TEST BANK for Project Management: A Managerial Approach, 11th Edition Jack Meredith; Scott Shafer

Chapter 1 Projects in Contemporary Organizations True/False 1. The past several decades have been marked by rapid decline in the use of project management as a means by which organizations achieve their objectives.

Ans: False Section: Introduction Level: Easy

2. The project to construct a highway is unique because the characteristics of terrain will be different for different segments.

Ans: True Section: 1.1 The Definition of a “Project” Level: Advanced

3. The project to construct a highway is unique because consistency of the concrete will vary for different segments.

Ans: False Section: 1.1 The Definition of a “Project” Level: Advanced

4. The project to construct a highway is unique because different types of laborers will be used to build various segments of the highway.

Ans: False Section: 1.1 The Definition of a “Project” Level: Advanced

5. The project to construct a highway is unique because different people manage different sections of the highway.

Ans: False Section: 1.1 The Definition of a “Project” Level: Advanced

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6. The production of weekly status reports could be considered a project.

Ans: False Section: 1.1 The Definition of a “Project” Level: Easy

7. All stakeholders have a financial interest in a project.

Ans: False Section: 1.1 The Definition of a “Project” Level: Easy

8. The techniques of project management were developed by an organization called the Project Management Institute (PMI).

Ans: False Section: 1.1 The Definition of a “Project” Level: Easy

9. The overwhelming majority of all projects are comparatively small.

Ans: True Section: 1.1 The Definition of a “Project” Level: Easy

10. Deliverables are also known as scope.

Ans: True Section: 1.1 The Definition of a “Project” Level: Easy

11. In computer science, projects are not called projects. Instead, they are called programs.

Ans: False Section: 1.1 The Definition of a “Project” Level: Intermediate

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12. One of the two primary tasks of the project manager is to manage the trade-offs associated with the project.

Ans: True Section: 1.1 The Definition of a “Project” Level: Easy

13. One of the two primary tasks of the project manager is to manage the budget.

Ans: False Section: 1.1 The Definition of a “Project” Level: Intermediate

14. One of the two primary tasks of the project manager is to anticipate and address risks to the project.

Ans: True Section: 1.1 The Definition of a “Project” Level: Easy

15. From the early days of project management, the direct project objectives of time, cost, and scope have been accepted as the primary determinants of project success or failure.

Ans: True Section: 1.1 The Definition of a “Project” Level: Easy

16. A universal characteristic of projects is that every project is unique.

Ans: True Section: 1.1 The Definition of a “Project” Level: Easy

17. A universal characteristic of projects is that a project is a one-time occurrence with a well-defined and specific set of desired end results.

Ans: True Section: 1.1 The Definition of a “Project” Level: Easy

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18. A universal characteristic of projects is that every project has a project manager.

Ans: False Section: 1.1 The Definition of a “Project” Level: Easy

19. A universal characteristic of projects is that they have a finite duration.

Ans: True Section: 1.1 The Definition of a “Project” Level: Easy

20. Projects typically have limited budgets.

Ans: True Section: 1.1 The Definition of a “Project” Level: Easy

21. Project managers rarely see much conflict.

Ans: False Section: 1.1 The Definition of a “Project” Level: Easy 22. A lion’s share of the credit for the development of the techniques and practices of project management belongs to the military.

Ans: True Section: 1.2 Why Project Management?

Level: Easy

23. The basic purpose for initiating a project is to make money.

Ans: False Section: 1.2 Why Project Management?

Level: Easy

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24. Most organizations report that project management results in greater organizational complexity.

Ans: True Section: 1.2 Why Project Management?

Level: Easy

25. Agile teams must be staffed with people who are the very best at what they do.

Ans: False Section: 1.4 Agile Project Management Level: Easy

26. With Agile, the emphasis is on producing products quickly.

Ans: False Section: 1.4 Agile Project Management Level: Easy

27. With Agile, product development work and administrative overhead should be kept to the minimum needed to achieve the project’s objectives.

Ans: True Section: 1.4 Agile Project Management Level: Easy

28. With Agile there is a concerted effort to ensure that everything is documented.

Ans: False Section: 1.4 Agile Project Management Level: Easy

29. With the traditional waterfall approach, customers are involved at the start of the project, when the scope of the project needs to change, and at the end of the project.

Ans: True Section: 1.4 Agile Project Management Level: Easy

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30. The Agile approach minimizes customer input in order to keep the schedule as tight as possible.

Ans: False Section: 1.4 Agile Project Management Level: Easy

31. In the traditional waterfall approach, the project team relies on detailed and structured change management procedures that ultimately discourage changes and stifle creativity.

Ans: True Section: 1.4 Agile Project Management Level: Easy

32. Agile approaches have built-in mechanisms that encourage and welcome change.

Ans: True Section: 1.4 Agile Project Management Level: Easy

33. One of the Agile principles is as follows: Our highest priority is to satisfy the customer through early and continuous delivery of valuable software.

Ans: True Section: 1.4 Agile Project Management Level: Easy

34. One of the Agile principles is as follows: Welcome changing requirements, even late in development. Agile processes.

Ans: True Section: 1.4 Agile Project Management Level: Easy

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35. One of the Agile principles is as follows: Deliver working software infrequently, say once a quarter or less. That way, there is plenty of time to make sure the software is bug free.

Ans: False Section: 1.4 Agile Project Management Level: Easy

36. One of the Agile principles is as follows: Business people must not be involved in the project as they will distract the developers and slow down the process.

Ans: False Section: 1.4 Agile Project Management Level: Easy

37. One of the Agile principles is as follows: Build projects around motivated individuals.

Ans: True Section: 1.4 Agile Project Management Level: Easy

38. One of the Agile principles is as follows: The most efficient and effective method of conveying information to and within a development team is frequent group emails.

Ans: False Section: 1.4 Agile Project Management Level: Easy

39. One of the Agile principles is as follows: Working software is the primary measure of progress.

Ans: True Section: 1.4 Agile Project Management Level: Easy

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40. One of the Agile principles is as follows: Agile processes promote sustainable development.

Ans: True Section: 1.4 Agile Project Management Level: Easy

41. One of the Agile principles is as follows: Continuous attention to technical excellence and good design enhances agility.

Ans: True Section: 1.4 Agile Project Management Level: Easy

42. One of the Agile principles is as follows: Simplicity--the art of maximizing the amount of work not done--is essential.

Ans: True Section: 1.4 Agile Project Management Level: Easy

43. One of the Agile principles is as follows: The best architectures, requirements, and designs emerge from well developed plans.

Ans: False Section: 1.4 Agile Project Management Level: Easy

44. One of the Agile principles is as follows: At regular intervals, the team reflects on how to become more effective, then tunes and adjusts its behavior accordingly.

Ans: True Section: 1.4 Agile Project Management Level: Easy

45. Scrum is the most popular Agile approach Ans: True Section: 1.4 Agile Project Management Level: Easy

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46. With scrum, the project work is completed in sprints that typically last one to two months.

Ans: False Section: 1.4 Agile Project Management Level: Easy

47. With scrum, the length of the sprints gets shorter as the project nears completion.

Ans: False Section: 1.4 Agile Project Management Level: Easy

48. A scrum master is a part of the scrum team.

Ans: True Section: 1.4 Agile Project Management Level: Easy

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Multiple Choice 1. The authors identify three forces that combine to mandate the use of teams to solve problems. Identify the force that the authors did not name. a) Explosion in the growth of certified project managers b) Worldwide acceptance of the Project Management Institute c) Interaction of supply and demand d) Evolution of worldwide competitive markets for the production and consumption of goods and services Ans: d Section: Introduction Level: Easy

2. The overwhelming majority of all projects are of what size? a) Small b) Medium c) Large d) Very large Ans: a Section: Three Project Objectives: The “Triple Constraint” or “Iron Triangle” Level: Easy

3. Identify the example that would not usually be considered a project. a) Building a house b) Developing a computer software application program c) Hosting a wedding reception d) Assembly line manufacturing of automobiles Ans: d Section: 1.1 The Definition of a “Project” Level: Intermediate

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4. According to the authors, the prime objectives of project management are what? a) Scope, cost, time b) Quality, scope, schedule c) Customer satisfaction, budget, schedule d) Cost, quality, customer satisfaction Ans: a Section: 1.1 The Definition of a “Project” Level: Easy

5. The authors discuss four dimensions of project success. Which of the following is not one of those four dimensions? a) Project efficiency b) Cost to the customer c) Business impact on the organization d) Opening new opportunities for the future Ans: b Section: 1.1 The Definition of a “Project” Level: Easy

6. Which of the following is not one of the four dimensions of project success? a) Opening new opportunities for the future b) Number of people working on the project c) Impact on the customer d) Business impact on the organization Ans: b Section: 1.1 The Definition of a “Project” Level: Easy

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7. There are three characteristics that all projects share. Which of the following is not one of those characteristics? a) The project is unique b) The project is a one-time occurrence c) The outcome of the project may change over time d) The project has a finite duration Ans: c Section: 1.1 The Definition of a “Project” Level: Easy

8. Which of the following is not a likely attribute of quasi-projects? a) Lack of specificity in the project objective b) A designated team working on the project c) Undefined performance parameters d) Limited scope and budget Ans: d Section: 1.1 The Definition of a “Project” Level: Easy

9. The production of weekly employment reports or the delivery of mail could be considered a what? a) Project b) Non-project c) Quasi-projects d) Triple projects Ans: b Section: 1.1 The Definition of a “Project” Level: Easy

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10. Who, according to the authors, has played a significant role in the development of techniques for project management? a) European navigators b) Trader community c) Brokerage firms d) The military Ans: d Section: 1.1 The Definition of a “Project” Level: Easy

11. Shenhar has concluded that project success has four dimensions. Which of the following is not one of those dimensions? a) The iron triangle b) Impact on the customer c) Impact on the budget d) Opening new opportunities for the future Ans: c Section: 1.1 The Definition of a “Project” Level: Easy

12. Recent research focused on the direct objectives now suggest managers should use three measures. Which of the following is not one of those measures? a) The iron triangle b) Project ownership success c) Project investment success d) Project time success Ans: d Section: 1.1 The Definition of a “Project” Level: Easy

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13. The organization that has the responsibility for maintaining and publishing The PMBOK Guidebook is called what? a) PMI b) APM c) PRINCE2 d) IPMA Ans: a Section: 1.2 Why Project Management?

Level: Easy

31. Which of the following is not a trend in project management? a) Increase in virtual projects b) Decreasing importance of project managers c) Importance given to strategic goals d) Regular accomplishment of routine goals Ans: b Section: 1.2 Why Project Management?

Level: Easy

14. A project that involves global teams with team members operating in different physical geographic locations and different time zones. a) International project b) Program c) Online project d) Virtual project Ans: d Section: 1.2 Why Project Management?

Level: Easy

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15. Project management has emerged because the characteristics of our contemporary society demand the development of new methods of management. Of the many forces involved, which of the following are not paramount? a) Access to far more information via the Internet b) The growing demand for a range of complex, customized goods and services c) The evolution of worldwide competitive markets d) The exponential expansion of human knowledge Ans: a Section: 1.2 Why Project Management?

Level: Moderate 16. The “stretched-S” pattern observed during the project life cycle, for the most part, is a result of which of the following? a) changing levels of resources used during successive stages of the project life cycle b) changing attitudes of the people who work in the project. c) difficulty in performing the individual activities of a project. d) principle that work expands to fill the allotted time Ans: a Section: 1.3 The Project Life Cycle Level: Easy

17. The largest amount of effort applied to a project is during which of the following? a) Conception b) Planning, scheduling, monitoring, and control c) Selection d) Evaluation and termination Ans: b Section: 1.3 The Project Life Cycle Level: Easy

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18. Earned value is based on the concept that the percentage of project completion is closely correlated with which of the following? a) The number of levels in the project b) Relevance of the project c) Cost or the use of resources d) Final assembly of the output Ans: c Section: 1.3 The Project Life Cycle Level: Advanced

19. While there are a number of different Agile approaches, they all share the following general characteristics except which one? a) The project is divided into iterations most commonly called tasks b) Based on its roots in lean management, there is an emphasis on simplicity c) Project teams are self-m d) Progress on the project is measured in terms of working product functionality Ans: a Section: 1.4 Agile Project Management Level: Easy

20. Associated with the scrum framework are three specific team roles. Which of the following is not one of those roles? a) Product owner b) Developers c) Scrum lord d) Scrum master Ans: c Section: 1.4 Agile Project Management Level: Easy

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Fill-in-the-Blanks 1. The project is generally credited with beginning the era of modern project management.

Ans: Manhattan Section: 1.1 The Definition of a “Project” Level: Intermediate

2. According to the PMBOK Guidebook, a to create a unique product or service.

is a temporary endeavor undertaken

Ans: project Section: 1.1 The Definition of a “Project” Level: Easy

3.

is a subset of a project consisting of work packages.

Ans: Task Section: 1.1 The Definition of a “Project” Level: Easy Bloom’s: Knowledge AACSB: Analysis Page: 2

4. The desired outcomes or results of a project are called

.

Ans: deliverables Section: 1.1 The Definition of a “Project” Level: Easy

5. As sub-elements of a task, these objectives of the task.

need to be accomplished to achieve the

Ans: work packages Section: 1.1 The Definition of a “Project” Level: Easy

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6. Projects are bound by the three objectives of scope, time, and cost. These are collectively referred to as the .

Ans: Triple Constraint Section: 1.1 The Definition of a “Project” Level: Easy

7. The of the project team is a crucial but unstated element of ancillary trade-offs that the project manager must consider.

Ans: health Section: 1.1 The Definition of a “Project” Level: Easy

8. Projects often interact with other projects being carried out simultaneously within the organization and these interactions take the form of competition for scarce resources between projects. This is an example of project .

Ans: interdependencies Section: 1.1 The Definition of a “Project” Level: Intermediate

9. An important implication of the project life cycle concept is that a project will resist of its existence.

Ans: termination Section: 1.1 The Definition of a “Project” Level: Easy

10. Individuals or groups with a special interest in a project are called

.

Ans: stakeholders Section: 1.1 The Definition of a “Project” Level: Easy

11. Relations between organizational functions, where one function or task is dependent on others, are known as .

Ans: interdependencies Section: 1.1 The Definition of a “Project” Level: Easy

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12. The military generally uses the term to refer to an exceptionally large, longrange objective that is broken down into a set of projects.

Ans: program Section: 1.1 The Definition of a “Project” Level: Easy

13. The is a project management organization headquartered in the United Kingdom, which started in the early 1970s and serves all of Europe.

Ans: APM Section: 1.2 Why Project Management Level: Moderate

14. Conflicting expectations among stakeholders related to performance, cost, and time will require the project manager to make appropriate in order to balance competing demands related to these objectives.

Ans: trade-offs Section: 1.2 Why Project Management?

Level: Easy

15. The foundational basis for education for project managers is the

.

Ans: PMBOK Guidebook Section: 1.2 Why Project Management?

Level: Easy

16. The Project Management Institute offers two certifications called the .

and the

Ans: PMP and CAPM Section: 1.2 Why Project Management?

Level: Easy

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The process of creating artificial deadlines and budgets to accomplish specific, though routine, tasks within a functional department is called .

Ans: projectizing Section: 1.2 Why Project Management?

Level: Easy 17. A is responsible for the evaluation and improvement of an organization’s project management skill and experience in managing projects.

Ans: project management office Section: 1.2 Why Project Management?

Level: Easy

18. The conventional project life cycle can be described as a pattern characterized by progress.

Ans: slow-rapid-slow Section: 1.3 The Project Life Cycle Level: Moderate

19. In a conventional project life cycle, as work progresses, uncertainty about the expected outcome should .

Ans: decrease Section: 1.3 The Project Life Cycle Level: Easy

20. The chance that project processes or outcomes will not turn out as planned is called .

Ans: risk Section: Glossary Level: Easy

21. Having only partial or no information about the situation or outcomes is called

.

Ans: uncertainty Section: 1.3 The Project Life Cycle Level: Easy

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22. In the traditional approach to project management, one phase of the project is completed before the next phase is started. This is typically referred to as the method.

Ans: Waterfall Section: 1.4 Agile Project Management Level: Easy

23.

: Approaches for managing projects based on lean management principles that were developed to provide greater flexibility to respond to changing customer requirements and ultimately complete projects more efficiently.

Ans: Agile Section: Glossary Level: Easy

24.

: The desired elements of value, outcomes, or results that must be created for a project to be considered complete.

Ans: Deliverables Section: Glossary Level: Easy

25.

: Relations between organizational functions where one function or task is dependent on others.

Ans: Interdependencies Section: Glossary Level: Easy

26.

: A standard concept of a product or project wherein it goes through a start-up phase, a building phase, a maturing phase, and a termination phase.

Ans: Life Cycle Section: Glossary Level: Easy

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27.

: Declaration of foundational values underlying Agile approaches to managing projects.

Ans: Manifesto for Agile Software Development Section: Glossary Level: Easy

28.

: Often not distinguished from a project, but frequently meant to encompass a group of projects oriented toward a specific goal.

Ans: Program Section: Glossary Level: Easy

29.

: A temporary endeavor undertaken to create a unique product, service, or result.

Ans: Project Section: Glossary Level: Easy

30.

: The means, techniques, and concepts used to run a project and achieve its objectives.

Ans: Project Management Section: Glossary Level: Easy

31.

: The chance that project processes or outcomes will not occur as planned.

Ans: Risk Section: Glossary Level: Easy

32.

: Most popular Agile approach which defines specific team roles, project events, documents for planning and reviewing projects referred to as “artifacts,” and rules that govern the relationship among the roles, events, and artifacts.

Ans: Scrum Section: Glossary Level: Easy

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33.

: In scrum, the project work is completed in sprints that typically last one to two weeks but occasionally last as long as four weeks. The duration of the sprints is held constant for a given project. Each sprint has specific targets in terms of product functionality to be completed and the quality of the work completed during the sprint is evaluated during the sprint.

Ans: Sprints Section: Glossary Level: Easy

34.

: Individuals or groups with a special interest in a project, usually the project team, client, senior management, and specific public interest groups that impact or are impacted by the project.

Ans: Stakeholder Section: Glossary Level: Easy

35.

: Doing the best within a function or area but at a cost to the larger whole.

Ans: Suboptimize Section: Glossary Level: Easy

36.

: A subset of a project, consisting of work packages.

Ans: Task Section: Glossary Level: Easy

37.

: The means for accomplishing a task.

Ans: Technology Section: Glossary Level: Easy

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38.

: Taking less on one measure, such as scope, in order to do better on another, such as schedule or cost.

Ans: Trade-off Section: Glossary Level: Easy

39.

: Having only partial or no information about the situation or outcomes, often due to ambiguity or complexity. Greater uncertainty translates into increased risk.

Ans: Uncertainty Section: Glossary Level: Easy

40.

: An approach to managing projects where one phase of the project is completed before the next phase is started.

Ans: Waterfall Approach Section: Glossary Level: Easy

41.

: A sub-element of a task used to assign costs and values.

Ans: Work Package Section: Glossary Level: Easy

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Essay Questions 1. Briefly describe the three characteristics that are common to all projects.

