Project Management Chapter 7,8 and 9

____________ risk occurs when a conscious decision is made to accept the risk of an event occurring.

Retaining

True or False: A perfectly leveled project can result in every activity becoming critical.

True

Indirect project costs include: a. Administration b. Project manager's salary c. Interest d. Supervision e. Operational costs

a. Administration c. Interest d. Supervision

Direct costs on a project include which of the following? a. labor b. executive salary c. interest expenses d. equipment e. materials

a. labor d. equipment e. materials

Risk profiles are updated and refined during the post-project __________.

audit

Identify a common method for reducing project costs when time is not an issue. a. Benchmarking project costs b. Reducing project scope c. Working overtime d. Using updated and more sophisticated equipment

b. Reducing project scope

When estimates for project costs exceed the budget, it may make sense to ___ in order to reduce costs. a. hire more employees b. transfer work from the owner to the team c. outsource project work

c. outsource project work

It is easier to shorten a project when resources are not ___________. (Enter only one word per blank.)

constrained

Outsourcing means you have less _________ over the project and will need to have clearly definable __________.

control,deliverables

Sacrificing quality may reduce the time of an activity on the _________ path.

critical

When a project is behind schedule, getting back on schedule usually requires compressing the time on some of the remaining __________ activities.

critical

When there are high overhead costs, it is prudent to examine the direct costs of shortening the _________ _________ versus the overhead cost savings.

critical path

One way of reducing project costs is identifying tasks that _________ can do themselves a. employees b. suppliers c. customers d. project teams

customers

Which are appropriate methods for handling cost risk? a. Back-up or alternate plans b. Lump sum approach c. Reducing project duration d. Item-by-item price risk analysis

d. Item-by-item price risk analysis

What term is used to describe the documents needed to develop an adequate risk response control plan? a. Work Breakdown Structure. b. Project Scope. c. Work Breakdown Structure Dictionary. d. Risk Register.

d. Risk Register.

The downside of leveling is a loss of ___________ that occurs from reducing ___________ .

flexibility,slack

Heuristics do not always yield an optimal schedule, but they are very capable of yielding a _________ schedule for very complex networks with many types of resources.

good

When a politician or other public figure makes a statement about when a project will be completed, it can create a(n) __________ deadline.

imposed

Projects of long duration need some contingency for ___________ changes—which are usually upward.

price

Reducing __________ is one way to accelerate project completion, but it is rarely acceptable or used.

quality

An advantage of the owner taking more responsibility is that, while costs are lowered, the original scope is ___________. (Enter one word in the blank.)

retained

The key to reducing project scope without reducing value is to reassess the true ___________ of the project.

specifications

A common method for shortening project time is to __________ an activity. (Enter only one word per blank.)

subcontract

____________ frees up resources that can be assigned to a critical activity.

subcontracting

Not only is more time needed to coordinate and manage a larger team but also there is the additional delay of _________ the new people.

training

Smoothing improves the _________ of resources.

utilization

___________ reserves are identified for specific work packages or segments of a project found in the baseline budget or work breakdown structure.

Contingency

___________ reserves are set up to cover identified risks; these reserves are allocated to specific segments or deliverables of the project.

Contingency

____________, or reducing project duration, is accomplished by shortening one or more activities on the critical path.

Crashing

Accelerating project completion, typically by rearranging the network schedule and using start-to-start lags, is referred to as: a. fast tracking. b. crash timing. c. splitting. d. buffering.

a. fast tracking.

Which of the following are used by a risk assessment matrix to prioritize identified risk? (choose all that apply) a. Cost b. Likelihood c. Impact d. Detectability

b. Likelihood c. Impact

In what circumstance can Brook's Law be overcome? a. When existing staff are offered a bonus for achieving their goals. b. When new staff are added early enough to a late software project. c. When new staff are added just before the end of the delayed task on a software project.

b. When new staff are added early enough to a late software project.

What is the starting point to determine the savings possible in reduced project scope? a. Status update meeting b. Work breakdown structure c. Project history documents d. Cost-Duration Graph

b. Work breakdown structure

In scenario analysis, the significance of ____ is assessed. a. risks on the critical path b. each risk event c. high-probability risks

b. each risk event

When critical path activities can be completed in parallel rather than sequentially, it is called ___. a. critical-chain b. fast-tracking c. reducing scope

b. fast-tracking

The Snapshot from Practice "Smartphone Wars" is an excellent example of reducing project duration due to __________. a. imposed project deadlines b. time to market c. incentive contracts d. unforeseen project delays e. high overhead

b. time to market

Which of the following is a goal of smoothing? a. Increase the number of resources used over the life of the project. b. Increase peak of demand for the resource. c. Minimize fluctuations in resource demand.

c. Minimize fluctuations in resource demand.

