Project Management 8-9
A contingency reserve is an amount of the project budget withheld for management control purposes, for unforeseen work that is within the scope.
False
Analogous estimating is the most detailed, time consuming and accurate way to estimate.
False
Crashing almost always accelerates the schedule while increasing project risk, whereas fast tracking almost always accelerates the schedule while increasing project cost.
False
Inflating the value of future revenue and cost streams to account for the time value of money enables better project decisions.
False
Recurring costs tend to occur during project planning and closing while nonrecurring costs tend to occur during project execution.
False
Resource leveling is a network scheduling technique that seeks to assign nearly equivalent work units to each member of the project team.
False
The component of the project management plan that describes how costs will be planned, structured and controlled is called the project financial plan.
False
The process of estimating the types and quantities of material, human resources, equipment, or supplies required to perform each activity is called a "project staffing analysis."
False
When project managers include diverse perspectives in making decisions, they can often avoid major risks that a single perspective would not uncover.
True
When recruiting resources to support a project, it is helpful to bring core team members and key subject matter experts on board as early as possible, to help plan the project and develop the project culture.
True
When resource overloads are extreme, project managers may need to consider the acquisition of additional resources, reductions in scope or extensions to the project schedule.
True
"Unknown unknowns" are unexpected events which can occur when the project is underway. All of the following accurately describe an implication associated with unknown unknowns EXCEPT: a. They are usually discovered during risk identification b. They need to be covered in the project budget. c. They usually require the use of management reserve. d. They usually cause an increase in cost and / or schedule.
A
Activity based costing allocates indirect costs to fixed costs based on different types of cost drivers. Which of the following is one of the cost drivers that serve as a basis of cost allocation? a. number of units produced b. number of labor hours c. quantity of materials used d. direct equipment costs
A
All of the following factors must be in place in order to develop an analogous estimate effectively EXCEPT: a. An organization must know details behind the time value of money. b. An organization must know how the proposed project differs from the previous project. c. An organization must have experience in performing similar projects. d. An organization must know how much previous projects actually cost.
A
Complex projects such as research and development for new products often employ rolling wave planning to estimate costs. Which of the following best describes "rolling wave" planning? a. Project managers render a definitive estimate for the first stage and an order of magnitude estimate for the remainder of the project. b. Project managers render an order of magnitude estimate for the first stage and a definitive estimate for the remainder of the project. c. Project managers render definitive estimates for all stages of the project during initiation. d. Project managers render an order of magnitude estimate for all stages of the project.
A
Consider the RACI chart presented in Figure 8-1. Who is accountable for the data requirements? a. the project manager b. the project engineer c. the contract officer d. the logistics manager
A
Project managers often confront the challenge of reducing excessive time commitments and overloads among project resources. All of the following methods represent a potentially viable strategy to reduce work overloads EXCEPT: a. Require all project resources to work overtime b. Split an activity into two activities and delay the second part. c. Reorder activities when logically feasible. d. Reassign certain activities to other workers.
A
Which estimating technique uses historical data from a similar project as a starting point for creating a time or cost estimate? a. analogous estimating b. parametric estimating c. bottom-up estimating d. Monte Carlo estimating
A
Which of the following terms best describes a provision in the project management plan to mitigate cost and / or schedule risk? a. reserve b. insurance c. padding d. discretionary fund
A
All of the following are among the benefits realized as a consequence of developing a cost management plan EXCEPT: a. It shows how to develop and share relevant, accurate and timely information that stakeholders can use to make intelligent and ethical decisions. b. It documents how the business case should be created c. It helps stakeholders to focus on schedule and performance as well as cost. d. It provides feedback that shows how the project's success is related to business objectives.
B
Consider the RACI chart presented in Figure 8-1 (RACI stands for Responsible, Approve, Consult, Inform). Who is responsible for development of the specification? a. the project manager b. the project engineer c. the contract officer d. the data manager
B
Consider the programmers resource histogram presented in Figure 8-3. If only six programmers are available to support this project, which of the following conclusions is valid? a. The current schedule is feasible. b. The demand for programmers during weeks five and six exceeds the number available. c. The demand for programmers during weeks six through ten exceeds the number available. d. There is an excess capacity of programmers throughout the duration of this project.
