During the execution phase of a construction project, the project manager notices that the cost incurred for the procurement of materials is consistently exceeding the planned budget. What is the BEST course of action for the project manager to take?
Analyze the cause of the budget overrun, report to the governance board, and seek approval for budget adjustments.
Negotiate a discount with suppliers to reduce the costs of materials.
Ignore the variance as long as the overall project is within the approved budget.
Apply cuts to other areas of the project to counterbalance the overrun.
The correct answer is to analyze the cause of the budget overrun, report it to the governance board, and seek approval for budget adjustments. This action aligns with best practices in project budget management, ensuring that any deviations are addressed promptly and with proper oversight. Adjusting the budget without understanding the cause or without approval could lead to mismanagement of funds or project scope creep. Negotiating a discount without further action ignores the possibility of systemic issues affecting the budget.
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What are some common causes of budget overruns in construction projects?
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What does it mean to report to the governance board in a project management context?
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What are budget adjustments and how are they implemented in project management?
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