SPM-Chap6-12

1. Although information technology projects have a poor track record in meeting project goals, they have a good track record in meeting budget goals.

False

10. Learning curve theory does not apply to the amount of time it takes to complete some tasks.

False

11. Most information technology products can reach 100 percent reliability.

False

13. A definitive estimate should be the least accurate of the three types of estimates.

False

13. Continuous quality improvement is not a goal of quality assurance.

False

14. Only in-house auditors can perform quality audits.

False

35. ____ is the earned value minus the actual cost. a. SV c. CPI b. CV d. SPI

CV

28. Many quality experts believe the main cause of quality problems is the lack of leadership.

True

37. The ____ is the ratio of earned value to actual cost and can be used to estimate the projected cost of completing the project. a. SV c. CPI b. CV d. SPI

C

10. ____ is a method for determining the estimated annual costs and benefits for a project and the resulting annual cash flow. a. Life cycle costing c. Cost estimating b. Profit margin analysis d. Cash flow analysis

Cash flow analysis

15. ____ allow for future situations that may be partially planned for. a. Contingency reserves c. Unknown unknowns b. Management reserves d. Direct reserves

Contingency reserves

19. All of the Six Sigma principles are brand new.

False

19. The people who develop software cost estimates often have a great deal of experience with cost estimation.

False

2. Preparing cost estimates is a job for accountants.

False

21. The WBS is not a required input to the cost budgeting process.

False

22. The term sigma means median.

False

24. Integration testing replaces the other forms of testing with a single comprehensive test.

False

24. There does not need to be a change control system to define procedures for changing the cost baseline.

False

26. If cost variance is a positive number, it means that performing the work cost more than planned.

False

26. In TQC, product quality is less important than production rates, and workers are not allowed to stop production whenever a quality problem occurs.

False

27. If the cost performance index is less than one or less than 100 percent, the project is under budget.

False

28. In an earned value chart, when the actual cost line is right on or above the earned value line, costs are less than or equal to planned.

False

29. DeMarco and Lister found direct correlations between productivity and programming language, years of experience, and salary.

False

3. When an information system does not function correctly, it is generally a slight inconvenience.

False

30. Databases are a common tool for cost estimating, cost budgeting, and cost control.

False

4. Quality is a lower priority than project scope, time, and cost.

False

5. The quality planning process involves taking responsibility for quality throughout the project?s life cycle.

False

6. Organizations have a history of spending too much money in the early phases of information technology projects.

False

8. Design of experiments cannot be applied to project management issues such as cost and schedule trade-offs.

False

8. Direct costs cannot be directly attributed to a certain project.

False

16. ____ allow for future situations that are unpredictable. a. Contingency reserves c. Known unknowns b. Management reserves d. Indirect reserves

Management reserves

30. The ____ is that portion of the approved total cost estimate planned to be spent on an activity during a given period. a. AC c. RP b. EV d. PV

PV

6. ____ is the ratio of revenues to profits. a. Profit c. Cost structure b. Profit margin d. Cost margin

Profit margin

8. ____, with assistance from financial experts in their organizations, should create estimates of the costs and benefits of the project for its entire life cycle. a. Financial mangers c. Budget managers b. Project managers d. System managers

Project managers

31. The ____ is the ratio of actual work completed to the percentage of work planned to have been completed at any given time during the life of the project or activity. a. AC c. RP b. EV d. PV

RP

10. It is important to clarify what functions and features the system must perform, and what functions and features are optional.

True

25. Modern quality management requires customer satisfaction, prefers prevention to inspection, and recognizes management responsibility for quality.

True

27. ISO 9000 provides minimum requirements needed for an organization to meet its quality certification standards.

True

29. Many projects, particularly information technology projects, do not have good planning information, so tracking performance against a plan might produce misleading information.

True

3. Any new technology or business process is untested and has inherent risks.

True

30. Expectations can vary based on an organization?s culture or geographic region.

True

4. Many projects that are started never finish because of cost management problems.

True

6. Quality planning implies the ability to anticipate situations and prepare actions that bring about the desired outcome.

True

7. Project managers must conduct cash flow analysis to determine net present value.

True

7. Understanding which variables affect outcome is a very important part of quality planning.

True

28. The project management plan, project funding requirements, work performance data, and organizational process assets are inputs for the process of ____. a. controlling costs c. consolidating costs b. budgeting costs d. estimating costs

controlling costs

5. When justifying investments in new information systems and technology, the focus should only be on revenues or expenses.

False

33. The ____ is the total direct and indirect costs incurred in accomplishing work on an activity during a given period. a. AC c. RP b. EV d. PV

AC

9. Organizational policies related to quality, the particular project?s scope statement and product descriptions, and related standards and regulations are all important input to the quality assurance process.

False

9. When deciding what projects to invest in or continue, you should include sunk costs.

False

3. ____ includes the processes required to ensure that a project team completes a project within an approved budget. a. Cost budgeting c. Cost control b. Cost estimating d. Project cost management

Project cost management

11. ____ are those costs that an organization can easily measure in dollars. a. Intangible costs c. Tangible costs b. Direct costs d. Indirect costs

Tangible costs

1. Most people simply accept poor quality from many information technology products.

True

11. If a project manager gets sick for two weeks or an important supplier goes out of business, management reserve could be set aside to cover the resulting costs.

