PMP Exam Prep Companion: Schedule and Cost—Forecasting, Baselines, and What to Do When You’re Off Track

Schedule and Cost as Practical Controls (Not Paperwork)

On the exam and in real projects, schedule and cost are controlled the same way: you plan a realistic target, you measure actual performance against that target, and you take corrective action through the proper approval path. The key idea is that the plan becomes a baseline, and the baseline is what you use to detect variance and forecast outcomes.

What “Control” Really Means

• Plan: build a schedule model and cost estimates, then set baselines.
• Measure: compare actuals and progress to the baselines.
• Analyze: find root cause (not just symptoms).
• Act: choose a response (re-sequence, add resources, reduce scope, request change, etc.).
• Update: adjust forecasts; update baselines only when changes are approved.

Schedule Fundamentals You Must Be Able to Use

Sequencing Logic: How Work Really Connects

Schedule logic is the set of relationships that explain why one activity can’t (or shouldn’t) start until something else happens. The most common relationship is Finish-to-Start (FS): Activity B starts after Activity A finishes.

Other relationships show up in exam questions when you’re trying to compress a schedule or model real-world constraints:

• FS (Finish-to-Start): B starts after A finishes (e.g., test after build).
• SS (Start-to-Start): B starts after A starts (e.g., drafting and peer review can start together).
• FF (Finish-to-Finish): B finishes after A finishes (e.g., documentation finishes with development).
• SF (Start-to-Finish): rare; used in shift handovers.

Logic can also include:

• Leads: allow overlap (e.g., start training 5 days before deployment finishes).
• Lags: add waiting time (e.g., 3-day curing time after pouring concrete).

Milestones: Zero-Duration Control Points

A milestone is a significant event (often a decision, approval, or handoff) with no duration. Milestones are useful because they make progress visible and create clear control points for governance.

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• Examples: “Design approved,” “Prototype accepted,” “Regulatory submission sent,” “Go-live authorized.”
• Milestones often align with phase gates or sponsor approvals.

Critical Path Basics: The Longest Path Drives the Finish Date

The critical path is the longest-duration path through the network of activities. It determines the earliest possible project finish date given the current logic and durations. If a critical-path activity slips, the project finish date slips (unless you take action).

Exam mindset: don’t confuse “most important” with “critical.” Critical means zero (or near-zero) schedule flexibility based on the model.

Float (Slack): Your Schedule Flexibility

Total float is how much an activity can slip without delaying the project finish date (or a constrained milestone). Activities on the critical path typically have 0 total float.

Practical interpretation:

• Positive float: you have flexibility; you can reassign resources temporarily without moving the end date.
• Zero float: any delay becomes a project delay unless you recover elsewhere.
• Negative float: the schedule is already impossible under the imposed constraints (e.g., a mandated finish date). You must compress or change scope/expectations.

Mini Example: Identify Where You Have Flexibility

Path 1 is the critical path at 12 days. Path 2 has 2 days of float (12 - 10). If C slips by 1 day, the project finish does not change. If B slips by 1 day, the project finish moves by 1 day unless you recover time elsewhere.

What a Baseline Means (Schedule and Cost)

Schedule Baseline

The schedule baseline is the approved version of the schedule model used for comparison. It’s the reference point for tracking variance and performance. Once baselined, you don’t “edit history” to make reports look better.

Common exam trap: updating the schedule model (e.g., actual start/finish dates, remaining duration) is normal. Changing the baseline requires approval through change control.

Cost Baseline

The cost baseline is the approved, time-phased budget used to measure and control cost performance. It answers: “How much did we plan to spend by this date?”

Also distinguish:

• Funding requirements: when cash is needed (may differ from cost baseline timing).
• Management reserves: not part of the cost baseline; used for unknown-unknowns with appropriate authorization.

