A project manager is negotiating a contract amendment with a vendor who is requesting a 20% price increase due to material cost inflation. The vendor is critical to project success, but the budget increase would exceed the project manager's approval authority. What should the project manager do FIRST?

Answer options:

Analyze the vendor's cost justification and explore alternative solutions before escalating

Immediately escalate to the sponsor since the increase exceeds approval authority

Reject the price increase and begin searching for alternative vendors

Accept the price increase and adjust other project costs to compensate

How to approach this question

Look for approaches that demonstrate thorough preparation and analysis before negotiation or escalation. Understanding all parties' positions is crucial.

Full Answer

A.Analyze the vendor's cost justification and explore alternative solutions before escalating✓ Correct

Effective negotiation requires understanding all parties' positions and constraints. Thorough analysis enables better negotiation outcomes and informed escalation when necessary.

Common mistakes

Immediately escalating without analysis, or making decisions that exceed authority without proper preparation.

Question 07 All questions Question 09

Practice the full PMI PMP Practice Exam 6

100 questions · hints · full answers · grading

More questions from this exam

Q01During a sprint retrospective in an agile project, two senior developers engage in a heated argum...Hard Q02A project manager is leading a hybrid software development project where the client has stable re...Hard Q03A team member who was previously a high performer has shown declining work quality and missed sev...Hard Q04An experienced team member approaches the project manager asking for more autonomy in making tech...Hard Q05A project team is transitioning from waterfall to agile methodology. Several team members express...Hard

View all 100 questions →