Answer The first is that every project is unique. That is, every project has some attributes that make it a one-of-a-kind undertaking. As a result of being unique, projects cannot be reduced to routine. The second is that a project is a one-time occurrence with a welldefined and specific set of desired end results. We know that since every project is unique, it must be a one-time occurrence. The outcomes must be well-defined because these outcomes are used to plan the project. Therefore, without well-defined outcomes, no project plan is possible. The third is that projects have a finite duration. In other words, they have a specific deadline.

Section: 1.1 The Definition of a “Project” Level: Easy

2. Discuss the factors that have contributed to the growth of the Project Management Institute.

Answer The complexity of problems faced by the project manager and the rapid growth in the number project-oriented organizations has contributed to the professionalization of project management. The growth in membership reflects the growth in the use of projects as well as the importance of PMI in the development of project management as a profession. The mission of PMI is to foster the growth of project management and to build professionalism in the field. PMI is responsible for codifying the areas of learning required for competent project management. PMI also offers a certificate called the Project Management Professional (PMP®) that includes a group of education, experience, and testing requirements to be obtained.

Section: 1.2 Why Project Management?

Level: Easy

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3. Name four benefits of project management.

Answer The project form of organization allows the project manager to be responsive to (1) the client and the environment, (2) identify and correct problems at an early date (3) make timely decisions about trade-offs between conflicting project goals, and (4) ensure that managers of the separate tasks that comprise the project do not optimize the performance of their individual tasks at the expense of the total project.

Section: 1.2 Why Project Management?

Level: Easy

4. What are some of the benefits of using project management?

Answer Better control, better customer relations, shorter development times, lower costs, higher quality and reliability, higher profit margins, etc. are the benefits of using project management.

Section: 1.2 Why Project Management?

Level: Easy

5. Describe the project life cycle.

Answer The project life cycle describes the set of tasks that must be completed in order to produce a product or service. There are many different project life cycles that exist, but a typical set includes: conception, selection, planning, scheduling, monitoring and controlling, and evaluation and termination.

Section: 1.3 The Project Life Cycle Level: Intermediate

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Chapter 2 Strategic Management and Project Selection True/False 1. The process of setting strategic goals by top management is very straightforward.

Ans: False Section: 2.1 Organizational Project Management and Governance Level: Easy

2. For a project selected using nonnumeric models, operating necessity projects have priority over competitive necessity projects.

Ans: True Section Reference: 2.2 Project Selection Models Level: Easy

3. For a project selected using nonnumeric models, competitive necessity projects have priority over operating necessity projects.

Ans: False Section Reference: 2.2 Project Selection Models Level: Easy

4. For a project selected using nonnumeric models, operating necessity and competitive necessity projects have equal priority.

Ans: False Section Reference: 2.2 Project Selection Models Level: Easy

5. For a project selected using nonnumeric models, product line extension projects have priority over operating necessity projects.

Ans: False Section Reference: 2.2 Project Selection Models Level: Easy

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6. When the hurdle rate increases, the NPV also increases.

Ans: False Section Reference: 2.2 Project Selection Models Level: Intermediate

7. The hurdle rate has no impact on the NPV. Ans: False Section Reference: 2.2 Project Selection Models Level: Intermediate

8. It is common and critical that the project manager be involved in the process by which projects are selected for inclusion in the set of projects the parent organization adopts for investment.

Ans: False Section Reference: 2.2 Project Selection Models Level: Intermediate

9. A longer payback period is better.

Ans: False Section Reference: 2.2 Project Selection Models Level: Easy

10. An NPV cannot be negative.

Ans: False Section Reference: 2.2 Project Selection Models Level: Easy

11. If a project has a payback period under five, it must have a positive NPV. Ans: False Section Reference: 2.2 Project Selection Models Level: Easy

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12. The shorter the payback period, the higher the NPV. Ans: True Section Reference: 2.2 Project Selection Models Level: Easy

13. The commonly seen phrase return on investment does not denote any specific method of calculation.

Ans: True Section Reference: 2.2 Project Selection Models Level: Easy

14. One of advantages of numeric profitability models is they are simple to use.

Ans: True Section Reference: 2.2 Project Selection Models Level: Easy

15. One of advantages of numeric profitability models is they are simple to understand.

Ans: True Section Reference: 2.2 Project Selection Models Level: Easy

16. One of advantages of numeric profitability models is the accounting data is usually available.

Ans: True Section Reference: 2.2 Project Selection Models Level: Easy

17. One of advantages of numeric profitability models is they can often be adjusted to account for project risk.

Ans: True Section Reference: 2.2 Project Selection Models Level: Easy

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18. One of disadvantages of numeric profitability models is they do not account for inflation.

Ans: False Section Reference: 2.2 Project Selection Models Level: Easy

19. One of disadvantages of numeric profitability models is do not account for risk.

Ans: False Section Reference: 2.2 Project Selection Models Level: Easy

20. One of disadvantages of numeric profitability models is they ignore all nonmonetary factors.

Ans: True Section Reference: 2.2 Project Selection Models Level: Easy

21. One of disadvantages of numeric profitability models is that models that use discounting are strongly biased toward short-term solutions.

Ans: True Section Reference: 2.2 Project Selection Models Level: Easy

22. One of disadvantages of numeric profitability models is they are highly sensitive to data errors in the early years of a project.

Ans: True Section Reference: 2.2 Project Selection Models Level: Easy

23. Scoring models use multiple criteria.

Ans: True Section Reference: 2.2 Project Selection Models Level: Easy

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Chapter 2

24. In a weighted factor scoring model, it is a requirement that they weights must sum to one. That is, ∑ 𝑤𝑗 = 1.

Ans: False Section Reference: 2.2 Project Selection Models Level: Easy

25. Scoring models allow multiple criteria to be used for evaluation and decision making, including profit/profitability models and both tangible and intangible criteria.

Ans: True Section Reference: 2.2 Project Selection Models Level: Easy

26. Scoring models only allow the use of subjective criteria.

Ans: False Section Reference: 2.2 Project Selection Models Level: Easy

27. Scoring models are structurally simple and therefore easy to understand and use.

Ans: True Section Reference: 2.2 Project Selection Models Level: Easy

28. Scoring models are intuitive and reflect the way we think about making choices.

Ans: True Section Reference: 2.2 Project Selection Models Level: Easy

29. It is difficult to make a scoring model a direct reflection of managerial policy.

Ans: False Section Reference: 2.2 Project Selection Models Level: Easy

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30. Scoring models are easily altered to accommodate changes in the environment or managerial policy.

Ans: True Section Reference: 2.2 Project Selection Models Level: Easy

31. Weighted scoring models allow for the fact that some criteria are more important than others.

Ans: True Section Reference: 2.2 Project Selection Models Level: Easy

32. You cannot use scoring models to perform sensitivity analysis.

Ans: False Section Reference: 2.2 Project Selection Models Level: Easy

33. The trade-offs among the several criteria are readily observable by scoring models.

Ans: True Section Reference: 2.2 Project Selection Models Level: Easy

34. The output of a scoring model is strictly a relative measure.

Ans: True Section Reference: 2.2 Project Selection Models Level: Easy 35. Project scores from scoring models represent the value or “utility” associated with a project and thus directly indicate whether or not the project should be supported.

Ans: False Section Reference: 2.2 Project Selection Models Level: Easy

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36. In general, scoring models are linear in form and the elements of such models are assumed to be independent.

Ans: True Section Reference: 2.2 Project Selection Models Level: Easy

37. It is easy to include too many criteria in a scoring model.

Ans: True Section Reference: 2.2 Project Selection Models Level: Easy

38. You should not include profitability measures in a scoring model.

Ans: False Section Reference: 2.2 Project Selection Models Level: Easy

39. In accounting data, cost and revenue data are assumed to vary linearly with associated changes in inputs and outputs.

Ans: True Section Reference: 2.2 Project Selection Models Level: Easy

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Chapter 2

Multiple Choice 1. Based on goal setting theory, Zwikael et al. found that there were three important dimensions that characterize the best and most attainable goals. Which of the following is not one of those characteristics? a) The goals must be specific in terms of their target values and timing. b) The goals must be attainable. c) The goal must be one that requires “stretching” to meet. d) The goals must be comprehensive in reflecting the views of the key stakeholders.

Ans: c Section: 2.1 Organizational Project Management and Governance Level: Easy

2. Project success definitions by Meredith et al. (2019) and Zwikael et al. identifies three main measures that are generic and can apply to any project. Which of the following is not one of those measures? a) Outputs achieves the iron triangle specifications b) The project was fully funded by the organization c) The business case objectives are successful d) The investment in the project is successful Ans: b Section: 2.1 Organizational Project Management and Governance Level: Easy

3. A project selected using the sacred cow model is likely to be maintained until successfully completed or until when> a) The project exceeds its budget b) The project falls behind schedule c) The boss recognizes the project as a failure and terminates it d) The project manager is terminated Ans: c Section Reference: 2.2 Project Selection Models Level: Easy

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Chapter 2

4. The Åstebro study (2004) of R&D projects found that all the characteristics below were excellent predictors of project commercial success, except for which one? a) Technological opportunity b) Managerial support c) Expected profitability d) Development risk Ans: b Section Reference: 2.2 Project Selection Models Level: Easy 5. A project selection criteria that focuses on how well new products would fit the firm’s existing product line would be which of the following? a) Sustainability b) Comparative benefit model c) Production line extension d) Operating necessity Ans: c Level: Easy Selection Reference: 2.2 Project Selection Models

6. If a system is being updated due to operating necessity, why was the project selected? a) The system is worth saving at any cost b) The system is worth saving at the estimated cost of the project c) The dimension of cost is not relevant to execution of the project d) The cost overruns can be hidden in someone else's budget Ans: b Section Reference: 2.2 Project Selection Models Level: Easy

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Chapter 2

7. A project selection criteria that focuses on environmental and social issues is what? a) Sustainability b) Profitability c) Production line extension d) Operating necessity Ans: a Level: Intermediate Selection Reference: 2.2 Project Selection Models

8. The drawback of which model is that it fails to consider cash flows obtained once the initial investment has been recovered? a) Payback period b) Average rate of return c) Discounted cash flow d) Profitability index Ans: a Section Reference: 2.2 Project Selection Models Level: Intermediate

9. Which of the following is a type of numeric model? a) The sacred cow b) The operating necessity c) Payback period d) The product line extension Ans: c Section Reference: 2.2 Project Selection Models Level: Easy

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Chapter 2

10. A small project has a cost of $12,000 to implement and is expected to have annual cash flows of $3,000. What is its payback period? a) One year b) Two years c) Three years d) Four years Ans: d Section Reference: 2.2 Project Selection Models Level: Easy

11. Which of the following is the interest rate set by an organization as the minimum acceptable rate of return for a project? a) Hurdle rate b) Acceptable rate c) Internal rate of return d) Net present value Ans: a Section Reference: 2.2 Project Selection Models Level: Easy

12. If a company raises their hurdle rate, what happens to the net present value (NPV) of their projects? a) Goes up b) Unchanged c) Goes down d) Positive NPV’s go up, negative NPV’s go down Ans: c Section Reference: 2.2 Project Selection Models Level: Easy

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Chapter 2

13. If a company predicted rate of inflation goes down (deflation), what happens to the net present value (NPV) of their projects? a) Goes up b) Unchanged c) Goes down d) Positive NPV’s go up, negative NPV’s go down Ans: a Section Reference: 2.2 Project Selection Models Level: Easy

14. If the NPV for a project is less than zero, it indicates that the project will do what? a) Report a profit loss b) Report a profit gain c) Fail to cover its required rate of return d) Fail to generate cash inflows Ans: c Section Reference: 2.2 Project Selection Models

15. The underlying premise of the real options approach is which of the following? a) Delaying an investment may lead to greater returns or may lead to elimination of marginal projects b) Rushing into an investment more quickly may lead to lower returns or may lead to elimination of marginal projects c) Delaying an investment may lead to increased costs due to delays d) Rushing into an investment more quickly may lead to less risk Ans: a Section Reference: 2.2 Project Selection Models Level: Intermediate

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Chapter 2

16. Which of the following is not an advantage of the discounted cash flow approach to project selection? a) Simple to use and understand b) The accounting data is usually available c) The accounting data is possibly inaccurate d) They can be adjusted to account for project risk Ans: c Section Reference: 2.2 Project Selection Models Level: Easy

17. Which of the following is not a disadvantage of the discounted cash flow approach to project selection? a) It cannot account for project risk b) It ignores all nonmonetary factors c) It is strongly biased toward short-term solutions d) It is highly sensitive to data errors in the early years of a project Ans: a Section Reference: 2.2 Project Selection Models Level: Easy

18. Project Typhoon has a net present value of $10,000 and a profitability index of 1.01.

Project Cyclone has a net present value of $10,000 and a profitability index of 1.10.

Project Surf’sUp has a net present value of $10,000 and a profitability index of 1.05.

If only one project could be undertaken, the organization should select which project? a) Project Typhoon b) Project Cyclone c) Project Surf’sUp d) Not enough information is provided Ans: b Section Reference: 2.2 Project Selection Models Level: advanced

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Chapter 2

19. Occasionally, organizations will approve projects that are forecast to lose money when fully costed and sometimes even when only direct costed. Which of the following is not a good reason for doing this? a) Acquire knowledge concerning a specific or new technology b) Get the organization’s “foot in the door” c) Improve their competitive position d) They plan on cutting corners on work and material, or forcing subsequent contract changes to make up the cost Ans: d Section Reference: 2.2 Project Selection Models Level: Intermediate

20. Scoring models that include both monetary and qualitative factors are generally known as what? a) Weighted factor scoring models b) Unweighted factor scoring models c) Cost–benefit analyses d) Z-scoring models Ans: c Section Reference: 2.2 Project Selection Models Level: Intermediate

21. Scoring models are most often used to overcome this disadvantage of profitability models. a) The inability to account for the time value of money. b) The inability to account for project results beyond the payback period. c) The inability to account for multiple decision criteria. d) The inability to account for cash flow.

Ans: c Section Reference: 2.2 Project Selection Models Level: Intermediate

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Chapter 2

22. Real options seek to reduce which of the following risks in projects? a) Political b) Environmental c) Technological and commercial d) Sociological Ans: c Section Reference: 2.2 Project Selection Models Level: Easy

23. A project has four criteria, represented by A-D. There weights are 0.1, 0.2, 0.4, and 0.3. A particular project has scores of 4, 5, 8, and 9 respectively. What is its total score for the project? a) 6.5 b) 7.1 c) 7.3 d) 26 Ans: c Section Reference: 2.2 Project Selection Models Level: Easy

24. Which of the following is not an advantage that favors the use of weighted scoring models? a) Multiple objectives can be considered. b) Decision makers are compelled to stick with the decision once it has been made. c) The models can be adapted to changes in managerial philosophy. d) They can help avoid a short-term focus on profitability.

Ans: b Section Reference: 2.2 Project Selection Models Level: Easy

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Chapter 2

25. Which of the following is not a disadvantage that favors the use of weighted scoring models? a) Scores are relative measures b) Easy to include too many factors c) Can handle non-numeric criteria d) Can only include profits in a non-numeric fashion Ans: c Section Reference: 2.2 Project Selection Models Level: Easy

26. Which of the following demonstrates the quality of realism required of a project selection model? a) It does not require special interpretation, data that are difficult to acquire, or excessive personnel. b) It gives valid results within the range of conditions that the firm might experience. c) It reflects the multiple objectives of both the firm and its managers. d) It deals with situations both internal and external to the project.

Ans: c Section Reference: 2.2 Project Selection Models Level: Easy

27. According to research by Sanchez and Robert (2010), which of the following is not a reason why strategic benefits may be difficult to appraise? a) Not immediately realized b) Difficult to quantify c) May be confounded with other factors d) Easy to plan for when they occur Ans: d Level: Easy Selection Reference: 2.3 Project Portfolio Management (PPM)

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Chapter 2

28. Which of the following should not be members of the project council? a) Senior management b) Accounting department c) Project owners or sponsors of major projects d) Head of the project management office Ans: b Level: Easy Selection Reference: 2.3 Project Portfolio Management (PPM)

29. Wheelwright identified four separate categories of projects. Which of the following are not one of those categories? a) Sacred cow projects b) Platform projects c) Breakthrough projects d) R&D projects Ans: a Section Reference: 2.3 Project Portfolio Management (PPM) Level: Intermediate

30. Which of the following is not a common characteristic of highly successful strategic projects? a) It creates a unique competitive advantage and/or exceptional value for its stakeholders. b) It requires a long period of project definition dedicated to defining a powerful vision. c) It creates a satisfied project culture. d) It needs a highly qualified PM who is unconditionally supported by top management.

Ans: c Section Reference: 2.3 Project Portfolio Management (PPM) Level: Intermediate

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Chapter 2

31. Which of the following is not a common characteristic of highly successful strategic projects? a) It develops new knowledge and minimizes the use of existing knowledge. b) It uses integrated development teams with fast problem-solving capability. c) Its project team has a strong sense of partnership and pride. d) It needs a highly qualified PM who is unconditionally supported by top management.

Ans: a Section Reference: 2.3 Project Portfolio Management (PPM) Level: Intermediate

32. Which of the following is not a symptom of a misaligned project portfolio? a) Many more projects than management expected. b) Inconsistent determination of benefits, including double counting. c) Competing projects; no cross-comparison of projects. d) Low NPV. Ans: d Section Reference: 2.3 Project Portfolio Management (PPM) Level: Intermediate

33. Which of the following is not a symptom of a misaligned project portfolio? a) “Interesting” projects that do not contribute to the strategy. b) Projects whose costs exceed their benefits. c) Every project is assigned to a client. d) Lack of tracking against the plan, at least quarterly.

Ans: c Section Reference: 2.3 Project Portfolio Management (PPM) Level: Intermediate

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Chapter 2

34. Which of the following is not a purpose of the PPM? a) To insure that every project has a positive NPV b) To identify proposed projects that are not really projects c) To prioritize the list of available projects d) To intentionally limit the number of overall projects being managed Ans: a Section Reference: 2.3 Project Portfolio Management (PPM) Level: Intermediate

35. Which of the following is not a purpose of the PPM? a) To identify the real options that each project offers b) To identify projects that best fit the organization’s goals and strategy c) To train the PM d) To identify projects that support multiple organizational goals Ans: c Section Reference: 2.3 Project Portfolio Management (PPM) Level: Intermediate

36. Which of the following is not a purpose of the PPM? a) To identify codependent projects b) To eliminate projects that incur excessive risk and/or cost c) To balance short-, medium-, and long-term returns d) To eliminate projects with a negative NPV Ans: d Section Reference: 2.3 Project Portfolio Management (PPM) Level: Intermediate

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Chapter 2

Fill-in-the-Blanks 1. OPM stands for

.

Ans: organizational project management Section: 2.1 Organizational Project Management and Governance Level: Easy

2. PO stands for

.

Ans: project owner Section: 2.1 Organizational Project Management and Governance Level: Easy

3. PM stands for

.

Ans: project manager Section: 2.1 Organizational Project Management and Governance Level: Easy

4. The oversight committee is typically called a

committee.

Ans: steering Section: 2.1 Organizational Project Management and Governance Level: Easy

5. PMO stands for

.

