2011-2016 examen Flashcards
(165 cards)
1
Q
Discuss the relevance of the statement: “You do not know the final scope of a project until it has been completed”.
A
A project is always new to an extent, which means that the scope often is adjusted. The adjustments can be both small, within the initially approved cost and time constraints, or large, with adjusted time and cost constraints. However, this does not mean that we do not need to define the scope initially. We should always make our best to define the scope as complete and accurate as possible at the start of the project.
2
Q
What is a projects life cycle?
A
The life cycle is the set of phases a project goes through from start to finish:
- Initiation and definition
- Planning and development
- Execution and control
- Closure
3
Q
Team building is an often-used tool to improve collaboration in a project. Discuss strengths and weaknesses with this tool including what one would like to achieve and likely obstacles.
A
Strengths:
- Creates work motivation among team members
- Creates a sense of team spirit; one-ness and cohesion among team members, belonging, identity
- Enhances relations and communication, reduced conflict; enables easier conflict resolution
Improves awareness and commitment to project goal and sub goals
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Weaknesses:
- May make team one-eyed
- Teambuilding efforts take time and cost money
4
Q
Poor planning is often regarded as the main reason for an unsuccessful project. Why?
A
Planning is the basis for:
- Justifying the project through a feasibility study – decision to invest. Unsuccessful if project is started without proper justification.
- Defining it within the constraints on time/scope/cost.
- How to meet risk and handle change.
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If the above is not properly addressed, there is increased likelihood of not meeting the scope, and/or exceeding cost or time. Poor planning is a reoccurring problem because:
- Planning takes time and money, and is therefore often insufficiently done.
- Learning from previous projects is often insufficiently done.
5
Q
What is the purpose of and what are the main components in a change order system?
A
The purposes of a change order system are
- To influence the factors that create change
- To determine that a change has occurred
- To manage the change as and when they occur
The main components/elements in a change order system are
1. Identifying change
2. Analyze the effects of the change
3. Develop a response strategy
4. Communicate the strategy and gain acceptance
5. Revise the project plan
6
Q
Should one expect cost overruns in a project? Why or why not?
A
Yes, one must always expect deviations from the plan. The plan is based on uncertainties. Small overruns may happen throughout the project due to changes, but they should be detected early so that consequences to the plan could be projected. However, appropriate control has the intention to adjust plans (update estimates). If the adjustments are approved, there should not be an overrun.
7
Q
What characterizes a well-designed WBS (Work Breakdown Structure) and what implications do the structure of the WBS have for estimation and control in the project?
A
The WBS covers the entire amount of work to be done in a project. Characteristics of a well-defined WBS is that the structure is broken down in units and sub units until
- the end of every branch represents a well-defined unit of work (“work package”)
- it can be carried out in a reasonable time
- by a single unit (person or team) of manpower resources
Each work package may contain several activities assigned to the person or team.
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Implications of the WBS:
- Makes estimation easier
- Makes control easier, because
- - - it makes it clear who is responsible for doing what
- - - the work is well-defined
- - - - - - - - in scope; can be determined whether it is completed
- - - - - - - - in time; can be determined if it is done in time
- - - - - - - - in cost; can determine if it is done within budget
- Completion at higher levels can be calculated by summing the amount of work at lower levels
8
Q
Discuss the design of the work breakdown structure (WBS) in a project. Emphasize coding system, use of the WBS during estimation of project cost and duration as well as the use of the WBS during project execution.
A
A Work Breakdown Structure is a top-down, deliverable oriented representation of all areas of work involved in a project. It can be represented diagrammatically or as a structured task list. The WBS is an important communication tool in the planning phase of a project, as it helps visualizing the work content and project deliverables. It creates a common understanding of the project. The lowest branches of the structures are work that can be done by a single member at a reasonable amount of time.
The WBS is coded using logical series of numbers to represent the level and position of each of the items in the project. The code can be used in other documents, e.g. responsibility allocation, cost allocation, and monitoring and reporting purposes. Each cost represents a unique part of the WBS. The coding is important to ensure the ability to control the project.
The WBS I very convenient in the execution phase of a project, especially when communicating information about different work packages, because there is lower chance of ambiguity, and no need for long work descriptions. It is very clear for the team members to see what is left to do in the project, as the WBS creates what looks like a checklist, with a clear overview of each and everyone’s responsibility.
The WBS can be used as a schedule for team members, where each work package has a certain duration. The cost of each branch is easier to determine when the task is broken down to smaller pieces. The cost of a small activity is easier to find than the cost of a larger activity, and the total cost can be found by taking the sum of all the activities.
9
Q
what is EVA?
A
The EVA (Earned Value Analysis) is a good tool to use for controlling the project in the execution phase. The basic principle of EVA is to compare the value of work completed against planned progress and actual expenditure. The main variables used in the EVA relate to planed cost, schedule, actual cost and actual progress.
10
Q
what is BCWP ?
A
Value of actual work done, i.e. earned value. This is the value of completed work in terms of the budget assigned to that work. Known as “budgeted cost of work performed” (BCWP)
11
Q
what is BCWS ?
A
Value of planned work, planned value or budgeted cost of work scheduled (BCWS)
12
Q
what is ACWP
A
Actual expenditure, actual cost of work performed (ACWP).
13
Q
what is EAC, BAC, VAC & SAC.
A
EAC = Estimate at completion
BAC = Budget at completion
VAC = Variance at completion
SAC = Schedule at completion
14
Q
how to calculate variance at completion
A
VAC = BAC – EAC
Variance at completion = Budget at completion - Estimate at completion
15
Q
what is SV?
A
Schedule variance: (SV = BCWP – BCWS)
Schedule variance=budgeted cost of work scheduale-budgeted cost of work performed
Or (SV = EV– PV). Schedule variance = earned value - Planned Value.
To Get in prosent SV% =SV/BCWS or SV%=SV/PV
16
Q
how do you calculate Schedule variance and what can you conclude whit it?
A
Schedule variance (SV = BCWP – BCWS) Or (SV = EV– PV). Schedule variance = earned value - Planned Value.
To Get in prosent SV% =SV/BCWS or SV%=SV/PV
- Negative result indicates that the project is behind schedule
- Positive result indicates that the project is ahead of schedule
17
Q
what is CV
A
Cost variance (CV = BCWP – ACWP)
Cost variance = budgeted cost of work performed- actual cost of work performed
18
Q
how do you calculate Cost variance and what can you conclude whit it?
A
Cost variance (CV = BCWP – ACWP)
- - -Negative result indicates that the project is over budget (cost overrun)
- - - Positive result indicates that the project is under budget
19
Q
what is SPI
A
Schedule performance index:
(SPI = BCWP / BCWS)
Schedule performance index = (budgeted cost of work performed / budgeted cost of work scheduled)
Or
(SPI = EV/PV)
Schedule performance index = Earned value / Panned Value
SPI>1 indicates that the project team is efficient in utilizing the time and resoyrses allocated to the project (NB kan være på bekostning av ting som hms så dette er som regel et godt tegn men ikke altid)
SPI<1 indicates that the project team is LESS efficient in utilizing the time and resoyrses allocated to the project
20
Q
how do you calculate Schedule performance index and what can you conclude whit it?
