Final Flashcards
(127 cards)
1
Q
What period of a project’s life cycle has the highest risk?
A
The period of highest risk is conceptualization due to factors including the high uncertainty, undefined scope, risk of runaways, etc
2
Q
A project life cycle refers to
A
the stages in a project’s development and are divided
into four distinct phases:
3
Q
what are the stages of a projects life cycle?
A
- Conceptualization—development of the initial goal and technical
specifications of the project. Key stakeholders are identified and signed on at this phase. - Planning—all detailed specifications, schedules, schematics, and plans are developed.
- Execution—the actual “work” of the project is performed.
- Termination—project is transferred to the customer, resources reassigned, project is closed out.
4
Q
What occurs during the Conceptualization phase
A
development of the initial goal and technical specifications of the project. Key stakeholders are identified and signed on at this phase.
5
Q
What occurs during the Planning phase
A
all detailed specifications, schedules, schematics, and plans are developed.
6
Q
What occurs during the Execution phase
A
the actual “work” of the project is performed
7
Q
What occurs during the Termination phase
A
project is transferred to the customer, resources reassigned, project is closed out
8
Q
What is the longest phase of a project’s life cycle
A
Execution
9
Q
Project management maturity (P M M) models are used to
A
used to allow organizations to benchmark the best practices of successful project management firms
10
Q
Projects are limited by
A
budget, schedule, and resources
11
Q
Projects are _______-focused
A
customer
12
Q
what are some markers for Project management maturity (P M M) models
A
project schedule
portfolio management
networking between projects
control practices
13
Q
Benchmarking is
A
the practice of systematically managing the process improvements of project delivery by a single organization of a period of time
14
Q
Project Management Maturity—A Generic Model
A
Low maturity - ad hoc processes
Moderate Maturity - Defined practices
High Maturity - Institutionalized
15
Q
Project Manager Responsibilities (6)
A
- Selecting a team
- Developing project objectives and a plan for execution
- Performing risk management activities
- Cost estimating and budgeting
- Scheduling
- Managing resources
16
Q
Identifying Project Stakeholders (2 kinds)
A
Internal Stakeholders
External Stakeholders
17
Q
Examples of Internal Stakeholders
A
Internal Stakeholders
* Top management
* Accountant
* Other functional managers
* Project team members
18
Q
Examples of External Stakeholders
A
External Stakeholders
* Clients
* Competitors
* Suppliers
* Environmental, political, consumer, and other intervener groups
19
Q
Approaches to Project Screening
A
- Checklist model
- Simplified scoring models
- Analytic hierarchy process
- Profile models/Financial Models
- Payback period
- Net present value
- Discounted payback period
- Internal rate of return
20
Q
Screening models help
A
managers pick winners from a pool of projects.Screening models are numeric or nonnumeric
21
Q
Screening models are numeric or nonnumeric and should have
A
- Realism
- Capability
- Flexibility
- Ease of use
- Cost effectiveness
- Comparability
22
Q
All Screening models only partially reflect ______ and have both _______ and ______ factors imbedded.
A
reality; objective; subjective
23
Q
Checklist Model definition
A
A checklist is a list of criteria applied to possible projects.
* Requires agreement on criteria
* Assumes all criteria are equally important
Checklists are valuable for recording opinions and
stimulating discussion.
Screening model
24
Q
Simplified Scoring Models
A
Each project receives a score that is the weighted sum of
its grade on a list of criteria.
Scoring models require:
* agreement on criteria
* agreement on weights for criteria
* a score assigned for each criteria
Score (Weight Score)
Relative scores can be misleading!
Screening model
25
Analytic Hierarchy Process
The AHP is a four step process:
1. Construct a hierarchy of criteria and subcriteria.
2. Allocate weights to criteria.
3. Assign numerical values to evaluation dimensions.
4. Determine scores by summing the products of numeric
evaluations and weights.
Unlike the simple scoring model, these scores can be
compared!
