CPST 3500 Final MC

Any new technology or business process is untested and has inherent risks.

True

Cost budgeting provides information for project funding requirements.

True

Estimates are usually done at various stages of a project and should become more accurate as time progresses.

True

Every cost estimate is unique.

True

If a project manager gets sick for two weeks or an important supplier goes out of business, management reserve could be set aside to cover the resulting costs.

True

The cost baseline, performance reports, change requests, and project funding requirements are inputs to the ____ process.

cost control

Which of the following earned value formulas is for the ratio of earned value to actual cost and can be used to estimate the projected cost of completing the project?

cost performance index

In addition to providing input for budgetary estimates, cost budgeting provides a(n) ____________________.

cost-baseline

The main outputs of the ____________________ process are a cost baseline, project funding requirements, requested changes, and updates to the cost management plan.

cost-budgeting

The main outputs of the ____________________ process are performance measurements, forecasted completion information, requested changes, recommended corrective action, and updates to the project management plan (which includes the cost management plan), cost estimate, a cost baseline, and organizational process assets.

cost-control

In practice, many people find that using a combination or hybrid approach involving analogous, bottom up, and/or parametric modeling provides the best ____________________.

cost-estimates

The main outputs of the ____________________ process are activity cost estimates and supporting detail, requested changes, and updates to the cost management plan.

cost-estimating

A(n) ____________________ is a document that describes how the organization will manage cost variances on the project.

cost-management-plan

A ____ is done very early in a project or even before a project is officially started.

rough order of magnitude estimate

__________ are developed for risks that have a high impact on meeting project objectives, and are put into effect if attempts to reduce the risk are not effective.

Fallback plans

Although information technology projects have a poor track record in meeting project goals, they have a good track record in meeting budget goals.

False

Bottom-up models are based on historical information and use parameters that are readily quantifiable. These models are flexible in terms of the size of the project.

False

Budgetary estimates are used for making many purchasing decisions for which accurate estimates are required and for estimating final project costs.

False

Coercive power is getting people to do things based on a position of authority.

False

Cost variance is the earned value minus the planned value.

False

Databases are a common tool for cost estimating, cost budgeting, and cost control.

False

Direct costs cannot be directly attributed to a certain project.

False

Given today's sophisticated communications channels, the receiver will normally correctly interpret a message exactly as the sender intended.

False

If cost variance is a positive number, it means that performing the work cost more than planned.

False

If the cost performance index is less than one or less than 100 percent, the project is under budget.

False

In Information Technology projects, experts recommend that technical criteria should be given more weight than management or cost criteria.

False

In an earned value chart, when the actual cost line is right on or above the earned value line, costs are equal to or less than planned.

False

It is projected that the Asia-Pacific region will grow the slowest of the three broad regions charted in Digital Planet 2006 study, at 4.4 percent between 2005 and 2009

False

Management reserves allow for future situations that may be partially planned for (sometimes called known unknowns) and are included in the project cost baseline.

False

Most IT-related degree programs require courses in communications (speaking, writing, listening), psychology, sociology, and the humanities.

False

Most organizations have a well-established process for preparing budgets.

False

Podcasts are now a common tool for presenting video, graphics, sound, voice, and participant feedback live over the Web.

False

Procurement audits are often carried out during the contract administration and contract closure processes in order to identify lessons learned during the entire procurement process.

False

Project 2007 allows you to use automated histograms to make level resources easier to manage.

False

Project managers should realize that all types of conflict are bad for the well being of projects.

False

Project managers, top management, and project team members can safely assume that using existing communications channels to relay project information is sufficient.

False

Research shows that physical challenges rarely help teams of strangers to work together more effectively.

False

Secondary risks are those that remain after all of the response strategies have been implemented.

False

The Microsoft .NET Framework includes a risk management model that includes developing and monitoring a top-ten master list of risks.

False

The WBS is not a required input to the cost budgeting process.

False

The main output of the risk identification process is a contingency plan.

False

The main outputs of quantitative risk analysis are updates to the risk register, such as filling in the ranking column along with a numeric value or high/medium/low rating for the probability and impact of the risk event.

False

The people who develop software cost estimates often have a great deal of experience with cost estimation.

False

There does not need to be a change control system to define procedures for changing the cost baseline.

False

Typically, leasing an item is often expensive for meeting short-term needs, but cheaper for long-term needs.

False

When justifying investments in new information systems and technology, the focus should just be on revenues or expenses.