A
Schedule performance index (SPI = BCWP / BCWS)
- - - A result smaller than one indicates that the project is behind schedule
- - - A result bigger than one indicates that the project is ahead of schedule
21
Q
what is CPI
A
Cost performance index (CPI = BCWP / ACWP)
=>Cost performance index = ( budgeted cost of work performed/actual cost of work performed)
22
Q
how do you calculate Cost performance index and what can you conclude whit it?
A
Cost performance index (CPI = BCWP / ACWP)
- - - A result smaller than one indicates that the project is over budget (overrun)
- - - A result bigger than one indicates that the project is under budget
23
Q
what is the Estimate at completion(EAC)
A
One event: EAC = BAC + (ACWP – BCWP)
=> Estimate at completion = Budget at completion + (Actual expenditure- the budgeted cost of work performed)
-
Several events (lower productivity): EAC = BAC / CPI
=> Estimate at completion= Budget at completion/Cost performance index
24
Q
how to calculate Schedule at completion
A
Schedule at completion= (Original estimated duration) /Schedule performance index “SPI”
25
Discuss which tools you would use, which information you will collect and how you will collect this information to keep control with cost and duration and to discover deviations as early as possible during the execution phase of a project. Also, discuss how you will manage changes when they occur.
The EVA (Earned Value Analysis) is a good tool to use for controlling the project in the execution phase. The basic principle of EVA is to compare the value of work completed against planned progress and actual expenditure. The main variables used in the EVA relate to planed cost, schedule, actual cost and actual progress.
!
Three variables are needed to determine project performance in terms of cost and schedule:
- Value of actual work done, i.e. earned value. This is the value of completed work in terms of the budget assigned to that work. Known as “budgeted cost of work performed” (BCWP).
- Value of planned work, planned value or budgeted cost of work scheduled (BCWS).
- Actual expenditure, actual cost of work performed (ACWP).
!
Different parameters are calculated to find the performance of the project:
- Schedule variance (SV = BCWP – BCWP)
- - - Negative result indicates that the project is behind schedule
- - - Positive result indicates that the project is ahead of schedule
- Cost variance (CV = BCWP – ACWP)
- - - Negative result indicates that the project is over budget (cost overrun)
- - - Positive result indicates that the project is under budget
- Schedule performance index (SPI = BCWP / BCWS)
- - - A result smaller than one indicates that the project is behind schedule
- - - A result bigger than one indicates that the project is ahead of schedule
- Cost performance index (CPI = BCWP / ACWP)
- - - A result smaller than one indicates that the project is over budget (overrun)
- - - A result bigger than one indicates that the project is under budget
!
A new estimate of the total duration can also be calculated, depending on whether the delay/time saved is due to one event or several (accumulated) events.
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One event: EAC = BAC + (ACWP – BCWP)
Several events (lower productivity): EAC = BAC / CPI
!
VAC = BAC – EAC
Schedule at completion= Original estimated duration/SPI
EAC = Estimate at completion
BAC = Budget at completion
VAC = Variance at completion
SAC = Schedule at completion
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In case of changes, a change management system should be implemented in the project charter to minimize the risk and maximize value. In any project, there might occur sudden changes. It is difficult to anticipate these changes and it is therefore essential to have a system to follow whenever change needs to be done.
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The following five elements is important in the change order system:
1. Identify change: Usually actions or circumstances which can cause change in scope, personnel, cost, quality, and schedule. The process should contain routine assessment such as scheduled project reviews, and be applicable at any time.
2. Analyze effect of change: Any changes will affect wither scope, cost, time/schedule, personnel, or quality, and hence adjustments to the project charter must be made.
3. Response strategy: Find out what needs to be done to implement the change.
4. Communicate the strategy: A plan for how to communicate the change to all parties.
5. Revise project plan, and see effect of the changes: One change will cause changes to other aspects of the project which needs to be accounted for. The project manager should also have a way to monitor changes.
26
Discuss briefly necessary measures to keep control with a project during the execution phase with focus on potential changes.
The most important measures to keep control with during the execution phase are scope, cost, and time. When introduced to changes, it might be necessary to introduce a formal control system to maintain control of the project, e.g. change order system.
27
What is the purpose with a network analysis? What is the role of the network analysis in the planning of the execution of a project?
The purpose of a network analysis is to find the duration of the project, critical path, and float/slack of non-critical activities. The role in the planning and execution phase is to
- know how to allocate and prioritize resources,
- make it possible to adjust time plan to avoid resource conflicts,
- keep track of changes that may result in shift of critical path, and
- see if there is any need to reallocate people.
28
Outline a network with four nodes where the two middle nodes represent parallel activities. Discuss which information you need in each node and how this information can be used to find duration and critical path for the network.
As seen in the figure, we need EST, EFT, LST, LFT, duration and float of each node to find total duration and critical. The float is given by EFT – LFT = EST – LST, and by following the nodes with zero float we can find the critical path. The total duration of the project is the duration of the critical path.
29
Find the project’s total budget ( 5 activities 1 project).
Assume that deviations so far is accumulated (for instance due to productivity deviations) for activities A11, A13 and A14, but that the deviation for A12 and A15 is due to a single event. Evaluate the cost and schedule performance for each activity and the project so far. Estimate expected cost and duration for each activity and the project when completed.
Are there any activities where corrective action seems required?
For activities where the deviations are accumulated (A11, A13, A14), the estimate at completion is => EAC = BAC/CPI =>
A11: EAC = 15/0.79 = 19 mill
A13: EAC = 30/0.79= 38 mill
A14: EAC = 20/1 = 20 mill
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For activities where the deviations are due to a single event (A12, A15), the estimate at completion is EAC = ACWP + (BAC – BCWP) =>
A12: EAC = 17 + (20 – 17) = 20 mill
A15: EAC = 4 + (15 – 3) = 16 mill
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total (19 + 38 + 20 + 20 + 16) =113 million
answer: Estimate at completion for the entire project is 113 million.
No duration information is given, so new duration estimates cannot be calculated.
-A11 is on schedule, but over budget. The cause of the budget overrun must be investigated, and the cost should be reduced. It is important to closely monitor the schedule performance in case that the cost reduction will affect the schedule performance.
-A12 is on budget, but behind schedule. This project should be speeded up. The cost performance is OK so far but should be closely monitored, in case the speeding up will affect the cost performance.
-A13 and A15 are both behind schedule and over budget. The cause must be investigated. In case the root cause is some invalid assumptions that have been made, estimates for both A13, A15 and other activities based on the same assumptions should be revised.
30
What is risk in a project? Discuss how you can discover risk sources, and how you can plan risk handling in a project.
Risk as defined by Guide to the Project Management Body of Knowledge (PMI, 2000):
“An uncertain event or condition that, if it occurs, has a positive or negative effect on a project outcome”
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Risk with positive effects are called upside risk, and risk with negative effects are called downside risk. We also distinguish between speculative risk (meaning a chance of loss of a chance of profit) and pure risk (meaning only a chance of loss).
One can discover risk by looking at the sources from which risk may arise:
1. Factors under project control, e.g. poor product design, weaknesses in the administrative systems, possible shortcomings in the contractors’ work etc.
2. Factors in the wider external environment which are only controllable by decision makers elsewhere, e.g. possible changes in laws and regulations, institutional weaknesses, political barriers etc.
3. Factors that are essentially uncontrollable, e.g. possible weather/climate problems, disasters, social economic development etc.)
Risk management is about balancing the harmful effects of risk against potential project benefits.