On most projects, additional workers increase the __________ requirements to coordinate their efforts.

communication

Hourly workers are typically paid time and a half for overtime and ________ time for weekends and holidays.

double

Basically PERT simulation assumes a statistical distribution, range between ___________ and __________, for each activity duration.

optimistic, pessimistic

__________ risk is changing the project plan to eliminate the risk or condition.

Avoiding

Which of the following is not considered an indirect cost? a. Supervision b. Consultants c. Equipment d. Interest

Equipment

__________ risk occurs when the project encounters a threat that is outside the scope of the project or the authority of the project manager.

Escalating

___________ zone risks are typically considered inconsequential and ignored unless their status changes.

Green

___________ (Heuristics/Leveling) prioritize which activities are allocated resources and which activities are delayed when resources are not adequate.

Heuristics

________ reserves are set up to cover unidentified risks and are allocated to risks associated with the total project.

Management

__________ reserve funds are needed to cover major unforeseen risks and, hence, are applied to the total project.

Management

When the project encounters a threat that is outside the scope of the project or the authority of the project manager, what should they do? Ignore the risk since it is outside the scope of the project Make a note of it in the risk plan Monitor the risk Notify the appropriate people within the organization

Notify the appropriate people within the organization

__________ and related techniques take a more macro perspective by looking at overall cost and schedule risks.

PERT

_________ refers to interrupting work on one task and assigning the resources to work on a different task for a period of time, then reassigning them to work on the original task.

Splitting

___________ risks are problematic; they can often be the kind that cause the project to be shut down.

Technical

Which of the following types of activities might need time buffers? a. Activities with severe risks b. Merge activities c. Activities with high costs to make sure the high cost does not negatively d. impact the budget e. Noncritical activities to reduce the likelihood that they will create another critical path f. Activities that require scarce resources g. Burst activities

a. Activities with severe risks b. Merge activities e. Noncritical activities to reduce the likelihood that they will create another critical path f. Activities that require scarce resources

What does fast tracking require? a. Confidence in the work that has been completed b. A single critical path. c. Close coordination among those responsible for the activities affected d. Building a "quick and dirty" short-term solution; then go back and do it the right way.

a. Confidence in the work that has been completed c. Close coordination among those responsible for the activities affected

Which of the following is not one of the techniques for accelerating project completion? a. Critical tracking b. Reduce project scope c. Establish a core team d. Assigning additional staff and equipment e. Do it twice—fast and correctly

a. Critical tracking

Identify the options for accelerating a project schedule when resources are constrained or the budget is severely constrained. a. Critical-chain b. Compromise quality c. Reducing project scope d. Phase project delivery

a. Critical-chain b. Compromise quality c. Reducing project scope

When in a hurry to complete a project where time is of the essence, and rework is possible, which method of reducing project duration is most appropriate? a. Do it twice-fast and correctly b. Improve the efficiency of the project team c. Schedule overtime d. Add resources to the project

a. Do it twice-fast and correctly

Multi-project environments add complexity to organizations. What must any system be able to do in these multi-project environments? a. Effective allocation of resources. b. Reduce project costs for the organization. c. Timely recognition of resource shortages. d. Reduce project durations for lower-priority projects.

a. Effective allocation of resources. c. Timely recognition of resource shortages.

Which are potential impacts given a project with risk responses but no contingency plan? (choose all that apply) a. Incorrect actions taken. b. Reduced costs through saved time. c. Delayed corrective action. d. Panic.

a. Incorrect actions taken. c. Delayed corrective action. d. Panic.

What are potential negatives with respect to splitting a task when planning/assigning project resources? a. Increased management time involvement. b. Probable increase to split task's total duration. c. Better control through more activities. d. Improved resource utilization.

a. Increased management time involvement. b. Probable increase to split task's total duration.

Why is the parallel method the most common resource constrained smoothing heuristic? (choose all that apply) a. It considers all activities at the same time that are competing for a resource. b. It saves time by considering only critical path activities. c. It has been found to be effective over a wide variety of projects. d. It protects the critical path by considering only non-critical activities.

a. It considers all activities at the same time that are competing for a resource. c. It has been found to be effective over a wide variety of projects.

In the "parallel method" of smoothing, what happens if an activity is not allocated a needed resource? a. It is pushed out farther in time until enough resources are available. b. It keeps the same early start date but is classified "over allocated." c. It is allowed to violate technical (precedent) constraints to keep schedule. d. The activity is moved to the late start date.

a. It is pushed out farther in time until enough resources are available.