False

__________ predict future project status and progress based on past information and trends.

Forecasts

Who is best known for distinguishing between motivational factors and hygiene factors when considering motivation in work settings?

Frederick Herzberg

According to the Digital Planet 2006 study, __________ will replace Korea as a member of the top ten ICT spending nations in 2007.

India

____ are costs that are not directly related to the products or services of the project, but are indirectly related to performing the project.

Indirect costs

The four dimensions of the DISC profile are Dominance, __________, Steadiness, and Compliance.

Influence

__________ is one of the four processes of project communications management that involves making required information available to project stakeholders in a timely manner.

Information distribution

____________________ states that when many items are produced repetitively, the unit cost of those items decreases in a regular pattern as more units are produced.

Learning-curve-theory

____________________ allows you to see a big-picture view of the cost of a project throughout its life cycle.

Life-cycle-costing

____________________ considers the total cost of ownership, or development plus support costs, for a project.

Life-cycle-costing

____________________ has many cost management features to help you enter budgeted costs, set a baseline, enter actuals, calculate variances, and run various cost reports.

Microsoft-project

Which item is a quantitative risk analysis technique that simulates a model's outcome many times to show a statistical distribution of the calculated results?

Monte Carlo analysis

A(n) __________ is a specific type of organizational chart that shows which organizational units are responsible for which work items.

OBS

__________ means more resources than are available are assigned to perform work at a given time. You Answered

Overallocation

The ____ is that portion of the approved total cost estimate planned to be spent on an activity during a given period.

PV

If you estimate that it would cost $1,000 to repair a software defect in the requirements and analysis phase, it would cost ____ to fix it in the post-product release phase

$30,000

If you estimate that it would cost $1,000 to repair a software defect in the requirements and analysis phase, it would cost ____ to fix it in the post-product release phase.

$30,000

Using simplified percentage complete amounts for a one-year project with weekly reporting and an average task or work packet size of one week, you can expect about a(n) ____ percent error rate.

1

Using the formula , ten people have __________ communication channels.

45

List and briefly describe the six main processes of project procurement management.

Planning scope: determining how the project's scopeand requirements will be managed Collecting requirements: defining and documenting the features and functions of the products produced during the project as well as the processes used for creating them Defining scope: reviewing the project charter, requirements documents, and organizational process assets to create a scope statement Creating the WBS: subdividing the major project deliverables into smaller, more manageable components Validating scope: formalizing acceptance of the project deliverables Controlling scope: controlling changes to project scope throughout the life of the project

What are the three basic types of cost estimating? Describe each type.

A "rough order of magnitude (ROM) estimate" provides an estimate of what a project will cost. A "budgetary estimate" is used to allocate money into an organization's budget. A "definitive estimate" provides an accurate estimate of project costs

Which of the following methods involves estimating individual work items or activities and summing them to get a project total?

A bottom-up estimate

__________, resource management, and project collaboration are tools that Microsoft Office Enterprise Project Management (EPM) Solution and similar products provide to enhance communications.

Portfolio management

____ is the ratio of revenues to profits.

Profit Margin

____________________ are revenues minus expenditures.

Profits

Two common examples of procurement documents include a Request for Proposal (RFP) and a(n) __________.

RFQ

The ____ is the ratio of actual work completed to the percentage of work planned to have been completed at any given time during the life of the project or activity.

RP

__________ are a common tool for cost estimating, cost budgeting, and cost control.

Spreadsheets

__________ are easy-to-use journals on the Web that allow users to write entries, respond to another poster's comments, create links, upload pictures, and post comments to journal entries.

Blogs

____ involve estimating individual work items or activities and summing them to get a project total.

Bottom-up estimates

List and describe four methods for identifying risks.

Brainstorming- a team thinks of a random number of risks in a creative fashion Prompt lists- structured areas to consider for risks Checklists- predefined lists of risks Delphi- consulting experts experienced in dealing with particular risks

List and describe the three values calculated for an activity in earned value management. Give examples of each.

The "planned value (PV)", also called the budget, is that portion of the approved total cost estimate planned to be spent on an activity during a given period. The "actual cost (AC)" is the total direct and indirect costs incurred in accomplishing work on an activity during a given period. The "earned value (EV)" is an estimate of the value of the physical work actually completed.

The ____ is the ratio of earned value to actual cost and can be used to estimate the projected cost of completing the project.

CPI

____ is a method for determining the estimated annual costs and benefits for a project and the resulting annual cash flow.

