Project Management Chapter 5

Quiz Start

Quiz Start

Range estimating works best when work packages have significant uncertainty, and ______ estimation will usually arrive at a more reasonable average.

a group

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

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

Detailed work package estimates are aggregated and "rolled up" by deliverable to estimate the:

total direct cost of the project.

For projects with a standard time unit of days (most typical), what is the rule of thumb for duration of an individual work package within a work breakdown structure?

1 - 5 days

Accounting would be an example of which of the following costs typically found in a project?

General and administrative overhead

Match the factor that causes inaccurate time and cost estimates to its root cause because of which the factor occurs. Instructions

Normal conditions do not apply --> Estimations should be based on past experience with resource availability, but while this is a good starting point, it rarely holds true during a project. Scope creep --> As the project progresses, a manager better understands what needs to be done to accomplish the project; plans may change without adequate documentation. Things go wrong --> The guideline is not to plan for disaster or accidents while estimating a specific task, but in reality, events happen which affect time and cost estimates.

Why should project task time, cost, and resource estimates be based on "normal conditions"?

Normal conditions prevent overly optimistic estimates. Normal conditions provide a common frame of reference for interpreting the estimates.

The ___ method is an extension to the ratio method.

apportion

Which of the following are potential impacts caused by padding time or cost estimates?

chances for realistic estimates are reduced the project duration and cost are seriously overstated

Project estimating is a ___ process.

complex

Top management needs to create an extra fund for ___ that can be used to cover unforseen events.

contingencies

Work package estimates should not include allowances for ___

contingencies

The 5- to 10-day rule of thumb applies to ___ and ___ goals of a project.

cost performance

A white elephant mega project is one that is ___.

cost exceeds benefits over budget under value

Using several people to make an estimate is sometimes called "___".

crowdsouring

Organizational ___ shapes every dimension of project management.

culture

In the software industry, software development projects are frequently estimated using weighted macro variables called ___ ___ or major parameters such as number of inputs, number of outputs, number of inquiries, number of data files, and number of interfaces.

function points

The estimating factor that considers the decreasing accuracy of estimates as one forecasts activities that are further into the future is known as ____________.

planning horizon

Contractors frequently use number of square feet to estimate the cost and time to build a house. This is an example of the top-down ___ method.

ratio

Top-down methods, sometimes called parametric, usually use ______ to estimate project times or costs.

ratios or surrogates

Network analysis requires a ___ unit of time.

standard

Uncertainty increases over time ___ has a habit of expanding in an increasing, nonlinear fashion.

technology

If the project is similar to past projects, then ___ methods can be used as a starting point for the new project.

template

The information necessary to conduct a bottom-up estimate of project time and cost starts with the ___________.

work package

template method.

labor.

The time estimate should represent the ___ level of resources.

normal

Which approach to estimating is usually performed by the people who are doing the work and are based on estimates of elements found in the work breakdown structure?

Bottom Up

When the learning curve can be applied, what effect does it have on project estimation?

Increases accuracy of time and cost estimates.

What "people factors" influence the quality of the project estimates?

Individual skills Familiarity with the task

The ___ method simply uses the pooled experience of senior and/or middle managers to estimate the total project duration and cost.

consensus

Cost of labor, materials, and equipment are examples of _____ costs.

direct

G&A overhead costs represent organization costs that are not ___ linked to a specific project.

directly

Learning curves describe the relationship where each time the output quantity ___, , the unit labor hours are reduced at a constant rate.

doubles

A new technology usually carries more ___ and cost ___ than a proven process.

time risks

Which of the following factors will influence the quality of a project's time or cost estimate?

Project management structure Organization culture Project duration

A scrum master is responsible for estimating a work package that has a significant amount of uncertainty associated with the time and cost to complete. Due to the uncertainty involved he will be making a low, an average and a high estimate. He is using which estimating approach?

Range estimating

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

An external view of a Mega Project based upon the outcome of similar projects undertaken in the past is known as:

Reference Class Forecasting.

Why is the accuracy of estimates for current events greater than that for more distant events?