One can plan to handle risk in six ways:
1. Avoidance
2. Mitigation (minimize)
3. Acceptance
4. Transfer (to a part more capable of carrying it)
5. Absorption or pooling (spreading and sharing among many partners)
6. Knowledge and research (ability to predict both probability and impact)
31
Discuss the six ways to handle risk in a project.
One can plan to handle risk in six ways:
1. Avoidance
2. Mitigation (minimize)
3. Acceptance
4. Transfer (to a part more capable of carrying it)
5. Absorption or pooling (spreading and sharing among many partners)
6. Knowledge and research (ability to predict both probability and impact)
32
Please discuss the use of incentives in contracts, and how they should vary with the contract’s compensation format.
- Fixed price: Risk is solely on the contractor
- Cost-plus fixed fee: Risk is solely on the customer
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Incentive contracts are used for projects with a risk of cost overrun and are designed so that the contractor and customer share the risk of the overrun – incentive for both to limit cost overrun.
How the incentives should vary depends on the format:
- Cost plus incentive fee (CPIF) (Completing the project at target cost gives the contractor the target fee. If the cost is over the target, the cost is shared according to an agreed ratio until the contractor’s fee is reduced to the minimum fee; above this limit all extra cost is carried by the owner. If the final project cost is below the target, the savings are shared by the same formula until the contractor’s fee reaches the maximum fee. Savings beyond this limit is to the benefit of the customer only.)
- Cost plus target price (CPTP)
- Cost plus guaranteed maximum price
- Fixed price incentive (FPI) (Completing the project at target cost results in target fee. If the project cost exceed the target, cost excess is shared according to a sharing formula between the customer and contractor, until the project cost reaches the price ceiling; all projects above this point is carried by the contractor. If the final project cost is below the target, savings are shared between the customer and contractor according to the sharing formula.)
33
Please discuss the use of incentives in contracts, and how they should vary with the contract’s compensation format.
How the incentives should vary depends on the format:
- Cost plus incentive fee (CPIF)
- - - Completing the project at target cost gives the contractor the target fee. If the cost is over the target, the cost is shared according to an agreed ratio until the contractor’s fee is reduced to the minimum fee; above this limit all extra cost is carried by the owner. If the final project cost is below the target, the savings are shared by the same formula until the contractor’s fee reaches the maximum fee. Savings beyond this limit is to the benefit of the customer only.
- Cost plus target price (CPTP)
- Cost plus guaranteed maximum price
- Fixed price incentive (FPI)
- - - Completing the project at target cost results in target fee. If the project cost exceed the target, cost excess is shared according to a sharing formula between the customer and contractor, until the project cost reaches the price ceiling; all projects above this point is carried by the contractor. If the final project cost is below the target, savings are shared between the customer and contractor according to the sharing formula.
34
Discuss criterions for accepting or rejecting a change during the execution phase of a project.
Criterions for accepting or rejecting a change depends on the effect of the change. Will it
- Move milestone date(s)? How much? Is it acceptable?
- Reduce scope of delivery? How much? Is it acceptable?
- Reduce quality of delivery? How much? Is it acceptable?
- Require more resources? How much? Is it acceptable?
35
A good change order system is essential for control during the execution of a project. Why? Discuss the main components in such a system and how information is collected and processed. Discuss criterions for accepting or rejecting a change during the execution phase of a project. Is there any relationship between the change order system and the contingency account?
A change order system is essential for control during the execution of a project mainly because any change may influence the main project conditions scope, cost and time. Keeping control on the project means keeping control of these three limiting conditions, i.e. planning on how changes are to be handled.
The purposes of a change order system are
- To influence the factors that create change
- To determine that a change has occurred
- To manage the change as and when they occur
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The main components/elements in a change order system are
1. Identifying change
2. Analyze the effects of the change
3. Develop a response strategy
4. Communicate the strategy and gain acceptance
5. Revise the project plan
!
Criterions for accepting or rejecting a change depends on the effect of the change. Will it
- Move milestone date(s)? How much? Is it acceptable?
- Reduce scope of delivery? How much? Is it acceptable?
- Reduce quality of delivery? How much? Is it acceptable?
- Require more resources? How much? Is it acceptable?
!
There is a relationship between the change order system and the contingency account:
Implementing change may have an effect so that extra project costs are needed. The size of a change one can accept is therefore dependent on how much additional funding one have available. The contingency account should however be avoided for this purpose, as it is mainly meant for contingencies (i.e. fallback arrangement, emergency solutions etc.). If the required change is due to a major failure it may however justify funding the change from the contingency account.
36
Do you expect that a project owner´s involvement will vary with the contract type? Explain why/why not and eventually how.
In the case of a firm fixed price (FFP) contract, the project owner will be less involved, as the costs are estimates and a price covering these costs are given to the contractor. The contractor is free to complete the contract as they want, because any additional costs beyond the price (risk) are carried by the contractor.
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In the case of a cost plus fixed fee (CPFF) contract, the project owner must be involved when auditing the cost that the contractor wants reimbursed. He/she must also be involved when determining the additional fee.
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The same arguments can be applied to FPI and CPIF. However, a greater involvement is required for incentive type contracts.
37
Find the duration and the critical paths of the project.?
Assume the following network:
Activity H can start when the activities E and F is completed and activity I can start when F
and G is completed. Activity E can start when activity C is completed, activity F can start
when activity B and C is completed. Activity G can start two months after activity D is
completed. Activity C can start when activity A is completed and activity D can start when
activity A and B is completed.
The following information is provided with respect to the duration of each activity:
Duration: 45 months
Critical path: ACEH
38
What is the baseline of a project? Discuss how/if changes and delays affect the baseline.
The baseline of a project is the plan at the start of the project. This includes plans for the budget, timeline, and quality/scope. All changes in the project will revise the baseline, because changes will affect such plans. A new baseline will be created; however, it will not wipe out the original baseline form the project plan, but rather take its place as the functioning baseline. The baseline can be used for performance analysis to find current performance versus expected performance for a specific activity and the entire project. The baselines are established in the planning phase, and updated during the project.
39
Which criterion(s) should be used to decide whether a project should be executed.
To decide whether a project should be executed, a feasibility study should be performed. The feasibility study is done to ensure that the project is possible, practical, and viable. It is a realistic evaluation of the project which should examine the technical, logistical, environmental, commercial, and financial risk of a project which requires a major investment. The feasibility study is usually executed for projects of a certain size. For smaller projects, a simple checklist with important issues may be sufficient.
A cash flow analysis such as the net present value (NPV) analysis should be conducted to see if the project is profitable. A business case should be prepared to ensure that projects which require funding has a business strategy and will deliver the required benefits and returns to shareholders and stakeholders.
The feasibility study, cash flow analysis and business case should cover:
- The technical criterion – is it going to work?
- The business criterion – cost, time, scope? Is the return big enough?
- The fundamental criterion – will the result satisfy the users?
40
Describe at least three different organizational structures one can find in project organizations.
Functional structure. A top-down hierarchy. Main characteristics:
- Deep structures with many levels and bosses
- Weak coordination and communication between functions
- No customer focal point
Allegiance and commitment are to the function and not the projects
- Roles are specified
- Possible conflict of interest between functions
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Product (projectised) structure. Organized according to product line, program or project. Main characteristics:
- Employees are collocated
- Participants work directly for the product or programme manager
- Strong communication channels
- Loyalty to the project
- Rapid reaction time to problems and issues
- Low innovation and lack of key personnel
- Roles vary according to the specific project
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Matrix structure. A combination of the functional and projectised structure. Main characteristics:
- Designed to dispel the disadvantages of both structures, while retaining their advantages.