Cash flow analysis

Which of the following statements is true about the project procurement management process of contact administration?

Changes to any part of the project must be reviewed,<br>approved, and documented by the same people in the same way that the original<br>part of the plan was approved.

According to the Digital Planet 2006 study, which country is expected to be the third largest ICT spending country by 2009?

China

__________ are oral or written acts or omissions by someone with actual or apparent authority that can be construed to have the same effect as a written change order.

Constructive change orders

__________ plans are predefined actions that the project team will take if an identified risk event occurs.

Contingency

____ involves allocating the overall cost estimate to individual work items to establish a baseline for measuring performance.

Cost budgeting

____ involves developing an approximation or estimate of the costs of the resources needed to complete a project.

Cost estimating

Describe Decision Trees and Expected Monetary Value.

Decision Tree is the method of tracing and comparing all the possible outcomes of multi-stage decisions.Expected Monetary Value is a statistical concept that calculates the average outcomes of potential futre scenarios

The ____ is an estimate of what it will cost to complete the project based on performance to date.

EAC

The cost performance index can be used to calculate the ____________________.

EAC

The __________ is the term used to define the product of a risk event probability and the risk event's monetary value.

EMV

The ____ is an estimate of the value of the physical work actually completed.

EV

Which type of contract is often used for services that are needed when the work cannot be clearly specified and total costs cannot be estimated in a contract?

Time and material contact

Add-on software can be purchased to perform Monte Carlo simulations using Excel or Project 2007.

True

An RFP for a larger, more complicated procurement might be hundreds of pages long.

True

Conflict situations in a project are never desirable.

True

Estimating costs for each major project activity over time provides project managers and top management with a foundation for project cost control.

True

Information technology projects have a poor track record in meeting project and budget goals.

True

Key outputs of the human planning process include roles and responsibilities, an organizational chart for the project, and a staffing management plan.

True

Many information technology professionals are choosing to work for temporary job agencies, so they can move from company to company while maintaining stability by working for the same temporary agency.

True

Many information technology project managers do not know that they can use Project 2007 for cost management.

True

Many practitioners define project success as satisfying the customer/sponsor, knowing that it's rare to meet scope, time, and cost goals without modifying at least one goal.

True

Many program and project managers hold periodic status review meetings to exchange important project information and motivate people to make progress on their parts of the project.

True

Many projects that are started never finish because of cost management problems.

True

One innovative approach to hiring and retaining information technology staff is to offer existing employees incentives for helping recruit and retain personnel.

True

Project risk management does not stop with the initial risk analysis.

True

Project team members must be aware of potential legal problems they might cause by not understanding a contract.

True

Providing information and receiving bids from multiple sources often takes advantage of the competitive business environment.

True

ROM estimates can be referred to as a ballpark estimate, a guesstimate, a swag, or a broad gauge.

True

Reviewing a proposed project in terms of a risk questionnaire or any other similar tool is a good method for understanding common sources of risk on information technology projects.

True

Risk management is an investment that has costs associated with it.

True

The cost management plan is part of the overall project management plan.

True

The formulas for variances and indexes start with EV, the earned value.

True

The risk management plan is a subset of the project management plan.

True

The work definition and assignment process is carried out during the proposal and startup phases of a project.

True

e-procurement services have proved to be very effective in reducing the costs and burdens of indirect procurement.

True

It is helpful to analyze the total dollar value as well as the percentage of the total amount for each major ____________________ category.

WBS

Which of the following questions are you most likely to find in a progress report?

What has the team accomplished during the last<br>month?

Which of the following questions would you most likely find in the "structure/process risk " category of an organization's risk questionnaire?

What is the degree of change the new project will<br>introduce into user areas and business procedures?

The risk register is often a simple Microsoft __________ or Excel file, but it can also be part of a more sophisticated database.

Word

__________ are unplanned responses to risk events that project managers use when they do not have contingency plans in place.

Workarounds

Which would be the most appropriate medium to use if you were trying to assess the commitment of project stakeholders?

a meeting

The __________ cost of a project is the total direct and indirect costs incurred in accomplishing work on an activity during a given period.

actual

Which of the following activities occurs after planning for contract?

all of the above

Which of the following activities can a project manager accomplish when he or she defines and assigns resources using Project 2007?

all of the above.

