Charter, business case and benefits
The outline pairs project initiation with benefit planning. The business case and the benefits management plan are business documents prepared before the project starts: the first argues that the investment is worth making, the second says how its benefits will be realized. Together they feed the project charter, which formally authorizes the project, names the project manager and their authority, and records the high-level objectives, milestones, budget, assumptions and constraints. The benefits plan keeps tracking value after the project team has gone home.
A team charter is a different document with a similar name. It holds the team’s working agreements and ground rules, and the questions on it belong to roles, leadership and ethics.
Four words for four states
- Risk: an uncertain event that may happen, positive or negative. The city may close the access road during the build.
- Issue: something that has happened and needs handling now. The access road closed this morning. It goes in the issue log.
- Assumption: something treated as true for planning without proof. The permit office will reply inside its posted window. It goes in the assumption log and gets checked.
- Constraint: a limit the project must work within. The venue is only available in March.
From maybe to logged
- 01 register
- 02 owner named
- 03 risk turns real
- 04 plan first
- 05 if it hit
What you should be able to do
- Tell a business case from a charter by asking whether the project is being justified or authorized.
- Find the assumptions and constraints inside a charter or scope statement, even when the stem does not use either word.
- Name the threat responses (escalate, avoid, transfer, mitigate, accept) and the opportunity responses (escalate, exploit, share, enhance, accept), and say which pairs mirror each other.
- Explain the difference between a contingency reserve, held for identified risks and inside the cost baseline, and a management reserve, held for the unforeseen and outside it.
- Recognize when a plan already contains a response, and prefer carrying it out over inventing a new one.
- Use a workaround for an unplanned negative event, and record it.
- Read a positive risk as a risk, with a response strategy of its own.
- Connect the risk register back to plans and registers, where it sits beside the other working documents.
Classify it, then respond
Classify the condition, pick the response strategy, or name the document. The note under each option says why it fits or why it does not.
Practice cards here are written for study, not taken from PMI. The real CAPM mixes multiple choice with drag-and-drop, hot spot, comic-strip and video items.
Card 01 of 20 · 0 done · 0 right
To do 20
Doing
Card 01 of 20
A project buys insurance so that a third party will bear the financial impact if key equipment is damaged. Which threat response strategy is this?
Note on A
Mitigation reduces the probability or impact of the threat; insurance does not stop damage from happening.
Note on B
Avoidance removes the threat entirely, while the project keeps the equipment exposed to damage.
Note on C
Accepting means taking no action or setting aside a reserve, rather than paying to shift the financial consequences.
Note on D
Correct: Insurance transfers the financial impact of the threat to a third party, which is the transfer strategy.
Card 02 of 20
In a software development project, the team discovers that their chosen development tool has potential security vulnerabilities that could compromise the final product. To eliminate this risk, the team decides to use a different tool without these vulnerabilities. Which of the following risk strategies does this action exemplify?
Note on A
Correct: Replacing the tool removes the source of the threat altogether, which is avoidance.
Note on B
Mitigation would reduce the chance or impact of the vulnerabilities while still using the tool.
Note on C
Escalation passes a threat to a higher level when it is outside the project’s scope or authority, which is not the case here.
Note on D
Transfer shifts the impact to a third party, such as through a contract or insurance, rather than removing the risk.
Card 03 of 20
A phase can finish early and earn a client bonus. The project manager assigns the organization’s most skilled engineers to make sure the bonus is earned. Which opportunity response strategy is this?
Note on A
Sharing assigns part of the opportunity to a third party better able to capture it, while here the organization uses its own staff.
Note on B
Correct: Exploiting an opportunity makes sure it happens, for example by assigning the most skilled people to secure the bonus.
Note on C
Escalation sends an opportunity to a higher level when it is beyond the project’s authority, which this is not.
Note on D
Enhancing raises the probability or impact of an opportunity, while assigning the best people here aims to guarantee it.
Card 04 of 20
During planning for a municipal construction project, the team learns that a possible supplier strike next spring could delay steel deliveries. Where should this be recorded?
Note on A
An assumption log records conditions believed to be true, not possible negative events.