Uncertainty increases over time.

Which of the following is NOT true in regard to the level of detail estimates should contain?

Detailed estimates are crucial to project success; therefore, an effort should be made to make estimates as detailed as possible for all projects.

The salary of the project manager would be an example of what type of cost found in a project?

Direct

Middle management might center on one ___ of the project.

segment

The main disadvantage of top-down approaches to estimating is simply that the time and cost for a specific ___ are not considered.

task

The bottom-up approach for estimating times and costs that uses costs from past projects that were similar to the current project is known as

template method.

Reasons why estimating time and cost are important include all of the following EXCEPT

to determine how long the project should take and cost.

Which of the following statements summarize why estimates are generally so inaccurate?

Flaws in the estimating process Uncertainty in predicting the future

Which of the following improvement ratios represents the largest learning rate?

70

Which type of project lends itself to the function point method of top down estimating?

Software development.

Development of templates in a ___ can quickly reduce estimate errors.

database

Benefits of Reference Class Forecasting include

All of these alternatives are correct.

A way to improve estimates on future projects is to collect and archive data on past project estimates and actuals. Creating ___________ for estimating is a way to achieve this goal.

Any of these alternatives are correct.

A home builder is collecting estimates for a house that he will have the funding to build in 12 months. Which of the following factors does he need to consider in regard to the quality of these estimates?

Planning horizon

Companies are using which of the following for improving the estimating process for future projects?

Creating historical databases of previous projects

Refining estimates may be necessary for a number of reasons. For example, resource shortages, in the form of people, equipment, or materials, can extend original estimates. This is a good example of

normal conditions not applying.

The estimating factor that considers the tendency to overestimate project time and cost in order to improve the likelihood of meeting the estimates is known as the ___________ factor.

padding estimates

Which process best describes phase estimating utilization of micro (bottom up) and macro (top down) methods?

A repetitive cycle of micro for short term and macro for the remainder of the project.

Factors outside of the organization, project team, or project itself may influence which aspect of a time/cost estimate?

Accuracy of the estimate

What are the benefits of using past project estimates and actuals to create a new project estimate?

Actuals from past projects provide benchmark measurements. Past projects can provide specific work package information.

Which costs are examples of G&A overhead costs?

Advertising VP of Sales

Typical kinds of costs found in a project include all of the following EXCEPT

All of these are examples of costs found in a project.

___ is used when projects closely follow past projects in features and costs.

Apportionment

A simple breakdown by ___ most ___ and ___ for task time could provide valuable information regarding time and cost.

Blank 1: optimistic Blank 2: likely Blank 3: pessimistic

As projects progress, a manager obtains a better understanding of the project. This may lead to major changes in project ___ and ___

Blank 1: plans Blank 2: costs

Many firms collect time and cost data through the ___ ___.

Blank 1: project Blank 2: office

First-line managers' interests may be limited to one ___ or ___ ___

Blank 1: task Blank 2: work Blank 3: package

Flyvbjerg advocates an external view based on the outcome of similar mega projects completed in the past. It is called reference class forecasting (RCF) and involves three major steps. Which of the following is not one of those steps?

Collect estimates of cost and duration from all of the top managers for the project.

Establishing cost and time estimates will allow a project manager to do which of the following?

Control the project

Which of the following is a good condition for top-down estimating?

Cost and time important

___ costs are clearly chargeable to a specific work package.

Direct

___ costs represent real cash outflows and must be paid as the project progresses

Direct

What is a primary reason for using several people to generate a time or cost estimate for a project rather than have a single estimator do all the estimating?

Eliminates extreme estimates.

Which statements are correct about the influence that a planning horizon has upon project estimates?

Estimating is more accurate after the individual work packages have been defined. Near term event estimating is more accurate than long range planning.

Why is top down estimating generally not effective at developing a low cost project estimate?

Estimators may be influenced by the proposed budget.

Why should time estimates use common units (hours, days, weeks, etc) across all project tasks?

Facilitates network analysis

Mega projects often cost much less than expected, but they overdeliver on benefits they are to provide.