Ans: project management office Section: Level: Easy

6. The mastery of the skills required to manage projects competently is referred to in the literature as project management .

Ans: maturity Section Reference: 2.2 Project Selection Models Level: Easy

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Chapter 2

7. There is usually some oversight committee, typically called a every project, of which the project owner is usually a member.

committee, for

Ans: steering Section Reference: 2.2 Project Selection Models Level: Easy

8. Project is the process of evaluating individual projects or groups of projects, and then choosing to implement some set of them so that the objectives of the parent organization will be achieved.

Ans: selection Section Reference: 2.2 Project Selection Criteria and Models Level: Easy

9. The two basic types of project selection models identified in the text are .

and

Ans: numeric and nonnumeric (in either order) Section Reference: 2.2 Project Selection Models Level: Intermediate

10. NPV stands for

.

Ans: net present value Section Reference: 2.2 Project Selection Criteria and Models Level: Easy

11. The

is the value of an opportunity foregone.

Ans: opportunity cost Section Reference: 2.2 Project Selection Models Level: Easy

12. The discounted cash flow method determines the net present value of all cash flows by discounting them by the .

Ans: hurdle rate Section Reference: 2.2 Project Selection Models Level: Easy

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Chapter 2

13. A collection of projects is known as a

.

Ans: portfolio Section Reference: 2.2 Project Selection Models Level: Easy

14. A project for inside clients is called an

project.

Ans: internal Section Reference: 2.2 Project Selection Models Level: Easy

15. A project for outside clients is called an

project.

Ans: external Section Reference: 2.2 Project Selection Models Level: Easy

16.

models do not use numbers as inputs.

Ans: Nonnumeric Section Reference: 2.2 Project Selection Models Level: Easy

17. ROI stands for

.

Ans: return on investment Section Reference: 2.2 Project Selection Models Level: Easy

18. A technique useful for developing numeric values that are equivalent to subjective, verbal measures of relative value is the system.

Ans: Delphi Section Reference: 2.2 Project Selection Models Level: Easy

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Chapter 2

19. Financial forecasts are reported as

financial statements.

Ans: pro forma Section Reference: 2.2 Project Selection Models Level: Intermediate 20. When the decision maker’s information is not complete, he/she will have to make a decision under conditions of .

Ans: uncertainty Section Reference: 2.2 Project Selection Models Level: Intermediate

21.

is a modeling technique for emulating a process, usually conducted a considerable number of times to understand the process better and measure its outcomes under different policies.

Ans: Simulation Level: Easy Selection Reference: 2.2 Project Selection Models

22. In a project portfolio, projects have objectives or deliverables that are only incrementally different in both product and process from existing offerings.

Ans: derivative Section Reference: 2.3 Project Portfolio Management (PPM) Level: Intermediate

23. In a project portfolio, a project that involves a new technology or even a disruptive technology that is known to the industry would serve as an example of a project.

Ans: breakthrough Section Reference: 2.3 Project Portfolio Management (PPM) Level: Intermediate

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Chapter 2

24.

: A formalized method for transforming the opinions of a group of individuals into quantitative measures that can be aggregated to use in decision making.

Ans: Delphi Section: Glossary Level: Easy

25.

: Designing the entities and roles involved in initiating, planning, executing, and routinizing projects.

Ans: Governance Section: Glossary Level: Easy

26.

: The sophistication and experience of an organization in managing multiple projects.

Ans: Maturity Section: Glossary Level: Easy

27.

: A way of looking at reality, usually for the purpose of abstracting and simplifying it, to make it understandable in a particular context.

Ans: Model Section: Glossary Level: Easy

28.

: The systematic management of projects, programs, and portfolios to achieve the strategic goals of an organization.

Ans: Organizational project management Section: Glossary Level: Easy

29.

: A group or set of projects with varying characteristics.

Ans: Portfolio Section: Glossary Level: Easy

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Chapter 2

30.

: Projected or anticipated, usually applied to financial data such as balance sheets and income statements.

Ans: Pro forma Section: Glossary Level: Easy

31.

: A procedure for selecting, implementing, and reviewing projects that will help an organization achieve its strategic goals.

Ans: Project portfolio management Section: Glossary Level: Easy

32.

: A technique for emulating a process, usually conducted a considerable number of times to understand the process better and measure its outcomes under different policies.

Ans: Simulation Section: Glossary Level: Easy

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Chapter 2

Problems 1. Assume a project costs $125,000 to implement and has annual net cash inflows of $25,000. Calculate its payback period.

Answer 𝑃𝑎𝑦𝑏𝑎𝑐𝑘 =

$125,000 = 5.0 $25,000

Section Reference: 2.2 Project Selection Models Level: Easy

2. Assume a project costs $125,000 to implement and has annual net cash inflows of $20,000. Calculate its payback period.

Answer 𝑃𝑎𝑦𝑏𝑎𝑐𝑘 =

$125,000 = 6.25 $20,000

Section Reference: 2.2 Project Selection Models Level: Easy 3. Assume a project costs $225,000 to implement and has annual net cash inflows of $40,000. Calculate its payback period.

Answer 𝑃𝑎𝑦𝑏𝑎𝑐𝑘 =

$225,000 = 5.63 $40,000

Section Reference: 2.2 Project Selection Models Level: Easy

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Chapter 2

4. Assume a project costs $800K to implement and has annual net cash inflows of $185K. Calculate its payback period.

Answer 𝑃𝑎𝑦𝑏𝑎𝑐𝑘 =

$800,000 = 4.32 $185,000

Section Reference: 2.2 Project Selection Models Level: Easy

5. Assume a project costs $1,200,000 to implement and has annual net cash inflows of $345,000. Calculate its payback period.

Answer 𝑃𝑎𝑦𝑏𝑎𝑐𝑘 =

$1.200,000 = 3.48 $345,000

Section Reference: 2.2 Project Selection Models Level: Easy

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Chapter 2

6. Assume a project costs $1,200,000 to implement and has annual net cash inflows of $345,000 for a period of eight years, a required rate of return of 15 percent, and an inflation rate of 3 percent. Calculate its net present value.

Answer $345,000 𝑁𝑃𝑉 = −$1,200,000 + ∑ Year 0 1 2 3 4 5 6 7 8

(1 + 0.15 + 0.03)8

= $206,760

Net Flow -$1,200,000 $292,373 $247,774 $209,978 $177,947 $150,803 $127,799 $108,304 $91,783 $206,760

Section Reference: 2.2 Project Selection Models Level: Intermediate

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Chapter 2

7. Assume a project costs $1,200,000 to implement and has annual net cash inflows of $345,000 for a period of eight years, a required rate of return of 8 percent, and an inflation rate of 2 percent. Calculate its net present value.

Answer $345,000 𝑁𝑃𝑉 = −$1,200,000 + ∑ Year 0 1 2 3 4 5 6 7 8

(1 + 0.08 + 0.02)8

= $640,550

Net Flow -$1,200,000 $313,636 $285,124 $259,204 $235,640 $214,218 $194,744 $177,040 $160,945 $640,550

Section: Section Reference: 2.2 Project Selection Models

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Chapter 2

8. Assume a project costs $125,000 to implement and has annual net cash inflows of $20,000 for a period of eight years, a required rate of return of 10 percent, and an inflation rate of 3 percent. Calculate its net present value.

Answer $20,000 𝑁𝑃𝑉 = −$125,000 + ∑ Year 0 1 2 3 4 5 6 7 8

(1 + 0.10 + 0.03)8

= −$29,025

Net Flow -$125,000 $17,699 $15,663 $13,861 $12,266 $10,855 $9,606 $8,501 $7,523 -$29,025

Section Reference: 2.2 Project Selection Models Level: Easy

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Chapter 2

9. Assume a project costs $225,000 to implement and has annual net cash inflows of $50,000 for a period of eight years, a required rate of return of 11 percent, and an inflation rate of 3 percent. Calculate its net present value.

Answer $50,000 𝑁𝑃𝑉 = −$225,000 + ∑ Year 0 1 2 3 4 5 6 7 8

(1 + 0.11 + 0.03)8

= $6,943

Net Flow -$225,000 $43,860 $38,473 $33,749 $29,604 $25,968 $22,779 $19,982 $17,528 $6,943

Section Reference: 2.2 Project Selection Models Level: Easy

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Chapter 2

10. Assume a project costs $225,000 to implement and has annual net cash inflows of $60,000 for a period of eight years, a required rate of return of 15 percent, and an inflation rate of 3 percent. Calculate its net present value.

Answer $60,000 𝑁𝑃𝑉 = −$225,000 + ∑ Year 0 1 2 3 4 5 6 7 8

(1 + 0.15 + 0.03)8

= $19,654

Net Flow -$225,000 $50,847 $43,091 $36,518 $30,947 $26,227 $22,226 $18,836 $15,962 $19,654

Section Reference: 2.2 Project Selection Models Level: Easy

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Chapter 2

Instruction Use the following data to answer the next five problems.

Projects Criterion Cost Risk Opportunity Profitability Sustainability Safety Competitiveness

Weight 0.20 0.20 0.10 0.10 0.10 0.15 0.15

A 1 2 2 2 1 3 2

B 2 2 2 2 1 1 1

C 1 1 1 3 3 3 3

D 3 1 2 1 3 1 2

11. What is the weighted score for Project A? Answer 0.20 (1) + 0.20 (2) + 0.10 (2) + 0.10 (2) + 0.10 (1) + 0.15 (3) + 0.15 (2) = 1.85 Section Reference: 2.2 Project Selection Models Level: Easy

12. What is the weighted score for Project B? Answer 0.20 (2) + 0.20 (2) + 0.10 (2) + 0.10 (2) + 0.10 (1) + 0.15 (1) + 0.15 (2) = 1.60 Section Reference: 2.2 Project Selection Models Level: Easy

13. What is the weighted score for Project C? Answer 0.20 (1) + 0.20 (1) + 0.10 (1) + 0.10 (3) + 0.10 (3) + 0.15 (3) + 0.15 (3) = 2.00 Section Reference: 2.2 Project Selection Models Level: Easy

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Chapter 2

14. What is the weighted score for Project D? Answer 0.20 (3) + 0.20 (1) + 0.10 (2) + 0.10 (1) + 0.10 (3) + 0.15 (1) + 0.15 (2) = 1.85 Section Reference: 2.2 Project Selection Models Level: Easy

15. Based on the weighted scores, which model should be selected.

Answer Project C has the highest weighted score.

Projects Criterion Cost Risk Opportunity Profitability Sustainability Safety Competitiveness Score

Weight 0.20 0.20 0.10 0.10 0.10 0.15 0.15

A 1 2 2 2 1 3 2 1.85

B 2 2 2 2 1 1 1 1.60

C 1 1 1 3 3 3 3 2.00

D 3 1 2 1 3 1 2 1.85

Section Reference: 2.2 Project Selection Models Level: Easy

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Chapter 2

Essay 1. Suppose that you have been assigned as the project manager to execute a project that was selected using the sacred cow method of project selection. The project sponsor is an executive who has been with the company for three years. Based on past employment history, the average tenure of a senior executive at your company is 5 years. After reviewing the project’s expectations and requirements, the project team has determined that the payback period will be 3.5 years. What are the implications for you and the project team?

Answer Many projects are terminated before they can be successfully completed. One potential source of uncertainty in a project that was selected using the sacred cow method would be the continuity of executive leadership. Therefore, it would be important for the project manager to understand the project-related factors that would support the overall corporate strategy for business success. Otherwise, should the sponsoring executive depart the company prior to completion of the project, the project will lack a sponsor. Given the selection method used, the scope of the project is likely to be unstable. A project manager should think about what he/she is doing and how it supports business success. This suggests that the project manager should understand the correlation between the project’s selection criteria and the business strategy.

Level: Advanced Section Reference: 2.2 Project Selection Models

2. Project Boulder has a payback period of 2.4 years, an NPV of $10,000, and a profitability index of 1.10. Project Flintstone has a payback period of 3.0 years, an NPV of $10,000 and a profitability index of 1.05. If only one project can be executed, which project should be selected? Explain your reasoning.

Answer Based on the available data, Project Boulder appears to be more favorable. In addition to recovering the initial investment more quickly, the same net present value is generated using fewer resources.

Section Reference: 2.2 Project Selection Models Level: Advanced

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Chapter 2

3. Consider the following three-year projects A and B each with the same initial investment of $1000. You are presented with the following measures for the projects: Project A: NPV $400; Payback 24 months Project B: NPV $545; Payback 26 months Which project would you choose and why?

Answer Project B would be the better choice for the following reasons: Project B has a greater NPV. Since NPV takes into account the time value of money and Payback does not, NPV is a more robust estimate. The fact that the Payback is delayed by two months (a 5.5% delay in a 36 month project) does not warrant leaving $145 on the table (36.25% higher NPV).

Section Reference: 2.2 Project Selection Models Level: Advanced 4. Contrast the real options selection approach with profitability models.

Answer Profitability models analyze a potential project using a single criterion: monetary return.

This analysis may also include time value of money but this is not always true.

Real options models are based on the concept of investing now to create opportunities for the future. This model analyses a potential project in terms of options that it generates or capability that it provides to a firm in the future. The investment may or may not be profitable or beneficial in the near future.

Section Reference: 2.2 Project Selection Models Level: Intermediate

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Chapter 2

5. Explain the difference between risk and uncertainty.

Answer Uncertainty means that it is possible to have alternate outcomes. Risk is uncertainty that affects the project for better or for worse. If the risk is favorable, it presents the project team with an opportunity to capture. If the risk is unfavorable, it represents a threat that may require a response from the project team. Uncertainty will not always affect the project. If the project is unaffected by the uncertain scenario, the uncertain scenario is not a risk to the project. Uncertainty ends when determinism is achieved.

Section Reference: 2.4 Risk Considerations in Project Selection Level: Intermediate

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Chapter 2

Chapter 3 The Project Manager True/False 1. A PM generally starts his or her career as a specialist in some field.

Ans: True Section Reference: 3.1 Project Management and the Project Manager Level: Easy

2. The analytic method is the best approach for understanding a complex system.

Ans: False Section Reference: 3.1 Project Management and the Project Manager Level: Easy

3. The PM must never allow senior management to be surprised.

Ans: True Section Reference: 3.1 Project Management and the Project Manager Level: Easy

4. Many projects are not large enough or sufficiently complex to require a full-time manager.

Ans: True Section Reference: 3.1 Project Management and the Project Manager Level: Easy

5. Many current project managers have no college-level training in the field of project management.

Ans: True Section Reference: 3.1 Project Management and the Project Manager Level: Easy

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Chapter 3

6. The individual who has the responsibility for performing and completing a task sometimes overestimates the time and cost required.

Ans: True Section Reference: 3.2 Special Demands on the Project Manager Level: Easy

7. The functional manager retains control of personnel evaluation, salary, and promotion for those people lent out to projects.

Ans: True Section Reference: 3.2 Special Demands on the Project Manager Level: Easy

8. Project managers can only manage one project at-a-time.

Ans: False Section Reference: 3.2 Special Demands on the Project Manager Level: Easy

9. The United States is the most litigious society on this planet.

Ans: True Section Reference: 3.4 Problems of Cultural Differences Level: Easy

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Chapter 3

Multiple Choice 1. Identify the attribute that is not normally associated with the job of functional manager. a) The functional manager is usually a generalist in the area being managed. b) The functional manager is responsible for deciding what resources will be devoted to accomplishing the task. c) The functional manager is administratively responsible for deciding how something will be done. d) The functional manager is responsible for deciding who will do the work.

Ans: a Section Reference: 3.1 Project Management and the Project Manager Level: Easy

2. According to the authors, the analytic method, when applied to systems, focuses on what? a) Assembling the components of a system into an integrated package b) Building an array of individually designed and manufactured components c) Calculating the cost and schedule requirements d) Dividing the components of a system into smaller and smaller elements Ans: d Section Reference: 3.1 Project Management and the Project Manager Level: Intermediate

3. The ideal project manager should be who? a) A direct, technical supervisor knowledgeable in the technology of the process being used b) Both generalist/facilitator and have a high level of technical competence in the science of the project c) A facilitator and specialist with technical credibility d) A technical specialist competent in principles of robust design Ans: b Section Reference: 3.1 Project Management and the Project Manager Level: Easy

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4. According to the authors, three major questions face the project manager with respect to synthesizing the requirements of a project. Identify the item that is not listed as one of the three major questions. a) What needs to be done? b) Who will actually do the work of the project? c) When must it be done? d) How will the required resources be obtained?