B
Consider the project crashing information presented in Figure 8-4. What is the incremental cost to achieve a one-day reduction in the duration of this project in the most cost efficient manner? a. $ 30 b. $ 35 c. $ 40 d. $ 60
B
Consider the project crashing information presented in Figure 8-4. What is the total cost to complete this project in 7 days if crashed in the most cost efficient manner? a. $ 180 b. $ 220 c. $ 240 d. $ 270
B
Events discovered during Identify Risks that may or may not occur are often categorized as: a. known knowns b. known unknowns c. unknown unknowns d. known certainties
B
The approved time-phased project budget, excluding any management reserves, which can be changed only through formal change control procedures and is used as a basis of comparing actual results, is called a ____: a. measurement baseline. b. cost baseline. c. cost benchmark d. control account
B
The components (principles) of Critical Chain Project Management include which of the following? a. Estimate activity durations generously b. Avoid multi-tasking. c. Adhere strictly to completion deadlines - rather than finishing early or late. d. Add a comfortable buffer to every activity
B
The documentation of a project cost estimate generally requires substantial supporting detail to include all of these EXCEPT: a. a description of scope. b. management reserve needs c. the estimating methods and a range of possible outcomes. d. assumptions and constraints.
B
The staffing management plan addresses all of the following except: a. how to identify internal and external human resources for the project. b. how to create RACI charts. c. how to handle timing issues in building, developing, and releasing the project team. d. how to determine the availability of human resources for the project
B
There are many causes of variation in project costs. Which of the following accurately describes the nature of this variation? a. Variation is generally greater on projects that use well-known technology and an experienced project team. b. Variation occurs in all work processes and the novelty associated with most projects creates many opportunities for variation. c. Special cause variation comes from many small causes that are inherent in a work process. d. Special cause variation is when something ordinary occurs
B
What type of cost is incurred when a project must be conducted faster than normal, and overtime for workers and / or extra charges for rapid delivery from suppliers are necessary? a. marginal costs b. expedited costs c. nonrecurring costs d. variable costs.
B
Which estimating technique uses an algorithm to calculate cost or duration based on historical data and other project parameters? a. empirical estimating b. parametric estimating c. grass roots estimating d. analogous estimating
B
A common tool project teams use is a responsibility assignment matrix (RAM). Typically, this chart will depict: a. the date each activity will begin. b. the duration of each activity. c. the roles key members of the team will play on each activity. d. organizational reporting structure
C
All of the following items describe an aspect of life cycle costing EXCEPT: a. Life cycle cost includes the cost of creating the project and using the result. b. Many project selection decisions are made based upon life cycle cost. c. Life cycle cost only includes the project cost from initiating through closing d. Project managers may need to consider product disposition costs to calculate total life cycle cost.
C
Consider the RACI chart presented in Figure 8-1. What responsibility should the contract officer assume with respect to the statement of work? a. develop b. approve c. consult d. inform
C
Consider the programmers resource histogram presented in Figure 8-3. Which activity is an ideal candidate to delay in order to achieve a feasible schedule? a. Activity A - Define Requirements b. Activity B - Design Application c. Activity C - Draft User Manual d. Activity F - Correct Defects
C
Consider the project crashing information presented in Figure 8-4. What is the cost to complete this project in the normal time? a. $ 40 b. $ 120 c. $ 145 d. $ 405
C
Consider the project crashing information presented in Figure 8-4. Which activity should you crash to reduce this project by one day with the least incremental cost? a. Activity A b. Activity C c. Activity E d. Activity F
C
Critical Chain method was developed to address several problems that are common in organizations that use traditional project scheduling. Which of the following describes a common problem addressed by the critical chain method? a. Many team members render overly optimistic estimates of the time it will take them to complete project activities. b. Many team members work solely on a single task until it is complete - impeding work on other related activities. c. Many team members tend to use all of the time available for an activity rather than completing it early. d. Many team members work best when multi-tasking
C
Project managers must often face the challenge of compressing the project schedule. All of the following actions can be taken to reduce the duration of the critical path EXCEPT: a. Reduce the project scope and /or quality. b. Overlap sequential activities using finish-to-finish, start-to-start, or start-to-finish relationships. c. Use the float in critical path activities d. Partially overlap sequential activities by using time leads.
C
Projects often include indirect costs that are not associated directly with one specific project. Which of the following items are most typically considered to be indirect costs? a. costs associated with material and purchased parts b. the cost of labor provided by project team members, consultants and subcontractors c. executive salaries, utilities and insurance d. travel cost for the project team
C
The process of developing an approximation of the cost of the monetary resources needed to complete project activities is known as: a. capital budgeting. b. estimate resources. c. estimate cost. d. activity resourcing.
C
Which estimating technique decomposes the work into detailed pieces for which estimates are prepared and then aggregated into a total quantity for the project? a. piece meal pricing b. decomposition estimating c. bottom-up estimating d. grass roots estimating
C
A milestone is a typical measuring point used when establishing cost control. Which of the following DOES NOT accurately describes the use of cost control milestones? a. Project managers can use their cash flow projections to determine the funding needed to reach each milestone. b. Project managers and sponsors often decide the number of milestones jointly. c. Milestones are often identified in the project charter. d. Milestones are developed during risk planning.