- Aims to provide strong customer focus and resource efficiency
- May have conflicts with reporting to leader of the function vs leader of the project
- Conflicts of resources is common because the project manager for each project tries to get the best resources
- Weak matrix structure: The project manager has a mandate to execute a project but may have a low level of authority compared to functional managers. The interpersonal and project marketing skills of the project manager are critical.
- Strong matrix structure: The project manager will have more influence in the organizational minefield. Good interpersonal skills are an advantage, the difference being that the rewards ain terms of project success are probably greater.
41
Why is it useful to carry out stakeholder analysis before the execution of a project? How is this done?
It is useful to carry out stakeholder analysis before the execution of a project because dissatisfied and disillusioned stakeholders can cause the project to fail. Stakeholder analysis consists of three stages:
1. Stakeholder identification and analysis
Identify the stakeholders and their values, beliefs, assumptions, and expectations.
2. Mapping the impact of stakeholders onto the project
Map the stakeholders according to whether or not they are likely to support or oppose the project, the power and means available for them to do so, and the predictability of their behavior and expected level of interest in the project. Some stakeholders are predictable, other not so predictable.
3. Response and resolutions of issues
By mapping the stakeholders, it is easier to know how you should build your relationship to each individual stakeholder, depending on impact, predictability, level of interest and power available for them.
42
How can one analyze stakeholder interests? Discuss briefly how external stakeholders can impact a project.
Stakeholder analysis consists of three stages:
1. Stakeholder identification and analysis
Identify the stakeholders and their values, beliefs, assumptions, and expectations.
2. Mapping the impact of stakeholders onto the project
Map the stakeholders according to whether or not they are likely to support or oppose the project, the power and means available for them to do so, and the predictability of their behavior and expected level of interest in the project. Some stakeholders are predictable, other not so predictable.
3. Response and resolutions of issues
By mapping the stakeholders, it is easier to know how you should build your relationship to each individual stakeholder, depending on impact, predictability, level of interest and power available for them.
43
Explain the structure of and what the advantages and disadvantages are for respectively the customer and for the contractor of the following contract types:
a) Firm fixed price (FFP) contracts
b)Cost plus fixed fee (CPFF) contracts
a)
In a firm fixed price (FFP) contract, the contractor carries most of the risk. Even though the contractor is expected to earn profit, this is not guaranteed. If a loss situation occurs (i.e. the cost is higher than expected), the contractor is required to perform the contract. In return for this rigidity, the fixed price contract constrains the customer from asserting control over the performance and any changes to the requirements may result in a claim for an equitable adjustment to the price. The contract is suitable when the contract requirements can be well designed and the risk of failure is small.
b)
In a cost plus fixed fee (CPFF) contract, the customer carries most of the risk. The contractor is reimbursed its cost of performance and is paid a fee in addition to those reimbursed costs. The fee does not change as the costs increase or decrease. CPFF contracts are used where the risks of performance are high, or the customer requires a high level of performance control.
44
Assume you are responsible for the planning of the execution phase of a project. Describe all steps one must take to have cost control in the project from which data to collect from where and how, how they are processed, which measures are used and how eventual changes are handled.
The first step to have cost control in a budget is to plan the project budget. There are different approaches to finding a budget:
1. Top-down budgeting: Senior management sets the budget.
2. Bottom-up budgeting: Project manager prepares a budget which supports efficient and on-schedule project execution.
3. Iterative budgeting: Dynamic process involving both top-down and bottom-up budgeting.
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For the cost budgeting, it is important to relate costs to the schedule to produce time-phased costs and estimate cash flow projections. Cost control is the process of ensuring that deliverables are according to the budget and baseline of the project, and to the timeline/schedule. This is done by observing activities and collection fo data at a certain time, which can be compared to the planned progress and budget. A type of formal control system is the Earned Value Analysis (EVA), which is a type of baseline performance analysis where the budgeted cost of performance work is compared to the budgeted cost of performed schedule and actual cost of work performed. This gives an impression of the project progress with regards to the time and cost.
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In general, continuous reporting to the project manager is important to determine potential changes to the project.
45
What is a project? Discuss why or why not the building of the pyramids can or cannot be regarded as a project.
Characteristics of a project:
- Have a defines goal
- Have a finite time duration
- Are unique (to varying degrees) and exhibit a degree of newness
- Require progressive elaboration
Was the pyramids a project? Yes, they had a defined goal, finite time duration, exhibited uniqueness and newness. But, the work went over such a long time that it did not seem finite for those involved. The term “project” as defined in the 1950s is associated with management techniques not used with the pyramids.
46
What are the main characteristics of a project?
A project is defined as “a temporary endeavor undertaken to create a unique product or service”.
There are three main characteristics of a project:
1. Each project is a temporary endeavor that exists for a limited period only.
2. One way or another projects are all different (uniqueness).
3. Projects take shape through a process called “progressive elaboration” in which the work required is gradually defined, with increasing detail being added over time.
47
Creating the Network Diagram, what are the different cells? and how to handle delays before or after a task.
- Early Start (ES): The earliest possible date that the task will be able to start.
- Early Finish (EF): The earliest possible date that the task will be able to finish.
- Late Start (LS): The latest possible date that the task will be able to start without affecting the overall project completion date.
- Late Finish (LF): The latest possible date that the task will be able to finish without affecting the overall project completion date.
-Duration: The Duration box is known prior to draw the network diagram. It is an input
- Float. difference between an early start and the latest start.
- delay: triangle in between two tasks whit the delay time in
48
Creating the Network Diagram whit A-J tasks where they are dependent on each order, what are the steps?
first set up a table as shown in picture 1,
then input the earliest start and end times as well as task time. then start from the back and set up the latest start and end time. when dis is dun calculate the flote. see picture 2
delay can be marked whit a triangle whit the delay time between to boxes.
49
What is “scope” in a project?
The project scope is defined as:
“A description of the sum of the products and services to be provided by the project”
It represents a complete listing of all the project deliverables, and defines the functionality (and quality) of the end result.
50
Why is it not a good idea to overestimate project costs?
Managers and other project stakeholders sometimes fear that if the project costs are overestimated, Parkinson’s Law will kick in, which is the idea that work will expand to fill available time. If you give a developer five days to deliver a task that could be completed in four days, the developer would most likely use five days anyway. If a team is given six months to complete a project which can be done in four months, the team will find something to do with the extra two months. Because of this, a too high estimate of project costs is ineffective. Thus, managers lower the estimates to avoid Parkinson’s Law.
However, it is better to overestimate the costs than underestimate them. Many experts recommend adding 10% on top of your total costs to cover unexpected expences.
51
how shod a Gantt diagram look, and what are the different symbols and directions
y axis: the difrent tasks in the projekt
x axis: time
Boxes in the diagram showing the different task which will have to be done during a given time period
boxes whit x is critical activities. aka the activities that affect the finished project timeline
circel whit, a number in shows delay
the flote can be shown whit boxes split in two.
52
Should one expect delays in a project?
Yes, one must always expect deviations from the plan. The plan is based on uncertainties. Small delays may happen throughout the project due to changes, but they should be detected early so that consequences to the plan could be projected. However, appropriate control has the intention to adjust plans (update estimates). If the adjustments are approved, there should not be delays.
