You are running a project for a customer based on a cost-reimbursable contract with the following terms: Target costs: $ 1,000,000 Fixed fee: $ 100,000 Benefit/cost sharing: 80% / 20% Price ceiling: $ 1,200,000 Which is the PTA (= point of total assumption, break point) of the project?
$1,125,000
Liquidated damages (LDs) are contractually agreed payments in order to...
...cover the customer's costs caused by late completion or failure to meet specifications by the contractor.
Which is an appropriate order in most project situations for the development of scope-related documents?
1. Project SOW (statement of work), 2. Project charter, 3. Project scope management plan, 4. Project scope statement, 5. WBS (work breakdown structure) and WBS dictionary.
Which statement describes best the meaning of the term cost baseline?
A cost baseline is an approved time-phased budget that will be used to measure and monitor cost performance on the project.
What is a constructive change?
A direction by the buyer or an action taken by the seller that the other party considers an undocumented change to the contract.
A production process has been defined as part of an industrial equipment manufacturing project. The process is intended to produce steel bolts with a length of 20 cm. The control limits are 19.955cm and 20.045cm. The measurements made at the end of the process yielded the following results: 20.033cm, 19.982cm, 19,995cm, 20.006cm, 19.970cm, 19.968cm, 19.963cm, 19.958cm, 19.962cm, 19.979cm, 19.959cm. What should be done?
A special cause should be investigated, the process should be adjusted.
A project management team wants to procure some customized products which are available in identical grade and quality from many vendors. What should be included in the procurement package to ensure that their offers will be comparable?
A statement of work specifying attributes and metrics of the requested deliverables in detail to allow vendors submission of bids
What is a trigger in project risk management?
A warning sign that a previously identified risk might be occurring or has occurred
A project sponsor requested earned value data on two concurrent projects from the project managers. Both projects are regarded as equally important and strategically beneficial and have been finished by over 80%. He received the following information: Project A: PV: $1,800,000 EV: $2,300,000 AC: $2,100,000 Project B: PV: $2,000,000 EV: $1,500,000 AC: $1,600,000 The sponsor considers to shift some resources from project A to project B to speed up the second project which is currently behind schedule. What is the most likely outcome of such a measure?
According to the law of diminishing returns, the consolidated cost variance of the two projects will decrease.
You have been assigned as a project manager to a software project. While you and your team are working on a WBS (work breakdown structure), estimations for activity durations based on the activity list vary significantly. Which additional documents may help you clarify this situation?
Activity attributes and project scope statement.
You have used estimates made by your team members and applied the critical path method to compute a network logic diagram for your project. Then you found out that it cannot be sufficiently optimized for scarce resources and fast progress towards a given deadline. What should you do next?
Apply Three-point estimation and critical chain project management.
Which statement describes best why you should document assumptions?
Assumption analysis is a valuable tool and technique to explore the validity of assumptions during risk identification.
Which of the following statement(s) on whistleblowing is/are not true? A.)It is a term used to define an employee's decision to disclose information on unethical, immoral or illegal actions at work to an authority figure. B.)An employee should always discuss the matter with people external to the company before following the "chain of command" and discuss it with the immediate superior. C.)The consequences of whistleblowing are often extreme and might include being branded as an owner of bad judgment, layoff, civil action and imprisonment. D.)Carefully performed whistleblowing can lead to the end of unethical business practices.
B
A prime contractor in a customer project under CPFF contract has run into unexpected technical problems. Fixing them will require a lot of additional work to be done. The company made a decision to book more staff and equipment from their subcontractors in order to adhere to the agreed timeline. The customer agreed to this decision. What will most likely happen?
Both the contractor's indirect costs and the customer's payment for them will not increase.
During a project, earned value analysis is performed, resulting in the following numbers: EV: 523,000; PV: 623,000; AC: 643,000. Which results are correct?
CV: -120,000; SV: -100,000
You are assigned as the project manager to a project which is executed for a customer under FP contract. Your customer informed you this morning that they insist on certain "refinements" of the project scope. You agree that the requested actions make really sense to the project, but believe that they constitute a major change increasing the project scope. What should you do next?
Check the contract, the project charter, the scope statement and other documents related to the project and the contract. Implement ADR (alternative dispute resolution) procedures if the conflict cannot be resolved otherwise.
Your project is executed with a globally spread virtual team. The project progress has been found to be too slow. Which measure is most likely to immediately speed up the project?
Collocation of team members at a suitable place
What is the meaning of a concept called the "Journey to Abilene"?
Committee decisions can have the paradox outcome, that a jointly made or approved decision is not desired by any individual group member.
Which of the following becomes increasingly important in a virtual team environment?
Communication planning
Which statement on conflicts is true?
Conflict is natural and forces a search for alternatives.