Screening model
26
Financial Models
* Payback period
* Net present value
* Discounted payback period
* Internal rate of return
27
Keys to Successful Project Portfolio Management (3)
* Flexible structure and freedom of communication
* Low-cost environmental scanning
* Time-paced transition
28
Leaders Versus Managers
1. Exchange of purpose
2. A right to say no
3. Joint accountability
4. Absolute honesty
29
Project managers function as __________ and manage both “hard”
technical details and “soft” people issues.
mini-C E O s
30
Project managers:
* acquire project resources
* motivate and build teams
* have a vision and fight fires
* communicate
31
Differences Between Managers and Leaders
Leader
do the right thing
Develop new processes
innovate
originate
earrn their position
command respect
focus on people
inspire trust
focus on potential
have longterm goals
Manager
do things right
maintain status quo
administer
imitate
state their position
demand respect
focus on system
strive for control
focus on the bottom line
have short-term view
32
Emotional intelligence refers to
Leaders’ ability to understand that effective leadership is part of the emotional and relational transaction between subordinates and themselves.
33
Five elements characterize emotional intelligence:
* Self-awareness
* Self-regulation
* Motivation
* Empathy
* Social skills
34
The Project Management Institute’s code of ethics for project managers consists of:
1. Responsibility
2. Respect
3. Fairness
4. Honesty
35
Project scope is
everything about a project—work content as well as expected
outcomes
36
Scope management is
the function of controlling a project in terms of its goals
and objectives
37
Scope management goals and objectives consist of
1. Conceptual development
2. Scope statement
3. Work authorization
4. Scope reporting
5. Control systems
6. Project closeout
38
A Statement of Work (SOW) is
a detailed narrative description of the work required for a project.
39
Effective S O W s contain:
1. Introduction and background
2. Technical description of the project
3. Timeline and milestones
40
Scope Statement steps
1. Establish project goal criteria to include:
a. cost
b. schedule
c. performance
d. deliverables
e. review and approval “gates”
2. Develop management plan for project
3. Establish a Work Breakdown Structure
4. Create a scope baseline
41
The WBS is a ________________ of the total
scope of work to be carried out by the project team to
accomplish the project objectives and create the project
deliverables. Each deliverable is decomposed, or broken
down, into specific “bite-sized” pieces representing work to
be completed
hierarchical decomposition
42
Work Authorization is
The formal “go ahead” to begin work.
Contractual documentation possesses some key identifiable features:
* Contractual requirements
* Valid consideration
* Contracted terms
Contracts range from: Lump-sum or turnkey <---------> Cost Plus
43
Project Changes Occur for one of several reasons
* Initial planning errors, either technological or human
* Additional knowledge of project or environmental conditions
* Uncontrollable mandates
* Client requests
44
Project Closeout the job is not over until the ______ is done
paperwork
45
Project Closeout documentation is used to
* Resolve disputes
* Train project managers
* Facilitate auditing
46
Project Closeout documentation includes:
* Historical records
* Post-project analysis
* Financial closeout
47
Building High-Performing Teams
Make the project team tangible.
* Publicity
* Terminology and language
Reward good behavior.
* Flexibility
* Creativity
* Pragmatism
Develop a personal touch.
* Lead by example
* Positive feedback for good performance
* Accessibility and consistency
48
Stages in Group Development
1. Forming—members become acquainted
2. Storming—conflict begins
3. Norming—members reach agreement
4. Performing—members work together
5. Adjourning—group disbands
49
Conflict is
a process that begins when you perceive that someone has frustrated or is about to frustrate a major concern of yours.
50
Conflict Resolution
* Mediate—diffusion/confrontation
* Arbitrate—judgment
* Control—cool down period
* Accept—unmanageable
* Eliminate—transfer
51
Risk management
the art and science of identifying, analyzing, and
responding to risk factors throughout the life of a project and in the best interest of its objectives.
52
Project risk
an uncertain event or condition that, if it occurs, has a positive or
negative effect on one or more project objectives such as scope, schedule, cost, or quality
53
Four Stages of Risk Management
1. Risk identification
2. Analysis of probability and consequences
3. Risk mitigation strategies
4. Control and documentation
54
Conflict is often evidence of _______!
progress
55
Cost management has been defined to
encompass data collection, cost accounting, and cost control.
56
Cost accounting and cost control serve as
the chief mechanisms for identifying and maintaining control over project costs.
57
Cost estimation
processes create a reasonable budget baseline for the project
58
Types of Costs
* Direct Versus Indirect
* Recurring Versus Nonrecurring
* Fixed Versus Variable
* Normal Versus Expedited
59
Direct Costs encompass
the costs involved with creating, developing and releasing a product or service
ex labour, materials, equipment
60
Indirect Costs are
expenses that are tied to a creating a product, they include costs
involved with maintaining and running a company.