When You Should (and Should Not) Re-Baseline

• Do not re-baseline just because you are behind or over budget. That hides performance issues.
• Re-baseline only after approved changes that materially alter scope, schedule logic, or budget assumptions.
• Partial re-baseline is common: you may re-baseline remaining work while preserving historical actuals.

Forecasting at a Conceptual Level: What CPI and SPI Imply

You may see earned value terms on the exam. For this chapter, focus on what the indices mean and what you do next.

• CPI (Cost Performance Index): cost efficiency. If CPI < 1.0, you’re getting less value per dollar than planned (over budget for the work accomplished). If CPI > 1.0, you’re under budget for the value delivered.
• SPI (Schedule Performance Index): schedule efficiency. If SPI < 1.0, you’re progressing slower than planned. If SPI > 1.0, you’re ahead of plan.

Important nuance for action: CPI/SPI are indicators. They don’t automatically tell you the fix. Your next step is root cause analysis and selecting a response that fits constraints and governance.

When You’re Off Track: A Practical Control Playbook

Step 1: Confirm the Variance Is Real (Data Quality Check)

• Are actual start/finish dates correct?
• Is remaining duration updated realistically (not “optimistic to look good”)?
• Are timesheets/invoices posted to the right work packages?
• Did scope change informally (work added without approval)?

Step 2: Localize the Problem (Where Is the Variance Coming From?)

Don’t treat the whole project as “behind.” Identify the specific drivers:

• Critical path slip: the finish date is threatened.
• Non-critical slip: you may be able to absorb with float.
• Cost overrun in a work package: may or may not affect total budget depending on reserves and remaining work.
• Milestone at risk: governance/approval dates may be the real constraint.

Step 3: Find Root Cause (Not Just Symptoms)

Use simple, exam-friendly reasoning:

• Estimation issue: durations/costs were underestimated; productivity assumptions wrong.
• Resource issue: key skill unavailable; multitasking; low availability; learning curve.
• Dependency issue: predecessor late; vendor delay; approvals taking longer.
• Quality/rework: defects causing redo; unclear acceptance criteria.
• Risk realized: a known risk occurred; response plan not executed.

A quick technique is “5 Whys” to drill down until you reach a controllable cause (process, decision, constraint), not a vague statement like “team is slow.”

Step 4: Generate Options (Typical Schedule/Cost Responses)

Most corrective actions fall into a few buckets. Each has trade-offs and often requires approval.

Step 5: Evaluate Options with Constraints in Mind

Use a simple decision filter:

• Does it protect the critical path or key milestone?
• What is the cost trade-off? (crashing often increases cost)
• What is the risk trade-off? (fast-tracking often increases rework risk)
• Is it allowed by contracts, policies, or resource limits?
• Does it require sponsor/customer approval?

Step 6: Choose the Correct Governance Action

• If you can recover within existing tolerances and authority, implement corrective action and update the schedule model/forecast.
• If the fix changes baselines, scope commitments, or budget beyond thresholds, submit a change request.
• If the project is no longer achievable under current constraints, escalate with data and options (not complaints).

Step 7: Update Forecasts (and Only Re-Baseline When Approved)

After action is selected:

• Update remaining durations and cost estimates for remaining work.
• Update schedule logic if you fast-tracked (and reassess critical path).
• Communicate revised forecast dates/costs and associated risks.
• Re-baseline only after the change is approved; preserve actuals.

Common Exam Scenarios and What the Best Action Looks Like

Scenario A: You’re Behind Schedule, but Only on Non-Critical Activities

If the delayed work has float and the project finish date is not threatened, the best action is usually to use the float intentionally and monitor. You might also reassign resources from non-critical tasks to critical tasks if needed, as long as it doesn’t create new critical paths.

Scenario B: A Critical Path Activity Slips

First confirm it’s truly on the critical path (logic and durations). Then evaluate recovery options:

• Re-sequence work (if dependencies allow)
• Fast-track (if overlap is feasible)
• Crash (if budget/resources allow)
• Adjust scope (if schedule is fixed and quality cannot drop)

If recovery requires changing baseline commitments, submit a change request with impacts and alternatives.