You have recently been assigned as a project manager to a new B-O-T (build, operate, transfer) capital project. Reviewing the initial documentation you found out that it has been calculated with a very small margin during operations of its product for the shareholders. What should you do?
Create a realistic plan broken down to a sufficient level of detail. Perform all risk management processes. Ensure real-time communications with all stakeholders.
You want to perform active risk acceptance. What should you do?
Create contingency reserves in resources, money and time.
Which tool and technique is used in the processes Create WBS and Define activities?
Decomposition
With your team you are using judgment from subject matter experts to identify and analyze project risks. There is a small number of experts available, but some of them have long been in a teacher-student or manager-assistant relationship. Which of the following techniques can ensure best that there is no dominating opinion during an expert review?
Delphi technique
A project manager spent some days to create a multi-page document, which he called project charter. The document should have been issued by the project sponsor. The sponsor found the document outsized and asked for a condensed document. Which of the following is usually not an element of the project charter?
Detailed control account and work package descriptions
You are assigned as the project manager to a project which had a one-time cost variance in the past caused by unexpected rework which has meanwhile been finished. You perform earned value analysis and get the following results: EV: 250,000; PV: 200,000; AC 275,000 BAC is 500,000. What is right?
EAC = 525,000
You are performing earned value technique on your project. After budget approval, an additional and unexpected cost item has been identified, which made the project more expensive some weeks ago. The item has meanwhile been paid by the project team, and it is expected that for the remaining duration of the project, costs will be as budgeted. In this case, which is the best formula to calculate EaC (Estimate at Completion)?
EaC = BaC - CV
You are the manager of your company's project management office. The company is running many concurrent projects; most of them share a resource pool of technical staff. Understanding how resources are utilized across projects has been found essential to overall project performance, including cost effectiveness and profitability. This morning you received a message that the resource pool members will be unable to perform as planned for the next months because the overall work load has grown too high and while delays are adding up, the morale of the staff is going down. What should you do next?
Ensure that quantitative information for all projects is made available in a uniform and reliable fashion and verify that the project management methodology is adhered to. Then consolidate the information to get an understanding of the problems related with the use of shared resources.
What is the purpose of configuration control when configuration management is applied in a project?
Ensuring that proposed and approved changes to configuration items are fully analyzed. Ensuring that proposed and approved changes to configuration items are fully documented. Managing and controlling the frequently requested changes to a project by applying agreed rules.
________ is typically not referred to as a buffer type in critical chain project management.
Free buffer
Which of the following statements describes best the relationship between project phases and the project life cycle?
In project management, the sequence of project phases and phase gates is often referred to as project life cycle.
Which is true in regard of RoI (return on investment) for a project?
It defines the cumulated net income from an investment at a given point in time or during a defined period. It includes investment, direct and indirect costs and may include allowances for capital cost, depreciation, risk of loss, and/or inflation. It is most commonly stated as a percentage of the investment or as a dimensionless index figure.
Which of the following is true regarding the code of accounts?
It is the collection of unique identifiers generally assigned to WBS items.
You are the project manager in an engineering project and have recently signed a contract with a software vendor for the development of a complicated control solution. The software will be used to control machinery equipment which your project team is currently developing. The contract is a lump-sum contract. The contractor has target cost estimated which seem rather low to you. Which of the following statements is true for this situation?
It is the contractor's risk in this type of contract that their profit may vanish if costs have been underestimated. This form of contract should only be chosen when all the requirements for the building of the product are well-known by all parties involved. In a fixed-price contract, change requests can cause issues regarding additional time and extra costs for the changes to be applied.
Which should be included in a requirements management plan?
It should describe how requirements activities will be planned, tracked, and reported.
Which of the following statements describes best the relationship of quality and grade?
Low quality is always a problem as it bears on the ability of an item to meet requirements; low grade may sometimes be acceptable.
You have been criticized that certain specifications in your scope statement do not pass the test for SMART objectives. What are SMART objectives?
Objectives that are described using specific, measurable, assignable, realistic and time-related specifications.
An estimation has been made that the construction of a residential home will cost a certain amount per square foot of living area. This is an example of what type of estimating?
Parametric estimating
A change request in a project has been rejected some weeks ago. Yesterday, the project manager found out that it nevertheless has been implemented by the team members, who knew of the change request, but not of the rejection. In order to avoid such a situation, rejected change requests should be consistently communicated to stakeholders through which process?
Perform integrated change control
Which is normally regarded as an elementS of cost of quality?
Prevention costs Appraisal costs Failure costs
When do bidder conferences normally take place?
Prior to the submission of a bid or proposal by the bidder.
A project management team has subcontracted work to a service company. Which of the following tools is the best choice to assure that this company will be able to meet the quality requirements of the project?
Quality audit
A review to determine whether of project activities comply with organizational and project policies, processes, and procedures is commonly called
Quality auditing
In a software company a large number of simultaneously performed projects utilize the same groups of human and other resources. What is the term commonly used for this situation?
