Which corrective action should be taken when an order for materials will run 75% over budget because it must be shipped by air to meet schedule?

Which corrective action should be taken when an order for materials will run 75% over budget because it must be shipped by air to meet schedule?

• A. Transfer
• B. Escalate
• C. Accept
• D. Delay

Answer: (A)

When schedule pressure forces you to choose air shipping, the financial impact can be treated by transferring the overrun to another funding source or contract arrangement. In practice, this means shifting the extra cost to a contingency, a different budget line, or charging the supplier through a change order so the project maintains its schedule without absorbing the entire extra amount in the current cost account. Escalating would only raise the issue to management without solving funding, accepting would do nothing to address the overrun, and delaying would risk the schedule.

When schedule pressure forces you to choose air shipping, the financial impact can be treated by transferring the overrun to another funding source or contract arrangement. In practice, this means shifting the extra cost to a contingency, a different budget line, or charging the supplier through a change order so the project maintains its schedule without absorbing the entire extra amount in the current cost account. Escalating would only raise the issue to management without solving funding, accepting would do nothing to address the overrun, and delaying would risk the schedule.