Ans: b Section Reference: 3.1 Project Management and the Project Manager Level: Intermediate

5. According to the authors the project manager should be more skilled at which of the following? a) General management b) Technology c) Synthesis d) Analysis Ans: c Section Reference: 3.1 Project Management and the Project Manager Level: Easy 6. Which of the following is when someone takes over the project manager’s job by exercising extremely close supervision over every action the project manager takes, or will actually tell the project manager precisely what to do. a) Micromanagement b) Over-management c) Turnover d) Supermanagement Ans: a Section Reference: 3.1 Project Management and the Project Level: Easy

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Chapter 3

7. When managing a project, the project manager is responsible for which of the following? a) Auditing the project b) Executing the project c) Budgeting the project d) Designing the project Ans: c Section Reference: 3.1 Project Management and the Project Manager Level: Intermediate

8. The project manager's responsibilities are broad and fall primarily into three separate areas. Responsibilities to which of the following is not one of these. a) The parent organization b) The project and the client c) The members of the project team d) Special-interest groups Ans: d Section Reference: 3.1 Project Management and the Project Manager Level: Easy

9. The Project Management Institute (PMI) offers a certification for project managers.

PMI offers examination for certification as which of the following. a) Project Management Professionals b) Project Management Experts c) Project Management Associates d) Project Management Intern Ans: a Section Reference: 3.1 Project Management and the Project Manager Level: Intermediate

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Chapter 3

10. The Tuckman ladder suggest that teams progress through four development phases.

Those phases are listed below. Which one matches the following description: Teams function as a cohesive unit focused on accomplishing the goals of the project. a) Forming b) Storming c) Norming d) Performing Ans: d Section Reference: 3.2 Special Demands on the Project Manager Level: Easy

11. The Tuckman ladder suggest that teams progress through four development phases.

Those phases are listed below. Which one matches the following description: Team members come together for the first time and begin learning about their roles and responsibilities. a) Forming b) Storming c) Norming d) Performing Ans: a Section Reference: 3.2 Special Demands on the Project Manager Level: Easy

12. The Tuckman ladder suggest that teams progress through four development phases.

Those phases are listed below. Which one matches the following description: In this phase, the team members begin to establish team norms and team cohesiveness develops. Individual team members reconcile their behaviors to support the overall team, and trust develops. a) Forming b) Storming c) Norming d) Performing Ans: c Section Reference: 3.2 Special Demands on the Project Manager Level: Easy

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Chapter 3

13. The Tuckman ladder suggest that teams progress through four development phases.

Those phases are listed below. Which one matches the following description: Work on the project begins, but initially the team members tend to work independently, which often leads to conflict. a) Forming b) Storming c) Norming d) Performing Ans: b Section Reference: 3.2 Special Demands on the Project Manager Level: Easy

14. How are most of the workers on a project acquired? a) Temporary agencies b) Borrowed from functional departments c) Transferred from functional departments d) Subcontractors Ans: b Section Reference: 3.2 Special Demands on the Project Manager Level: Easy

15. Which of the following is not typically recommended to be considered when hiring new team members? a) High-quality technical skills b) Political, and general, sensitivity c) Strong goal orientation d) Low self-esteem Ans: d Section Reference: 3.2 Special Demands on the Project Manager Level: Intermediate

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Chapter 3

16. Which of the following is not an important characteristic for effective team members? a) High-quality technical skills b) Political, and general, sensitivity c) High self-esteem d) Strong sense of self Ans: d Section Reference: 3.2 Special Demands on the Project Manager Level: Easy

17. What is scope creep? a) A change in the budget for the project b) A reduction in what is required for the project in order to reduce the budget c) A change in what is required for the project d) A change in the time for the project Ans: c Section Reference: 3.2 Special Demands on the Project Manager Level: Easy

18. Which of the following is one of the most serious crises for the project manager? a) Change in the budget for a project b) A key worker leaving the project c) A technical issue d) Change in required project scope Ans: d Section Reference: 3.2 Special Demands on the Project Manager Level: Easy

19. Which of the following is not a phase in the Tuckman ladder? a) Forming b) Defining c) Norming d) Mourning Ans: d Section Reference: 3.2 Special Demands on the Project Manager Level: Easy

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Chapter 3

20. Three approaches are paramount for handling complex projects. Which of the following is not one of those approaches? a) Communicating effectively with all stakeholder groups b) Skill with Microsoft Project or other similar software c) Learn as much about the client as possible d) Leadership Ans: b Section Reference: 3.2 Special Demands on the Project Manager Level: Easy

21. The project manager must make trade-offs between project progress and process.

Conceptually, this involves trade-offs between which functions? a) Technical and managerial b) Schedule and cost c) Performance and schedule d) Cost and performance Ans: a Section Reference: 3.2 Special Demands on the Project Manager Level: Intermediate

22. During the buildup phase, the project goals, in order of importance, are what? a) Schedule, scope, cost b) Cost, schedule, scope c) Schedule, cost, scope d) Cost, scope, schedule Ans: a Section Reference: 3.2 Special Demands on the Project Manager Level: Intermediate

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Chapter 3

23. A project manager must make trade-off decisions between the project, the firm, and what? a) Other projects b) Their own career goals c) Demands of the functional managers d) Completion time for the project Ans: b Section Reference: 3.2 Special Demands on the Project Manager Level: Intermediate

24. Most of the time spent by a project manager is spent how? a) Attending technical workshops b) Overseeing the workforce c) Filing paperwork d) Communicating Ans: d Section Reference: 3.2 Special Demands on the Project Manager Level: Intermediate

25. In order to meet the demands of the job of project manager—acquiring adequate resources, acquiring and motivating personnel, dealing with obstacles, making project goal trade-offs, maintaining a balanced outlook, and establishing a broad network of communication—the project manager must be a what? a) Highly skilled negotiator b) Hard worker c) Effective budgeter d) Cultural expert Ans: a Section Reference: 3.2 Special Demands on the Project Manager Level: Easy

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Chapter 3

26. According to the authors, of all the characteristics desirable in a project manager, which is the most important? a) Availability b) A strong technical background c) Ability to keep the project team happy d) Drive to complete the task Ans: d Section Reference: 3.3 Attributes of Effective Project Managers Level: Easy

27. Listed below are three aspects of leadership. Which one is associated with the following competency: Engaging communication, managing resources, empowering, developing, and achieving. a) Intellectual quality b) Managerial quality c) Emotional quality Ans: b Section Reference: 3.3 Attributes of Effective Project Managers Level: Easy

28. Listed below are three aspects of leadership. Which one is associated with the following competency: Self-awareness, emotional resilience, motivation, sensitivity, influence, intuitiveness, and conscientiousness? a) Intellectual quality b) Managerial quality c) Emotional quality Ans: c Section Reference: 3.3 Attributes of Effective Project Managers Level: Easy

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Chapter 3

29. Listed below are three aspects of leadership. Which one is associated with the following competency: Critical analysis and judgment, vision and imagination, and strategic perspective? a) Intellectual quality b) Managerial quality c) Emotional quality Ans: a Section Reference: 3.3 Attributes of Effective Project Managers Level: Easy

30. Project managers must have this, which refers to possessing enough technical abilities to direct the project. a) Technical credibility b) Managerial credibility c) Negotiation skill d) Drive to complete the task Ans: a Section Reference: 3.3 Attributes of Effective Project Managers Level: Intermediate

31. The project manager needs what kind of credibility? a) Technical and personal b) Administrative and personal c) Technical and administrative d) Technical and financial Ans: c Section Reference: 3.3 Attributes of Effective Project Managers Level: Easy

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Chapter 3

32. The ability to sense conflict early, then confront and deal with it before the conflict escalates into interdepartmental and intradepartmental warfare is which of the following attributes? a) Credibility b) Sensitivity c) Competency d) Ability to handle stress Ans: b Section Reference: 3.3 Attributes of Effective Project Managers Level: Easy

33. Projects are conducted in four important environments. They are what? a) Economic, political, legal, and sociotechnical b) Internal, external, transitional, and multicultural c) Routine, unique, fast-paced, and complex d) Profit, not for profit, government, and industry Ans: a Section Reference: 3.4 Problems of Cultural Differences Level: Easy

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Chapter 3

Fill-in-the-Blanks 1. PO stands for

.

Ans: project owner Section: Introduction Level: Easy

2. PM stands for

.

Ans: project manager Section: Introduction Level: Easy

3. The functional manager uses the approach.

approach and the PM uses the

Ans: analytic; systems Section Reference: 3.1 Project Management and the Project Manager Level: Intermediate

4. The states that to understand the system, we must understand the environment (or larger system) of which it is a part.

Ans: systems approach Section Reference: 3.1 Project Management and the Project Manager Level: Intermediate

5. The project manager should be more skilled at manager should be more skilled at .

, whereas the functional

Ans: synthesis; analysis Section Reference: 3.1 Project Management and the Project Manager Level: Easy

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Chapter 3

6. The project manager's responsibility to the project and to the client is met by ensuring that the of the project is preserved in spite of conflicting demands made by stakeholders.

Ans: integrity Section Reference: 3.1 Project Management and the Project Manager Level: Intermediate

7. The method focuses on breaking the components of a system into smaller and smaller elements.

Ans: analytic Section Reference: 3.1 Project Management and the Project Manager Level: Easy

8. PMBOK stands for

.

Ans: project management body of knowledge Section Reference: 3.1 Project Management and the Project Manager Level: Easy

9. Resources initially budgeted for a project are frequently for the task, partly because of natural optimism by the proposer about how many resources are needed.

Ans: insufficient Section Reference: 3.2 Special Demands on the Project Manager Level: Easy

10. Research has shown that the chances for successful completion of a multidisciplinary project are greatly increased if project team members are oriented rather than oriented.

Ans: problem; discipline Section Reference: 3.2 Special Demands on the Project Manager Level: Easy

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Chapter 3

11. According to the authors, the key to coping with uncertainty at the end of a project (a common obstacle for project managers) is .

Ans: communication Section Reference: 3.2 Special Demands on the Project Manager Level: Intermediate

12. During the stage of the project lifecycle, there is no significant difference in the importance that project managers place on the three goals of cost, time, and scope.

Ans: formation Section Reference: 3.2 Special Demands on the Project Manager Level: Easy

13. During the final or phaseout stage of the project lifecycle, of many project managers.

is the dominant goal

Ans: scope Section Reference: 3.2 Special Demands on the Project Manager Level: Intermediate

14. During the buildup stage of a project life cycle, project managers.

is the dominant goal of many

Ans: schedule Section Reference: 3.2 Special Demands on the Project Manager Level: Intermediate

15.

result(s) when the demands made on an individual are greater than the person's ability to cope with them, particularly when the person has a high need for achievement.

Ans: Stress Section Reference: 3.3 Attributes of Effective Project Managers Level: Easy

16. The successful PM is a

by avocation.

Ans: firefighter Section Reference: 3.2 Special Demands on the Project Manager Level: Easy

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Chapter 3

17. EQ stands for

.

Ans: emotional intelligence Section Reference: 3.3 Attributes of Effective Project Managers Level: Easy

18.

is the entire way of life for a group of people. It contains the four elements of technology, institutions, language, and arts.

Ans: Culture Section Reference: 3.4 Problems of Cultural Differences Level: Easy

19. The structure of a society is determined by its

.

Ans: institutions Section Reference: 3.4 Problems of Cultural Differences Level: Intermediate

20. According to the textbook, in Latin America, the give preference to relatives and friends when hiring.

system leads a manager to

Ans: compadre Section Reference: 3.4 Problems of Cultural Differences Level: Easy

21. The project.

is the “corporate culture” within the organization, or even within the

Ans: microculture Section Reference: 3.4 Problems of Cultural Differences Level: Easy

22. The is a person who spearheads an idea or action and sells it throughout the organization.

Ans: champion Section Reference: Glossary Level: Easy

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Chapter 3

23. The

is an alternative action if the expected result fails to materialize.

Ans: contingency plan Section Reference: Glossary Level: Easy

24. The represents everything outside the system that delivers inputs or receives outputs from the system.

Ans: environment Section Reference: Glossary Level: Easy

25. The project manager makes a by allowing one aspect of the project to get worse in return for allowing another aspect of the project to get better.

Ans: trade-off Section Reference: Glossary Level: Easy

26. A is a person who helps people overcome problems, either with technical issues or with other people.

Ans: facilitator Section Reference: Glossary Level: Easy

27.

: Breaking problems into their constituent parts to understand the parts better and thereby solve the problem.

Ans: Analytic Approach Section Reference: Glossary Level: Easy

28.

: A ratio to evaluate a proposed course of action.

Ans: Benefit–Cost Section Reference: Glossary Level: Easy

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Chapter 3

29.

: The way of life of any group of people.

Ans: Culture Section Reference: Glossary Level: Easy

30.

: An area of expertise.

Ans: Discipline Section Reference: Glossary Level: Easy

31.

: One of the standard organization disciplines such as finance, marketing, accounting, or operations.

Ans: Functional Section Reference: Glossary Level: Easy

32.

: A wide-ranging, synthesizing method for addressing problems that considers multiple and interacting relationships. Commonly contrasted with the analytic approach.

Ans: Systems Approach Section Reference: Glossary Level: Easy

33.

: Having to do with the methods and techniques for doing something.

Ans: Technological Section Reference: Glossary Level: Easy

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Chapter 3

Essay 1. Compare and contrast a functional manager with a project manager.

Answer Functional managers are also known as department heads. They are usually specialists in the areas of the organization that they manage. As specialists, they are analytically oriented and know many of the details of the operation for which they are responsible.

They know how to tackle problems in their area. They are administratively responsible for deciding how something will be done, who will do it, and what resources will be devoted to the task. They are more skilled at analysis.

Project managers are generalists. They oversee many functional areas, each with its own specialists. The project manager may not know how to perform the tasks they oversee.

They are more skilled at synthesis.

Section Reference: 3.1 Project Management and the Project Manager Level: Intermediate

2. Compare and contrast the analytic and systems approaches. As part of your answer, be sure to indicate which part of project leadership is likely to use each approach.

Answer The analytic method focuses on breaking the components of a system into smaller and smaller elements. Functional managers use the analytic approach. The systems approach maintains that to understand a component, we must understand the system of which the component is a part. And to understand the system, we must understand the environment (or larger system) of which it is a part. Adoption of the systems approach is crucial for the project manager.

Section Reference: 3.1 Project Management and the Project Manager Level: Intermediate

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Chapter 3

3. With respect to acquiring resources, there is a high potential for conflict between the functional manager and the project manager. Describe a major source of that conflict and suggest how it can be managed properly.

Answer The project manager often will seek individuals with scarce but necessary skills.

Moreover, the project manager will seek those individuals who are top producers.

However, these are the very people the functional manager would like to retain to perform the work of the function. In order to manage this conflict, the use of an objective standard to set priorities is recommended. Instead of seeking to optimize the project or the function, the project manager and the functional manager should collaborate to solve the problem in a manner that maximizes organizational success for the business as a whole.

Section Reference: 3.2 Special Demands on the Project Manager Level: Advanced 4. When asked, “How do you motivate astronauts?” a representative of NASA responded, “We don't motivate them, but, boy, are we careful about whom we select.”

Discuss the implications of this statement for project managers seeking to motivate project team members.

Answer The most effective team members have some common characteristics. Moreover, the issue of motivating people in a project team is closely related to the kind of people who are invited to join the team. For example, when faced with technical problems, will the team members take the initiative to resolve the issue or will the team members seek to delay action by referring the problem back to the functional department? Moreover, because of the potential for conflicting priorities between the function and the project, team members should have the political skills to balance such competing demands, especially when the project team is not assigned full-time to work on a project. If each team member has a problem solving orientation, the team member will seek interdisciplinary collaboration instead of narrowly viewing the problem within a specific discipline. And finally, team members should have the moral courage necessary to work in an open environment where problems are identified and resolved.

Section Reference: 3.2 Special Demands on the Project Manager Level: Easy

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Chapter 3

5. At the inception of a project, crises tend to be associated with resources. Explain why this scenario could be common in some organizations.

Answer Uniqueness is a characteristics shared by projects. Once the technical plans to accomplish the project have been translated into a budget and schedule, managerial reviews will often seek to gain cuts in budget and/or schedule. Each time this happens, the cuts will have to be translated into changes in technical plans.

Section Reference: 3.2 Special Demands on the Project Manager Level: Intermediate

6. Identify three important characteristics that would be desirable in a project manager.

Explain your reasoning.

Answer The three characteristics would be an ability to get the job done without destroying the performing organization and/or its relationships with key stakeholders. There are three aspects to this statement. First, there needs to be a drive to complete the tasks of the project. Second, the resources of the performing organization must be used in a manner that ensures survivability of the organization. Finally, the project manager needs the emotional maturity to balance competing demands among multiple project stakeholders.

This response assumes that is important for the performing organization to survive after completion of the project. In some cases, the intent would be to dismantle the performing organization once the project's results have been completed. However, this answer assumes that the performing organization intends to sustain operations as an ongoing business.

Section Reference: 3.3 Attributes of Effective Project Managers Level: Advanced

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Chapter 4 Managing for Stakeholders and Resolving Conflicts True/False 1. All stakeholders should have any equal voice in the project.

Ans: False Section: Introduction Level: Easy

2. Key stakeholders remain constant over the lift of the project.

Ans: False Section: Introduction Level: Easy

3. Even when the project is relatively small and simple, planning may involve the interaction of almost every functional and staff operation in the organization.

Ans: True Section: Introduction Level: Easy

4. Withdrawal is one way to resolve conflict.

Ans: True Section: Introduction Level: Easy

5. Smoothing is one way to resolve conflict.

Ans: True Section: Introduction Level: Easy

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Chapter 4

6. Compromise is one way to resolve conflict.

Ans: True Section: Introduction Level: Easy

7. Forcing is one way to resolve conflict.

Ans: True Section: Introduction Level: Easy

8. Buying is one way to resolve conflict.

Ans: False Section: Introduction Level: Easy

9. Forcing is the most effective method to resolve conflict.

Ans: False Section: Introduction Level: Easy

10. Contracts do little to ensure a smoothly running project.

Ans: True Section: Introduction Level: Intermediate

11. It is only necessary to identify the stakeholders for large projects.

Ans: False Section: 4.1 Identifying and Analyzing Stakeholders Level: Easy

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Chapter 4

12. All stages of the project life cycle appear to be typified by conflict.

Ans: True Section: 4.2 Conflict and the Project Life Cycle Level: Easy

13. The project team faces conflicts regarding labor costs.

Ans: False Section: 4.2 Conflict and the Project Life Cycle Level: Easy

14. The different goals and objectives of the PM, senior management, and functional managers are a major and constant source of conflict.

Ans: True Section: 4.2 Conflict and the Project Life Cycle Level: Easy 15. As the project’s plans become detailed, conflicts over technical issues build— conflicts between the PM and the functional areas tend to predominate.

Ans: True Section: 4.2 Conflict and the Project Life Cycle Level: Easy

16. Approaching intraproject conflicts with a desire to win a victory over other parties is generally the best approach.

Ans: False Section: 4.4 The Nature of Negotiation Level: Easy

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Chapter 4

Multiple Choice 1. A party to a conflict will usually be satisfied when the level of frustration has been what? a) Increased by the domination of the other party b) Lowered to the point where no action against the other party is contemplated c) Lowered because the party realizes the hopelessness of continuing the conflict d) Eliminated because the party has surrendered to the other party Ans: b Section: Introduction Level: Easy

2. There are probably more opportunities for this in handling conflicts and negotiations than in any other aspect of project management. a) Errors in judgment b) Ethical missteps c) Project team strife d) Project manager burnout Ans: b Section: Introduction Level: Easy

3. Eskerod notes that there are four important reasons to be aware of the roles stakeholders may play in a project. Which of the following is not one of those reasons? a) The project may need contributions from the stakeholders b) Their resistance may negatively affect the project during its front-end formulation c) Unhappy stakeholders may not approve the project once it is completed d) Stakeholders may have their own criteria for evaluating the “success” of the project Ans: c Section: Introduction Level: Easy

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Chapter 4

4. Using the Power-Interest Grid, the following relationships with the project manager matches up with low power, low interest? a) Monitor b) Keep informed c) Closely manage d) Keep satisfied Ans: a Section: 4.1 Identifying and Analyzing Stakeholders Level: Easy

5. Using the Power-Interest Grid, the following relationships with the project manager matches up with high power, low interest? a) Monitor b) Keep informed c) Closely manage d) Keep satisfied Ans: d Section: 4.1 Identifying and Analyzing Stakeholders Level: Easy

6. Using the Power-Interest Grid, the following relationships with the project manager matches up with high interest, low power? a) Monitor b) Keep informed c) Closely manage d) Keep satisfied Ans: b Section: 4.1 Identifying and Analyzing Stakeholders Level: Easy

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Chapter 4

7. Using the Power-Interest Grid, the following relationships with the project manager matches up with high interest, high power? a) Monitor b) Keep informed c) Closely manage d) Keep satisfied Ans: b Section: 4.1 Identifying and Analyzing Stakeholders Level: Easy

8. After identifying the stakeholders, what should be created to maintain key information about them including contact information, their requirements and expectations, what stage in the project they have the most interest in, and so on? a) Stakeholder register b) Stakeholder plan c) Project plan d) Request for proposal Ans: a Section: 4.1 Identifying and Analyzing Stakeholders Level: Easy

9. A useful tool for accessing the level of commitment needed from stakeholders is the what? a) Commitment Assessment Matrix b) Power-Interest Grid c) Stakeholder Survey d) Administrative Matrix Ans: a Section: 4.1 Identifying and Analyzing Stakeholders Level: Easy

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Chapter 4

10. The most common method of identifying stakeholders is what? a) Expert judgment of the project manager and project team b) Surveying all users c) Sending out invitations d) Using corporate guidelines Ans: a Section: 4.1 Identifying and Analyzing Stakeholders Level: Easy

