Situational Questions On The PMP® Exam

09 March, 2014

So you are a project manager and have been for quite some time now. But you have reached the stage when a certificate in project management would be welcome. Maybe you have been passed over for a promotion because you have no project management accreditation? Maybe your company is looking shaky and you might be entering the job market soon? Or maybe you just want to prove to yourself that you are the real deal?

It does not take much research into project management certification to encounter the Project Management Institute and its Project Management Professional (PMP®) award. A little digging will show that you need to have three years project management experience, if you have a degree, and five years if you do not. If you meet the experience requirement you then have to sit a 200-question, multiple-choice exam, based on the Guide to the Project Management Body of Knowledge (PMBOK® Guide).

You will have also noticed in your travels Registered Education Providers (like Velopi) who provide four day PMP® exam preparation courses and support for students all the way up to the PMP® exam itself. These can be puzzling: why would an experienced project manager need to attend a course? Surely all that’s needed is some study of the PMBOK® Guide and the understanding years of experience brings?

Unfortunately, this is not the case. While this approach might work if you were aiming for the Certified Associate in Project Management (CAPM)® entry-level qualification, which is a straight test of knowledge, the PMP® exam is a lot more tricky. The problem relates to the situational questions. How would you handle this one for instance?

“You completed an estimate to determine the cost of sub-contracting the manufacturing of 1,000,000 ball bearings for a customer’s skateboard company. You estimated the cost to be €5 per unit. However, when you asked for bids and proposals from prospective suppliers, the minimum price quoted was €7.50 per bearing. The customer is now requesting justification for the variance. What is the LEAST LIKELY cause?”

The PMBOK® Guide will not offer much help in this sort of scenario. Even your experience might not be able to come to the rescue, if you have never been involved in purchasing. But the biggest problem questions like this pose is that they are not asking for the correct answer; they want the worst (least likely) possible option.

Let us look at the options we have:

a. The suppliers did not understand the procurement statement of work.
b. There was an error in the procurement statement of work data.
c. The procurement statement of work was missing information.
d. The costs of materials have changed since the estimate was completed.

Newcomers to PMP® exams get really frustrated when they see choices like these - every one of the options is plausible. Now, if you had studied the PMBOK® Guide, you would have recognized the term “statement of work”. Then you would notice that this term appears in three out of four of the answers. Remember that these questions are based on the PMBOK® Guide and want to test if you practice project management in the Project Management Institute style. So you could opt for option (d) because it is the only one that is outside of your control. 

This proves to be the right answer. Velopi gives explanations with all its PMP® exam questions and this is how the question setter explains the answer:

"Such dramatic variances in cost estimates can occur as a result of many factors including procurement statement of work misunderstanding (Option A), erroneous information (Option B), and/or that the procurement statement of work was missing information (Option C). Significant variances such as in the example are unlikely to occur as a result of increased costs of materials so Option D is the least likely cause to convey to the customer."

So the rationale is based on this being a dramatic variance (50%) in material costs. It is also assumed that the tendering process occurred in a reasonable time interval after the original estimate was made. If this occurs, any materials increase would be in line with inflation, which is low in the current climate. If you have worked on government projects, where large delays occur between estimates and the go-ahead to tender for work, option (d) could appear quite reasonable. Remember the original Luas light rail line? Its original budget was €288m but in the end it cost €800m. This is not surprising when the estimate was produced in 1994, but the contracts were not signed until 2001!

It takes a bit of practice to get used to this sort of scenario-based question. Velopi’s Blended Learning Solution offers all the practice you need. By doing lots of simulated PMP® exam questions, you will (eventually) get into the mind-set of the question setters. You will begin to understand the nuances of questions and to read between the lines. Sadly, studying the PMBOK® Guide on your own will only lead to a very frustrating PMP® exam experience.

Velopi’s PMP® Exam Preparation courses are held in DublinCorkLimerick and Galway. Find out more by visiting our training page or by contacting us directly.

By Velopi Seamus Collins

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