There are three ways to estimate the duration of a project:
- Historical data or similar projects
- Measure time of each activity
- Probabilistic methods
53
How will you evaluate a proposed change to a project?
A proposed change should be evaluated using a change order system. A change order system is essential for control during the execution of a project mainly because any change may influence the main project conditions scope, cost, and time. Keeping control on the project means keeping control of these three limiting conditions, i.e. planning on how changes are to be handled.
The purposes of a change order system are
- To influence the factors that create change
- To determine that a change has occurred
- To manage the change as and when they occur
54
What is an S-curve, and how are S-curves used?
An S-curve is a curve that displays the cumulative cost of a project against time. The reason for the S shape relates to the project life cycle. Expenditure begins relatively slow on a project as initial plans are discussed and sketched out. Once a solution is fixed, its development takes place and the rate of expenditure is at its highest. Eventually, as the project nears completion, activity subsides and the S-curve slope decreases, reaching zero at project closure.
55
When planning the duration for each activity, you must decide resource use or cost of the activity. Discuss the relationship between the duration and cost for an activity.
The cost or use of resources is often increased when trying to shorten the duration of a project. When a project has several activities, there is usually a critical activity which increases the total duration of the project. In some cases, the project needs to be done at a certain time and therefore reduce the time of these critical activities. The extra cost needs to be evaluated against the importance of the set deadline.
56
Discuss briefly the importance of a good communication strategy for a project to be successful. What is the objective of good communication?
The objective of good communication is to
- transfer important and relevant information, and
- making sure the real meaning of the information has been understood by the receiver.
!
By having a good communication strategy one is more likely to achieve
- efficient marketing of the project to stakeholders
- accurate reporting on progress
- encouragement of teamwork
- early identification of problems and quick response to them
- a clear audit trail and traceability so that the project evaluation becomes easier
!
The overall project planning documentation should therefor include a clear description of the project’s communication strategy.
57
Discuss briefly how you can manage quality in a project.
When talking about quality, this includes both the quality of the deliverable of the project and the quality of the project itself. The main processes of managing control in a project are
- Planning, i.e. identifying the relevant quality standards and how to satisfy them.
- Assurance, i.e. evaluating the project on a regular basis to ensure that the project will satisfy the above standards (mainly a preventive activity).
- Control, i.e. monitoring project results to determine whether they comply to the above standards – and taking corrective action if needed (mainly an after-the-fact activity)
!
Cost of quality management = Prevention cost + Appraisal cost + Failure cost
Managing quality includes achieving a balance between the level of quality sought and the cost associated with managing quality.
58
Discuss pros and cons with a standardized coding system.
Advantage: Since each work package is uniquely defined and shared by all project participants, misunderstandings are avoided and information is easier to share.
!
Disadvantage: Each project has its unique features, so the standard of the coding system may not be exactly suitable for every project. Specifics of a project may be difficult to fit into the coding system.
59
How much should one invest in obtaining control with costs and progress during the execution of a project?
The decision to introduce a formal control system and the selection of a specific system should be based largely on two aspects of the project:
1. The administrative cost of running the control system weighted against its expected benefits (i.e. how much costs can we avoid by running the control system).
2. The risk involved. Projects with a high degree of risk involved need a tighter degree of control (i.e. justify spending more on implementing a control system).
60
Which of the following are projects?
I Staging an open air concert
II Getting married
III Staying married
I and II only
61
Which of the following are correct?
I Projects are about managing change
II Projects are about team work
III Projects are about uncertainties
I, II and III
62
Which of the following are correct?
a) Projects are temporary and repetitive
b) Projects are unique and ongoing
c) Projects are ongoing and unique
d) Projects are temporary and unique
d) Projects are temporary and unique
63
Which of the following are not a project?
a) Making a batch of chips in a restaurant
b) Crossing the Atlantic in a hot air balloon
c) Starting a management consultancy
d) Performing a heart transplant operation in a hospital
Making a batch of chips in a restaurant (repetitive and ongoing process)
64
Which of the following is correct?
I Uncertainty and risk are highest at the start of a project
II Each phase in a project has different organizational needs
III Staffing levels begin high in a project then level off during execution and control before dropping quickly as the project draws to a close
I and II only
65
Approval to go ahead with a project should not be given unless it satisfies which three criteria?
a) Technical, feasibility and business
b) Technical, business and functional
c) Business, feasibility and functional
d) Business, functional and team
b) Technical, business and functional
66
Which of the following is correct when managing a project?
I All decisions must be directed towards achieving the project objectives
II Only the remaining work can be managed
III All decisions must have the sponsor’s approval
I and II only
67
Which of the following are correct?
I Projects are closed systems
II Projects are open systems
I only
68
What is the benefit of classifying projects?
a) To help with network optimization
b) To demonstrate the link between strategy and projects
c) To help understand how to manage projects
d) All of the above
d) All of the above
69
Which of the following is correct?
a) PRINCE 2 is a spreadsheet designed drawing Gantt charts
b) PRINCE 2 is a project management methodology
c) PRINCE 2 was developed in the private sector
d) PRINCE 2 is a project management maturity model
c) PRINCE 2 was developed in the private sector
70
Which of the following is correct? The four phases in the project life cycle are:
a) Initiation and definition; management; execution; control
b) Initiation and definition; management and control; closure; operations and maintenance
c) Starting a management consultancy
d) Initiation and control; planning and development; execution and control; closure
d) Initiation and control; planning and development; execution and control; closure
71
Which of the following is correct? The principles of project management:
a) Apply to any discipline
b) Are best suited to engineering and construction disciplines
c) Are best suited to event management
d) Apply to any discipline except operations management
a) Apply to any discipline
72
Which of the following is correct? Fast tracking is a method of reducing
a. The cost of a project
b. The duration of a project
c. The complexity of a project
d. The number of stakeholders on a project
b. The duration of a project
73
Which of the following people benefit the most from feed-forward information?
a.The project manager and his senior colleagues
b.The sponsor and user
c. Participants involved in early project phases
d.Participants involved in later projects phases
d) Participants involved in later projects phases
74
Which of the following is correct? A project system has:
I Inputs and outputs
II Mechanisms and constraints
I and II
75
Which of the following statements are true?
I A project is an investment
II Project selection is rarely related to an organization’s long-term strategy and business plan
I only
76
Which of the following is correct? The principal purpose of a business case is to:
a. Approve the project charter
b. Obtain the funding of a project
c. Obtain management commitment and approval for investment
d. To educate the end used about the project
c. Obtain management commitment and approval for investment
77
Which of the following is concerned with managing and prioritizing sets of projects?
