PMI Scheduling Professional Certification (PMI-SP) Practice Exam

What does the cost management plan outline?

1. Project's communication strategies

2. How project costs will be planned and controlled

3. Vendor relationship management

4. Staffing and resource allocation

The correct answer is: How project costs will be planned and controlled

The cost management plan is a crucial component of project management that specifically focuses on how costs will be planned, managed, and controlled throughout the project lifecycle. This plan defines the processes and tools that will be used to estimate project costs, determine the budget, and monitor expenditures to ensure that the project stays within the approved budget constraints. By clearly outlining these processes, the cost management plan ensures that stakeholders have a mutual understanding of how financial resources will be allocated and tracked. It establishes the criteria for performance measurement and provides a framework for making informed decisions regarding budget adjustments and cost control measures as the project progresses. In this context, while communication strategies, vendor management, and staffing allocations are essential aspects of project management, they fall under different management plans. The communication plan focuses on how information will be shared among stakeholders, vendor relationship management deals with supplier interactions and contracts, and staffing and resource allocation pertain to human resource planning. However, the cost management plan specifically addresses the financial aspects, solidifying its importance in the project’s overall success.