11. The Project Management Institute has found that the primary method project groups use to obtain stakeholder feedback is what? a) Email b) Customer satisfaction surveys c) A wiki d) Face-to-face meetings Ans: d Section: 4.1 Identifying and Analyzing Stakeholders Level: Easy

12. During project formation, the organizational structure selected will have a major impact on the ways in which conflicts are handled. Lack of clarity about the relative power/influence/authority of the PM and the functional managers is a major component of all conflicts involving what? a) Contractual obligations b) Property rights c) Budgeting d) Resource allocation and scheduling Ans: d Section: 4.2 Conflict and the Project Life Cycle Level: Intermediate

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Chapter 4

13. During project build-up, the project should move from a general concept to what? a) Implementation of plans b) A highly detailed set of plans c) A project charter d) A project contract Ans: b Section: 4.2 Conflict and the Project Life Cycle Level: Easy

14. During the early program phases of the project lifecycle, Thamhain says that conflict intensity is the greatest with respect to what? a) Cost b) Human resource management c) Time d) Priorities Ans: d Section: 4.2 Conflict and the Project Life Cycle Level: Easy

15. The need to manage interfaces and to correct incompatibilities is likely to create technical conflicts during what phase of the project lifecycle? a) Project formation b) Project buildup c) Main program d) Project phase out Ans: c Section: 4.2 Conflict and the Project Life Cycle Level: Intermediate

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Chapter 4

16. During project build-up, if the project is independent and standalone, the project manager seeks a commitment of what from the functional departments? a) Work b) Materials c) People d) Budgets Ans: c Section: 4.2 Conflict and the Project Life Cycle Level: Intermediate

17. During project build-up, if the project is functionally tied down, the project manager seeks a commitment of what from the functional departments? a) Work b) Materials c) People d) Budgets Ans: a Section: 4.2 Conflict and the Project Life Cycle Level: Intermediate

18. During the main program phases of the project lifecycle, the conflict intensity is the greatest with respect to what? a) Cost b) Schedules c) Scope d) Quality Ans: b Section: 4.2 Conflict and the Project Life Cycle Level: Easy

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Chapter 4

19. Toward the end of the project lifecycle, conflict intensity is the greatest with respect to what? a) Cost b) Schedules c) Scope d) Quality Ans: b Section: 4.2 Conflict and the Project Life Cycle Level: Easy

20. What type of problems are comparatively rare during project phase-out because most have been solved or bypassed earlier? a) Resource b) Schedule c) Authority d) Technical Ans: d Section: 4.2 Conflict and the Project Life Cycle Level: Intermediate

21. Personality conflicts during project phase-out are often caused by what? a) The absence of deadlines b) The influx of newer technology c) Pressure to complete the project and anxiety about leaving the project d) Distribution of expenses charged to the project Ans: c Section: 4.2 Conflict and the Project Life Cycle Level: Intermediate

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Chapter 4

22. In order to move from the initial stage of the project to the execution stage, three fundamental issues must be handled. Which of the following is not one of these three? a) The technical objectives of the project must be specified in necessary detail b) The budget must be finalized c) Commitment of resources must be forthcoming from senior management. d) The priority of the project must be set and communicated Ans: b Section: 4.2 Conflict and the Project Life Cycle Level: Easy

23. The project manager must manage three important areas of trade-offs. Which of the following is not one of these three? a) Conflict b) Time c) Cost d) Scope Ans: a Section: 4.2 Conflict and the Project Life Cycle Level: Easy

24. Which of the following are not strategies people use to deal with conflict identified by Thomas? a) Competing b) Avoiding c) Collaborating d) Forcing Ans: d Section: 4.3 Dealing With Conflict Level: Easy

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Chapter 4

25. Most of the conflicts that involve the organization and outsiders have to do with what? a) Interpersonal differences b) Cultural differences and status differences c) Technical differences d) Property rights and contractual obligations Ans: d Section: 4.4 The Nature of Negotiation Level: Easy

26. Conflicts within the organization typically differ from conflicts with outsiders in one important way. As far as the organization is concerned, these conflicts are what? a) Conflicts between opponents b) Conflicts between allies c) Conflicts between microcultures d) Conflicts between subcultures Ans: b Section: 4.4 The Nature of Negotiation Level: Easy

27. There are several words that are synonyms for negotiate. Which of the following is not quoted by the authors? a) Arbitrate b) Bicker c) Conciliate d) Haggle Ans: b Section: 4.4 The Nature of Negotiation Level: Easy

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Chapter 4

28. Which one of the following choices was not identified by the authors as one of the reasons why organizations enter into partnership arrangements with each other? a) Avoidance of litigation b) Diversification of technical risk c) Reducing internal conflict d) Avoidance of capital investment Ans: c Section: 4.5 Partnering, Chartering, and Scope Change Level: Easy

29. The authors mention three situations where the highest level of negotiating skill is required by the project manager. Which of the following is not one of them? a) Getting personnel from the functional manager b) Using subcontractors c) Changing project deliverables in midstream d) Using input from multiple functional units in developing the project mission Ans: a Section: 4.5 Partnering, Chartering, and Scope Change Level: Intermediate 30. Which of the following is not included in the authors’ four part agreement for partnering? a) Continuous senior management support b) A method for resolution of problems and disagreements c) Joint evaluation of the project’s progress d) A set of team building exercises Ans: d Section: 4.5 Partnering, Chartering, and Scope Change Level: Intermediate

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Chapter 4

31. According to the authors; which of the entities below is not a party to the chartering process? a) The project manager b) The customer c) Senior management d) Functional managers Ans: b Section: 4.5 Partnering, Chartering, and Scope Change Level: Easy

32. Principled negotiation is defined by four points. The following description matches which of these points in the list below? Effort should be devoted to finding a wide variety of possible solutions—or elements thereof—that advance the mutual interests of the conflicting parties. a) Separate the people from the problem b) Focus on interests, not positions c) Before trying to reach agreement, invent options for mutual gain d) Insist on using objective criteria Ans: c Section: 4.5 Partnering, Chartering, and Scope Change Level: Easy

33. Principled negotiation is defined by four points. The following description matches which of these points in the list below? To minimize the likelihood that the conflict will become strictly interpersonal, the substantive problem should be carefully defined. Then everyone can work on it rather than each other. a) Separate the people from the problem b) Focus on interests, not positions c) Before trying to reach agreement, invent options for mutual gain d) Insist on using objective criteria Ans: a Section: 4.5 Partnering, Chartering, and Scope Change Level: Easy

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Chapter 4

34. Principled negotiation is defined by four points. The following description matches which of these points in the list below? Attention should be given to finding standards that can be used to determine the quality of an outcome. a) Separate the people from the problem b) Focus on interests, not positions c) Before trying to reach agreement, invent options for mutual gain d) Insist on using objective criteria Ans: d Section: 4.5 Partnering, Chartering, and Scope Change Level: Easy

35. Principled negotiation is defined by four points. The following description matches which of these points in the list below? Knowledge of the other party’s interests allows a negotiator to suggest solutions that satisfy the other party’s interests without agreeing with the other’s position. a) Separate the people from the problem b) Focus on interests, not positions c) Before trying to reach agreement, invent options for mutual gain d) Insist on using objective criteria Ans: b Section: 4.5 Partnering, Chartering, and Scope Change Level: Easy

36. According to the authors, the nature of negotiation as it applies to project management is the realization that few of the conflicts arising in projects have to do with what? a) Whether or not the task will be done b) The precise design of the deliverable c) How the design will be achieved d) Who will do the work, when, and at what cost.

Ans: a Section: 4.5 Partnering, Chartering, and Scope Change Level: Intermediate

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Chapter 4

37. When dealing with conflict between parties, it is recommended that one do what in order to avoid the conflict becoming interpersonal? a) Avoid the situation b) Define the substantive problem c) Leisurely discuss the issue d) Focus on interests Ans: b Section: 4.5 Partnering, Chartering, and Scope Change Level: Intermediate

38. Which of the following is not one of the four points of principled negotiation? a) Insist on using objective criteria b) Focus on interest not positions c) Invent options for mutual gain before trying to reach an agreement d) Separate people from the problem Ans: c Section: 4.5 Partnering, Chartering, and Scope Change Level: Intermediate

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Chapter 4

Fill-in-the-Blanks 1.

is the process which begins when one party perceives that the other has frustrated, or is about to frustrate, some concern of his.

Ans: Conflict Section: Introduction Level: Easy

2. Before the goals of the shareholders can be aligned with the purpose of the project, the must be identified.

Ans: stakeholders Section: 4.1 Identifying and Analyzing Stakeholders Level: Easy

3. In the stage of the project life cycle, most of the conflict centers on the inherent confusion of setting up the project.

Ans: initial Section: 4.2 Conflict and the Project Life Cycle Level: Easy

4.

are a major source of conflict in the execution phase of the project life cycle, and as the actual work gets under way.

Ans: Schedules Section: 4.2 Conflict and the Project Life Cycle Level: Easy

5. Many parts of a project must be correctly linked together in order for the project to perform properly. These linkages are known as .

Ans: interfaces Section: 4.2 Conflict and the Project Life Cycle Level: Easy

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Chapter 4

6. Technical problems are comparatively rare during

.

Ans: phase-out; project closure would also be acceptable Section: 4.2 Conflict and the Project Life Cycle Level: Easy

7. Approaching a situation assertively and being unwilling to cooperate is referred to as a strategy.

Ans: competing Section: 4.3 Dealing With Conflict Level: Easy

8. When the position is not asserted aggressively but the person is still unwilling to cooperate, we have a conflict strategy.

Ans: avoiding Section: 4.3 Dealing With Conflict Level: Easy

9. The quickly.

strategy may be appropriate in situations where a decision must be made

Ans: competing Section: 4.3 Dealing With Conflict Level: Easy

10. A/n

strategy might be applied when the issue is not that important to you.

Ans: avoiding Section: 4.3 Dealing With Conflict Level: Easy

11. A/n strategy might be applied when you deem the detrimental effects from the conflict outweigh the benefits of resolving the issue in a desirable way.

Ans: avoiding Section: 4.3 Dealing With Conflict Level: Easy

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12. When you assertively state your position but do so in a spirit of cooperation, you are employing a strategy.

Ans: collaborating Section: 4.3 Dealing With Conflict Level: Easy

13. The

strategy can be considered a win–win strategy.

Ans: collaborating Section: 4.3 Dealing With Conflict Level: Easy

14. In situations where you do not assert your position and focus more on cooperating with the other party, you are employing a/n strategy.

Ans: accommodating Section: 4.3 Dealing With Conflict Level: Easy

15. With the win.

strategy, the situation can be described as I lose, you win, or lose–

Ans: accommodating Section: 4.3 Dealing With Conflict Level: Easy

16. With the

strategy, nobody wins and nobody loses.

Ans: compromising Section: 4.3 Dealing With Conflict Level: Easy

17. According to the authors, the favored technique for resolving conflict is

.

Ans: negotiation Section: 4.4 The Nature of Negotiation Level: Easy

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18. Project is a method of transforming contractual relationships into a cohesive, cooperative project team with a single set of goals and established procedures for resolving disputes in a timely and effective manner.

Ans: partnering Section: 4.5 Partnering, Chartering, and Scope Change Level: Easy

19. Partnering is an attempt to

the risk associated with subcontracting.

Ans: mitigate Section: 4.5 Partnering, Chartering, and Scope Change Level: Easy

20. A/n is simply a written agreement between the PM, senior management, and the functional managers who are committing resources and/or people to the project.

Ans: project charter Section: 4.5 Partnering, Chartering, and Scope Change Level: Easy

21. Negotiating to a/n management.

solution is the key to conflict resolution in project

Ans: win-win Section: 4.5 Partnering, Chartering, and Scope Change Level: Easy

22. Traditionally, relations between the organization carrying out a project and a subcontractor working on the project are best characterized as .

Ans: adversarial Section: 4.5 Partnering, Chartering, and Scope Change Level: Easy

23. The agreements between groups partnering on large endeavors are often referred to as .

Ans: charters Section: 4.5 Partnering, Chartering, and Scope Change Level: Easy

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24.

: The boundaries between departments or functions.

Ans: Interfaces Section: Glossary Level: Easy

25.

: Communications across lines of equivalent authority.

Ans: Lateral Relations Section: Glossary Level: Easy

26.

: Stating immediate wants on the assumption that the environment is static.

Ans: Positional Negotiation Section: Glossary Level: Easy

27.

: A process of negotiation that aims to achieve a win–win result.

Ans: Principled Negotiation Section: Glossary Level: Easy

28.

: Individuals or groups with a special interest in a project, usually the project team, client, senior management, and specific public interest groups that impact or are impacted by the project.

Ans: Stakeholders Section: Glossary Level: Easy

29.

: When both parties are better off in the outcome.

Ans: Win-win Section: Glossary Level: Easy

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Chapter 4

Essay 1. Identify the three fundamental categories of conflict that occur during a project’s lifecycle.

Answer Groups working on the project may have different goals and expectations. There is considerable uncertainty about who has the authority to make decisions. There are interpersonal conflicts between people who are parties-at-interest in the project.

Section: 4.2 Conflict and the Project Life Cycle Level: Easy

2. Thomas et al. identified five strategies people use to deal with conflict. List and briefly describe these.

Answer Approaching a situation assertively and being unwilling to cooperate is referred to as a “competing” strategy. When the position is not asserted aggressively but the person is still unwilling to cooperate, we have a conflict “avoiding” strategy. When you assertively state your position but do so in a spirit of cooperation, you are employing a “collaborating” strategy. In situations where you do not assert your position and focus more on cooperating with the other party, you are employing an “accommodating” strategy. Finally, when you take a middle ground position on both dimensions you are “compromising.”

Section: 4.3 Dealing with Conflict Level: Easy

3. Describe the type of relations that generally exist between the organization carrying out the project and a subcontractor working on the project.

Answer The relationships are best characterized as adversarial because the parent organization’s objectives are to get the deliverable at the lowest possible cost, as soon as possible. On the other hand, the subcontractor’s objectives are to produce the deliverable at the highest possible profit with the least effort. These conflicting interests tend to lead both parties to work in an atmosphere of mutual suspicion and antagonism.

Section: 4.5 Partnering, Chartering, and Scope Change Level: Easy

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4. Describe the multistep process for building partnered projects.

Answer Initially, the parent firm must make a commitment to partnering, select subcontractors who will also make such a commitment, engage in joint team building exercises, and develop a charter for the project. Next, both parties must implement the partnering process with a four-part agreement on a joint evaluation of the project’s progress; a method for resolving any problems or disagreements; acceptance of a goal for continuous improvement for the joint project; and continuous support for the process of partnering from the senior management of both parties. Finally, the parties commit to a joint review of project execution once the project has been completed.

Section: 4.5 Partnering, Chartering, and Scope Change Level: Advanced

5. Identify three basic causes for change in projects.

Answer Some changes result because planners erred in their initial assessment about how to achieve a given end or erred in the choice of the proper goal for the project.

Technological uncertainty is the fundamental causal factor for either error. Other changes result because the client/user or project team learns more about the nature of the project deliverable or about the setting in which it is to be used. In these circumstances, an increase in knowledge or sophistication is the primary factor leading to the change. A third source of change is the mandate. This is a change caused by a change in the environment in which the project is being conducted.

Section: 4.5 Partnering, Chartering, and Scope Change Level: Intermediate

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6. List and describe the three basic causes for change in projects.

Answer 1.) Planners erred in their initial assessment about how to achieve a given end or erred in their choice of the proper goal for the project.

2.) The client/user or project teams learn more about the nature of the project deliverable or about the setting in which it is to be used.

3.) Mandate (a change in the environment in which the project is being conducted) Section: 4.5 Partnering, Chartering, and Scope Change Level: Intermediate

7. Describe the four points of principled negotiation described by Fisher.

Answer 1) Separate the people from the problem. To minimize the likelihood that the conflict will become strictly interpersonal, the substantive problem should be carefully defined. Then everyone can work on it rather than each other.

2) Focus on interests, not positions. When negotiation focuses on interests, the negotiator must determine the underlying concern of the other party 3) Before trying to reach agreement, invent options for mutual gain. As soon as the substantive problems are spelled out, some effort should be devoted to finding a wide variety of possible solutions—or elements thereof—that advance the mutual interests of the conflicting parties.

4) Insist on using objective criteria. Rather than bargaining on positions, attention should be given to finding standards that can be used to determine the quality of an outcome.

Section: 4.5 Partnering, Chartering, and Scope Change Level: Easy

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8. List and describe the five strategies people use to deal with conflict.

Answer 1.) Approaching a situation assertively and being unwilling to cooperate is referred to as a “competing” strategy.

2.) When the position is not asserted aggressively but the person is still unwilling to cooperate, we have a conflict “avoiding” strategy.

3.) When you assertively state your position but do so in a spirit of cooperation you are employing a “collaborating” strategy.

4.) In situations where you do not assert your position and focus more on cooperating with the other party you are employing an “accommodating” strategy.

5.) Finally, when you take a middle ground position on both dimensions you are “compromising.”

Section: 4.5 Partnering, Chartering, and Scope Change Level: Intermediate

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Chapter 5 The Project in the Organizational Structure True/False 1. As long as its organizational structure is sufficient to the tasks imposed on it, the structure tends to persist.

Ans: True Section: Introduction Level: Easy

2. Large firms frequently organize by the same method at different levels.

Ans: False Section: Introduction Level: Easy

3. There is one universally best organizational structure.

Ans: False Section: Introduction Level: Easy

4. With a functional organization, there is minimal flexibility in the use of staff.

Ans: False Section: 5.1 Projects in a Functional Organization Level: Easy

5. With a functional organization, individual experts can be utilized by many different projects.

Ans: True Section: 5.1 Projects in a Functional Organization Level: Easy

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6. With a functional organization, specialists in the division can be grouped to share knowledge and experience.

Ans: True Section: 5.1 Projects in a Functional Organization Level: Easy

7. With a functional organization, the functional division also serves as a base of technological continuity when individuals choose to leave the project.

Ans: True Section: 5.1 Projects in a Functional Organization Level: Easy

8. With a functional organization, the project contains the normal path of advancement for individuals whose expertise is in the functional area.

Ans: False Section: 5.1 Projects in a Functional Organization Level: Easy

9. With a functional organization, the client is not the focus of activity and concern.

Ans: True Section: 5.1 Projects in a Functional Organization Level: Easy

10. With a functional organization, the functional division tends to be very focused on the project.

Ans: False Section: 5.1 Projects in a Functional Organization Level: Easy

11. With a functional organization, response to client needs can be slow and arduous.

Ans: True Section: 5.1 Projects in a Functional Organization Level: Easy

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12. With a functional organization, there is a tendency to suboptimize the project.

Ans: True Section: 5.1 Projects in a Functional Organization Level: Easy

13. With a functional organization, the motivation of people assigned to the project tends to be strong.

Ans: False Section: 5.1 Projects in a Functional Organization Level: Easy

14. With a functional organization, such an organizational arrangement does not facilitate a holistic approach to the project.

Ans: True Section: 5.1 Projects in a Functional Organization Level: Easy

15. With a standalone project (projectized) organization, the project manager shares authority with the functional managers.

Ans: False Section: Projects in a Projectized Organization Level: Easy

16. With a standalone project (projectized) organization, all members of the project work force are directly responsible to the project manager.

