A project manager is using a predictive methodology. During the execution phase, a major supplier goes bankrupt. This risk was identified in the risk register, and the response plan was to use a backup supplier. However, the backup supplier is now charging double the original price. What should the PM do?

Answer options:

Use the backup supplier immediately and accept the cost overrun.

Submit a change request to use the contingency reserve (or management reserve if costs exceed contingency) to cover the price difference.

Look for a third supplier.

Cancel the project.

How to approach this question

Risk happened -> Cost increased -> Change Control for Money.

B.Submit a change request to use the contingency reserve (or management reserve if costs exceed contingency) to cover the price difference.✓ Correct

Task 3 (Risk) and Task 5 (Budget). Executing a risk response that costs more than expected requires budget management (Change Request).

Spending money you don't have (A) without approval.

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