Electrical and rent costs are indirect cost
61
The budget is
a plan that identifies the resources, goals, and schedule that allows
a firm to achieve those goals
62
a project plan includes (3)
WBS
Scheduling
Budgeting
63
types of Cost Estimation
* Ballpark (order of magnitude) +/- 30%
* Comparative +/- 15%
* Feasibility +/- 10%
* Definitive +/- 5%
64
Activity-Based Costing is (4 steps)
Projects use activities and activities use resources (4)
1. Assign costs to activities that use resources.
2. Identify cost drivers associated with this activity.
3. Compute a cost rate per cost driver unit or transaction.
4. Multiply the cost driver rate times the volume of cost driver units
used by the project
65
Budget Contingencies:
The allocation of extra funds to cover uncertainties and
improve the chance of finishing on time.
66
Gantt Charts
* Establish a time-phased network
* Can be used as a tracking tool
67
Benefits of Gantt charts
1. Easy to comprehend
2. Identify the schedule baseline network
3. Allow for updating and control
4. Identify resource needs
5. Easy to create
68
Project Control Cycles—General Model
1. Setting a goal.
2. Measuring progress.
3. Comparing actual with planned performance.
4. Taking action.
69
Monitoring Methods (3)
1. Project S-Curve interpretation (time vs cumulative costs)
2. Milestone Analysis
3. Earned Value Management
70
Steps in Earned Value Management (5)
1. Clearly define each activity including its resource needs and budget.
2. Create usage schedules for activities and resources.
3. Develop a time-phased budget (P V).
4. Total the actual costs of doing each task (A C).
5. Calculate both the budget variance (C V) and schedule variance (S V).
71
Earned Value Management (E V M) recognizes that
it is necessary to jointly consider the impact of time, cost, and project performance on any analysis of current project status.
72
Earned Value (E V) directly links
all three primary project success metrics
-cost,
-schedule,
-performance
73
Which statement about scope management is BEST?
Scope management is accomplished in a single step by any one project team member
Scope management can begin once a project hits operational level
Project goals don't matter in scope management as long as the budget is not exceeded
Scope management must take place during the conceptual development, full definition, execution, and termination phases
Scope management must take place during the conceptual development, full definition, execution, and termination phases
74
Your instructor moonlights to make ends meet during the summer months and has a knack for painting houses. You agree to pay $500 over whatever the materials and equipment rental cost for the job and delight in sipping lemonade in the shade watching your poor instructor perform under a(n):
Lump-sum contract.
Cost-plus contract.
Time and material contract.
Fixed wage contract.
Cost-plus contract.
75
The term network logic means:
Tasks must either precede or follow other tasks in project planning and management.
Unselected
Tasks cannot be performed unless the project manager issues a specific command to perform the work.
Unselected
Prior project planning removes the need for any rush so that tasks can be performed in a methodical fashion.
Unselected
Tasks are not performed unless the customer issues a specific request to perform the work.
Tasks must either precede or follow other tasks in project planning and management.
76
Project risk is lowest during the:
Conceive phase of the project life cycle.
Finish phase of the project life cycle.
Execute phase of the project life cycle.
Develop phase of the project life cycle.
Finish phase of the project life cycle.
77
Which of these is more characteristic of a leader?
Strive for control
Do things right
Demand respect
Inspire trust
Inspire trust
78
The concept of project portfolio management holds that firms should:
Regard all projects as unified assets.
Manage projects as independent entities.
Focus on short-term strategic goals.
Focus on long-term constraints.
Regard all projects as unified assets.
79
A simple scoring model for project evaluation requires:
Importance weights from 1 to 10 assigned to each criterion
Score values assigned to each criterion in terms of its rating
A summation for each criterion to achieve an overall criterion score
A division of weights by scores to arrive at a standardized score for each criterion
Score values assigned to each criterion in terms of its rating
80
Project risk is highest during the:
Finish phase of the project life cycle.
Develop phase of the project life cycle.
Execute phase of the project life cycle.
Conceive phase of the project life cycle
Conceive phase of the project life cycle
81
The mountaineers all agreed that their quest to build a bridge between the two peaks of Mount Kilimanjaro was a noble one, but they had no idea how long it would take to complete until they finished their:
Project goal criteria.
