Project Management - ISM4314

Net present value is being used to break the tie among four otherwise equal projects. If the interest rate is 4%, which of these anticipated four-year flows would yield the greatest net present value? • $10,000 in year 1; $11,000 in year 2; $12,000 in year 3; and $13,000 in year 4 • $13,000 in year 1; $12,000 in year 2; $11,000 in year 3; and $10,000 in year 4 • $10,000 in year 1; $10,000 in year 2; $13,000 in year 3; and $13,000 in year 4 • $11,000 in year 1; $11,000 in year 2; $12,000 in year 3; and $12,000 in year 4

$13,000 in year 1; $12,000 in year 2; $11,000 in year 3; and $10,000 in year 4

A company facing an interest rate of 8% must choose among projects offering the following four-year cash flows. If the company is employing the net present value criterion, which project should they choose? • $25,000 in year 1; $15,000 in year 2; $10,000 in year 3; and $5,000 in year 4 • $5,000 in year 1; $5,000 in year 2; $20,000 in year 3; and $30,000 in year 4 • $15,000 in year 1; $15,000 in year 2; $15,000 in year 3; and $15,000 in year 4 • $5,000 in year 1; $5,000 in year 2; $25,000 in year 3; and $25,000 in year 4

$15,000 in year 1; $15,000 in year 2; $15,000 in year 3; and $15,000 in year 4

Consider the portfolio of projects described in the table. The resource requirements are in numbers of labor hours. The First in Line rule would begin work with project: A April 2006 Oct 2006 125 200 100 B Feb 2006 Sep 2006 200 350 400 C Mar 2006 Aug 2006 100 650 200 D Jan 2006 Nov 2006 150 250 350 • A. • B. • C. • D.

A

Consider the portfolio of projects described in the table. The resource requirements are in numbers of labor hours. The Greatest Resource Demand rule would begin work with project: • A. • B. • C. • D.

A

Consider the portfolio of projects described in the table. The resource requirements are in numbers of labor hours. The Greatest Resource Utilization rule would begin work with project: A April 2006 Oct 2006 200 0 400 B Feb 2006 Sep 2006 150 200 170 C Mar 2006 Aug 2006 0 250 200 D Jan 2006 Nov 2006 150 100 0 • A. • B. • C. • D.

A

Which statement regarding project selection is best? • Organizational reality can be perfectly captured by most decision-making models. • Before selecting any project, the team should identify all the relevant issues that play a role in project selection. • Decision models must contain either objective or subjective factors. • Every decision model has both objective and subjective factors.

Every decision model has both objective and subjective factors.

A work package may be composed of one or more subdeliverables. True False

False

All that is needed to create a resource loading calendar is the work breakdown structure and the activity network. True False

False

Because projects managed under a project portfolio management scheme may be independent of each other, it is not necessary to consider resource use when deciding to pursue any single project. • True • False

False

Because resource management is typically a multivariate, combinatorial problem (i.e., on that is characterized by multiple solutions involving literally dozens, hundreds, or even thousands of activity variables) truly correct answers are not possible. True False

False

Controls can be established at any point during a project but should follow the maxim "more control is better". True False

False

If an activity can be split, only the functional portion of the original activity needs to be accomplished for the project to be fully completed. True False

False

If resources have been over-allocated, the loading table must be reconfigured to eliminate resource contention points. The project manager can focus solely on the original point of contention since the activities in a project are separate entities. True False

False

Internal rate of return is preferable to net present value because IRR employs a weighted average cost of capital discount rate that reflects potential reinvestment. • True • False

False

The problem of resource underutilization that a project manager faces when managing a single project disappears in the multi-project environment. True False

False

Which of these statements about subdeliverables is best? • Subdeliverables have durations of their own. • Subdeliverables consume resources. • Subdeliverables have direct assignable costs. • Subdeliverables summarize the outcomes of work packages.

Subdeliverables summarize the outcomes of work packages.

A lump sum contract requires the customer to pay for the full delivered price of the project before any work is done. True False

True

A resource loading table is created through identifying the project activities and their resources required to completion and applying this information to the project schedule baseline. True False

True

A work package may consist of more than one milestone. True False

True

Every decision model contains both objective and subjective factors. • True • False

True

In-process inventory represents the amount of work waiting to be completed but delayed due to unavailable resources. True False