I Scoring and ranking models
II Portfolio optimization
II only
78
Which of the following is not a scoring and ranking model?
a)Decision tree
b)Analytic hierarchy process
c)Simple multi-attribute rating technique
d)Satisficing
a)Decision tree
79
Which of the following is correct? Prioritization techniques should reflect:
I The degree of business risk involved
II The organization’s internal and external environment
III Cost of prioritization activities compared to expected project returns
I, II and III
80
Which of the following is correct? The purpose of a feasibility study is to:
a) Assess the factors which might affect the project
b) Determine if a business opportunity is possible
c) Improve confidence in the project idea
d) All of the above
All of the above
81
Which of the following financial analysis methods requires a discount rate?
a) Net present value
b) Payback period
c) Internal rate of return
d) All of the above
a) Net present value
82
Which of the following is correct? The cost of capital is
a) The annual capital budget of an organization
b) The opportunity cost of an investment
c) The expected return on an investment
d) The capital expenditure required on a project
b) The opportunity cost of an investment
83
Project communication with the customer is crucial to a project’s success. This communication takes place between the executives, project managers, and employees of both customer and the contractor. The key to success is that the formal communication should go through which of the following people?
a) The project manager
b) The project sponsor
c) An executive
d) Functional managers
a) The project manager (as soon as people begin to bypass the project manager communication failures start to occur leading to disharmony, distrust and conflict)
84
When a Director of Project Management is making a decision on whether or not a project requires a project manager, the Director should do which of the following?
a) Develop evaluation criteria that allow consideration of all relevant factors
b) Consider only the importance of the project’s customer to the organization
c) Assign the most senior project managers to larger projects and the junior project managers to smaller projects
d) Consider only the financial value of the project
a) Develop evaluation criteria that allow consideration of all relevant factors (projects are characterized by complexity and uncertainty; there is a high degree of variability between projects)
85
Which of the following is correct? The swiftest and most effective communications take place among people with:
a) Common points of view
b) Dissimilar interests
c) The ability to reduce perception barriers
d) Good encoding skills
a) Common points of view (more effective than ability to reduce perception barriers)
86
A programme can best be described as:
a) A grouping of related activities, which last two years or more
b) The first major subdivision of a project
c) A grouping of projects, similar in nature, which support a product, product line or strategic plan
d) Another name for a project
c) A grouping of projects, similar in nature, which support a product, product line or strategic plan
87
On which projects are integration most complicated?
a) Large, labor-intensive
b) Large, capital
c) Small, capital
d) Small, labor-intensive
a) Large, labour-intensive (large, labour-intensive projects are more complex and have a greater number of human relationships and interface boundaries to manage – this requires greater integration)
88
Which of the following is (are) the wrong reason(s) for selecting someone to act as a project manager?
I Selecting someone simply because of availability
II Selecting someone who has a command of technology
III Selecting someone who knows the customer personally
I, II and III
89
Which of the following statements illustrates a major difference between project managers and project champions?
a) Project managers prefer to work individually whereas project champions prefer to work in groups
b) Project managers seek perfection whereas project champions seek what is possible
c) Project managers manage things whereas project champions manage people
d) Project managers will seek to meet objectives whereas project champions will seek to exceed objectives
d) Project managers will seek to meet objectives whereas project champions will seek to exceed objectives (the inverse is true for points a-c)
90
Which of the following personnel changes do customers dislike the most?
a) Change project manager in midstream
b) Change project sponsor in midstream
c) Changing key project office personnel midstream
d) Changing key functional employees in midstream
a) Change project manager in midstream
91
Project managers spend a considerable amount of time communicating and interacting with project stakeholders. Which of the following is (are) useful reminders for project managers?
I Analyze the work regularly to determine what can be eliminated
II Keep the priorities clear
III If possible, schedule the most interesting activities first
I and II only
92
Setting project selection criteria and establishing project priorities is the responsibility of which people on a project?
a) The project manager
b) Line managers
c) Senior management or sponsors
d) Customers
c) Senior management or sponsors (the project manager should be aware of the issues but senior management are responsible for making strategic decisions)
93
The role of the executive sponsor is to help the project manager. This help can include which of the following?
I Priority setting
II Assistance in conflict resolution
III Developing the master project plan
IV Setting proper project objectives
I, II, III and IV (the sponsor is intimately involved in all key project decisions)
94
Individuals or organizations with active involvement or active interest in a project are called:
a) Team members
b) Parent organization
c) Client organization
d) Stakeholders
d) Stakeholders (a-c are all examples of stakeholders)
95
Who normally has the responsibility for determining “who” will do the work, “where” the work will be done, and “how” the work will be done in a project?
a) Project manager
b) Line manager
c) Senior levels of management
d) Customer interface
b) Line manager
96
Perception barriers can occur because of individuals:
a) View the same message in different ways
b) Have different experiences
c) Use words that do not have precise meanings
d) All of the above
d) All of the above
97
Which of the following statements are true in a cost plus contract?
I The only firm figure is the fee
II The total man-hours cannot be estimated
III The equipment rate is not firm
I only
98
The make or buy decision is usually made at which stage of the contracting cycle?
a) Requirement
b) Solicitation
c) Award
d) Contract management
a) Requirement
99
When is a FFP contract typically sought by the customer’s project manager?
a) When the risk and consequences associated with the contract project are large
b) When the customer is proficient at dealing with the contracted project activities
c) When neither the contractor nor the project manager understand the scope of the task
d) When the project manager’s company has excess production capacity
a) When the risk and consequences associated with the contract project are large
100
Which of the following is not a function of contract administration?
a) Contract change management
b) Specification interpretation
c) Determination of breach of contract
d) Selection of the project manager
d) Selection of the project manager
101
Which of the following does not affect a contractor’s ability to perform the contract activities after the contract is signed?
a) A poor definition of contract deliverables
b) The extent of project sub-contracting
c) The complexity of the contracted effort
d) The contract type
d) The contract type
102
Using the data shown below, if the cost of the work is £13,000, then what will be the final price paid by the customer?
Target cost: £12,000
Target fee: £1,000
Sharing ratio: 80% / 20%
Price ceiling: £14,000
a) £12,000
b) £12,800
c) £13,000
d) £13,800
£13,800 (£13,000 + £1,000*0.80)
103
In which of the following types of contract is it most important for the contractor to maintain tight control of cost, schedule, and scope changes?
a) Unit price
b) Cost Plus Incentive Fee
c) Cost Plus Fixed Fee
d) Firm Fixed Price
d) Firm Fixed Price
104
Which of the following should be considered in the negotiation and selection of a contract type?
I The degree of clarity with which the end product is defined
II Price competition
III Period of performance
I, II and III
105
Using the data shown below, what is the profit at the point of total assumption?
Target cost: £12,000
Target fee: £1,000
Sharing ratio: 80% / 20%
Price ceiling: £14,000
a) £300
b) £500
c) £750
d) £800
(denne er det noe rart med)
£750
106
In which of the following contract types is it easiest to change the scope of the contract?
a) Firm Fixed Price
b) Fixed Price Plus Incentive Fee
c) Cost Plus Incentive Fee
d) Letter contract
c) Cost Plus Incentive Fee
107
The impact of a risk event is calculated by multiplying which of the following?
a) The likelihood of the event by the consequences of its occurrence
b) The likelihood of the event by the number of risk events
c) The number of risk events by the consequences of their occurrence
d) None of the above
a) The likelihood of the event by the consequences of its occurrence
108
When trying to manage, and reduce the risks associated with a project, how should the risk events be grouped?
a) By the effect that the risk event will have on the project
b) By the impact of the risk event should it occur
c) By the source of the risk event
d) By the project manager’s tolerance for the risk event
c) By the source of the risk event
109
When challenging the scope of a project to lower the associated risk, a project manager should consider the impact on which of the following?
a) Schedule
b) Cost
c) Quality
d) All of the above
d) All of the above
110
In what type of projects should the principles of risk management be applied?
a) Only when the project is large
b) Only when the project is large and there is substantial uncertainty
c) All projects
d) When no project sponsor has been assigned
c)All projects
111
During which phase of a project is the level of uncertainty the greatest?
a) Planning
b) Execution
c) Initiation
d) Closure
c) Initiation
112
A project manager states “I will share this risk with others or totally shift it to them”. He/she is exercising which method of risk reduction?
a) Transfer
b) Avoidance
c) Mitigation
d)Acceptance
a) Transfer
113
Proper implementation of project management will guarantee which of the following?
a) That budgets will be met
b) That schedules will be adhered to
c) That quality/performance will be met
d) None of the above
d) None of the above
114
What is the ultimate goal of applying the principles of risk management to a project?
a) To eliminate all project risks
b) To reduce project risks significantly
c) To reduce the cost of completing the project
d) To reduce the time required to complete the project
b) To reduce project risks significantly
115
Which of the following is correct?
a) Inspection is an appropriate way to ensure quality
b) Inspection is expensive and time consuming
c) Inspection reduces rework and overall costs
d) Inspection is always effective in stopping defective products from reaching the customer
b) Inspection is expensive and time consuming
116
Which of the following is considered a cost of prevention?
