managing budget variations.

**Why not C:** Removing completed work is not feasible once features are integrated and potentially deployed. This approach ignores the fact that effort was already expended and does not address why the unplanned work was accepted in the first place. It also damages trust with the product owner and team by unilaterally reversing decisions rather than collaboratively addressing the process failure.

**Why not D:** Updating the cost baseline without investigating the cause assumes the variance is permanent and acceptable. This approach fails to address whether the reduced velocity and unplanned scope additions represent a systemic problem or a one-time event. It bypasses the opportunity to correct course and potentially lets process breakdowns continue unchecked into future iterations.

Key Concept

This question covers Balance competing resource demands under Plan and Manage Budget and Resources (Process).

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