True

Use the information in the table and assume that a worker is expected to devote half-time (four hours per day) to this project with work taking place on a 5-day-per-week basis. Which week has the highest resource usage? A 5 days B 4 days C 5 days D 6 days E 6 days F 6 days • week 6 • week 2 • week 4 • week 3

week 2

Use the information in the table and assume that a worker is expected to devote half-time (four hours per day) to this project with work taking place on a 5-day-per-week basis. Which week has the highest resource usage? A 4 6 B 4 11 C 5 5 D 4 6 E 4 6 F 6 3 G 8 11 H 8 8 J 3 10 K 6 4 • week 4 • week 5 • week 6 • week 7

week 4

Use the information in the table and assume that a worker is expected to devote half-time (four hours per day) to this project with work taking place on a 5-day-per-week basis. What is the total resource requirement for activity G? A 4 6 B 4 11 C 5 5 D 4 6 E 4 6 F 6 3 G 8 11 H 8 8 J 3 10 K 6 4 • 22 hours • 88 hours • 44 hours • 132 hours

88 hours

Which of these statements about resource management is best? • A mathematically optimal solution is almost always attainable and should be pursued. • The project manager should level resources as to maximize fluctuations from time period to time period. • A common approach to analyzing resource-leveling problems is to apply heuristics. • Resource management is usually a univariate, combinatorial problem.

A common approach to analyzing resource-leveling problems is to apply heuristics.

Which statement about scope management is best? • Scope management must take place during the conceptual development, full definition, execution, and termination phases. • Project goals don't matter in scope management as long as the budget is not exceeded. • Scope management is accomplished in a single step by any one project team member. • Scope management can begin once a project hits operational level.

Scope management must take place during the conceptual development, full definition, execution, and termination phases.

A statement of work identifies: • a need. • a project organization. • members of the project team. • alternatives.

a need.

Mathematical programming is sometimes used to generate optimal solutions to resource constrained problems in a multi-project setting but suffers from: • an inability to model project and activity due dates. • resource substitution. • resource constraints. • problem complexity.

problem complexity.

A writer estimates it will take three months to generate spiffy documents to accompany a seminal work in operations management. He grossly underestimates the time required and misses his deadline by two months. This estimate was: • objective and accurate. • subjective and accurate. • objective and inaccurate. • subjective and inaccurate.

subjective and inaccurate.

Which of the following is NOT a project goal criteria? • cost • schedule • team membership • review and approval gates

team membership

A resource loading chart displays: • the amount of time needed as a function of resource limits. • the amount of resources required as a function of time. • the amount of time needed as a function of money. • the amount of resources needed as a function of money.

the amount of resources required as a function of time.

The Minimum Late Finish Time rule stipulates that: • the earliest late finishers are scheduled last. • the latest early finishers are scheduled first. • the earliest late finishers are scheduled first. • the latest late finishers are scheduled first.

the earliest late finishers are scheduled first.

A commercial factor in project selection and screening might be: • a need to develop employees. • the likelihood that users of the project are injured. • the long-term market dominance. • the impact on the company's image.

the long-term market dominance.

Use the project described in the table to determine the total resources required for this project during week 1 if a worker is expected to devote half-time (four hours per day) to this project. Assume that the project work is conducted on a 5-day-per-week basis. A 5 days B 4 days C 5 days D 6 days E 6 days F 6 days • 40 hours • 20 hours • 28 hours • 36 hours

20 hours

Use the project described in the table to determine the total resources required for activity D if a worker is expected to work half-time (four hours per day) on this project. A 5 days B 4 days C 5 days D 6 days E 6 days F 6 days • 6 hours • 40 hours • 24 hours • 48 hours

24 hours

Use the information in the table and assume that a worker is expected to devote half-time (four hours per day) to this project with work taking place on a 5-day-per-week basis. What is the total resource requirement for the project? A 4 6 B 4 11 C 5 5 D 4 6 E 4 6 F 6 3 G 8 11 H 8 8 J 3 10 K 6 4 • 365 hours • 335 hours • 320 hours • 310 hours

365 hours

Use the project described in the table to determine the total resources required for this project on day 2 if a worker is expected to devote half-time (four hours per day) to this project. A 5 Days B 4 Days C 5 Days D 6 Days E 6 Days F 6 Days • 4 hours • 2 hours • 8 hours • 6 hours

4 hours

Use the project described in the table to determine the total resources required for this project during week 2 if a worker is expected to devote half-time (four hours per day) to this project. Assume that the project work is conducted on a 5-day-per-week basis. • 30 hours • 20 hours • 40 hours • 36 hours

40 hours

Use the project described in the table to determine the total resources required for this project on day 10 if a worker is expected to devote half-time (four hours per day) to this project. Assume that the project work is conducted on a 5-day-per-week basis. A 5 Days B 4 Days C 5 Days D 6 Days E 6 Days F 6 Days • 5 hours • 10 hours • 4 hours • 8 hours

8 hours

Which statement about the Analytical Hierarchy Process is false? • AHP scores are significant. • AHP can be used to capture choice options that do not yield positive outcomes. • AHP can improve the process of developing project proposals. • AHP groups subcriteria that share the weight of a common higher-level criterion.