Which of the following is true of smoothing/leveling resources in a time-constrained project? a. Loss of scheduling flexibility b. Changing the precedence relationship of activities c. There are no risks in a time-constrained project.

a. Loss of scheduling flexibility

Which are the goals of smoothing a resource constrained project? (choose all that apply) a. Minimize any delay b. Reduce total project cost c. Prioritize assignment (allocation) of resources to activities d. Alter technical network relationships

a. Minimize any delay c. Prioritize assignment (allocation) of resources to activities

What negative impacts does the centralization of project resource planning hope to avoid? a. Overall schedule slippage. b. Resource bottlenecks. c. Inefficient resource utilization. d. Excessive project costs.

a. Overall schedule slippage. b. Resource bottlenecks. c. Inefficient resource utilization.

Assessing identified risk is done with respect to which of the following aspects of the project? (choose all that apply) a. Project priorities b. Project timing c. Risk profiles d. Project cost

a. Project priorities b. Project timing d. Project cost

What are the potential actions of project funding cuts such as the reduction or elimination of the source of project cash inflow? a. Reduce project scope b. Crashing the project c. Cancel remainder of the project

a. Reduce project scope c. Cancel remainder of the project

There are basically two strategies for mitigating risk. What are they? (chose all that apply) a. Reduce the likelihood that the event will occur b. Reduce the impact that the adverse event would have c. Purchase insurance to cover the risk d. Have a well developed risk profile.

a. Reduce the likelihood that the event will occur b. Reduce the impact that the adverse event would have

Which are appropriate methods for handling technical (project technology related issues) risk? (choose all that apply) a. Testing and assessment methods. b. Purchase price protections. c. Back-up or alternate plans. d. Reducing project duration.

a. Testing and assessment methods. c. Back-up or alternate plans.

What happens to a time constrained schedule if executed with insufficient resources? a. The resource constrained schedule will be forced onto the plan. b. The amount of free slack will be limited. c. The amount of total slack will be limited.

a. The resource constrained schedule will be forced onto the plan.

What are the advantages of establishing a core project team? a. Undivided attention to a specific project is attained b. Creation of a shared goal c. Multi-tasking costs are avoided d. Short-term projects are efficiently handled

a. Undivided attention to a specific project is attained b. Creation of a shared goal c. Multi-tasking costs are avoided

Which methods may be used to transfer risk in a project? (Select all that apply) a. Warranties and/or guarantees b. Time and material contracts c. Fixed-price contracts d. Insurance

a. Warranties and/or guarantees c. Fixed-price contracts d. Insurance

The most common method for shortening project time when resources are not constrained is to: a. assign additional staff and equipment to activities b. fast-tracking critical project activities c. outsourcing project work d. reducing project scope

a. assign additional staff and equipment to activities

In general terms, risk mitigation will approach an identified risk by planning to reduce its: (choose all that apply) a. impact. b. transferability. c. likelihood. d. specificity.

a. impact. c. likelihood.

A contractor finished a bridge across a lake 18 months early and received more than $6 million for the early completion. This is an example of reducing project duration caused by ____. a. incentive contracts b. time to market c. imposed project deadlines d. unforeseen project delays

a. incentive contracts

Management reserves are established ____________ contingency reserves are identified and funds established.

after

How can teams improve efficiency in a resource-constrained environment? a. Add new team members to late tasks b. Ask to bypass some organizational policies d. Improve project planning methodology

b. Ask to bypass some organizational policies d. Improve project planning methodology

Which statements are correct with respect to time buffers? a. Buffers are a form of estimate padding added by the project manager rather than by the work package estimator. b. Buffers should be added to projects with high uncertainties. c. Buffers should be added to most, if not all, individual activities.

b. Buffers should be added to projects with high uncertainties.

What type of contingency is typically required to manage a "schedule risk," i.e., finishing a project late? a. Termination of project b. Contingency funds, i.e. cash c. Inflation factor adjustments d. Mitigation of risk likelihood

b. Contingency funds, i.e. cash

Identify the two statements that are correct and explain the distinction between a risk response plan and a contingency plan. (Choose all that apply) a. Contingency plans go into effect before a risk occurrence happens. b. Contingency plans go into effect after a risk occurrence happens. c. Risk response plans are initiated before the risk occurs. d. Risk response plans are initiated after the risk occurs.

b. Contingency plans go into effect after a risk occurrence happens. c. Risk response plans are initiated before the risk occurs.

Why is "minimum slack" the first criteria for the parallel method heuristic? a. It is less complex than using minimum duration. b. Critical activities will have the minimum amount of slack in a network. c. If there is zero slack, the activity will not be moved.

b. Critical activities will have the minimum amount of slack in a network.

The term "resource" is used a great deal in project management. What are the classifications of resources that must be managed in a project schedule? a. Customers b. Equipment c. People d. Materials e. Time

b. Equipment c. People d. Materials

What characteristics of a risk event may make "accepting the risk" an appropriate strategy? (choose all that apply) a. The risk is unknown. b. Extremely low probability of occurrence. c. Low cost impact.

b. Extremely low probability of occurrence. c. Low cost impact.

