CH5

13) Companies are using which of the following for improving the estimating process for future projects? A) Adjusting estimates based on individual forecasting abilities B) Creating historical databases of previous projects C) Using time and motion studies D) Benchmarking and using the experience of other companies E) Establishing an estimating training course for all employees

B) Creating historical databases of previous projects

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

B) Padding estimates

4) Which of the following methods is NOT considered a top-down approach to estimating project time and cost? A) Learning curve B) Template C) Ratio D) Function point E) Apportion

B) Template

9) A project estimator is working on estimates for a project that is very similar to a previous project, in that it has many of the same features and those features have similar costs. Each feature or deliverable will represent the same percentage of the total cost as it did for the previous project. He is using the _________ method of top-down estimating. A) function point B) apportion C) consensus D) ratio E) learning curves

B) apportion

6) The salary of the project manager and temporary rental space for the project team would be classified as __________ costs. A) interaction B) direct project overhead C) fixed D) general and administrative overhead E) direct

B) direct project overhead

23) Learning curves are more likely to be applied in situations where most of the costs are A) overhead. B) labor. C) labor and materials. D) materials. E) evenly spread over materials, labor, and overhead.

B) labor.

7) The estimating factor that considers the decreasing accuracy of estimates as one forecasts activities that are further into the future is known as ____________. A) project complexity B) organizational culture C) planning horizon D) padding estimates E) people

C) planning horizon

24) In practice, estimating processes are frequently classified as A) draft/final. B) precise/order of magnitude. C) top down/bottom up. D) rough/polished. E) broad/specific.

C) top down/bottom up.

22) Estimating can be challenged by A) human nature. B) political dynamics. C) size of the project. D) All of these alternatives are correct. E) difficulty in predicting the future.

D) All of these alternatives are correct.

1) Which of the following is NOT one of the factors that need to be considered to improve quality of estimates for project times and costs? A) padding estimates B) planning horizon C) profit D) people E) project structure

D) people

14) The estimating approach that is best to use on projects where there is an unusual amount of uncertainty surrounding the project and when it is impractical to estimate times and costs for the entire project is known as ___________. A) phase estimating method B) parametric procedure C) range estimating D) template method E) WBS method

A) phase estimating method

18) Typical kinds of costs found in a project include all of the following EXCEPT A) general and administrative overhead costs. B) project overhead costs. C) direct costs. D) labor. E) All of these are examples of costs found in a project.

E) All of these are examples of costs found in a project.

3) A project manager is forecasting the time and cost of developing a customized software program by looking at the number of inputs, outputs, inquiries, files, and interfaces. Which of the following methods is he using? A) Ratio B) Apportion C) Template D) Learning curve E) Function point

E) Function point

19) Accounting would be an example of which of the following costs typically found in a project? A) Salary B) Labor C) Direct D) Direct project overhead E) General and administrative overhead

E) General and administrative overhead

21) Reasons why estimating time and cost are important include all of the following EXCEPT A) to determine how long the project should take and cost. B) to determine how well the project is progressing. C) to develop cash flow needs. D) to schedule work. E) to help establish a project selection process.

E) to help establish a project selection process.

11) After averaging out the underestimates and overestimates, a long-duration project is more likely to be on target than a short-term, small project. ⊚ true ⊚ false

FALSE

15) The project management structure chosen to manage the project will have little impact on the quality of estimates. ⊚ true ⊚ false

FALSE

17) The salary of the project manager and her administrative assistant are classified as direct labor costs. ⊚ true ⊚ false

FALSE

2) The consensus method of estimating costs is a bottom-up technique. ⊚ true ⊚ false

FALSE

16) Estimating the total cost of a project by multiplying each major function by a complexity factor is an example of the apportion method of estimating costs. ⊚ true ⊚ false

FASLE

8) Under what conditions would the top-down approach to estimating project times and costs be the best choice?

In the early stages of a project to help develop the initial plan, in making strategic decisions, in projects of high uncertainty, in small internal projects, or in projects with an unstable scope.

5) A project to return Americans to the moon has been estimated to cost $100 billion and take five years to complete, but past similar projects have cost 30% more and taken 20% longer. What should the revised estimates for cost and time be? Because of the long duration, the effects of the time value of money should be taken into consideration—what does this do to the estimated budget and duration. Assume a 3% annual inflation rate.

Based on Reference Class Forecasting, the revised budget should be $130 billion and the revised duration should be six years. Taking into consideration the long project duration and the time value of money, the revised budget would have to be in excess of $130 billion and the revised duration longer than 6 years.

12) Estimates are supposed to be based on normal conditions. While this is a good starting point, it rarely holds true in real life. ⊚ true ⊚ false

TRUE

20) Top-down estimates usually are derived from someone who uses experience and/or information to determine the project duration and total cost. ⊚ true ⊚ false

TRUE

25) One guideline to follow when estimating time, cost and resources is to use several people to make the estimate for a task. ⊚ true ⊚ false

TRUE