Note on B
Correct: A possible strike is an uncertain future event, so it belongs in the risk register.
Note on C
The issue log tracks problems that have already happened, while the strike has not occurred.
Note on D
The change log tracks change requests, which are not relevant here.
Card 05 of 20
A company cannot fully capture a market opportunity on its own, so it forms a joint venture with a partner and shares the rewards. Which opportunity response strategy is this?
Note on A
Correct: Sharing gives part of the opportunity to a partner better able to capture it, such as through a joint venture.
Note on B
Exploiting means making sure the opportunity happens with the organization’s own means, which it cannot do alone here.
Note on C
Enhancing raises the chance or size of an opportunity without bringing in a partner to share the reward.
Note on D
Transfer is a threat response that shifts negative impact to a third party, not a way to capture an opportunity.
Card 06 of 20
Who is responsible for monitoring a specific risk and making sure its agreed response is carried out?
Note on A
The project manager oversees risk management overall, but each risk is assigned to an owner who monitors it.
Note on B
The sponsor supports the project and may handle escalated risks, but does not track each individual risk.
Note on C
Correct: The risk owner monitors the assigned risk and makes sure the agreed response is carried out.
Note on D
A change control board reviews change requests and does not monitor individual risks.
Card 07 of 20
A resort construction project is highly exposed to weather. After analyzing the identified weather risks, the project manager adds ten days to the schedule model to cover them. What is this time allowance?
Note on A
Total float is schedule flexibility within the network, not time added to cover known risks.
Note on B
Management reserve covers unknown risks and is not built into the schedule from analysis of identified risks.
Note on C
Padding is undisclosed extra time added to estimates, while this allowance is based on analyzed, identified risks.
Note on D
Correct: Time added to the schedule for identified, analyzed risks is a contingency reserve.
Card 08 of 20
Which situation should be recorded in the issue log rather than in the risk register?
Note on A
A regulation that may take effect is uncertain, so it is a risk.
Note on B
An expectation of on-time delivery is an assumption, not an issue.
Note on C
A possible price increase is uncertain, so it is a risk.
Note on D
Correct: The supplier going out of business has already happened, so it is an issue for the issue log.
Card 09 of 20
A company-wide training initiative has been approved. The sponsor now asks for a document describing how and when its benefits will be delivered and measured, and who owns them. What should be prepared?
Note on A
Correct: A benefits management plan describes how and when benefits will be delivered and measured and who is responsible for them.
Note on B
The charter authorizes the project and names the project manager, but does not detail how benefits will be measured over time.
Note on C
The business case justifies the investment before approval, and that decision has already been made.
Note on D
The stakeholder engagement plan covers how to involve stakeholders, not how benefits will be realized.
Card 10 of 20
While reviewing the risk register, a project manager checks which entry is an opportunity. Which one is it?
Note on A
A server failure that has already happened is an issue, not a risk, and it is negative.
Note on B
A possible resignation would harm the project, so it is a threat.
Note on C
Correct: A possible volume discount is an uncertain event that would benefit the project, which makes it an opportunity.
Note on D
A delay in permit approval would hurt the project, so it is a threat.
Card 11 of 20
Which information is recorded in the risk register for each identified risk?
Note on A
Correct: The risk register records details for each risk, including who owns it and the planned response.
Note on B
Resolution status and corrective actions are tracked in the issue log.
Note on C
Engagement levels and communication needs belong in the stakeholder register and engagement plan.
Note on D
Risk categories and probability scales are defined once for the project in the risk management plan, not per risk.
Card 12 of 20
A regulatory filing deadline of December 31 and a fixed budget of $500,000 are stated in the charter. The team also plans around the unverified belief that the vendor’s API will support 500 concurrent users. How should these three items be classified?
Note on A
Correct: The deadline and budget are fixed limits set in the charter, so they are constraints, while the unverified API capacity is an assumption.
Note on B
The deadline and budget are stated limits, not beliefs that still need to be checked.
Note on C
The API capacity is an unverified belief, so it is an assumption, not a constraint.