Work breakdown structure.
Scope baseline.
Management plan.
Work breakdown structure.
82
Which statement about scope management is BEST?
Project goals don't matter in scope management as long as the budget is not exceeded.
Scope management is accomplished in a single step by any one project team member.
Scope management must take place during the conceptual development, full definition, execution, and termination phases.
Scope management can begin once a project hits operational level.
Scope management must take place during the conceptual development, full definition, execution, and termination phases.
83
A graphical display of costs against project schedule is called a(n):
S-curve.
Gantt chart.
Radar chart.
Budget plot.
S-curve.
84
Implementing sustainable practices in projects will require organizations to pay attention to:
Project planning.
Project conceptualization.
Project execution.
All aspects of the project life cycle.
All aspects of the project life cycle.
85
When negotiating, it is important to:
Focus on interests, not positions.
Focus on positions, not interests.
Focus on positions and interests.
Focus on neither interests nor positions.
Focus on interests, not positions.
86
Which statement regarding project selection and screening criteria is BEST?
It is possible, given enough time and effort, to identify all relevant issues that play a role in project selection
Decision models are either objective or subjective.
For many projects, more than 80% of the decision criteria are vital
The most complete model in the world is still only a partial reflection of organization reality
The most complete model in the world is still only a partial reflection of organization reality
87
The behavioral side of project management emphasizes:
leadership
planning
scheduling
project selection
leadership
88
Which of the following is accomplished through project management?
An automotive manufacturer produces a day's quota of vehicles
A cellular phone company activates a new customer's service.
A software developer creates a new crash-proof operating system
A retailer restocks the shelves after a day of brisk sales.
A software developer creates a new crash-proof operating system
89
Direct costs are those clearly assigned to the aspect of the project that generated the cost.
(T/F)
T
90
Product life cycles are longer now than twenty years ago
T/F
F
91
Which statement regarding the duties of leaders and managers is BEST?
Leaders embrace the status quo while managers support change.
A manager's title is bestowed by the organization.
Leaders aim for efficiency.
Managers aim for effectiveness.
A manager's title is bestowed by the organization.
92
External stakeholders that are external to a project but possess the power to effectively disrupt the project's development are:
Special-interest groups.
Stressor groups.
Environmental groups.
Intervenor groups.
Intervenor groups.
93
Concurrent activities are:
Activities that use resources from the same resource pool
Activities that can be performed at the same time
Activities that use labor from the same group of workers
Activities that must be done one after the other
Activities that can be performed at the same time
94
Every decision model contains both objective and subjective factors
T/F
T
95
Which of the following is NOT an element of strategic management?
Eliminating cross-functional decisions
Evaluating cross-functional decisions
Implementing cross-functional decisions
Formulating cross-functional decisions
Eliminating cross-functional decisions
96
The Project Management Body of Knowledge Guide definition of a project indicates that a project is:
Multifunctional
Permanent
Designed to avoid using human resources
Not limited by a budget
Multifunctional
97
Conflict begins as team members begin to resist authority and demonstrate hidden agendas and prejudices in the:
Storming stage of group development.
Performing stage of group development.
Forming stage of group development.
Norming stage of group development.
Storming stage of group development.
98
Geoff's project manager names three individuals and requests a project budget of $3,000,000 for the new 8-Pod, a backpack-sized personal music player for 8-track tapes capable of holding up to 100 songs from the '60s and '70s. This important step takes place during ________ of the project life cycle.
planning
conceptualization
execution
termination
conceptualization
99
A baseline is the project's scope fixed at a specific point in time.
T/F
T
100
The commitment of financial, human, and technical resources is highest during the:
Conceptualization phase
Planning phase
Execution phase
Termination phase
Execution phase
101
Which statement about stakeholders is BEST?
Stakeholders can potentially impact project development.
By definition, clients are not stakeholders, they are customers.
Stakeholders can potentially impact project development.
102
An allocation of extra funds to cover uncertainties and improve chances that the project can be completed within the timeframe originally specified is a:
Reserve line budget.
Setback.
Budget contingency.
Reallocation budget.
Budget contingency.