Scenario C: Cost Overrun with No Schedule Slip

Don’t automatically crash or fast-track. Focus on cost drivers:

• Is the overrun due to higher rates, low productivity, or rework?
• Can you reduce future cost through process improvements, vendor renegotiation, or scope adjustment?
• Do you need to use contingency or request additional funds via change control?

Short Exercises: Choose the Best Response (Fast-Track, Crash, Re-Estimate, or Adjust Scope)

Exercise 1: Critical Path Delay with Stable Budget

Situation: A critical-path development activity is 2 weeks late due to underestimated complexity. The sponsor insists the finish date cannot move. Budget has some flexibility, and quality standards cannot be reduced.

Choose one primary action:

• A) Fast-track by overlapping development and testing
• B) Crash by adding experienced developers and extending hours
• C) Re-estimate remaining work and accept the new finish date
• D) Adjust scope by removing lower-value features

Best choice: B or D depending on scope flexibility. If scope is fixed and date is fixed, crashing is the most direct lever (cost increases). Fast-tracking increases rework risk and may violate quality constraints. Re-estimating is necessary for forecasting but does not meet the “date cannot move” constraint by itself. If sponsor is open to reducing deliverables, scope adjustment can protect the date without adding as much cost, but requires formal approval.

Exercise 2: You’re Behind, and Rework Risk Is High

Situation: You are 10% behind schedule. The team proposes overlapping design and build. However, requirements are still volatile and defects have been high.

Choose one primary action:

• A) Fast-track to regain time
• B) Crash by adding more people immediately
• C) Re-estimate and stabilize the plan before compressing
• D) Adjust scope to reduce rework

Best choice: C (and possibly D). When volatility and defects are high, fast-tracking often increases rework and can worsen both schedule and cost. Crashing can also backfire if onboarding slows progress. Re-estimating remaining work and addressing root causes (quality, unclear requirements, decision latency) is the safer first move; scope adjustment may be an approved option to reduce churn.

Exercise 3: Cost Performance Is Poor, Schedule Is Fine

Situation: Work is completing on time, but costs are trending higher than planned (conceptually, CPI < 1). The cause appears to be expensive contractor rates and overtime.

Choose one primary action:

• A) Fast-track to finish earlier
• B) Crash to finish earlier
• C) Re-estimate remaining costs and pursue cost controls
• D) Adjust scope to reduce remaining effort

Best choice: C (and evaluate D). Fast-tracking/crashing are schedule tools and may increase cost. The right control move is to update the forecast, identify cost drivers, and implement cost responses (reduce overtime, renegotiate, replace roles, improve productivity). If benefits allow, scope adjustment can reduce remaining spend but requires approval.

Exercise 4: Negative Float Due to an Imposed Deadline

Situation: A regulatory deadline is fixed. Your schedule now shows negative float after a vendor delay. You cannot miss the deadline.

Choose one primary action:

• A) Re-estimate and report the new finish date
• B) Fast-track and/or crash, then submit a change request for added risk/cost
• C) Do nothing; negative float will resolve itself
• D) Re-baseline immediately to the new dates

Best choice: B. Negative float signals the plan cannot meet constraints. You must compress (fast-track/crash) and manage the consequences through governance. Re-estimating is still needed for accuracy, but action is required. Re-baselining without approval is not appropriate.

Practical Checklist: What to Document When Proposing Recovery

• Problem statement: what variance exists and where (critical path? milestone?).
• Root cause: estimation, resource, dependency, quality, risk, or scope creep.
• Options considered: fast-track, crash, re-sequence, re-estimate, adjust scope.
• Impacts: schedule, cost, risk, quality, resources, procurement/contract terms.
• Decision needed: what approvals are required and by whom.
• Updated forecast: expected finish and expected cost after the action.