AHP can be used to capture choice options that do not yield positive outcomes.

The project represented by this resource load chart has a maximum limit of 6 units of resource activity in any day. The first activities that are strong candidates for shifting are: • Activity A • Activities B and C • Activities D and E • Activity E and F

Activities D and E

Use this resource load chart to determine which activity uses the greatest number of resources. • Activity A • Activity B • Activity C • Activity D

Activity A

A baseline is the project's scope fixed at a specific point in time. True False

True

Resource loading charts are used to display the amount of resources required as a function of time on a graph. True False

True

Scope reporting not only identifies the type of information that will be reported, but also to whom it will be reported and with what frequency. True False

True

The efficient frontier in a profile model is the set of options that offers a maximum return for a given level of risk or a minimum risk for every level of return. • True • False

True

The reciprocal of the payback period is used to calculate the average rate of return for a project. • True • False

True

There is, for almost all projects, usually a dominant constraint that serves as the final arbiter of project decisions. • True • False

True

In order to allocate costs more precisely, a company will assign: • bar codes to each activity. • activity codes to each subdeliverable. • WBS codes to each activity. • level 4 codes to each package element.

WBS codes to each activity.

Which of these is NOT a typical element of a statement of work? • introduction and background • a list of activities needed to complete the project • technical description of the project • timeline and milestones

a list of activities needed to complete the project

Scope management for a project begins with: • a work package. • an organization breakdown structure. • a statement of goals. • a configuration statement.

a statement of goals.

An internal operating issue in project screening and selection is: • expected return on investment. • change in physical environment. • patent protection. • the chance that the firm's goodwill will suffer due to the quality of the finished project.

change in physical environment.

Evaluating projects in terms of their strategic fit with existing project lines or their ability to augment the current product family is known as: • balance. • an open criterion • weighted criterion. • complementarity.

complementarity.

The pairwise comparison approach: • is a method to split the weights assigned to subcriteria. • is a method to compare pairs of hierarchies prior to any further analysis. • is a means of achieving all project objectives within the allocated time frame. • may be used instead of AHP if time is limited.

is a method to split the weights assigned to subcriteria.

A wedding planner allows $10,000 for flowers and three weeks to receive all RSVPs back from the list of 700 guests. Both estimates are correct within a fraction of a percent. We could describe this factoid as: • numeric and subjective. • numeric and objective. • non-numeric and subjective. • non-numeric and objective.

numeric and subjective.

If an organization that currently is managing a vast and well-balanced portfolio of projects decides on a new strategic direction, it will initially face the problem of: • scarce resources. • a conservative technical community. • out-of-sync projects and portfolios. • unpromising projects.

out-of-sync projects and portfolios.

What are work breakdown structure elements that must be completed to conclude the project deliverables? • activities • tasks • work packages • milestones

work packages

The lowest level in work breakdown structure contains the: • atoms. • activities. • finite elements. • work packages.

work packages.

A project consisting of six activities is represented in the resource loading table shown below. There is a limit of 12 hours time spent on this project for any given day. What activities are involved in the first resource problem in this schedule? • Activities A, B, and C • Activities B, C, and D • Activities C, D, and E • Activities D, E, and F

Activities D, E, and F

The project described in the table uses the same resource for activities A, B, C, and D. Which activity gets first use of this resource if we assign the resource based on the activity with the shortest duration? W 4 12 A 3 16 B 4 15 C 5 13 D 6 14 E 1 17 Z 7 18 • Activity A • Activity B • Activity C • Activity D

Activity A

The project described in the table uses the same resource for activities A, B, C, and D. Which activity gets first use of this resource if we assign the resource based on the activity with the greatest number of successor tasks? W 4 12 A 3 16 B 4 15 C 5 13 D 6 14 E 1 17 Z 7 18 • Activity A • Activity B • Activity C • Activity D

Activity B

Use this resource load chart to determine which activity is the longest in duration. • Activity A • Activity B • Activity C • Activity D

Activity B

The project described in the table uses the same resource for activities A, B, C, and D. Which activity gets first use of this resource if we assign the resource based on the activity with the smallest amount of slack? Activity Duration Predecessor WBS ID W 4 -- 12 A 3 W 16 B 4 W 15 C 5 W 13 D 6 W 14 E 1 B 17 Z 7 A,E,C,D 18 • Activity A • Activity B • Activity C • Activity D

Activity D

Use this resource load chart to determine which activity uses the fewest resources. • Activity A • Activity B • Activity C • Activity D

Activity D

The statement of work should contain: • information on the key objectives for the project. • a brief and general description of the work to be performed. • expected project outcomes. • All of these are elements of a statement of work.