Ans: True Section: Projects in a Projectized Organization Level: Easy

17. With a standalone project (projectized) organization, there are shorter lines of communication for the project.

Ans: True Section: Projects in a Projectized Organization Level: Easy

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Chapter 5

18. With a standalone project (projectized) organization, when there are several successive projects of a similar kind, the projectized organization can maintain a more or less permanent cadre of experts who develop considerable skill in specific technologies.

Ans: True Section: Projects in a Projectized Organization Level: Easy

19. With a standalone project (projectized) organization, motivation is low.

Ans: False Section: Projects in a Projectized Organization Level: Easy

20. With a standalone project (projectized) organization, the ability to make swift decisions is greatly enhanced.

Ans: True Section: Projects in a Projectized Organization Level: Easy

21. With a standalone project (projectized) organization, unity of command exists.

Ans: True Section: Projects in a Projectized Organization Level: Easy

22. With a standalone project (projectized) organization, the organizational structure tends to support a holistic approach to the project.

Ans: True Section: Projects in a Projectized Organization Level: Easy

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23. With a standalone project (projectized) organization, there can be considerable duplication of effort in every area from clerical staff to the most sophisticated (and expensive) technological support units.

Ans: True Section: Projects in a Projectized Organization Level: Easy

24. With a standalone project (projectized) organization, administrative corner‐cutting is common and easily justified.

Ans: True Section: Projects in a Projectized Organization Level: Easy

25. With a standalone project (projectized) organization, project managers tend to stockpile equipment and technical assistance.

Ans: True Section: Projects in a Projectized Organization Level: Easy

26. With a standalone project (projectized) organization, team members form strong attachments to the project and to each other.

Ans: True Section: Projects in a Projectized Organization Level: Easy

27. In a matrixed organization, the project is the point of emphasis.

Ans: True Section: 5.3 Projects in a Matrixed Organization Level: Easy

28. In a matrixed organization, the project has reasonable access to the entire reservoir of technology in all functional divisions.

Ans: True Section: 5.3 Projects in a Matrixed Organization Level: Easy

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29. In a matrixed organization, there is more anxiety about what happens when the project is completed than is typical of the standalone project organization.

Ans: False Section: 5.3 Projects in a Matrixed Organization Level: Easy

30. In a matrixed organization, response to client needs is as rapid as in the standalone project case.

Ans: True Section: 5.3 Projects in a Matrixed Organization Level: Easy

31. In a matrixed organization, consistency with the policies, practices, and procedures of the parent firm tends to be preserved.

Ans: True Section: 5.3 Projects in a Matrixed Organization Level: Easy

32. In a matrixed organization, where there are several projects simultaneously under way, matrix organization struggle to provide companywide balance of resources to achieve the several different time/cost/scope targets of the individual projects.

Ans: False Section: 5.3 Projects in a Matrixed Organization Level: Easy

33. In a matrixed organization, it is clear that the PM is the power center of the project.

Ans: False Section: 5.3 Projects in a Matrixed Organization Level: Easy

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34. In a matrixed organization, the movement of resources from project to project in order to satisfy the several schedules may foster political infighting among the several project managers.

Ans: True Section: 5.3 Projects in a Matrixed Organization Level: Easy

35. In a matrixed organization, for strong matrices, problems associated with shutting down a project are minimal.

Ans: False Section: 5.3 Projects in a Matrixed Organization Level: Easy

36. In a matrixed organization, the organization violates the management principle of unity of command.

Ans: True Section: 5.3 Projects in a Matrixed Organization Level: Easy

37. The complexities of the real world rarely lead firms to organize their projects in any of the previous “pure” forms.

Ans: True Section: 5.4 Projects in Composite Organizational Structures Level: Easy

38. The choice of how to organize a project is made by the project manager.

Ans: False Section: 5.5 Selecting a Project Form Level: Easy

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Chapter 5

Multiple Choice 1. There are many reasons for the rapid growth of project‐oriented organizations, but most of them can be subsumed in four general areas. Which of the following is not one of those four general areas? a) Low prices and low incremental costs have become absolute requirements for successful competition. b) The development of new products, processes, or services regularly requires inputs from diverse areas of specialized knowledge. c) The rapid expansion of technological possibilities in almost every area of enterprise tends to destabilize the structure of organizations. d) The rapid expansion of technological possibilities in almost every area of enterprise tends to destabilize the structure of organizations.

Ans: a Section: Introduction Level: Intermediate

2. Identify the statement that is not a major advantage of placing a project within a functional element of the parent organization. a) The flexible use of staff increases. b) Expertise is easily shared across multiple projects. c) The functional division tends to be oriented towards activities particular to its function. d) The functional division serves as a base of technological continuity.

Ans: c Section: 5.1 Projects in a Functional Organization Level: Easy

3. Identify the statement that is not a major disadvantage of placing a project within a functional element of the parent organization. a) There is a tendency to suboptimize the project. b) The project’s client is not the primary focus of activity in the function. c) The motivation of people assigned to the project tends to be weak. d) The functional division contains the normal path of advancement for individuals whose expertise is in the functional area.

Ans: d Section: 5.1 Projects in a Functional Organization Level: Easy

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Chapter 5

4. Identify the statement that is not a major advantage of placing a project within the pure project organization. a) The functional manager retains full line authority over project team members. b) The lines of communication are shortened in regards to the project’s resources. c) Centralized authority tends to increase the speed of decision-making. d) A holistic approach to performing the project is supported.

Ans: a Section: 5.2 Projects in a Projectized Organization Level: Easy

5. Identify the statement that is not a major disadvantage of placing a project within the pure project organization. a) The project manager has full line authority over the project. b) Projects duplicate effort because resources are not shared across projects. c) Projects attempt to stockpile resources. d) Policies and procedures of the organization are inconsistently used and enforced.

Ans: a Section: 5.2 Projects in a Projectized Organization Level: Easy

6. Identify the statement that is not a major advantage of placing a project in the matrix approach. a) A single individual, the project manager, takes responsibility for managing the project. b) The project will have access to representatives from the administrative units of the parent firm. c) The division of authority between the project manager and the functional managers is complex. d) There may be less anxiety among team members about what will happen to them when the project is completed.

Ans: c Section: 5.3 Projects in a Matrixed Organization Level: Easy

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Chapter 5

7. Identify the statement that is not a major disadvantage of placing the project in the matrix approach. a) The balance of power between stakeholders is delicate. b) Balancing the demands of competing projects using shared resource pools is complicated. c) The principle of unity of command is violated. d) The project manager takes responsibility for managing the project.

Ans: d Section: 5.3 Projects in a Matrixed Organization Level: Easy

8. When a project requires the integration of inputs from several functional areas and involves reasonably sophisticated technology, but does not require all the technical specialists to work for the project on a full-time basis, which organizational form should be used? a) Functional b) Matrix c) Pure project d) Mixed Ans: b Section: 5.3 Projects in a Matrixed Organization Level: Easy

9. In which organizational structure does the project manager have the highest level of authority? a) Functional b) Weak matrix c) Strong matrix d) Projectized Ans: d Section: 5.3 Projects in a Matrixed Organization Level: Easy

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Chapter 5

10. Which organizational structure has the highest availability of resources? a) Functional b) Weak matrix c) Strong matrix d) Projectized Ans: d Section: 5.3 Projects in a Matrixed Organization Level: Easy

11. In which organizational structure does the project manager have ownership of the project budget? a) Functional b) Weak matrix c) Balanced matrix d) Projectized Ans: d Section: 5.3 Projects in a Matrixed Organization Level: Easy

12. In which organizational structure is the project manager part-time? a) Functional b) Balanced matrix c) Strong matrix d) Projectized Ans: a Section: 5.3 Projects in a Matrixed Organization Level: Easy

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Chapter 5

13. In which organizational structure is the project administrative staff full-time? a) Functional b) Weak matrix c) Balanced matrix d) Projectized Ans: d Section: 5.3 Projects in a Matrixed Organization Level: Easy

14. A characteristic of which type of projects is that the work on these projects can cross time, space, organizational, and cultural boundaries? a) Matrix b) Projectized c) Standard d) Virtual Ans: d Section: 5.3 Projects in a Matrixed Organization Level: Intermediate 15. Virtual teams, when composed, should consist of “boundary spanners” who number about one in every how many team members? a) 6-7 b) 8-12 c) 10-20 d) 25-30 Ans: a Section: 5.3 Projects in a Matrixed Organization Level: Intermediate

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Chapter 5

16. Gratton also offers some rules for success when organizations find they must use geographically dispersed virtual teams for some of their projects. Which of the following is not one of those rules? a) Only virtual teams use for projects that are challenging and interesting. b) Pick the highest performers and assign them to the virtual team. c) Include a few members in the team who already know each other. d) Encourage frequent communication, but not social gatherings.

Ans: b Section: 5.3 Projects in a Matrixed Organization Level: Easy

17. If the project manager controls when and what people do while the functional managers control who will be assigned to the project and what technology will be used, which organizational form is probably being used? a) Projectized b) Pure project c) Matrix d) Weak project Ans: c Section: 5.4 Projects in Composite Organizational Structures Level: Advanced

18. If both functional and projectized divisions coexist in a firm, this would result in which organizational structure? a) Composite b) Objective c) Encompassing d) Free-form Ans: a Section: 5.4 Projects in Composite Organizational Structures Level: Easy

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Chapter 5

19. In which form of organizational structure, pure functional and pure project organizations may coexist in the firm? a) Strong b) Weak c) Functional d) Mixed Ans: d Section: 5.4 Projects in Composite Organizational Structures Level: Easy

20. When the major focus of a project must be on the in-depth application of a technology rather than on minimizing cost, meeting a specific schedule or achieving speedy response to change, which organizational form is apt to be the form of choice? a) Strong b) Weak c) Functional d) Mixed Ans: c Section: 5.5 Selecting a Project Form Level: Intermediate

21. When a firm engages in a large number of similar projects, which organizational form is apt to be preferred? a) Pure project b) Partial matrix c) Functional d) Mixed matrix Ans: a Section: 5.5 Selecting a Project Form Level: Intermediate

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Chapter 5

22. The process of dealing with uncertainties in projects that may affect the project for better or for worse has come to be known as what? a) Scope management b) Risk management c) Quality management d) Procurement management Ans: b Section: 5.6 The Project Management Office Level: Easy

23. An organization structure that is based on the Financial, Human Resources and Operational departments rather than by project is termed as a what? a) Matrix organization b) Parent organization c) Functional organization d) Projectized organization Ans: c Section: 5.6 The Project Management Office Level: Advanced 24. A common objective of an organization’s PMO is often created by organizations to do what? a) Establish consistent project management standards and methods b) Deal with technological obsolescence c) Train process managers d) Administer application software Ans: a Section: 5.6 The Project Management Office Level: Easy

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Chapter 5

25. A major purpose of the project management office should be to serve as what? a) The central location for all clerical support b) The critical disaster recovery support c) A link between strategic management and project management d) Maintenance for the project management library Ans: c Section: 5.6 The Project Management Office Level: Intermediate

26. To achieve its goals, PMOs and EPMOs commonly perform many tasks. Which of the following is not one of those tasks? a) Establish and enforce good project management processes b) Assess and improve the organization’s project management maturity c) Ensure that all of the budgetary procedures for the client are followed d) Offer consulting services to the organization’s project managers Ans: c Section: 5.6 The Project Office Level: Easy

27. To achieve its goals, PMOs and EPMOs commonly perform many tasks. Which of the following is not one of those tasks? a) Help project managers with administrative details such as status reports b) Conduct project reviews and audits c) Establish a project resource database and manage the resource pool d) Serve as a home for the project managers and functional workers assigned to the project one the project is completed Ans: d Section: 5.6 The Project Office Level: Easy

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Chapter 5

28. This member of the project team is in charge of product design and development and is responsible for functional analysis, specifications, drawings, cost estimates, quality/reliability, engineering changes, and documentation. a) Systems architect b) Manufacturing engineer c) Project controller d) Support services manager Ans: a Section: 5.7 The Project Team Level: Intermediate 29. This person’s task is the efficient production of the product or process the project engineer has designed, including responsibility for manufacturing engineering, design and production of code, unit testing, production scheduling, and other production tasks. a) Test engineer b) Contract administrator c) Development engineer d) Systems architect Ans: c Section: 5.7 The Project Team Level: Easy

30. This member of the project team is responsible for the efficient production of the product of the process, including the manufacturing engineering, design and production of tooling, production scheduling, and other production tasks. a) Project engineer b) Development engineer c) Contract administrator d) Support services manager Ans: b Section: 5.7 The Project Team Level: Intermediate

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Chapter 5

31. This person is responsible for the installation, testing, and support of the product (process) once its engineering is complete. a) Development engineer b) Systems architect c) Test engineer d) Project controller Ans: c Section: 5.7 The Project Team Level: Intermediate

32. The person is in charge of the basic product design and development and is responsible for functional analysis, specifications, drawings, cost estimates, and documentation. a) Test engineer b) Contract administrator c) Development engineer d) Systems architect Ans: d Section: 5.7 The Project Team Level: Easy

33. There are three specific scrum team roles associated with the scrum methodology.

Which of the following is not one of those? a) Product owner b) Client/customer c) Developers d) Scrum master Ans: b Section: 5.7 The Project Team Level: Easy

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34. In Agile, this person works with customers to gain a clear understanding of their needs. a) Product owner b) Client/customer c) Developers d) Scrum master Ans: a Section: 5.7 The Project Team Level: Easy

35. In Agile, this person is responsible for translating these desires into product1 requirements and developing the overarching strategy for the project. a) Product owner b) Client/customer c) Developers d) Scrum master Ans: a Section: 5.7 The Project Team Level: Easy

36. In Agile, this person is responsible for doing the work associated with creating the new product or improving an existing product. a) Product owner b) Client/customer c) Developers d) Scrum master Ans: c Section: 5.7 The Project Team Level: Easy

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Chapter 5

37. In Agile, after completing a task, this person selects the next task to work on based on the task priorities. a) Product owner b) Client/customer c) Developers d) Scrum master Ans: c Section: 5.7 The Project Team Level: Easy

38. In Agile, this person is responsible for updating the sprint backlog at the end of each day to reflect the work that was completed and to estimate the number of hours remaining for the task currently in-process. a) Product owner b) Client/customer c) Developers d) Scrum master Ans: c Section: 5.7 The Project Team Level: Easy

39. This person has deep expertise on the scrum framework and Agile methodologies and techniques. a) Product owner b) Client/customer c) Developers d) Scrum master Ans: d Section: 5.7 The Project Team Level: Easy

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Chapter 5

40. One of the main technical problems faced by the project manager is meeting what without compromising performance? a) Supplier’s targets b) Schedule and cost goals c) Technical specifications d) Cost and conflict goals Ans: b Section: 5.8 Human Factors and the Project Team Level: Intermediate

41. Project priorities are more of a concern in which stages of the project life cycle? a) Earlier b) Later c) Middle d) Final Ans: a Section: 5.8 Human Factors and the Project Team Level: Advanced

42. This behavior in a project manager would be highly correlated with unsuccessful project management. a) Conflict avoidance b) Interdisciplinary problem solving c) Win-win negotiation techniques d) Risk mitigation Ans: a Section: 5.8 Human Factors and the Project Team Level: Easy

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Chapter 5

43. According to Dewhurst, a group of individuals working independently is what? a) Disaster b) Name-only team c) Functional team d) Project team Ans: b Section: 5.8 Human Factors and the Project Team Level: Advanced

44. Subletting tasks out to smaller contractors is known as what? a) Contract management b) Subcontracting c) Contract avoidance d) Contract leasing Ans: b Section: Glossary Level: Easy

45. When the standard departments of the organization represent individual disciplines such as engineering, marketing, purchasing, and so on, the organization follows what? a) Projectized management b) Matrixed management c) Functional management d) Mixed management Ans: c Section: Glossary Level: Easy

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Chapter 5

46. The firm or organization within which the project is being conducted is known as the what? a) Parent organization b) Consulting firm c) Project team d) Stakeholder company Ans: a Section: Glossary Level: Intermediate

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Chapter 5

Fill-in-the-Blanks 1. The underlying principle of modern organizations is the group.

of the human elements in

Ans: specialization Section: Introduction Level: Intermediate

2.

is a powerful competitive advantage.

Ans: First‐to‐market Section: Introduction Level: Easy

3. The rapid expansion of technological possibilities in almost every area of enterprise tends to the structure of organizations.

Ans: destabilize Section: Introduction Level: Easy

4. PMO stands for

.

Ans: project management office Section: Introduction Level: Easy

5. The key to conflict resolution is to turn a

into a

.

Ans: win-lose situation; win-win situation Section: 5.1 Projects in a Functional Organization Level: Intermediate

6. A major advantage of using a placement for a project is that individual experts can be utilized by many different projects.

Ans: functional Section: 5.1 Projects in a Functional Organization Level: Intermediate

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Chapter 5

7. In a/n organization, the firm’s administrative support groups (HR, Legal, Finance, Controller, and so on) report to the President or CEO as staff units.

Ans: projectized Section: 5.2 Projects in a Projectized Organization Level: Easy

8. The organizational form is a pure project organization overlaid on the functional divisions of the parent firm.

Ans: matrix Section: 5.3 Projects in a Matrixed Organization Level: Easy

9. The

matrix is most similar to the projectized organizational form.

Ans: strong Section: 5.3 Projects in a Matrixed Organization Level: Easy

10. The

matrix is least similar to the pure project organizational form.

Ans: weak Section: 5.3 Projects in a Matrixed Organization Level: Easy

11. Viewing the whole at one time rather than each piece individually describes the approach.

Ans: holistic Section: 5.3 Projects in a Matrixed Organization Level: Intermediate

12. A

matrix is similar to a standalone project.

Ans: strong Section: 5.3 Projects in a Matrixed Organization Level: Easy

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Chapter 5

13.

projects are those in which work on the project team crosses time, space, organizational, or cultural boundaries.

Ans: Virtual Section: 5.3 Projects in a Matrixed Organization Level: Easy

14. In general, the form is apt to be the organizational form of choice for projects where the major focus must be on the in‐depth application of a technology.

Ans: functional Section: 5.5 Selecting a Project Form Level: Easy

15. If the firm engages in a large number of similar projects, the organization is preferred.

form of

Ans: projectized Section: 5.5 Selecting a Project Form Level: Easy

16. The form would generally be used for one‐time, highly specific, unique tasks that require careful control and are not appropriate for a single functional area.

Ans: projectized Section: 5.5 Selecting a Project Form Level: Easy

17. When the project requires the integration of inputs from several functional areas and involves reasonably sophisticated technology but does not require all the technical specialists to work for the project on a full‐time basis, the organization is the only satisfactory solution.

Ans: matrix Section: 5.5 Selecting a Project Form Level: Easy

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Chapter 5

18. A major contribution of is to establish project administration procedures for selecting, initializing and planning, budgeting, and scheduling projects as well as to serve as a repository for reports on the performance of the planning, budgeting, scheduling, and resource allocation processes.

Ans: PMOs Section: 5.6 The Project Management Office Level: Easy

19. Dealing with uncertainties has come to be known as

management.