I Creating quality control charts
II Rework costs
III Collecting data for use in process improvement efforts
I, II and III
117
Using the data in the figure below, which supplier would you eliminate if you could eliminate only one vendor (assume that correcting each defect has the same cost per defect in all categories)?
a) Supplier A
b) Supplier B
c) Supplier C
d) Cannot determine the correct answer from the available data
a) Supplier A
118
Which of the following is (are) true about quality costs when quality management principles are applied?
I Prevention costs may actually rise over time
II Prevention costs and failure costs (internal and external) are inversely related
III Prevention costs and failure costs (internal and external) are directly related
I and II only
119
What is the progressive detailing of a project plan often called?
a) Rolling wave planning
b) Continuous planning
c) Team planning
d) Detail planning
a) Rolling wave planning
120
Any measurable, tangible, verifiable item that must be produced to complete the project is called which of the following?
a) A deliverable
b) A task
c) A project phase
d) All of the above
a) A deliverable
121
Which of the following is correct?
I A project charter is a document prepared by the project manager that provides the project manager with the authority to apply organizational resources
II A project charter is a document prepared by the senior management/project sponsor that provides the project manager with the authority to apply organizational resources
III A project charter is a document prepared by the customer that provides the project manager with the authority to apply organizational resources
II only
122
What is the totality of all of the products and services to be provided as a project called?
a) The scope of the project
b) The deliverables of the project
c) The project charter
d) The management plan
a) The scope of the project
123
Scope changes on a project are inevitable; however, scope changes can be minimized by which of the following?
I Spending more time developing the scope baseline
II Spending more time analyzing the estimates
III Asking the sponsor to actively participate in the planning
I only
124
Which of the following is correct? A deliverable-oriented grouping of project elements is a:
a) Detailed plan
b) Responsibility chart
c) Work breakdown structure
d) Cost account coding system
c) Work breakdown structure
125
Which of the following is correct? The “control pins” in the work breakdown structure used for assignments to resource units are referred to as:
a) Work packages
b) Subtasks
c) Activities
d) Integration points
a) Work packages
126
Which of the following is correct? In preparing a good project definition, experienced projects managers will:
I Concentrate mainly on the end product, rather than on costs or benefits
II Understand that a project definition/plan is a dynamic rather than static tool, and thus subject to change
III Try to express objectives in quantifiable terms
I, II and III
127
Which of the following is correct? Using the WBS shown below, a typical work package would be:
I Software development
II Systems design
III Coding
1.0.1.1 Software development
1.0.1.2 Systems design
1.0.1.2.1 Hardware development
1.0.1.2.2 Flowcharting
1.0.1.3 Coding
1.0.1.3.1 Language selection
None of the above
128
A project manager believes that modifying the scope of the project may provide added value for the customer. What should the project manager do?
a) Change the scope baseline
b) Prepare a variance report
c) Call a meeting of the change control board
d) Change the project’s objectives
c) Call a meeting of the change control board
129
Which of the following statements are true?
I Project meetings can be used to facilitate teambuilding
II Project meetings should last about one hour
I only
130
Which of the following statements are true?
I Consensus is not required for all decisions relating to the project
II A good rule of thumb is to keep the client well away from team meetings
I only (a high performing team will normally achieve consensus most of the time)
131
A team of industrial engineers presented their plans for re-organizing a production department to a group of shop floor supervisors for approval. After the presentation the plans were approved without any questions. Which of the following is most likely to be true?
a) The presentation communicated all the implications and benefits of the change
b) The presentation did not communicate all the implications and benefits of the change (the lack of questions or comments suggests that there may be some misunderstanding about the plans)
c) The plans proposed satisfied the supervisor’s requirements for change
d) The plans proposed did not satisfy the supervisor’s requirement for change
b) The presentation did not communicate all the implications and benefits of the change (the lack of questions or comments suggests that there may be some misunderstanding about the plans)
132
You have received tenders from eight contractors for the design and construction of a laboratory for testing new products. Three of the tenders seem to meet all the specifications required and provide the necessary flexibility during implementation. The prices of the three short-listed tenders are: £6.8m, £5.4m, and £3.2m. Which of the following is correct?
a) All three tenders meet the requirements, therefore, award the contract to the lowest bidder as this would minimize the cost of the project to the firm and to the shareholders
b) The pricing of the third tender is unrealistically low compared to the others and may be based on a misunderstanding or misrepresentation of the costs involved
c)The second tender should be selected as it represents a good compromise, avoiding the risks of the lowest bid and making savings against the highest priced bid
d)None of the tenders can be trusted, it would be better to conduct a feasibility study and then go out to tender a second time
b) The pricing of the third tender is unrealistically low compared to the others and may be based on a misunderstanding or misrepresentation of the costs involved
133
Read the following dialogue between Rita (project manager), Gavin and Julie decide which stage in the team life cycle the team is at.
Rita: Now that we’ve discussed all the options let’s agree a course of action.
Gavin: That’s not difficult. There was only one option which met all client expectations.
Julie: Well that’s not how I see it; and if you mean your idea, it’s impractical, will take longer to implement and costs too much. The client won’t approve it. At the very last, I think we should discuss all three options with the client.
Rita: Well, that can’t do any harm. Gavin, are you in on this?
Gavin: I still think we should recommend one course of action above the others – even if we let the client see all the choices.
Rita: Julie?
Julie: Whatever.
Rita: Good. Now we can get on with the real work.
Next day.
Rita to Gavin: What time should we expect the client today?
Gavin: Why are you asking me? Julie arranges the meetings.
Rita to Julie: Gavin said you arranged today’s meeting.
Julie: No-one asked me to do it – I know I did it last time, but it’s not my role to arrange all the meetings … Anyway I still think we should hold back on recommending one option above the others until the client has seen all of them first.
Which stage of the team life cycle best represents the above dialogue?
a) Forming
b) Storming
c) Norming
d) Performing
b) Storming
134
The key terminology for project scheduling includes which of the following?
a) Activities, milestones, manpower, skill levels, and float
b) Activities, documentation, manpower, and skill levels
c) Float, activities, milestones, and time estimates
d)Time estimates, float, sponsorship involvement, and activities
a) Activities, milestones, manpower, skill levels, and float
135
Guidelines for estimating time durations include which of the following?