True

12. Project managers are ultimately responsible for quality management on their projects.

True

12. ROM estimates can be referred to as a ballpark estimate, a guesstimate, a swag, or a broad gauge.

True

14. Estimates are usually done at various stages of a project and should become more accurate as time progresses.

True

15. If products are accepted, they are considered to be validated deliverables.

True

15. The cost management plan is part of the overall project management plan.

True

16. A large percentage of total project costs are often labor costs.

True

2. The majority of people in the United States use the Internet.

True

20. Every cost estimate is unique.

True

20. Using Six Sigma principles is an organization-wide commitment.

True

21. Minimizing defects does not matter if an organization is making a product that no one wants to buy.

True

22. Most organizations have a well-established process for preparing budgets.

True

23. Cost budgeting provides information for project funding requirements.

True

23. Testing needs to be done during almost every phase of the systems development life cycle.

True

25. The formulas for variances and indexes start with EV, the earned value.

True

19. A ____ is used to allocate money into an organization?s budget. a. budgetary estimate c. rough order of magnitude estimate b. definitive estimate d. final estimate

budgetary estimate

27. A ____ is a time-phased budget that project managers use to measure and monitor cost performance. a. budget baseline c. cost baseline b. ledger d. cost line

cost baseline

26. The main goal of the ____ process is to produce a cost baseline for measuring project performance and project funding requirements. a. cost budgeting c. cost control b. cost consolidation d. cost estimating

cost budgeting

12. Project managers should focus on ____, since they can control them. a. sunk costs c. direct costs b. indirect costs d. intangible costs

direct costs

24. Tom DeMarco, a well-known author on software development, suggests ____ reasons for the inaccuracies of many information technology project cost estimates and some ways to overcome them. a. three c. five b. four d. six

four

17. A ____ provides an estimate of what a project will cost. a. budgetary estimate c. rough order of magnitude estimate b. definitive estimate d. final estimate

rough order of magnitude estimate

18. A ____ is done very early in a project or even before a project is officially started. a. budgetary estimate c. rough order of magnitude estimate b. definitive estimate d. final estimate

rough order of magnitude estimate

2. Three separate surveys of software project cost overruns found that the average cost overrun for all of the projects in their survey samples (not just unsuccessful projects) were ____ percent. a. 13?14 c. 33?34 b. 23?24 d. 43?44

33?34

21. ____ use the actual cost of a previous, similar project as the basis for estimating the cost of the current project. a. Actual estimates c. Bottom-up estimates b. Parametric estimates d. Analogous estimates

Analogous estimates

39. The ____ is an estimate of what it will cost to complete the project based on performance to date. a. CPI c. EAC b. SV d. SPI

EAC

32. The ____ is an estimate of the value of the physical work actually completed. a. AC c. RP b. EV d. PV

EV

34. Variances are calculated by subtracting the actual cost or planned value from ____. a. EV c. PV b. AC d. RP

EV

29. ____ is a project performance measurement technique that integrates scope, time, and cost data. a. Cost baseline c. Constructive cost modeling b. Earned value management d. Parametric modeling

Earned value management

4. ____ involves developing an approximation or estimate of the costs of the resources needed to complete a project. a. Determining the budget c. Controlling costs b. Consolidation of costs d. Estimating costs

Estimating costs

13. ____ are costs that are not directly related to the products or services of the project, but are indirectly related to performing the project. a. Intangible costs c. Direct costs b. Tangible costs d. Indirect costs

Indirect costs

7. ____ helps you develop an accurate projection of a project?s financial costs and benefits. a. Profit cycle costing c. Life cycle costing b. Financial costing d. Profit margin costing

Life cycle costing

14. ____ should be forgotten. a. Sunk costs c. Direct costs b. Indirect costs d. Intangible costs

Sunk costs

23. A(n) ____ might provide an estimate of $50 per line of code for a software development project based on the programming language the project is using, the level of expertise of the programmers, the size and complexity of the data involved, and so on. a. analogous cost estimate c. bottom-up estimate b. parametric model d. reserve analysis

parametric model

36. ____ is the earned value minus the planned value. a. SV c. CPI b. CV d. SPI

SV

40. Using simplified percentage complete amounts for a one-year project with weekly reporting and an average task or work packet size of one week, you can expect about a(n) ____ percent error rate. a. 1 c. 11 b. 5 d. 15

1

1. The Standish Group?s CHAOS studies reported an average cost overrun for unsuccessful IT projects ranged from 180 percent in 1994 to ____ percent in 2004. a. 28 c. 56 b. 43 d. 73

56

5. ____ involves allocating the overall cost estimate to individual work items to establish a baseline for measuring performance. a. Determining the budget c. Controlling costs b. Consolidation of costs d. Estimating costs

A

22. ____ involve estimating individual work items or activities and summing them to get a project total. a. Actual estimates c. Bottom-up estimates b. Parametric estimates d. Analogous estimates

Bottom-up estimates

20. A ____ is used for making many purchasing decisions for which accurate estimates are required and for estimating final project costs. a. budgetary estimate c. rough order of magnitude estimate b. definitive estimate d. final estimate

definitive estimate

25. If the cost estimate will be the basis for contract awards and performance reporting, it should be a ____ and as accurate as possible. a. budgetary estimate c. rough order of magnitude estimate b. definitive estimate d. final estimate

definitive estimate

9. Since organizations depend on reliable information technology, there are also huge costs associated with ____. a. work time c. uptime b. technical planning d. downtime

downtime

38. The ____ is the ratio of earned value to planned value and can be used to estimate the projected time to complete the project. a. SV c. CPI b. CV d. SPI

CPI

16. In a Pareto chart, the variables described by the histogram are ordered chronologically.

False

17. Parametric models are least reliable when historical information was used to create the model.

False

17. To obtain valid statistics, it is important to study every member of a population.

False

18. Control charts are one tool used in the analyze phase of the DMAIC process.

False

18. When developing an estimate for a large software project, estimates cannot be made before clear system requirements have been produced.

False