103
The first step in assembling a project team is to
Negotiate with the functional supervisor
Notify top management
Talk to potential team members
Identify the required skills
Identify the required skills
104
Project management is a useful training ground for
Interns
Employees of recently acquired companies
Recent graduates
Senior executives
Senior executives
105
The process of accelerating a project is referred to as:
Streamlining.
Expediting.
Rushing.
Crashing.
Crashing.
106
The step that reflects the formal "go ahead" given to the project to commence once the scope definition, planning documents, and other contractual documents have been prepared and approved is the:
Go ahead.
Kick off.
Work Release.
Work authorization.
Work authorization.
107
The four main reasons for project termination are:
* Extinction – project stopped, either successfully or
unsuccessfully and all project activities cease.
* Addition – when a successful project is integrated into an
organizations structure as a broader program or initiative
* Integration – a method of terminating a project by
integrating it into another project.
* Starvation – the project is cut off from resources, support
or funding.
108
Closeout Paperwork
* Documentation
* Legal
* Cost
* Personnel
109
Financial Management is the practice of
planning, organizing, directing and controlling financial resources to accomplish set financial goals including profitability, cash flow and investing
110
Concepts of Financial Management
Interest and Equivalence
111
Interest and Equivalence refers to
refers to different cash flows at different snapshots in
time can be considered equivalent if they have the same economic value with factors including the time value of money and interest rates
112
Interest (I) is the
compensation for giving up the use of money for the duration of
a loan
113
Simple Interest:
interest that is computed only on the original sum and not on
accrued interest
114
Compound Interest
how interest is normally calculated. The interest earned (for
invested money) or due (for borrowed money) in one period affects the principal for interest calculations in later periods
115
Cash Flow Diagrams
a graphical summary of the timing and magnitude of a set of
cash flows
116
Cash Flow Diagrams Assumptions
Cash flows occur at the ends of periods.
End of time period 1 = beginning of time period 2, etc.
“Now” is (usually) time 0.
117
Present worth is the value of
a future sum of money or stream of cash flows that
is determined by discounting a future value by an estimated rate of return that the
money could have earned if it were invested for the time period.
118
Annuities
a series of n same-sized receipts or disbursements that begin at the end of period 1 and continue to the end of period n
Mortgage and loan payments are classical examples of annuities.
119
Comparison Methods are used to make financial decisions
1. Minimum Acceptable Rate of Return (MARR):
2. Present Worth Analysis
3. Rate of Return Analysis
4. Benefit-Cost (B/C) Ratio Analysis
120
Minimum Acceptable Rate of Return (MARR):
* Investing in a project implies foregoing the opportunity to invest
elsewhere (opportunity cost).
* Any proposed investment must earn at least as much as elsewhere or any investment must earn at least enough to pay the “cost of capital” (e.g. interest on loans).
* MARR: Interest rate required to accept a project
121
Present Worth Analysis
compares projects, say A and B, by computing
their present worths at the MARR. For independent projects with a positive PW yield, a rate of return > MARR, decision rule is to take the contract.
(Example of Software genius).
122
Rate of Return Analysis:
the interest rate i* such that, when all cash flows
associated with a project are discounted at i*, the present worth of the cash flows is zero.
Or, the present worth of cash receipts, is equal to the present worth of the cash disbursements.
Decision Rule for Internal Rate of Return (IRR) Method (for independent projects): Select any project which has an IRR which is at least the MARR. PW or AW ≥ 0 is acceptable.
123
Benefit-Cost (B/C) Ratio Analysis
Calculated as a ratio of the Equivalent
Worth (EW) of the projects benefits to the equivalent worth of the project
costs. If the B/C > 1.0, the project is accepted
124
Benefit-Cost (B/C) Ratio is accepted if
the B/C > 1.0
125
Opportunity Cost:
the value of the next best alternative that is foregone when a
decision is made for a particular option.
126
Depreciation
Engineering projects often involve investment in equipment or other
assets. These assets lose value, or depreciate, over time.
127
Depreciation can occur
for a variety of reasons:
* Use related physical loss: e.g., tire wear on a car. This type of loss is usually measured as a function of units of production, miles driven, or other measures of use.
* Time related physical loss: e.g., rusting of cars. This type of loss is usually measured in units of time.
* Functional loss : e.g., style changes, changes in safety device requirements. This is usually measured in terms of the function lost.
