The Manage by Exception principle sets tolerances for six areas of the project, Time. Cost
and Quality are three of them, what are the other three?

A.

Scope, People & Resources, Benefit

B.

Scope, Risk, Product

C.

Risk, Benefit, Product

D.

Scope, Risk, Benefit

Which of the following statements is FALSE regarding the Continued Business
Justification?

A.

The justification for the project must remain the same throughout the project

B.

The justification for the project should remain valid

C.

The justification for the project may change

D.

If the project is no longer justified it should be stopped

Which of the following principles describes this statement?" xxx defines tolerances for each
project objective to establish limits of delegated authority"

A.

Manage by stages

B.

Focus on products

C.

Manage by exception

D.

Learn from experience

Which of the following statements is NOT correct?
The Learn from Experience principle suggests that lessons should be actively sought...

A.

When Starting a Project

B.

When Initiating a Project

C.

As the project progresses

D.

As the project closes

Which of the following principles uses Product Descriptions to provide clarity by defining
each product's purpose, composition, derivation, format, quality criteria and quality
method?

A.

Tailor to suit the project environment

B.

Focus on products

C.

Manage by stages

D.

Continued business justification

Which statement best explains the purpose of Tailor to suit the project environment?

A.

Ensure project controls are based on project's scale, complexity, importance, capability
and risk

B.

To use a set of pre-defined templates for the size of project

C.

To tailor the use of the principles to suit the project

D.

To pick which PRINCE2 processes to apply and which to leave out

Scenario
Additional Information
During the initiation stage the Project Manager met with the Marketing Director to find out
more about the requirements of the promotional calendar and recorded the following notes:
There has been a reduction in the order numbers at the MNO Manufacturing due in part to
the increased marketing activities of its competitors. 10% of customers have not re-ordered
in this financial year and staff morale is poor. A number of skilled staff have left as a result
and replacement staff have not been recruited due to the reduced operation. If the project
is successful, a recruitment campaign will be required to fill the existing staff vacancies and
there may be a requirement for additional staff. Operational costs are likely to increase
because skilled staff are expensive and difficult to find.
In financial terms, there were a total of 1,500 orders in the last financial year, each with an
average profit of £2k. The Marketing department believes that sending a promotional
calendar to our current and prospective customers would increase orders by at least 10%
with a minimum of 10 further orders from the list of prospective customers within 12 months
from the date of distribution.
The Marketing Director will be funding the project from the business marketing budget. She
believes that the effect of a good company image portrayed by a successful calendar would
last into a second year. She has forecast the same increase in orders for a second year
and predicts that the annual employee satisfaction survey will show a measurable
improvement in staff morale.
A number of alternatives were explored, including:
20% discount for all repeat customers - not cost-effective and very short term
A promotional calendar as a free Christmas gift - would target current and
prospective customers and the benefits would last into a second year
A series of television and press advertisements· was too expensive
A direct mail shot to all customers - benefit would be short term
Creation of an internet website - would not suit all customers
The calendar is seen as the favored option, as long as the company's competitors do not
increase their marketing activity. Whilst the Marketing department wants a very high
quality, glossy product, the project management team must be aware of the cost this will
incur.
Which 2 statements should be recorded under the Costs heading?

A.

The MNO marketing budget this year is £120k.

B.

The project will be funded from the business marketing budget

C.

10 further orders with an average profit of £2k will deliver a benefit of £20k in the first
year.

D.

The new company logo is estimated to cost £4k.

E.

Project costs are estimated to be a total of £26.5k

Which of the following statements is TRUE with regard to expected benefits?

A.

They cannot be assigned

B.

They don't need to follow corporate objectives

C.

They should be measurable

D.

Tolerances cannot be set against expected benefits

Additional Information
During the initiation stage the Project Manager met with the Marketing Director to find out
more about the requirements of the promotional calendar and recorded the following notes:
There has been a reduction in the order numbers at the MNO Manufacturing due in part to
the increased marketing activities of its competitors. 10% of customers have not re-ordered
in this financial year and staff morale is poor. A number of skilled staff have left as a result
and replacement staff have not been recruited due to the reduced operation. If the project
is successful, a recruitment campaign will be required to fill the existing staff vacancies and
there may be a requirement for additional staff. Operational costs are likely to increase
because skilled staff are expensive and difficult to find"
In financial terms, there were a total of 1,500 orders in the last financial year, each with an
average profit of £2k. The Marketing department believes that sending a promotional
calendar to our current and prospective customers would increase orders by at least 10%
with a minimum of 10 further orders from the list of prospective customers within 12 months
from the date of distribution.
The Marketing Director will be funding the project from the business marketing budget. She
believes that the effect of a good company image portrayed by a successful calendar would
last into a second year. She has forecast the same increase in orders for a second year
and predicts that the annual employee satisfaction survey will show a measurable
improvement in staff morale.
A number of alternatives were explored, including:
20% discount for all repeat customers - not cost-effective and very short term
A promotional calendar as a free Christmas gift - would target current and
prospective customers and the benefits would last into a second year
A series of television and press advertisements was too expensive
A direct mail shot to all customers - benefit would be short term
Creation of an internet website - would not suit all customers
The calendar is seen as the favored option, as long as the company's competitors do not
increase their marketing activity. Whilst the Marketing department wants a very high
quality, glossy product, the project management team must be aware of the cost this will
incur.
Which 2 statements should be recorded under the Reasons heading?