Top-down estimates, also known as __________ estimates, use the actual cost of a previous, similar project as the basis for estimating the cost of the current project.

analogous

Also called a supplier conference or pre-bid conference, a(n) __________ is a meeting with prospective sellers prior to preparation of their proposals or bids.

bidders conference

The Delphi Technique is an approach to gathering information that helps prevent some of the negative group effects found in __________.

brainstorming

Which of the following modes for resolving conflict is also known as the problem-solving mode?

confrontation

A __________ is the final output from the project procurement process of selecting sellers.

contract

Project managers measure and monitor cost performance by using a time-phased budget known as a(n) __________.

cost baseline

Which of the following would be considered an indirect cost in an information technology project?

cost of electricity

A(n) __________ program would be the most appropriate type of software for tracking suppliers.

database

Assessing team performance is the main output of _________ process of project human resource management.

developing the project team

Which of the following definitions is correct

e-tendering refers to requests sent for information<br>to potential suppliers, such as prices, and receiving the responses using<br>Internet technology.

Which of the following tools is used to ensure that the needs and expectations of project stakeholders are satisfied?

expectations management matrix

Information technology project managers need to be able to present and discuss project information in ____________________ terms as well as in technical terms.

financial

Which diagram is most suitable in determining staffing needs or in identifying staffing problems?

histogram

You can use Project 2007 to assign resources such as equipment, materials, facilities, or __________ to tasks.

individuals

A(n) __________ is a matter under question or dispute that could impede project success.

issue

A(n) __________ is used to document, monitor and track problems that need to be resolved.

issue log

A(n) __________ is the term used to describe a meeting that is held at the beginning of a project or project phase where all major project stakeholders discuss project objectives, plans and other related matters.

kickoff meeting

Several tools and techniques are available to help project managers and their teams in planning purchases and acquisitions, including contract types, expert judgment, and __________.

make-or-buy analysis

Labor costs are often much ____________________ for contractors.

more

In general, ____________________ numbers for cost and schedule variance indicate problems in those areas.

negative

The project's __________ is a starting point for identifying internal stakeholders.

organizational chart

Outputs from contract closure include closed contracts and updates to __________.

organizational process assets

The term procurement is widely used in government; many private companies however use the terms purchasing and __________.

outsourcing

A(n) __________ is defined as the additional percentage or dollar amount by which actual costs exceed estimates.

overrun

Which of the following activities occurs during the monitoring and controlling stages of project management

performance reporting and managing stakeholders

Many organizations now collect and control an entire suite of projects or investments as one set of interrelated activities in one place, called a(n) ____________________.

portfolio

The main categories of David McClelland's theory of acquired needs include achievement, affiliation, and __________.

power

Many project teams would benefit from using a simple qualitative analysis technique such as the __________ to help them identify risks that they need to pay attention to.

probability/impact matrix

Which combination of tools are used to assist in the contract closure process?

procurement audits and a records management system

The ratio of revenues to profits is called the __________.

profit margin

According to the PMBOK® Guide Third Edition, the cost management plan should be created as part of the project management plan under __________.

project integration management

A staffing plan is often part of the __________.

project management plan

Using good ____________________ can change the false perception that costs grow and failures are to be expected.

project-cost-management

If an organization wants to automate its work practices or find a solution to a business problem, it can write and issue an RFP so suppliers can respond with __________.

proposals

Which of the following project procurement management processes occurs during the executing phase of the project life cycle?

requesting seller responses and selecting sellers

Which of the following pairs are two of the tools and techniques for performing risk monitoring and control?

risk audits and reserve analysis

A hierarchy of potential risk categories for a project is called a(n) __________.

risk breakdown structure

Which of the following pairs are examples of basic response strategies for positive risks?

risk exploitation and risk acceptanc

A(n) __________ individual is one who has a high tolerance for risk, and his or her satisfaction increases when more payoff is at stake.

risk seeking

The amount of satisfaction or pleasure received from a potential payoff is referred to as __________.

risk utility

Risk response strategies often include the identification of residual and __________ risks as well as contingency plans and reserves.

secondary

Project managers must use their __________ skills to find the best way to motivate and manage each team member.

soft

Often called __________, selecting suppliers or sellers involves evaluating proposals or bids from sellers.

source selection

What type of tool would be most suitable for performing a sensitivity analysis?

spreadsheet application

____________________ cost is money that has been spent in the past.

sunk

Indicators or symptoms of actual risk events are called __________.

triggers

A(n) __________ is a list of risks that are low priority, but are still identified as potential risks.

watch list

Information regarding the content of essential project communications comes from the __________.

work breakdown structure

____ allow for future situations that are unpredictable.

Management reserves

____ is the earned value minus the planned value.

SV

In the coding and unit test phase of software development, the relative cost to repair defects is ____.