Ans: risk Section: 5.6 The Project Management Office Level: Easy

20. EPMO stands for

.

Ans: Enterprise Project Management Office Section: 5.6 The Project Management Office Level: Easy 21. The organization’s project management competency is now known as

.

Ans: maturity Section: 5.6 The Project Management Office Level: Easy

22.

is currently the most popular Agile methodology.

Ans: scrum Section: 5.7 The Project Team Level: Easy

23. In Agile, the prioritized list of product requirements is maintained by the product owner in an artifact called the product .

Ans: backlog Section: 5.7 The Project Team Level: Easy

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Chapter 5

24. Scrum teams usually consist of no more than

members.

Ans: nine or 9 Section: 5.7 The Project Team Level: Easy

25. It is the responsibility of the to ensure that the project is structured in such a way as to allow for motivational factors to be used.

Ans: project manager Section: 5.8 Human Factors and the Project Team Level: Intermediate

26. TQM and Six Sigma are good examples of

programs.

Ans: participative Section: 5.8 Human Factors and the Project Team Level: Easy

27. TQM stands for

.

Ans: Total Quality Management Section: 5.8 Human Factors and the Project Team Level: Easy

28. CIT stands for

.

Ans: continuous improvement teams Section: 5.8 Human Factors and the Project Team Level: Intermediate

29. SDWT stands for

.

Ans: self‐directed work teams Section: 5.8 Human Factors and the Project Team Level: Intermediate

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Chapter 5

30. The manager is typically responsible for a number of related projects, each with its own project manager.

Ans: program Section: Glossary Level: Easy

31.

is defined as inappropriately intense loyalty to the project.

Ans: Projectitis Section: Glossary Level: Easy

32.

is the term that describes the optimization of a sub-element of a system, perhaps to the detriment of the overall system.

Ans: Suboptimization Section: Glossary Level: Easy

33. The is a basic project document that describes all the work that must be done to complete the project and forms the basis for costing, scheduling, and work responsibility.

Ans: WBS or work breakdown structure Section: Glossary Level: Easy

34. WBS stands for

.

Ans: work breakdown structure Section: Glossary Level: Easy

35. The approach to organizing that includes both functions (disciplines) and projects in its hierarchy is known as the organization.

Ans: mixed Section: Glossary Level: Intermediate

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36.

: Scrum team members responsible for doing the work associated with creating the new product or improving an existing product. Collectively, the developers are referred to as the development team.

Ans: Developers Section: Glossary Level: Easy

37.

: The whole viewed at one time rather than each piece individually.

Ans: Holistic Section: Glossary Level: Easy

38.

: A method of organizing that maintains both functional supervisors and project supervisors. A strong matrix operates closer to a projectized organization, while a weak matrix operates more like a functional organization.

Ans: Matrix Organization Section: Glossary Level: Easy

39.

: These are huge, highly complex projects costing enormous amounts, consisting of multiple contractors and subcontractors, and taking years to complete.

Ans: Mega‐projects Section: Glossary Level: Easy

40.

: Scrum artifact containing prioritized list of product requirements.

Ans: Product Backlog Section: Glossary Level: Easy

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41.

: This form of organizing is characterized by projects being the main subdivisions of the organization, and general administrative functions common to all projects being a staff office reporting to the President or CEO.

Ans: Projectized Organization Section: Glossary Level: Easy

42.

: An office to deal with multiple projects and charged with improving the project management maturity and expertise of the organization, as well as increasing the success rate of projects.

Ans: Project Management Office Section: Glossary Level: Easy

43.

: Scrum team member that serves as a process coach to help ensure the project team is leveraging best practices, to buffer the development team from organizational distractions, to help remove organizational roadblocks the development team encounters, to help ensure the project execution is aligned with Agile values, and facilitating scrum events.

Ans: Scrum Master Section: Glossary Level: Easy

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Chapter 5

Essay 1. Identify the major reasons for the rapid growth of project-oriented organizations.

Answer Speed and market responsiveness have become requirements of successful competition.

Moreover, clients want increased customization of project outputs. Second, the development of new products, processes, and services has become increasingly complex.

This requires interdisciplinary collaboration and coordination. Third, rapid expansion of technological possibilities tends to destabilize organizational structures. And finally, business managers are seeking to gain greater control over the operations of the business.

Section: Introduction Level: Easy

2. Identify three major advantages and disadvantages of using functional elements of the parent organization as the administrative home for a project. Assume that the structure is appropriate for the project being undertaken.

Answer The advantages would include: the flexible use of staff in a manner that maximizes utilization of staff, the sharing of expertise among multiple projects, and the provision of a stable base for technological continuity for the organization. The disadvantages would include: the project’s client is not the primary focus of activity within the function, lines of cross-functional communication may be unclear, and responsiveness to client needs may be slow and arduous.

Section: 5.1 Projects in a Functional Organization Level: Easy

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Chapter 5

3. Identify three major advantages and disadvantages of using the pure project organization as the administrative home for project. Assume that the structure is appropriate for the project being undertaken.

Answer The advantages would include: the project manager has full line authority over the project, the structure tends to support a holistic approach to running the project, and the ability to make swift decisions is greatly enhanced. The disadvantages would include: the duplication of resources which are not shared between projects, the inconsistent adherence to corporate policies and procedures, and the potential to develop projectitis in a manner that distorts relationships between project team members and their counterparts in the parent organization.

Section: 5.2 Projects in a Projectized Organization Level: Easy

4. Discuss the advantages of empowering the project team.

Answer By empowering a project team, team members are enabled to manipulate tasks so that project objectives are met. Team members are encouraged to find better ways to do things. A participative style of management avoids micromanaging professionals and enables them to achieve goals using appropriate methods of their choosing. Team members begin to understand that they are responsible and accountable for achieving the project’s deliverables. There is a good chance that synergistic solutions will result from team collaboration. The project manager will serve as a tool for evaluating a team's performance and will be positioned to provide timely feedback to keep the team on track.

Section: 5.8 Human Factors and the Project Team Level: Easy

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Chapter 5

5. Explain how a company can go about implementing a PMO. Answer The best way to implement a PMO is to treat it as a project and apply good project management procedures. In addition, given the role of this special type of project, it is also suggested that the effort not be initiated until it has the full commitment of the top managers of the organization. It should also have a senior management sponsor or champion who is determined to see this project through to success. One way to initiate the project is through a pilot program in one of the areas that falls under the responsibility of the PMO project champion. Following its completion, the pilot project can be assessed, any mistakes corrected, and the benefits publicized to the rest of the organization.

Section: 5.6 The Project Management Office (PMO) Level: Advanced

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Chapter 5

Chapter 6 Activity Planning: Traditional and Agile True/False 1. Once the risk management group develops a risk management plan, the process of managing risk is a fairly static process.

Ans: False Section: 6.1 Traditional Project Activity Planning Level: Easy

2. Only large changes to the project need to go through the change order process.

Ans: False Section: 6.1 Traditional Project Activity Planning Level: Easy 3. A useful tool for facilitating the management of changes to a project’s scope is the Requirements Traceability Matrix.

Ans: True Section: 6.1 Traditional Project Activity Planning Level: Easy

4. The project sponsor generally takes responsibility for gathering the necessary approvals and assuring that any changes incorporated into the plan at higher levels are communicated to, and approved by, the units that have already signed off on the plan.

Ans: False Section: 6.1 Traditional Project Activity Planning Level: Easy 5. When the project is to deliver a product/service to an outside client, the project’s scope cannot be altered without the client’s permission.

Ans: True Section: 6.1 Traditional Project Activity Planning Level: Easy

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Chapter 6

6. According to PMBOK, a proper project plan addresses the following issue: The process for managing change.

Ans: True Section: 6.1 Traditional Project Activity Planning Level: Easy

7. According to PMBOK, a proper project plan addresses the following issue: The process for hiring (and firing) project workers.

Ans: False Section: 6.1 Traditional Project Activity Planning Level: Easy

8. According to PMBOK, a proper project plan addresses the following issue: A plan for communicating with and managing stakeholders.

Ans: True Section: 6.1 Traditional Project Activity Planning Level: Easy

9. According to PMBOK, a proper project plan addresses the following issue: A plan specifically for communicating with the media.

Ans: False Section: 6.1 Traditional Project Activity Planning Level: Easy

10. According to PMBOK, a proper project plan addresses the following issue: Specifying the process for setting key characteristics of the project deliverable.

Ans: True Section: 6.1 Traditional Project Activity Planning Level: Easy

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Chapter 6

11. According to PMBOK, a proper project plan addresses the following issue: Establishing the cost baseline for the project and developing a plan to manage project costs.

Ans: True Section: 6.1 Traditional Project Activity Planning Level: Easy

12. According to PMBOK, a proper project plan addresses the following issue: Developing a plan to raise funds to pay for the project.

Ans: False Section: 6.1 Traditional Project Activity Planning Level: Easy

13. According to PMBOK, a proper project plan addresses the following issue: Developing a plan for managing the human resources assigned to the project.

Ans: True Section: 6.1 Traditional Project Activity Planning Level: Easy

14. According to PMBOK, a proper project plan addresses the following issue: Developing a plan for continuously monitoring and improving project work processes.

Ans: True Section: 6.1 Traditional Project Activity Planning Level: Easy

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Chapter 6

15. According to PMBOK, a proper project plan addresses the following issue: Developing guidelines for procuring project materials and resources.

Ans: True Section: 6.1 Traditional Project Activity Planning Level: Easy

16. According to PMBOK, a proper project plan addresses the following issue: Developing a list of approved vendors for the project.

Ans: False Section: 6.1 Traditional Project Activity Planning Level: Easy

17. According to PMBOK, a proper project plan addresses the following issue: Defining the project’s scope and establishing practices to manage the project’s scope.

Ans: True Section: 6.1 Traditional Project Activity Planning Level: Easy

18. According to PMBOK, a proper project plan addresses the following issue: Developing the WBS. Ans: True Section: 6.1 Traditional Project Activity Planning Level: Easy

19. According to PMBOK, a proper project plan addresses the following issue: Developing practices to manage the quality of the project deliverables.

Ans: True Section: 6.1 Traditional Project Activity Planning Level: Easy

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Chapter 6

20. According to PMBOK, a proper project plan addresses the following issue: Defining how project requirements will be managed.

Ans: True Section: 6.1 Traditional Project Activity Planning Level: Easy

21. According to PMBOK, a proper project plan addresses the following issue: Defining who will be the project sponsor.

Ans: False Section: 6.1 Traditional Project Activity Planning Level: Easy

22. According to PMBOK, a proper project plan addresses the following issue: Defining who will be the project manager.

Ans: False Section: 6.1 Traditional Project Activity Planning Level: Easy

23. According to PMBOK, a proper project plan addresses the following issue: Establishing practices for managing risk.

Ans: True Section: 6.1 Traditional Project Activity Planning Level: Easy

24. According to PMBOK, a proper project plan addresses the following issue: Establishing the schedule baseline and developing a plan to manage the project’s schedule.

Ans: True Section: 6.1 Traditional Project Activity Planning Level: Easy

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Chapter 6

25. It is all too common for projects to go over budget and/or be completed late.

Ans: True Section: 6.1 Traditional Project Activity Planning Level: Easy

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Chapter 6

Multiple Choice 1. The project plan must be designed in such a way that the project outcome meets what? a) The objectives of the parent organization b) Unauthorized requests for change in the project outcome c) The requirements associated with scope creep d) Only the expressed warranties identified in the contract Ans: a Section: Introduction Level: Easy

2. What is the tendency for the project objectives to be changed with little or no discussion with other parties actively engaged in the project? a) Scope reference b) Scope creep c) Effectiveness d) Hierarchical planning Ans: b Section: Introduction Level: Intermediate

3. The success of the project launch meeting is dependent on the existence of what? a) A project charter b) The project's scope statement c) A well-defined set of objectives for the project d) Project planning templates Ans: c Section: 6.1 Traditional Project Activity Planning Level: Intermediate

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Chapter 6

4. Having key stakeholders involved early in the project tends to which of the following? a) Increased communication errors b) Increased project risk c) To create buy-in d) To create more problems than it is worth Ans: c Section: 6.1 Traditional Project Activity Planning Level: Intermediate

5. The sponsor and key stakeholders should participate in the project launch meeting for all of the following purposes except which of the following? a) Agreeing on top deliverables b) Discussing resourcing c) Finalizing contract details d) Establishing scheduling tolerances Ans: c Section: 6.1 Traditional Project Activity Planning Level: Intermediate

6. Planning a project should result in a number of outputs. Which of the following is not one of those outcomes? a) Technical scope is established b) Basic areas of performance responsibility are accepted by the participants c) Every possible risk is identified and a contingency plan is developed d) Any tentative delivery dates or budgets and their tolerances set by the parent organization are clearly noted Ans: c Section: 6.1 Traditional Project Activity Planning Level: Easy

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Chapter 6

7. When the project is to deliver a product/service to an outside client, the project’s scope cannot be altered without whose permission? a) Senior management b) Project management c) Project Engineer d) Client Ans: d Section: 6.1 Traditional Project Activity Planning Level: Easy 8. A useful tool for facilitating the management of changes to a project’s scope is the what? a) Requirements traceability matrix b) WBS c) Project charter d) Mind map Ans: a Section: 6.1 Traditional Project Activity Planning Level: Easy

9. This project plan element describes both the managerial and the technical approaches to the work. The technical discussion describes the relationship of the project to available technologies. a) Overview b) Objectives c) General approach d) Contractual aspects Ans: a Section: 6.1 Traditional Project Activity Planning Level: Easy

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Chapter 6

10. This project plan element should include profit and competitive goals as well as technical goals. a) Overview b) Objectives c) General approach d) Contractual aspects Ans: b Section: 6.1 Traditional Project Activity Planning Level: Easy

11. This project plan element lists all milestone events. It identifies the estimated time for each task and is used to construct the master project schedule. a) Budget b) Schedule c) Personnel plan d) Evaluation methods Ans: b Section: 6.1 Traditional Project Activity Planning Level: Easy

12. This element of the project plan lists all milestone events and/or phase-gates. a) Schedule b) Resources c) Personnel d) Evaluation methods Ans: a Section: 6.1 Traditional Project Activity Planning Level: Easy

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Chapter 6

13. This element of the project plan, at a high-level, this covers potential problems as well as potential lucky breaks that could affect the project. a) Schedule b) Resources c) Risk management plans d) Evaluation methods Ans: c Section: 6.1 Traditional Project Activity Planning Level: Easy

14. This element of the project plan contains a brief description of the procedure to be followed in monitoring, collecting, storing, and evaluating the history of the project. a) Schedule b) Resources c) Personnel d) Evaluation methods Ans: d Section: 6.1 Traditional Project Activity Planning Level: Easy

15. Once the project charter is completed and the project approved, a more detailed project plan can be developed. Which of the following issues is not addressed in the detailed project plan? a) The process for managing change b) The salary for the project manager c) A plan for communicating with and managing stakeholders d) Establishing the cost baseline for the project Ans: b Section: 6.1 Traditional Project Activity Planning Level: Easy

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Chapter 6

16. Once the project charter is completed and the project approved, a more detailed project plan can be developed. Which of the following issues is not addressed in the detailed project plan? a) Developing a plan for managing the human resources assigned to the project b) Developing a plan for continuously monitoring and improving project work processes c) Developing the Work Breakdown Structure d) Developing a list of skilled workers to hire Ans: d Section: 6.1 Traditional Project Activity Planning Level: Easy

17. Unfortunately, it is all too common for projects to go over budget and/or be completed late. What is the main reason? a) An improperly constructed WBS b) Too much scope creep c) An unplanned for risk event d) Insufficient upfront planning Ans: d Section: 6.1 Traditional Project Activity Planning Level: Easy

18. Which of the following is not another name for stage gates? a) Phase gates b) Quality gates c) Transition points d) Toll gates Ans: c Section: 6.1 Traditional Project Activity Planning Level: Easy

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Chapter 6

19. What is an approach that breaks the planning task down into the activities that must be done in each managerial level of the organization? Typically, the upper level sets the objectives for the next lower level. a) Strategic planning b) Organizational planning c) Hierarchical planning d) Agile planning Ans: c Section: 6.1 Traditional Project Activity Planning Level: Intermediate

20. During initial project planning, activities are identified and sorted. In completing this process, each level in the hierarchy should limit the number of activities to a range between what? a) 5 to 10 activities b) 0 to 5 activities c) 2 to 20 activities d) 10 to 20 activities Ans: c Section: 6.1 Traditional Project Activity Planning Level: Intermediate

21. When using a WBS, all of the work should roll up to the next level such that no extra work is required. This is referred to as the what? a) Development rule b) All-inclusive rule c) 100% rule d) WBS rule Ans: c Section: 6.1 Traditional Project Activity Planning Level: Easy

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Chapter 6

22. This is a specialized view of the action plan that focuses on who has what responsibility for each project task. a) Resource histogram b) Linear responsibility chart c) Project team directory d) Scope management plan Ans: b Section: 6.1 Traditional Project Activity Planning Level: difficult

23. A number of outcomes must be accomplished at a project planning meeting. Which of the following is not one of those outcomes? a) Technical scope is established b) Basic areas of performance responsibility are accepted by the participants c) Any tentative delivery dates or budgets and their tolerances are clearly noted d) All potential risks are identified and a plan is developed to deal with those risks Ans: d Section: 6.1 Traditional Project Activity Planning Level: Intermediate

24. There are 12 Agile Principles to guide the implementation of Agile Project Management (APM). Which of the following is not one of those 12 principles? a) Our highest priority is to satisfy the customer through early and continuous delivery of valuable software. b) Define all of the requirements up-front so that changes are minimized later in the process. c) Deliver working software frequently, from a couple of weeks to a couple of months. d) Business people and developers must work together daily throughout the project.

Ans: b Section: 6.2 Agile Project Planning Level: Easy

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Chapter 6

25. There are 12 Agile Principles to guide the implementation of Agile Project Management (APM). Which of the following is not one of those 12 principles? a) Build projects around the most qualified individuals. b) The most efficient and effective method of conveying information to and within a development team is face-to-face conversation. c) Working software is the primary measure of progress. d) Agile processes promote sustainable development.

Ans: a Section: 6.2 Agile Project Planning Level: Easy

26. There are 12 Agile Principles to guide the implementation of Agile Project Management (APM). Which of the following is not one of those 12 principles? a) Continuous attention to technical excellence and good design enhances agility. b) Efficiency-the art of maximizing the amount of work that is accomplished in a given period of time-is essential. c) The best architectures, requirements, and designs emerge from self-organizing teams. d) At regular intervals, the team reflects on how to become more effective, then tunes and adjusts its behavior accordingly.

