Question

Janet is forecasting how much money her department needs to support a new project. She estimates that two people and $25,000 in expenses will cover her needs. Because management typically insists on reducing forecasts by 20 percent, she increases her estimates to allow for that reduction. Which of the following factors is illustrated in this situation?A. Padding estimates
B. Planning horizon
C. Project structure
D. People
E. Organization culture

Answer 1

Answer:

Padding estimates

Explanation:

Padding estimates is defined as process by which the budget for a project is inflated above what is really needed for the project. The estimate of funds for the project are overstated.

In this instance Janet forecasted that her department will need $25,000 and 2 people to support a new project.

Management usually cuts down the estimated figure by 20% and so she inflates the figure to ensure she gets her required funds after management approval.

Answer 2

Answer:

The correct answer is A. Padding estimates

Explanation:

Padding is, basically, adding extra time or cost to an estimate when submitting a budget for approval. It artificially inflates the proposed budget in order to give the project room to expand or to cover unexpected costs.