Resource pooling
Which of the following is generally regarded to be a motivator according to Frederick Herzberg?
Responsibility for enlarged task Interest in the task Recognition for achievement
What does the acronym RACI commonly stand for in project management?
Responsible, Accountable, to be Consulted, to be Informed
In order to speed up a project, you made a decision to fast-track a phase currently performed with five team members, and another one which was planned to begin in four weeks time with another five team members. Which of the following activities should you do first?
Restructure your team and delegate tasks in order to ensure the flow of communications in a team with the number of communication channels increased by a factor of 4.5.
Which of the following tools is used to create a risk management plan?
Risk planning meetings
What should be covered by a risk management plan?
Roles and responsibilities for handling project risks Timing of project risk management activities The methodological approach used for risk management
The scope baseline consists of what?
Scope statement, WBS, and WBS dictionary
A project management team is evaluating the causes that might contribute to unsatisfactory performance and quality. Which of the following statements is not true?
Special causes are easier to predict and handle than random causes (also called common causes).
Your project management team includes two external consultants each from a different company. You found that repeated conflicts between the two consultants already slow down project progress and jeopardize achievement of objectives. Which stage of team development can be difficult to overcome in such a situation?
Storming from Forming, Storming, Norming, Performing
Network templates which contain only portions of a network are often referred to as
Sub-networks or fragment networks
During execution of a project which is performed for a customer on a T&M (time and material) contract base, a new project manager is taking over the assignment. He discovers that two members assigned to the project have charged time without performing any work for the project customer. Upon further investigation, he determines that this occurred because there have been no other project assignments open for these employees. The customer is unaware of these facts. What should the project manager do?
Take the two people off the team immediately and arrange for the refund of the excess charges to the customer.
What is defined by control limits?
The area consisting of typically three standard deviations on either side of a mean value of a control chart to plot measured values found in statistical quality control
You are performing a project management audit in your company and find that most of the project plans are neither consistent nor up-to-date. Which of the following statements is not true?
The consistency of the project management plan is secondary because it is only the results that matter.
A company has to make a choice between two projects, because the available resources in money and kind are not sufficient to run both at the same time. Each project would take 9 months and would cost $250,000. The first project is a process optimization which would result in a cost reduction of $120,000 per year. This benefit would be achieved immediately after the end of the project. The second project would be the development of a new product which could produce the following net profits after the end of the project: 1. year: $ 15,000 2. year: $ 125,000 3. year: $ 220,000 Assumed is a discount rate of 5% per year. Looking at the present values of the benefits of these projects in the first 3 years, what is true?
The first project is more attractive by app. 3%
What is the S-curve in project management?
The graph that describes the typical growth of earned value during the course of the project.
During a company event, you had the opportunity to talk to a colleague project manager. He told you that in his current project actual costs are 15% under cumulated costs budgeted for today. What do you think?
The information given to you by the colleague is not sufficient to assess project performance.
You have been asked to calculate the internal rate of return (IRR) of a project? What will you assess?
The inherent discount rate or investment yield rate produced by the project's deliverables over a pre-defined period of time.
A project manager has been asked to support an internal project request by developing a business case. What kind of information is the person expected to provide in the document?
The necessary information from a business standpoint to determine whether the project is worth the investment.
A project is handled by departments of an organization and expedited by a project coordinator. Which of the following statements is most likely to be true?
The performing organization is a weak matrix.
You found the following earned value analysis information for a project that was recently closed-out: SPI = 0.7, CPI = 1.0
The project has been cancelled while it was executed. At that time the project was behind schedule and on budget.
What is true for prototypes?
They are tangible and allow for early feedback on requirements by stakeholders.
You are project manager in a global project with a team consisting of people from various countries. What can you try to prevent misunderstandings due to cross-cultural differences?
Use all communication methods available that are suitable for the team and follow up in writing when communicating verbally. Remember that cultural and individual diversity may help project teams solving unforeseen problems during the course of the project.
A document called ____________ is created by decomposing the project scope into smaller, more manageable elements.
Work Breakdown Structure
According to the project plan, a contractor is scheduled to deliver some software components today afternoon. A regular payment is due to be made to this contractor tomorrow. You and your project team received a note this morning informing you that the software delivery will be delayed by 2 weeks. What should you do right now?
You should conduct a meeting with the contractor to resolve the delivery issues before making the payment.
In a traditionally drawn decision tree, a circle represents ___________.
a chance to which an expected monetary value may be assigned to calculate the most likely pay-off.
An output of the process Estimate activity resources is a document called "activity resource requirements". It identifies the types and quantities of resources...
required for each activity in a work package.
What is true for modern project management? Project managers need...
to be team players and facilitators instead of "bosses"