I Assuming a normal level of manpower and other resources
II Using consistent time units
III Using historical records as guides to durations
I only
136
A line manager provides you with three estimates for his activity in your network diagram. His estimates are 2 weeks optimistically, 4 weeks most likely, and 12 weeks pessimistically. What is the expected time which should appear on the chart?
a) 4 weeks
b) 5 weeks
c) 6 weeks
d) None of the above
5 weeks (weighted average = (2+4*4+12)/6 = 5)
137
Based upon the situation, which method(s) shown below could be acceptable for shortening the schedule?
I Crashing
II Changing the scope
III Performing activities in parallel rather than in series
I, II and III
138
Increasing resources on the critical path activities may not always shorten the length of the project because:
Certain activities are time-dependent rather than resource-dependent (e.g. you can’t use three ovens rather than one to bake a cake);
II The skill level of the added resources might not be appropriate for the activities to be performed;
III Adding more resources may create additional work and produce inefficiencies (e.g. additional people may need training and supervision)
I, II and III
139
Activities J, K and L are each the immediate predecessors for activity N. If the earliest finish times for J, K and L are 5, 7, and 9 weeks respectively, what is the earliest start time for activity N?
a) 5 weeks
b) 7 weeks
c) 9 weeks
d) 21 weeks
c) 9 weeks
140
The critical path in a project is determined by which of the following?
a) A forward pass
b) A forward pass and then a backward pass
c) A backward pass
d) Trial and error solutions
A forward pass and then a backward pass
141
Which of the following is (are) not true about a Gantt chart?
I It shows the time spans in which project tasks are performed
II It is particularly effective in showing the logic relationships between project activities
III It was developed by Henry Gantt in the early twentieth century
II only
142
Which of the following sources provide data on duration and estimating?
I Project team knowledge
II Project files (existing or historical)
III Published data on standard practice techniques
I, II and III
143
Which of the following is correct? Project budgets are used to:
I Control costs and cash flow
II Prepare budget baselines
III Control project progress
I, II and III
144
Project budgeting includes which of the following major processes?
a) Resource planning, cost estimating, cost budgeting, cost control
b) Scope definition, cost estimating, cost budgeting, cost control
c) Scope definition, cost estimating, cost budgeting, change control
d) Resource planning, environmental analysis, cost budgets, cost control
a) Resource planning, cost estimating, cost budgeting, cost control
145
Which of the following is correct? Schedule and budget baselines are:
a) Fixed and therefore can never change
b) Never fixed, except on small value projects
c) Fixed towards the end of a project when risk levels have reduced
d) Fixed, but subject to intermittent change
d) Fixed, but subject to intermittent change
146
Baseline cost projections can be aggregated to high levels of the WBS for reporting purposes, and used to generate which of the following?
a) Milestones
b) Activity time-cost curves
c) S-curves
d) Parametric estimates
c) S-curves
147
Which of the following is correct? The three approaches to project budgeting are:
a) Parametric, bottom-up, serial
b) Bottom-up, top-down, serial
c) Bottom-up, top-down, parametric
d) Top-down, bottom-up, iterative
d) Top-down, bottom-up, iterative
148
What is a cost breakdown structure?
a) An alternative form of WBS used to control projects with cost as the main priority
b) A method of cost budgeting using an integrated WBS and OBS
c) A method of cost budgeting that replaces the need for a WBS and OBS (except for very large projects)
d)A structured list showing the cost of every item used in the project
b) A method of cost budgeting using an integrated WBS and OBS
149
Which of the following would increase the accuracy of estimating the project cost?
I Pricing out the work at lower levels in the WBS
II Using historical data
III Talking to people who have worked on similar projects
I, II and III
150
What are the three most common types of project cost estimate?
a) Order of magnitude, parametric, and budget
b) Parametric, bottom-up, and top-down
c) Order of magnitude, budget, and bottom-up
d) Analogous, parametric, and top-down
b) Parametric, bottom-up, and top-down
151
Which of the following is correct? Company expenses such as auditing cost, supervision, office supplies, building rent, and maintenance are elements of the
a) Capital budgeting process
b) Overhead rates
c) Contracts and administration costing system
d) Fringe benefits package
b) Overhead rates
152
What tool have project managers come to use to identify the costs associated with a project budget?
a) A bill of materials
b) A Gantt chart
c) A network diagram
d) A work breakdown structure
d) A work breakdown structure
153
Typically, during which phase in a project life cycle are most of the project expenses incurred?
a) Initiation phase
b) Development phase
c) Execution phase
d) Close-out phase
c) Execution phase
154
Using the table below, what is the cost performance index (CPI) for WBS element R?
1.14
155
Using the table, what is the schedule performance index (SPI) of WBS element P?
1.10
156
Upon completion of 75% of the project, what should the original schedule and cost estimate that were submitted at the inception of the project be referred to as?
a) Baseline
b) Budgeted costs
c) Estimates upon completion costs
d) Scheduled costs
a) Baseline
157
Using the table, which WBS element has a favorable cost variance of £150?
R
158
What is the difference between the BCWP and BCWS referred to as?
a) Schedule variance
b) Cost variance
c) Estimate at completion
d) Actual cost of work performed
Using the table, which of the following is correct?
a) WBS element Q is over budget by 16.66 per cent
b) WBS element Q is under budget by 16.66 per cent
c) WBS element Q is over budget by 10.0 per cent
d) WBS element Q is under budget by 10.0 per cent
159
Using the table, which of the WBS elements is behind schedule but under the budget?
S
160
BCWP for a task that has been completed can be calculated by which of the following methods?
a) Multiplying the actual hours worked on the task by the budgeted labor rate
b) Multiplying the budgeted hours to complete the task by the budgeted labor rate
c) Dividing the actual hours required to complete the task by the budgeted labor rate
d) Dividing the budgeted hours required to complete the task by the budgeted labor rate
b) Multiplying the budgeted hours to complete the task by the budgeted labor rate
161
The formula, EAC = BAC/CPI, assumes which of the following?
a) All work downstream will be completed at the planned expenditure
b) All work downstream will be completed at the planned expenditures, excluding the work packages currently under way
c) All work downstream will be completed based upon the current cost efficiency
d) The cost efficiency cannot change during the project
c) All work downstream will be completed based upon the current cost efficiency
162
Using the table below, which of the following is correct?
a) A comparison of the cost variance of August as compared to that of July shows that the magnitude (£ value) of the variance has become worse and the percentage change has become worse
-
b) A comparison of the cost variance of August as compared to that of July shows that the magnitude (£ value) of the variance has become worse and the percentage change has improved
-
c) A comparison of the cost variance of August as compared to that of July shows that the magnitude (£ value) of the variance has improved and the percentage change has improved
-
d) A comparison of the cost variance of August as compared to that of July shows that the magnitude (£ value) of the variance has improved and the percentage change has become worse
b) A comparison of the cost variance of August as compared to that of July shows that the magnitude (£ value) of the variance has become worse and the percentage change has improved
163
If the actual cost to date for your project is £12,000 and the BCWS to date is £10,000, then which of the following is correct?
a) The project is ahead of schedule
b) The project is under budget
c) The project is ahead of schedule and under budget
d) The status is unknown without further information
d) The status is unknown without further information
164
Using the table below and based upon sterling, what is the actual per cent complete?
Current Period Cumulative
50%
165
In the early stages of a project, the allowable cumulative cost variances are +/- 20%. Given the data below, which elements require an explanation?
P and R