D
Consider the programmers resource histogram presented in Figure 8-3. How many programmers are required during the fifth week of this project? a. 2 programmers b. 4 programmers c. 6 programmers d. 7 programmers
D
Consider the project crashing information presented in Figure 8-4. What is the normal (un-crashed) duration of this project? a. 6 days b. 7 days c. 8 days d. 9 days
D
Consider the software programmer loading chart presented in Figure 8-2. What percent of available time is the software programmer assigned to work activities on Thursday? a. 80 percent b. 100 percent c. 150 percent d. 200 percent
D
Consider the software programmer loading chart presented in Figure 8-2. Which of the following statements most accurately describes the loading of the software programmer? a. The programmer is never overloaded. b. The programmer is overloaded on Wednesday only. c. The programmer is overloaded on Thursday only. d. The programmer is overloaded on both Wednesday and Thursday.
D
Consider the time-phased budget presented in Figure 9-1. What is the cumulative project budget through the end of April? a. $ 8.000 b. $20,000 c. $38,000 d. $46,000
D
Costs that repeat as project work continues such as writing code are appropriately classified as: a. fixed costs. b. indirect costs. c. nonrecurring costs. d. recurring costs
D
When estimating resource needs, project teams should consider all the following EXCEPT: a. support needs such as information systems. b. the time required to communicate between activities. c. specific knowledge or skills that are required. d. scoring models.
D
Crashing is a project schedule compression technique that relies extensively on overlapping activities and a high degree of concurrency.
False
Early in a project when very little detail is known about a project, it is impractical to render even a rough estimate of the final project cost.
False
Estimate Activity Resources focuses exclusively upon the identification of the number of human resources required to perform each scheduled activity.
False
Generally, parametric estimating requires less information and time than analogous estimating.
False
The project resource allocation plan is a component of the human resource management plan that describes when and how project team members will be acquired and how long they will be needed.
False
Typically, expedited costs are preferred over regular costs.
False
When determining resource availability, project managers need only consider full-time, internal resources.
False
While a "RACI" chart may be very useful for assigning activities to core team members and project managers, the sheer number of subject matter experts on many projects renders the RACI chart impractical for large projects.
False
A project manager needs to ensure that the cumulative amount of cash coming into the project either from internal budgeting or from customer payments meets or exceeds the demands for paying cash out.
True
Both normal and special cause variation add to project cost and need to be considered by project managers.
True
Cost estimating is linked very closely with scope, schedule and resource planning.
True
Critical Chain Project Management (CCPM) attempts to keep the most highly demanded resource busy on critical chain activities.
True
Decisions related to fixed and variable costs are very sensitive to changes in volume related factors and project scope.
True
Direct costs typically include the cost of direct labor as well as other direct costs for items such as material, travel, subcontracts and computer time.
True
Estimate cost is the process of developing an approximation of the monetary resources needed to complete project activities.
True
Even when a project team does not identify individual activities, it will still need to determine how many resources are needed to complete the project
True
Fast Tracking is a project schedule compression technique in which activities or phases normally done in sequence are performed in parallel for at least a portion of their duration.
True
Fixed costs remain the same regardless of the size or volume of work, while variable costs vary directly with volume of use.
True
If a project resource is excessively overloaded, it may be necessary to reduce the project scope.
True
In addition to optimizing project life cycle costs, value engineering can also be used to improve quality or expand market share.
True
In order to avoid project delays, project managers confronted with resource overloads will naturally seek to exploit the slack associated with non-critical activities.
True
Most projects will employ bottom-up estimating at some point to serve as a basis for estimating cash flow needs and for controlling the project.
True
On small projects, the cost management plan may simply address the accuracy of estimating, the source of funding and cost reporting procedures.
True
One approach to identify which activities contribute to work overload for a particular resource is to compare the resource histogram to the Gantt chart schedule.
True
Plan cost management is the process that establishes the policies, procedures and documentation for planning, managing, expending, and controlling project costs.
True
Project managers are encourage to avoid overly conservative cost estimates because the resulting estimate may be too high to approve.
True
Project managers should not lie to themselves or others regarding project costs.
True
RACI (Responsible, Approve, Consult, Inform) charts go beyond a communication plan in that they identify every project activity and specify the exact involvement of each stakeholder.
True
Regardless of what method is used to estimate project costs, supporting detail should be provided.
True
Special cause variation arises when something out of the ordinary occurs.
True
The critical chain method is a schedule method that modifies the critical path to account for limited resources.
True
Vendor bid analysis is used to determine whether the price being asked by the vendors appears to be reasonable.
True
When constructing a responsibility matrix or "RACI" chart, it is important to ensure that only one person has primary accountability for any activity.
True
When identifying people to work on the project, it is helpful to consider their professional disciplines, skill levels and their physical location.
True