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 Expected dis-benefits heading?

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 Timescale heading?

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?

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 correctly define a Business Case risk which should be recorded under the
Major risks heading?

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?

HOTSPOT
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.
Using the Project Scenario and the additional Information provided for this question In the
Scenario Booklet, answer the following question.
Lines A to E in the table below consist of an assertion statement and a reason statement. For
each line identify the appropriate option, from options A to E, that applies. Each option can be
used once, more than once or not at all.

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 Business options heading?

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 Expected benefits heading?

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 Expected dis-benefits heading?

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 Timescale heading?