All of these are elements of a statement of work.

A simple scoring model is used to decide among three projects that we'll call A, B, and C. The total score for project A is 30, for project B is 20, and for project C is 10. Which of the following statements is best? • If project A is successfully completed, it will yield three times the benefits that project C would have provided. • If project C is chosen, the company would benefit only half as much as if they had chosen project B. • Project C is better than project B for this company at this point in time. • Project A is better than project B for this company at this point in time.

Project A is better than project B for this company at this point in time.

A project is exceptionally risky might still be undertaken by a firm if they have several other projects underway that are considered more of a sure thing. This approach to project selection is best described by the criterion called: • strategic "fit". • risk. • desire for portfolio balance. • top management pressure.

desire for portfolio balance.

Excessive in-process inventory is often caused by: • schedule slippage. • over-ordering supplies. • lack of available resources. • too much labor.

lack of available resources.

Penalty clauses for schedule slippage are sometimes referred to as: • liquidated damages. • punitive damages. • temporal assessments. • late fees.

liquidated damages.

The amounts of individual resources that a schedule requires during specific time periods is referred to as the resource's: • loading. • capacity. • constraint. • drag

loading

Conceptual development for a project concludes with: • project objectives. • alternative analysis. • project delivery. • team dissolution.

project objectives.

A project that must be finished by December 31st is: • time-constrained. • resource-constrained. • mix-constrained. • capacity-constrained.

time-constrained.

Use the information in the table and assume that a worker is expected to devote half-time (four hours per day) to this project with work taking place on a 5-day-per-week basis. If the project manager is told that the total number of hours per week cannot exceed 48, what is the first week that some resource leveling must occur? A 4 6 B 4 11 C 5 5 D 4 6 E 4 6 F 6 3 G 8 11 H 8 8 J 3 10 K 6 4 • week 2 • week 6 • week 4 • week 5

week 4

The project described in the table uses the same resource for activities A, B, C, and D. Which activity gets first use of this resource if we assign the resource based on the activity with the lowest activity identification number? Activity Duration Predecessor WBS ID W 4 -- 12 A 3 W 16 B 4 W 15 C 5 W 13 D 6 W 14 E 1 B 17 Z 7 A,E,C,D 18 • Activity A • Activity B • Activity C • Activity D

Activity C

A project consisting of six activities is represented in the resource loading table shown below. There is a limit of 12 hours time spent on this project for any given day. Which activity should be left alone if at all possible in the adjustment process among the candidates? A 4 4 4 4 B - - - - - -4 4 4 4 4 4 4 4 4 4 4 C - - - - - -5 5 5 5 5 D - - - - - - - - - - - - - - - - - - - - - 4 4 4 4 4 4 E - - - - - - - - - - - - - - - - - - - - - 4 4 4 4 4 F - - - - - - - - - - - - - - - - - - - - - 6 6 6 • Activity D • Activity C • Activity F • Activity E

Activity D

The costs attached to subdeliverables: • are the summary of the work packages that support it. • are called phantom costs. • should be subtracted directly from deliverable costs. • are not recoverable unless explicitly stated in the work breakdown structure.

are the summary of the work packages that support it.

The first step in the Analytical Hierarchy Process: • requires supporting requirements to be combined into level II challenges. • is analyzing the process you intend to improve before undertaking any improvement project. • requires Saatyfication of the team members. • consists of constructing a hierarchy of criteria and subcriteria.

consists of constructing a hierarchy of criteria and subcriteria.

The section of the contractual documentation that identifies what are the excusable delays, allowable costs, and criteria for inspection is called the: • bylaws. • amendments. • contracted terms. • dissolution factors.

contracted terms.

In the case of projects developed for external clients, work authorization typically addresses: • budget linkage. • audit trail establishment. • resource requirements. • contractual obligations.

contractual obligations.

All projects are promised in terms of the specific functionality or performance criteria they will meet. The key feature of the contractual documentation that specifies this functionality or criteria is the: • contractual requirements. • valid consideration. • contracted terms. • contractual performance.

contractual requirements.

One consequence of conceptual development that proceeds with a problem that is poorly understood is: • problem restatement. • cost overruns. • problem clarification. • task confusion.

cost overruns.

