Project Management Chapter 5

Benefits of Reference Class Forecasting include acts as a reality check helps avoid unsound optimism provides a basis for contingency funds leads to improved accountability all of these are correct

all of these alternatives are correct There are other benefits as well which include reduction of human bias, forcing executives to focus on empirical information, and improved accountability.

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 ratio consensus apportion function point learning curves

apportion This method is an extension to the ratio method. Apportionment is used when projects closely follow past projects in features and costs. Given good historical data, estimates can be made quickly with little effort and reasonable accuracy. This method is very common in projects that are relatively standard but have some small variation or customization.

Refining Estimates may be necessary for a number of reasons. For example, a manager getting further into a project and obtaining a better understanding of what needs to be done to accomplish a project and meet the needs of the customer is an example of hidden interaction costs things going wrong on a project normal conditions not applying changes in project scope there is never a good reason to refine estimates

changes in project scope As he or she gets further and further into the project, the manager obtains a better understanding of what needs to be done to accomplish the project. This may lead to major changes in project plans and costs. Likewise, if the project is a commercial project, changes often have to be made midstream to respond to new demands by the customer and/or competition.

What is the relationship between organizational culture and estimating? there is no relationship cultural norms affect the accuracy of estimates culture determines whether estimates are made estimating alters cultural norms estimating and culture are independent

cultural norms affect the accuracy of estimates Organizational culture can significantly influence project estimates. Organizations vary in the importance they attach to estimates.

The salary of the project manager and temporary rental space for the project team would be classified as __________ costs. general and administrative overhead direct direct project overhead fixed interaction

direct project overhead Direct overhead rates more closely pinpoint which resources of the organization are being used in the project. Direct project overhead costs can be tied to project deliverables or work packages. Examples include the salary of the project manager and temporary rental space for the project team.

Accounting would be an example of which of the following costs typically found in a project? labor direct direct project overhead general and administrative overhead salary

general and administrative overhead Accounting is an example of a cost that is carried out for the duration of the project and cannot be linked to a specific work package or even the project itself. These costs are called general and administrative overhead.

The best way to __________________ is to collect and archive data on past projects. train estimators assist project managers improve estimates forecast project duration estimate project costs

improve estimates Looking back at previous efforts attempted or completed within the organization will give the project manager and the team an idea of what to expect, thus improving their estimating. Of course, one needs to be wary of external factors such as changes in technology or market conditions.

Which of the following is a good condition for top-down estimating? cost and time important fixed price contract customer wants details internal, small project large scale project involving several subcontractors

internal, small project Good conditions for top-down estimating are when there is high uncertainty involved in the project, when the project is small and internal, when the scope is unstable and when it involves strategic decision making.

A project leader is estimating the time and cost of developing an intranet for a new customer. Her department has completed six such intranets for customers during the last two years. Although the proposed system is about the same size as the others, she estimates that it will take about 10 percent less time and money. Which of the following methods is she using? ratio template apportion function point learning curve

learning curve This is a phenomenon of tasks that are labor intensive. In these circumstances the pattern of improvement phenomenon can be used to predict the reduction in time to perform the task. From empirical evidence across all industries, the pattern of this improvement has been quantified in the learning curve (also known as improvement curve, experience curve, and industrial progress curve).

The estimating factor that considers the prevailing belief in some firms that detailed estimating takes too much time and is not worth the effort is an example of the ___________ factor. project complexity planning horizon people organizational culture padding estimates

organizational culture Organizations vary in the importance they attach to estimates. The prevailing belief in some organizations is that detailed estimating takes too much time and is not worth the effort or that it's impossible to predict the future. Other organizations subscribe to the belief that accurate estimates are the bedrock of effective project management. Organization culture shapes every dimension of project management; estimating is not immune to this influence.

A good starting point for developing time and cost estimates is past experience work packages task analysis time and motion studies work breakdown structure

past experience Past experience is a good starting point for developing time and cost estimates. But past experiences must almost always be refined to reach an acceptable level of accuracy.

Which of the following methods is NOT considered a top-down approach to estimating project time and cost? ratio template apportion function point learning curve

template Template methods are used in bottom-up approach to estimating.

The preferred method for situations involving strategic decision making, projects with a high degree of uncertainty, and projects with an unstable scope is the ___________ approach to estimating project time and costs top-down experimental bottom-up reference class professional estimation

top-down Good conditions for top-down estimating are when there is high uncertainty involved in the project, when the project is small and internal, when the scope is unstable and when it involves strategic decision making.

Project managers typically use ________, also called analogous estimating or the ______ method when there is a past history of similar projects and rough-cut estimates are needed for strategic purposes two-to-five years out because, as estimating methods go, it is faster and less expensive. top down apportion bottom up, range estimating bottom- up, learning curve top down, range estimating top down, phase estimating

top-down, apportion Top-down methods (sometimes called parametric) usually use ratios, or surrogates, from prior past projects to estimate project times or costs. Top-down approaches are often used in the concept or "need" phase of a project to get an initial duration and cost estimate for the project.

A(n) __________ is something that is a valuable but burdensome possession. mega-project white elephant yacht vacation home concorde

white elephant The definition of a white elephant.

Consider a five-mile-long railroad tunnel. Tunnel experts and advocates estimate the total cost to be $200 million. What is the reference class for this project? But reference class projects in this area have been over-budget by 30%. So, what should the actual revised budget number be for this proposed five-mile tunnel project? past bridge projects, 230 million past tunnel projects, 260 million past highway projects, 200 million past building projects 230 million past construction projects 230 million

past tunnel projects, 260 million The reference class for this project should be old tunnel projects in the area. The revised budget should be the original budget plus 30% of the original budget or $260 million in this case.

The approach to estimating project time and cost that begins with an overall estimate for the project and then refines estimates for various stages of the project as it is implemented is known as ____________. range estimating parametric procedure template method phase estimating method WBS method

phase estimating method This approach begins with a top-down estimate for the project and then refines estimates for phases of the project as it is implemented. Some projects by their nature cannot be rigorously defined because of the uncertainty of design or the final product. Phase estimating is used when an unusual amount of uncertainty surrounds a project and it is impractical to estimate times and costs for the entire project.

A project manager is looking over the actual results of projects and comparing them to what was estimated. She notices that the projects that took six months or longer to complete were noticeably more off the estimates. Which of the following factors is she recognizing? padding estimates planning horizon project structure people organizational culture

planning horizon Long duration projects increase the uncertainty in estimates.

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? planning horizon people padding estimates profit project structure

profit Factors that need to be considered to improve the quality of estimates are the planning horizon, the project duration, the people responsible for making the estimates, project management structure and organization, padding estimates, and the organizational culture.

A construction estimator is forecasting project time and cost for constructing a new building by multiplying the total square footage by a given dollar amount. Which of the following methods is he using? ratio template apportion function point learning curve

ratio Top-down methods (sometimes called parametric) usually use ratios, or surrogates, to estimate project times or costs. Top-down approaches are often used in the concept or "need" phase of a project to get an initial duration and cost estimate for the project. For example, contractors frequently use the number of square feet to estimate the cost and time to build a new house.