A.

The Marketing department believes that sending a promotional calendar to current and
prospective customers will increase orders by at least 10%.

B.

10% of customers have not re-ordered in this financial year.

C.

1,500 orders are expected, each with an average profit of £2k.

D.

The Marketing department believes that the effect of a good company image, portrayed
by a successful calendar, will last into a second year.

E.

MNO Manufacturing is experiencing a fall in orders due in part to the increased
marketing activities of its competitors.

Scenario
A central government department, the Ministry of Food Hygiene (MFH), faces increasing
pressure to cut costs, better manage suppliers’ performance and reduce the confusion
caused by inadequate internal controls, outdated standards and outdated technology.
External consultants were employed to conduct a feasibility study to identify options to
address the problems, and the likely costs and benefits. The following options were
considered:
Do nothing.
Re-engineer selected business functions.
Outsource selected business functions.
The feasibility study concluded that there was a case for outsourcing the MFH Information
Technology
Division and the Facilities Division (maintenance of buildings and grounds). The
recommendations were:
One service provider should be contracted to provide the services currently provided by
the Information Technology Division and the Facilities Division.
A 10-year service contract should be agreed with the selected service provider.
The feasibility study developed high-level designs of the current organization, processes,
systems and
operating models, plus an outline Business Case for the required project. The external
consultants
also made the following recommendations for the management of the project:
Use PRINCE2.
Set up the project with 4 management stages:
Stage 1. Standard PRINCE2 initiation activities.
Stage 2. Create detailed designs (future organization, processes, systems and operating
models) and the service level agreement between MFH and the future service
provider.
Stage 3. Request and evaluate proposals, select service provider and agree contract.
Stage 4. Transfer equipment and staff, transfer responsibility for service provision and run
trial period.
Initial estimates indicated that the project would cost £2.5m and take two years to
complete.
MFH senior management agreed that there was a case for outsourcing, and accepted the
recommendations as a basis for the project. There is an expected saving of £20m over 10
years.
The Outsourcing project has completed the Starting up a Project process and is now in the
initiation stage. Because of the strategic importance of the project, the MFH Chief
Executive Officer has taken the role of Executive. A PRINCE2-experienced Project
Manager has been appointed from within MFH. Staff within the business functions being
outsourced will work with the external consultants who conducted the feasibility study to
define the detailed designs.
Which 2 statements should be recorded under the Reasons heading?

A.

The lack of up-to-date technology in MFH means a re-engineering of existing services
will not necessarily deliver the performance improvements required.

B.

Providing re-engineered services in-house will remove the need to transfer staff to a
service provider.

C.

The Ministry of Food Hygiene (MFH) needs to deal with the increasing pressure to cut
costs and better manage supplier's performance.

D.

Relocating staff to the selected service provider's premises will mean that no property
transfer is required.

E.

The inadequate controls, outdated standards and outdated technology must be
addressed.

Which of the following should NOT be included in the business case?

A.

Reasons

B.

Major Risks

C.

Business options

D.

Business approach

Scenario
Additional Information
During the initiation stage the Project Manager met with the Marketing Director to find out
more about the requirements of the promotional calendar and recorded the following notes:
There has been a reduction in the order numbers at the MNO Manufacturing due in part to
the increased marketing activities of its competitors. 10% of customers have not re-ordered
in this financial year and staff morale is poor. A number of skilled staff have left as a result
and replacement staff have not been recruited due to the reduced operation. If the project
is successful, a recruitment campaign will be required to fill the existing staff vacancies and
there may be a requirement for additional staff. Operational costs are likely to increase
because skilled staff are expensive and difficult to find.
In financial terms, there were a total of 1,500 orders in the last financial year, each with an
average profit of £2k. The Marketing department believes that sending a promotional
calendar to our current and prospective customers would increase orders by at least 10%
with a minimum of 10 further orders from the list of prospective customers within 12 months
from the date of distribution.
The Marketing Director will be funding the project from the business marketing budget. She
believes that the effect of a good company image portrayed by a successful calendar would
last into a second year. She has forecast the same increase in orders for a second year
and predicts that the annual employee satisfaction survey will show a measurable
improvement in staff morale.
A number of alternatives were explored, including:
20% discount for all repeat customers - not cost-effective and very short term
A promotional calendar as a free Christmas gift - would target current and
prospective customers and the benefits would last into a second year
A series of television and press advertisements· was too expensive
A direct mail shot to all customers - benefit would be short term
Creation of an internet website - would not suit all customers
The calendar is seen as the favored option, as long as the company's competitors do not
increase their marketing activity. Whilst the Marketing department wants a very high
quality, glossy product, the project management team must be aware of the cost this will
incur.
Which 2 statements should be recorded under the Business options heading?

A.

Produce a promotional calendar as a free Christmas gift to current and prospective
customers.

B.

Use a professional photographer to create the photographs for the calendar.

C.

Create the photographs for the calendar internally.

D.

Outsource the creation of the calendar to a professional marketing company.

E.

Do nothing.