The amount of work waiting to be completed but delayed due to unavailable resources is known as: • resource utilization. • in-process inventory. • resource underutilization. • efficiency.

in-process inventory.

The systematic process of selecting, supporting, and managing a firm's collection of projects is called: • heavyweight project management. • matrix project organization. • profile management. • project portfolio management.

project portfolio management.

The concept of project portfolio management holds that firms should: • regard all projects as unified assets. • manage projects as independent entities. • focus on short-term strategic goals. • focus on long-term constraints.

regard all projects as unified assets.

The One Shovel Construction Company is hired by the City of Edmond to lay sewer pipe from the east end of town to the west end of town. While the crew would like to begin at both ends simultaneously and have a dramatic ceremony when both ends meet, they find themselves with a bit of a: • time constraint. • resource constraint. • mixed constraint. • partial network.

resource constraint.

The process that addresses the complex challenges of project constraints is known as: • TOC. • resource leveling. • constraint scheduling. • resource scheduling.

resource leveling.

The best method for establishing the existence of resource conflicts across project activities uses: • Gantt charts. • network diagrams. • Pareto diagrams. • resource loading charts.

resource loading charts.

A resource loading form is also known as a(n): • load schedule. • resource usage calendar. • activity resource schedule. • network resource profile.

resource usage calendar.

A simple scoring model for project evaluation requires: • importance weights from 1 to 10 assigned to each criterion. • score values assigned to each criterion in terms of its rating. • a division of weights by scores to arrive at a standardized score for each criterion. • a summation for each criterion to achieve an overall criterion score.

score values assigned to each criterion in terms of its rating.

Splitting activities refers to: • assigning the work to two or more workers. • assigning the work to two or more days. • starting an activity, interrupting it to use a resource elsewhere, and then returning to work on the activity. • breaking each non-critical activity into two or more components and subdividing the resources they use by a similar divisor.

starting an activity, interrupting it to use a resource elsewhere, and then returning to work on the activity.

A resource loading form can be generated once you have developed: • the activity network and productivity profile. • the work breakdown structure and the project budget. • the activity network and the work breakdown structure. • the project budget and the productivity profile.

the activity network and the work breakdown structure.

Which of the following would NOT typically be displayed in a resource loading table? • the project team members • the tasks the project team members have been assigned • the time the activities are expected to take • the expenses allocated to the activities

the expenses allocated to the activities

Quality risk refers to the chance that: • the project relies on developing new or untested technologies. • the firm's reputation may suffer when the product becomes available. • the well-being of the users or developers may decline dramatically. • the firm may face a lawsuit.

the project relies on developing new or untested technologies.

Use the information in the table and assume that a worker is expected to devote half-time (four hours per day) to this project with work taking place on a 5-day-per-week basis. Which week has the lowest resource usage? A 5 Days B 4 Days C 5 Days D 6 Days E 6 Days F 6 Days • week 6 • week 2 • week 4 • week 3

week 6

Use the information in the table and assume that a worker is expected to devote half-time (four hours per day) to this project with work taking place on a 5 day per week basis. Which week has the lowest resource usage? B 4 11 C 5 5 D 4 6 E 4 6 F 6 3 G 8 11 H 8 8 J 3 10 K 6 4 • week 3 • week 2 • week 9 • week 8

week 8

Options models are used to assist in project selection decisions: • when IRR calculations are favorable but NPV calculations are unfavorable. • when a company may not recover the money it invests in a project. • when NPV calculations are favorable but IRR calculations are unfavorable. • when a company is guaranteed to recover the money it invests in a project.

when a company may not recover the money it invests in a project.

A checklist screening model does not consider: • whether one criterion is more important than another. • governmental or stakeholder interference. • product durability and future market potential of the product line. • the riskiness of the new venture.

whether one criterion is more important than another.

The step that reflects the formal "go ahead" given to the project to commence once the scope definition, planning documents, and other contractual documents have been prepared and approved is the: • go ahead. • send off. • work authorization. • work release.

work authorization.

The mountaineers all agreed that their quest to build a bridge between the two peaks of Mount Kilimanjaro was a noble one, but they had no idea how long it would take to complete until they finished their: • project goal criteria. • work breakdown structure. • scope baseline. • management plan.

work breakdown structure.

The new Magic Pan coming soon to your area usually serves 20,000 customers in the first year of operation. Construction plans include site selection, foundation, framing, finishing, egg-laying, and chicken acquisition. The scope statement step that determines relationships among these steps, e.g. does the chicken acquisition come before the egg laying, etc., is the: • project goal criteria. • management plan. • work breakdown structure. • scope baseline

work breakdown structure.