5X

Many projects, particularly information technology projects, do not have good planning information, so tracking performance against a plan might produce misleading information.

true

Project cost budgeting involves allocating the project cost estimate to individual work items over time based on the __________ for the project.

work breakdown structure

The ____ is the total direct and indirect costs incurred in accomplishing work on an activity during a given period.

AC

____ is the earned value minus the actual cost

CV

A definitive estimate should be the least accurate of the three types of estimates.

False

Preparing cost estimates is a job for accountants.

False

____ includes the processes required to ensure that a project team completes a project within an approved budget.

Project cost management

After you total the EV, AC, and PV data for all activities on a project, you can use the CPI and ____________________ to project how much it will cost and how long it will take to finish the project based on performance to date.

SPI

Project managers must conduct cash flow analysis to determine net present value.

True

To improve project cost management, several companies have developed methods to link data between their project management software and their main __________ software systems.

accounting

A ____ is used to allocate money into an organization's budget.

budgetary estimate

A ____ is a time-phased budget that project managers use to measure and monitor cost performance.

cost baseline

Project managers should focus on ____, since they can control them.

direct costs

In the beta test phase of software development, the relative cost to repair defects is ____.

15X

Three separate surveys of software project cost overruns found that the average cost overrun for all of the projects in their survey samples (not just unsuccessful projects) were ____ percent.

33-34

The Standish Group's CHAOS studies reported an average cost overrun for unsuccessful IT projects ranged from 180 percent in 1994 to ____ percent in 2002.

43

____ use the actual cost of a previous, similar project as the basis for estimating the cost of the current project.

Analogous estimates

Variances are calculated by subtracting the actual cost or planned value from ____.

EV

Describe four problems with Information Technology cost estimates.

Estimates are done too quickly. Developing an estimate for a large software project is a complex task requiring a significant amount of effort. Lack of estimating experience. The people who develop software cost estimates often do not have much experience with cost estimation, especially for large projects. Human beings are biased toward underestimation. For example, senior information technology professionals or project managers might make estimates based on their own abilities and forget that many junior people will be working on a project. Management desires accuracy. Management might ask for an estimate, but really desire a more accurate number to help them create a bid to win a major contract or get internal funding.

____________________ costs or benefits are costs or benefits that are difficult to measure in monetary terms.

Intangible

____ should be forgotten.

Sunk Costs

List and briefly describe the three project cost management processes.

"Controlling" costs involves controlling changes to the project budget. The main outputs of the cost control process are work performance measurements, budget forecasts, organizational process asset updates, change requests, project management plan updates, and project document updates."Determining the budget" involves allocating the overall cost estimate to individual work items to establish a baseline for measuring performance."Estimating costs" involves developing an approximation or estimate of the costs of there sources needed to complete a project.

____ allow for future situations that may be partially planned for.

Contingency reserves

____ is a project performance measurement technique that integrates scope, time, and cost data.

Earned value management

Organizations have a history of spending too much money in the early phases of information technology projects.

False

____ might provide an estimate of $50 per line of code for a software development project based on the programming language the project is using, the level of expertise of the programmers, the size and complexity of the data involved, and so on.

Parametric modeling

A ____ is used for making many purchasing decisions for which accurate estimates are required and for estimating final project costs.

definitive estimate

If the cost estimate will be the basis for contract awards and performance reporting, it should be a ____ and as accurate as possible.

definitive estimate

Tom DeMarco, a well-known author on software development, suggests ____ reasons for the inaccuracies of many information technology project cost estimates and some ways to overcome them.

four

What are tangible, intangible, direct and indirect costs? Give examples of each.

Tangible and intangible costs and benefits are categories for determining how definable the estimated costs and benefits are for a project. "Direct costs" are costs that can be directly related to producing the products and services. "Indirect costs" are costs that are not directly related to the products or services of the project, but are indirectly related to performing the project.

____ are those costs that an organization can easily measure in dollars.

Tangible costs

____________________ and SPI less than one or less than 100 percent indicate problems.

CPI

When deciding what projects to invest in or continue, you should include sunk costs.

False

When developing an estimate for a large software project, estimates cannot be made before clear system requirements have been produced.

False

____________________ uses project characteristics in a mathematical model to estimate project costs.

Parametric-modeling

A large percentage of total project costs are often labor costs.

True