False

Bottom up estimating is considered by the authors to be more accurate than top down because...

It considers specific tasks.

Why is keeping task estimates independent of each other needed for sound project planning?

It prevents developing optimistic task time estimates. It considers the uncertainties of individual activities.

What are the project characteristics that would benefit from phase estimating?

Long duration with progressive design High degree of scope uncertainty

___ projects are large-scale, complex ventures that typically cost $1 billion or more, take many years to complete, and involve multiple private and public stakeholders.

Mega

Good time and cost estimates are needed within project execution to allow a project manager to do which of the following?

Monitor project progress Schedule work Support decision making

What estimating influence is described by the general statement that some organizations encourage padding of estimates while others discourage the practice and want the most realistic and/or accurate estimate?

Organization Culture

Which is a significant concern with using consensus for top-down project estimating?

People may yield to the opinion of the highest ranking person in the room.

One of the major advantages of a dedicated project team is the speed gained from concentrated focus and localized project decisions, what is the additional cost of that speed gained?

Personnel are 100% allocated to that project.

Direct costs are real cash outflows expended as a project progresses and may be influenced by which of the following?

Project Manager. Project Team Member. Work Package Leader.

Which of the following is considered a direct overhead cost?

Salary of the project manager Temporary rental space for the project team

According to project estimation guidelines, each task estimate is supposed to be done independently of other tasks. Why does this lead to inaccurate estimates?

Task interdependencies influence actual time and cost requirements.

Poorly written scope statements for new technology lead to errors in estimating times and costs.

True

Identify the main reasons why the project cost estimate is broken down into direct costs, direct project overhead costs, and general and administrative overhead costs.

To sharpen the control process To improve decision making

Which approach to estimating project time and cost is usually completed by upper management?

Top down

Top down and bottom up estimating both use parametric (ratio) estimating, the difference is that...

Top down looks at the project as a total unit, whereas bottom up looks at individual tasks.

___ - ___ estimates usually are derived from someone who uses experience and/or information to determine the project duration and total cost.

Top-Down

Sometimes, top-down estimates are used until the tasks in the ___ are clearly defined.

WBS

Which of the following is a good condition for bottom-up estimating?

When the project is internal and small

After project execution begins, at what point in a project should time and cost estimates be reviewed for change?

When there is any change to the project scope

Range estimating will provide an estimation for a "high" and "low" cost and/or time frame to complete a project. Which project characteristics would need this type of approach?

When work packages have a high degree of uncertainty. Software/technology projects with relatively unknown requirements.

Why is past experience the best starting point for creating quality time and cost estimates?

While projects are unique, many elements are similar to past work.

Why is bottom up estimating generally considered more accurate than top down?

Work packages are individually considered/estimated.

Top down estimating for projects is best suited for situations when ___.

a WBS cannot easily be defined. project proposals are being evaluated.

Estimating a project's time and cost should be __.

a continual process rather than a one time event.

A worker can perform a task ___the second time and each succeeding time she performs it.

better

When work package estimates are made by individuals most knowledgeable about the work being performed and these estimates are then "rolled up" to find estimated costs for major deliverables and the project itself, ____________ estimating is being used.

bottom-up

The process of forecasting or approximating the time and cost of completing project deliverables is called

estimating.

Estimators should treat each task as ___ of other tasks that might be integrated by the WBS.

independent

Time and cost devoted to managing ___ rises exponentially as the number of people and different disciplines involved increases on a project.

interactions

What factors inherent to dedicated project team structures will improve the quality of time and cost estimates?

localized project decisions concentrated focus

Large projects that have long time horizons and a very high complexity can be referred to as

mega projects.

Direct ___ rates more closely pinpoint which resources of the organization are being used in the project.

overhead

In some cases people are inclined to ___ estimates.

pad

___ techniques can be applied to specific tasks.

parametric

The ___ factor can influence the quality of time and cost estimates.

people

At the work package level, estimates should be made by the ___ most familiar with the task.

person(s), person, employee, people, persons, individual, or individuals

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 ____________.

phase estimating method