Note on D
This reverses the classification: two items are fixed limits and only one is unverified.
Card 13 of 20
During risk identification, the team examines the organization’s strengths and weaknesses and the opportunities and threats arising from them. Which technique is the team using?
Note on A
Root cause analysis looks for the underlying cause of a problem rather than reviewing strengths and weaknesses.
Note on B
Checklist analysis uses lists of risks from past projects, not a strengths-and-weaknesses review.
Note on C
Correct: SWOT analysis examines internal strengths and weaknesses and the external opportunities and threats.
Note on D
Assumption analysis tests the validity of project assumptions, which is a different technique.
Card 14 of 20
A risk reaches its trigger, but a new company policy makes the planned response no longer usable. What should the risk owner do NEXT?
Note on A
Correct: When the planned response can no longer be used, the risk owner reassesses the risk and agrees on a new response.
Note on B
Management reserve is controlled above the project and does not replace a missing response.
Note on C
The planned response is no longer allowed by company policy, so using it is not an option.
Note on D
Waiting for the impact and patching it later abandons planned risk management.
Card 15 of 20
An organization documents that recurring software bugs are driving customer churn, estimates the cost of a quality-improvement project and compares it with the expected gain from retaining customers. Which document is this?
Note on A
The charter authorizes a project that has already been approved; it does not hold the cost-versus-benefit comparison.
Note on B
The scope statement describes deliverables and boundaries, not the economic justification.
Note on C
Correct: A business case explains the problem and compares the expected costs and benefits to justify the project.
Note on D
The benefits management plan describes how benefits will be delivered and measured after approval, not the case for investing.
Card 16 of 20
A project manager has repeatedly attempted to mitigate a severe schedule risk caused by an uncooperative external stakeholder. All direct mitigation efforts have failed, and the project manager lacks the authority to enforce compliance. Based on standard progressive escalation paths, what is the next step?
Note on A
Transfer shifts impact to a third party, such as through insurance or a contract; a governance board is not a third party taking on the impact.
Note on B
Raising thresholds just to accept the risk hides the problem instead of resolving it.
Note on C
A team lead has less authority than the project manager, so routing the issue there goes down rather than up.
Note on D
Correct: When the project manager lacks the authority to resolve the risk, it goes up to the next level, here the sponsor.
Card 17 of 20
A severe winter storm may delay construction in Colorado. How should this condition be classified?
Note on A
Correct: A possible storm is an uncertain future event that could affect the project, so it is a risk.
Note on B
An issue is something that has already happened, while the storm is only possible.
Note on C
An assumption is something believed to be true for planning, not a possible negative event.
Note on D
A constraint is a fixed limit on the project, while weather is uncertain.
Card 18 of 20
A newly identified risk could have a high cost impact, and some stakeholders want contingency reserve added immediately. What should the project manager do FIRST?
Note on A
A budget change request is premature until the risk has been analyzed.
Note on B
Correct: The project manager first analyzes the risk’s probability and impact to decide whether and how much reserve is warranted.
Note on C
Escalation is premature when the risk is within the project’s authority and has not yet been analyzed.
Note on D
Adding reserve before analysis may waste funds or set the wrong amount.
Card 19 of 20
The team plans on a vendor delivering by September 15, but the date is unconfirmed. How should this be classified?
Note on A
The unconfirmed date can create a risk, but the date itself is something the team is treating as true for planning.
Note on B
A dependency is a link between activities; the question is about how sure the team is of the date.
Note on C
Correct: The team plans on a delivery date it has not confirmed, which is an assumption.
Note on D
A constraint is a fixed limit, while this date is unconfirmed.
Card 20 of 20
The approved completion date cannot move because of a lease requirement. How should this condition be classified?
Note on A
The schedule baseline is the approved schedule; the lease requirement is the reason the date cannot change.
Note on B
Correct: A completion date fixed by a lease is a constraint that limits the project’s options.
Note on C
An assumption is something believed to be true but not proven, while this date is a firm requirement.
Note on D
A risk is an uncertain event, while the fixed date is a known limit.
Done 0
An assumption left unchecked is a risk that has not introduced itself yet.