What is key to developing a risk transfer approach to risk management? a. Finding ways to reduce the probability of the risk event occurring. b. Identify and document responsibility for absorbing the impact of the risk occurrence. c. Determine at what point in the project the risk transference should occur.

b. Identify and document responsibility for absorbing the impact of the risk occurrence.

What are the drawbacks in using insurance to transfer risk? (choose all that apply) a. It is difficult to insure low-probability and high-consequence risk events. b. Insurance is often costly c. It may be difficult to explain the risk and its consequences to an insurance broker.

b. Insurance is often costly c. It may be difficult to explain the risk and its consequences to an insurance broker.

What are potential benefits of splitting a task when planning/assigning project resources? a. Splitting can be a useful tool if the work involved includes large start-up or shutdown costs. b. It ensures improved resource utilization. c. It shortens project duration. d. Splitting a task does not involve any hidden costs.

b. It ensures improved resource utilization. c. It shortens project duration.

Identify two limiting assumptions that have been used in this chapter to improve the ease of demonstrating resource allocation. a. Resources cannot be assigned to a task. b. Resources assigned to a task cannot be changed. c. Splitting activities is not allowed.

b. Resources assigned to a task cannot be changed. c. Splitting activities is not allowed.

Which of the following is true of scheduling resources? a. Failure to schedule limited resources does not lead to serious problems for a project manager. b. The resource-constrained schedule will materialize as a project is implemented if resources are truly limited. c. Scheduling of resources does not help a manager to gauge the impact of unforeseen events such as turnover. d. Scheduling of resources should always be done after a project is complete.

b. The resource-constrained schedule will materialize as a project is implemented if resources are truly limited.

Which statement is correct with respect to transferring risk? a. Transferring risk infers postponement or delay of a risk occurrence. b. Transfer of risk does not change the likelihood or impact. c. Transfer of risk increases total cost of the risk event occurring.

b. Transfer of risk does not change the likelihood or impact.

Which best describes what is meant by "risk avoidance" in a risk management plan? a. Ignore the risk and manage it when it occurs. b. Buy insurance to manage consequences. c. Changing the project plan to eliminate a risk condition. d. Change the plan to lessen consequences

c. Changing the project plan to eliminate a risk condition.

According to Brooks' Law, what is the likely impact of adding more people to a late project? a. It helps the project finish early. b. It gets the project back on schedule. c. It makes the project slip further. d. It keeps the project from slipping any further.

c. It makes the project slip further.

Which of the following is a reason for reducing project duration due to intense global competition and rapid technological advances? a. High overhead b. Incentive Contracts c. Time to market d. Imposed project deadlines

c. Time to market

Resource smoothing (leveling) is accomplished through... a. Increasing the number of resources. b. Delaying a critical path activity until resources are available. c. Using slack time to move "non-critical-path" activities.

c. Using slack time to move "non-critical-path" activities.

The priority rules for resource smoothing are applied in ___. a. any period when a critical path activity is scheduled b. every time period of a project c. any period when two or more activities require the same resource

c. any period when two or more activities require the same resource

A common response for meeting unattainable deadlines is to reduce project scope which invariably leads to _____. a. less emphasis on change management b. increased customer satisfaction c. reduced functionality d. preserving value

c. reduced functionality

Freeway projects can fall short of the original intentions but still add value for each mile completed. This is called "___________."

chunkability

The president of a software company remarks in a speech that new technologically advanced software will be available in one year. This is an example of reducing project duration caused by ___. a. high overhead b. time to market c. incentive contracts d. imposed project deadlines

d. imposed project deadlines

The additional costs of doing it twice are often more than compensated for by the benefits of satisfying the _________. (Enter only one word per blank.)

deadline

Contingency reserves __________ as the project progresses.

decrease

Basically all ___________ techniques delay noncritical activities by using positive slack to reduce peak demand and fill in the valleys for the resources.

leveling

The ideal assumption is that direct costs for an activity time represent _________ costs.

normal

In projects the availability or unavailability of _________ will often influence the way projects are managed.

resources

An effective tool for identifying specific risks is the _______ ________ _________.

risk breakdown structure

A __________ __________ details all identified risks, including descriptions, category, probability of occurring, impact, responses, contingency plans, owners, and current status.

risk register

When used wisely, overtime for ________ employees does not add labor expense, but it can decrease project duration. (Enter only one word per blank.)

salaried

A project manager has fewer options for accelerating project completion once the ____________ has been established.

schedule

A __________ __________ - __________ graph includes direct, indirect, and total costs for a project over a relevant range of time.

Project cost-duration

___________ costs continue for the life of the project.

Indirect

___________ scales can be a bit more problematic, since adverse risks affect project objectives differently.

Impact