Ans: b Section: 6.2 Agile Project Planning Level: Easy 27. With regards to planning, the characteristic of “short-term plans that are adjusted as project progresses” applies to which approach? a) Agile project management b) Traditional waterfall approach c) Both approaches d) Neither approach Ans: a Section: 6.2 Agile Project Planning Level: Easy

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Chapter 6

28. With regards to planning, the characteristic of “attempts to stick to long-term plans made in advance” applies to which approach? a) Agile project management b) Traditional waterfall approach c) Both approaches d) Neither approach Ans: b Section: 6.2 Agile Project Planning Level: Easy 29. With regards to client involvement, the characteristic of “throughout the project” applies to which approach? a) Agile project management b) Traditional waterfall approach c) Both approaches d) Neither approach Ans: a Section: 6.2 Agile Project Planning Level: Easy 30. With regards to client involvement, the characteristic of “beginning and end of project” applies to which approach? a) Agile project management b) Traditional waterfall approach c) Both approaches d) Neither approach Ans: b Section: 6.2 Agile Project Planning Level: Easy

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Chapter 6

31. With regards to budgets, the characteristic of “budgets are secondary to performance” applies to which approach? a) Agile project management b) Traditional waterfall approach c) Both approaches d) Neither approach Ans: d Section: 6.2 Agile Project Planning Level: Easy 32. With regards to project execution, the characteristic of “broken down into incremental stages called iterations or sprints” applies to which approach? a) Agile project management b) Traditional waterfall approach c) Both approaches d) Neither approach Ans: a Section: 6.2 Agile Project Planning Level: Easy 33. With regards to project execution, the characteristic of “work completed based on comprehensive and highly structured plan” applies to which approach? a) Agile project management b) Traditional waterfall approach c) Both approaches d) Neither approach Ans: b Section: 6.2 Agile Project Planning Level: Easy

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Chapter 6

34. With regards to communications, the characteristic of “open, frequent (daily) communication among stakeholders encouraged” applies to which approach? a) Agile project management b) Traditional waterfall approach c) Both approaches d) Neither approach Ans: a Section: 6.2 Agile Project Planning Level: Easy 35. With regards to communications, the characteristic of “mainly for project control” applies to which approach? a) Agile project management b) Traditional waterfall approach c) Both approaches d) Neither approach Ans: b Section: 6.2 Agile Project Planning Level: Easy 36. With regards to communications, the characteristic of “communications is mainly via press releases” applies to which approach? a) Agile project management b) Traditional waterfall approach c) Both approaches d) Neither approach Ans: d Section: 6.2 Agile Project Planning Level: Easy

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Chapter 6

37. With regards to feedback on results, the characteristic of “at the end of each iteration” applies to which approach? a) Agile project management b) Traditional waterfall approach c) Both approaches d) Neither approach Ans: a Section: 6.2 Agile Project Planning Level: Easy 38. With regards to feedback on results, the characteristic of “at the end of the project” applies to which approach? a) Agile project management b) Traditional waterfall approach c) Both approaches d) Neither approach Ans: b Section: 6.2 Agile Project Planning Level: Easy 39. With regards to work structure, the characteristic of “integrated cross-functional team” applies to which approach? a) Agile project management b) Traditional waterfall approach c) Both approaches d) Neither approach Ans: a Section: 6.2 Agile Project Planning Level: Easy

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Chapter 6

40. With regards to work structure, the characteristic of “team members tend to work independently and rely on project manager to coordinate tasks” applies to which approach? a) Agile project management b) Traditional waterfall approach c) Both approaches d) Neither approach Ans: b Section: 6.2 Agile Project Planning Level: Easy 41. With regards to project leadership, the characteristic of “self-managed teams with project manager as facilitator of process” applies to which approach? a) Agile project management b) Traditional waterfall approach c) Both approaches d) Neither approach Ans: a Section: 6.2 Agile Project Planning Level: Easy 42. With regards to project leadership, the characteristic of “project manager allocates work to team members and controls process” applies to which approach? a) Agile project management b) Traditional waterfall approach c) Both approaches d) Neither approach Ans: b Section: 6.2 Agile Project Planning Level: Easy

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Chapter 6

43. With regards to team member feedback, the characteristic of “open communication encouraged by all team members” applies to which approach? a) Agile project management b) Traditional waterfall approach c) Both approaches d) Neither approach Ans: a Section: 6.2 Agile Project Planning Level: Easy 44. With regards to team member feedback, the characteristic of “feedback typically provided confidentially by project manager” applies to which approach? a) Agile project management b) Traditional waterfall approach c) Both approaches d) Neither approach Ans: b Section: 6.2 Agile Project Planning Level: Easy 45. With regards to process ownership, the characteristic of “the team owns” applies to which approach? a) Agile project management b) Traditional waterfall approach c) Both approaches d) Neither approach Ans: a Section: 6.2 Agile Project Planning Level: Easy

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Chapter 6

46. With regards to process ownership, the characteristic of “the project manager owns” applies to which approach? a) Agile project management b) Traditional waterfall approach c) Both approaches d) Neither approach Ans: b Section: 6.2 Agile Project Planning Level: Easy 47. With regards to process ownership, the characteristic of “the client owns” applies to which approach? a) Agile project management b) Traditional waterfall approach c) Both approaches d) Neither approach Ans: d Section: 6.2 Agile Project Planning Level: Easy 48. With regards to experimentation, the characteristic of “encouraged to identify ways to best meet customer requirements” applies to which approach? a) Agile project management b) Traditional waterfall approach c) Both approaches d) Neither approach Ans: a Section: 6.2 Agile Project Planning Level: Easy

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Chapter 6

49. With regards to experimentation, the characteristic of “discouraged so as to meet project deadline and stay on budget” applies to which approach? a) Agile project management b) Traditional waterfall approach c) Both approaches d) Neither approach Ans: b Section: 6.2 Agile Project Planning Level: Easy 50. With regards to scope, the characteristic of “flexible” applies to which approach? a) Agile project management b) Traditional waterfall approach c) Both approaches d) Neither approach Ans: a Section: 6.2 Agile Project Planning Level: Easy 51. With regards to scope, the characteristic of “rigid” applies to which approach? a) Agile project management b) Traditional waterfall approach c) Both approaches d) Neither approach Ans: b Section: 6.2 Agile Project Planning Level: Easy

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Chapter 6

52. With regards to change, the characteristic of “welcome and expected part of project” applies to which approach? a) Agile project management b) Traditional waterfall approach c) Both approaches d) Neither approach Ans: a Section: 6.2 Agile Project Planning Level: Easy 53. With regards to change, the characteristic of “resisted and often requires formal change order request” applies to which approach? a) Agile project management b) Traditional waterfall approach c) Both approaches d) Neither approach Ans: b Section: 6.2 Agile Project Planning Level: Easy 54. With regards to priorities, the characteristic of “customer is top priority followed by team and then scope” applies to which approach? a) Agile project management b) Traditional waterfall approach c) Both approaches d) Neither approach Ans: a Section: 6.2 Agile Project Planning Level: Easy

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Chapter 6

55. With regards to priorities, the characteristic of “schedule is top priority followed by scope and then team” applies to which approach? a) Agile project management b) Traditional waterfall approach c) Both approaches d) Neither approach Ans: b Section: 6.2 Agile Project Planning Level: Easy 56. With regards to measures of success, the characteristic of “value (extrinsic quality), quality (intrinsic quality), and constraints (cost, schedule, and scope)” applies to which approach? a) Agile project management b) Traditional waterfall approach c) Both approaches d) Neither approach Ans: a Section: 6.2 Agile Project Planning Level: Easy 57. With regards to measures of success, the characteristic of “cost, schedule, and scope” applies to which approach? a) Agile project management b) Traditional waterfall approach c) Both approaches d) Neither approach Ans: b Section: 6.2 Agile Project Planning Level: Easy

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Chapter 6

58. The process of coordinating the work and timing of the different groups working on multidisciplinary teams is called what? a) Procurement management b) Integration management c) Vertical management d) Matrix management Ans: b Section: 6.3 Coordination Through Integration Level: Easy

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Chapter 6

Fill-in-the-Blanks 1. The of a project includes the objectives of the project as well as the time and cost required to complete the project to the customer’s satisfaction.

Ans: scope Section: Introduction Level: Intermediate

2. The of a project includes the objectives of the project as well as the time and cost required to complete the project to the customer’s satisfaction.

Ans: scope Section: Introduction Level: Intermediate

3. The physical items to be delivered from a project are called

.

Ans: deliverables Section: Introduction Level: Easy

4.

is the tendency of project objectives to be changed by the client through the project owner, senior management such as the sponsor, or individual project workers.

Ans: Scope creep Section: Introduction Level: Easy

5. Both the plans and the process of planning should start simple with the project charter .

Ans: charter Section: Introduction Level: Easy

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Chapter 6

6. A must be submitted for any changes requested after the project plan has been approved.

Ans: change order Section: 6.1 Traditional Project Activity Planning Level: Easy

7. Project managers can rely on the side of their brain for analytical reasoning and on the side of their brain for creativity.

Ans: left, right Section: 6.1 Traditional Project Activity Planning Level: Easy

8. When using the mind mapping process, you should designate one team member as the to ensure that all team members are involved and contributing, and to ensure that team members are focusing on the work that must be done.

Ans: facilitator Section: 6.1 Traditional Project Activity Planning Level: Intermediate

9. The is a list of the project activities with major activities broken down into subactivities.

Ans: WBS Section: 6.1 Traditional Project Activity Planning Level: Easy

10. The

chart is a tree diagram used to represent a hierarchical plan.

Ans: Gozinto Section: 6.1 Traditional Project Activity Planning Level: Easy

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Chapter 6

11. A(n) displays the organizational units responsible for each of the various work elements in the WBS. Ans: OBS Section: 6.1 Traditional Project Activity Planning Level: Intermediate

12. The project is a high-level document that helps to define the scope of the project and is typically submitted to get project approval to move on to develop a project plan.

Ans: charter Section: 6.1 Traditional Project Activity Planning Level: Easy

13. In a project charter, the is a short summary directed to top management and those unfamiliar with the project.

Ans: purpose Section: 6.1 Traditional Project Activity Planning Level: Easy

14. In a project charter, the contains a statement of the general goals of the project and a brief explanation of their relationship to the firm’s objectives Ans: purpose Section: 6.1 Traditional Project Activity Planning Level: Easy

15. In a project charter, the contains a more detailed statement of the general and ancillary goals of the project and their priorities, what constitutes success, and how the project will be closed out.

Ans: objectives Section: 6.1 Traditional Project Activity Planning Level: Easy

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Chapter 6

16. In a project charter, the requirements.

provides a high-level description of the project and its

Ans: overview Section: 6.1 Traditional Project Activity Planning Level: Easy

17. In a project charter, the

lists all milestone events and/or phase-gates.

Ans: schedule Section: 6.1 Traditional Project Activity Planning Level: Easy

18. In a project charter, the has each major task is listed, with the estimated time obtained from those who will do the work.

Ans: schedule Section: 6.1 Traditional Project Activity Planning Level: Easy

19. In a project charter, the section lists the project budget, contractual items, and the set of cost monitoring and control procedures.

Ans: resources Section: 6.1 Traditional Project Activity Planning Level: Easy

20. In a project charter, the covers potential problems as well as potential lucky breaks that could affect the project.

Ans: risk management plans Section: 6.1 Traditional Project Activity Planning Level: Easy

21. In a project charter, the contains a brief description of the procedures to be followed in monitoring, collecting, storing, auditing, and evaluating the project, as well as in the postproject evaluation following project termination.

Ans: evaluation methods Section: 6.1 Traditional Project Activity Planning Level: Easy

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Chapter 6

22.

is essentially a visual approach that closely mirrors how the human brain records and stores information.

Ans: Mind mapping Section: 6.1 Traditional Project Activity Planning Level: Easy

23. WBS stands for

.

Ans: work breakdown structure Section: 6.1 Traditional Project Activity Planning Level: Easy

24. The

is the main tool for managing the project scope as described in PMBOK.

Ans: WBS Section: 6.1 Traditional Project Activity Planning Level: Easy

25. MRP stands for

.

Ans: material requirements planning Section: 6.1 Traditional Project Activity Planning Level: Intermediate

26. OBS stands for

.

Ans: organizational breakdown structure Section: 6.1 Traditional Project Activity Planning Level: Easy

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Chapter 6

27. RACI stands for

.

Ans: responsible, accountable, consult, inform Section: 6.1 Traditional Project Activity Planning Level: Intermediate

28. For projects that are constantly changing, the

methodology is recommended.

Ans: agile Section: 6.2 Agile Project Planning Level: Easy

29. In an agile project, teams are given several requirements but only deal with one at a time, with each iteration being referred to as a .

Ans: sprint Section: 6.2 Agile Project Planning Level: Intermediate

30. Agile IT project teams are typically

and located at

site/s.

Ans: small; a single Section: 6.2 Agile Project Planning Level: Intermediate

31. APM stands for

.

Ans: agile project management Section: 6.2 Agile Project Planning Level: Easy

32. JIT stands for

.

Ans: just-in-time Section: 6.2 Agile Project Planning Level: Intermediate

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Chapter 6

33. The sprint is a subset of the product backlog and contains a list of product requirements that are targeted to be completed during the current sprint.

Ans: backlog Section: 6.2 Agile Project Planning Level: Easy

34. The product documents the completed functionality that can be made available to customers and is the sum of all completed sprint backlog items.

Ans: increment Section: 6.2 Agile Project Planning Level: Intermediate

35. MTs stands for

.

Ans: multidisciplinary teams Section: 6.3 Coordination Through Integration Level: Easy

36.

: An approach developed for software projects but now applied in many other kinds of projects that interfaces with the customer on a short-cycle, iterative basis for constant replanning.

Ans: Agile Project Planning Section: Glossary Level: Easy

37.

: The set of physical elements required to build a product.

Ans: Bill of Materials Section: Glossary Level: Easy

38.

: Scrum event held at the beginning of each workday of the sprint. It is a standup meeting typically time-boxed to 15 minutes.

Ans: Daily Scrum Section: Glossary Level: Easy

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Chapter 6

39.

: Achieving the objectives set beforehand; to be distinguished from efficiency, which is measured by the output realized for the input used.

Ans: Effectiveness Section: Glossary Level: Easy

40.

: Product improvements that engineering has designed after the initial product design was released.

Ans: Engineering Change Orders Section: Glossary Level: Easy

41.

: A pictorial representation of a product that shows how the elements required to build a product fit together.

Ans: Gozinto Chart Section: Glossary Level: Easy

42.

: A planning approach that breaks the planning task down into the activities that must be done at each managerial level. Typically, the upper level sets the objectives for the next lower level.

Ans: Hierarchical Planning Section: Glossary Level: Easy

43.

: Managing the problems that tend to occur between departments and disciplines, rather than within individual departments.

Ans: Integration Management Section: Glossary Level: Easy

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Chapter 6

44.

: A planning and material ordering approach based on the known or forecast final demand requirements, lead times for each fabricated or purchased item, and existing inventories of all items.

Ans: Materials Requirements Planning; or MRP Section: Glossary Level: Easy

45.

: Natural subproject ending points where payments may occur, evaluations may be made, or progress may be reassessed.

Ans: Milestones Section: Glossary Level: Easy

46.

: A process for pictorially representing ideas from a group so they can build upon each of the presented ideas and further elaborate them.

Ans: Mind Mapping Section: Glossary Level: Easy

47.

: Preplanned points during the project where progress is assessed and the project cannot resume until re-authorization has been approved.

Ans: Phase-Gates Section: Glossary Level: Easy

48.

: Scrum artifact that contains a complete list of the requirements for the product being developed or improved.

Ans: Product Backlog Section: Glossary Level: Easy

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Chapter 6

49.

: Scrum artifact documenting the completed functionality that can be made available to customers and is the sum of all completed sprint backlog items.

Ans: Product Increment Section: Glossary Level: Easy

50.

: A proposal for a project that summarizes at a high level the main aspects of the project for approval.

Ans: Project Charter Section: Glossary Level: Easy

51.

: The nominal plan for the entire project to which deviations will be compared.

Ans: Project Plan Section: Glossary Level: Easy

52.

: A table showing, for each project task, who is responsible, accountable, who should be consulted, and who needs to be informed.

Ans: RACI Matrix; also acceptable are responsibility or assignment chart Section: Glossary Level: Easy

53.

: A short stage lasting 1 to 4 weeks in an agile project.

Ans: Sprint Section: Glossary Level: Easy

54.

: Scrum artifact consisting of a subset of the product backlog to be completed during the current sprint.

Ans: Sprint Backlog Section: Glossary Level: Easy

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Chapter 6

55.

: A scrum event held at beginning of each sprint that is attended by the entire scrum team (product owner, scrum master, and developers).

Ans: Sprint Planning Meeting Section: Glossary Level: Easy

56.

: A description of all the tasks to complete a project, organized by some consistent perspective and containing a variety of information needed for that perspective.

Ans: Work Breakdown Structure; or WBS Section: Glossary Level: Easy

57.

: A description of a task that defines all the work required to accomplish it, including inputs and desired outputs.

Ans: Work Statement Section: Glossary Level: Easy

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Chapter 6

Essay 1. Identify four important outcomes associated with the project launch meeting.

Answer The technical scope should be established. Participants should accept the basic areas for performance responsibility. Tentative schedules and budgets are spelled out for the overall project. A group to manage risk has been created.

Section: 6.1 Traditional Project Activity Planning Level: Easy Bloom’s: Comprehension

2. Describe how a risk management plan is developed.

Answer The risk management group develops a risk management plan that includes proposed methodologies for managing risk, the group’s budget, schedule, criteria for dealing with risk, and required reports. Further, necessary inputs to the risk data base are described and various roles and responsibilities for group members are spelled out. It must be emphasized that the process of managing risk is not a static process. Rather, it is ongoing, with constant updating as more risks are identified, as some risks vanish, as others are mitigated—in other words as reality replaces conjecture—and new conjecture replaces old conjecture.

Section: 6.1 Traditional Project Activity Planning Level: Intermediate

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Chapter 6

3. Identify two objections commonly raised by marketing organizations against the early participation by engineering and manufacturing in the selling process to external customers. Explain how you would counter these objections.

Answer The sales arm of the organization is trained to sell. It is expected to be fully conversant with all technical aspects of the firm's products and services. In addition, salespeople are expected to be knowledgeable about design and manufacturing lead times and schedules.

On the other hand, it is widely assumed by marketing that manufacturing and design engineers do not understand sales techniques. Moreover, there may be legitimate concerns about the appropriateness and effectiveness of interpersonal communications due to the lack of formal training in selling processes. And finally, it is expensive to invest high-priced technical talent for proposals with a relatively low probability of success.

Section: 6.1 Traditional Project Activity Planning Level: Intermediate

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Chapter 6

4. Describe the general steps recommended by the authors for designing and using the WBS. Answer Step 1: Using information from the action plan, list the task breakdown in excessively finer levels of detail. Continue until all meaningful tasks for work packages have been identified. Each task should be at a level of detail such that it can be individually planned, budgeted, scheduled, monitored, and controlled.

Step 2: For each work package, identify the data relevant to the WBS. It is helpful to construct a linear responsibility chart to show who is responsible for what. The LRC will help the PM keep track of who must approve what and who must report to whom.

Step 3: All work package information should be reviewed with the individuals or organizations responsible for doing or supporting the work. This review should verify the WBS’s accuracy.

Step 4: The project budget should consist of four elements. They are: direct budgets from each task, an indirect costs budget for the project, a project contingency for unexpected emergencies, and any residual, which includes a profit derived from the project.

Step 5: Schedule information and milestones should be integrated into a project master schedule.

Step 6: During project execution, the project manager will compare actual resource usage by work element, work package, task and so on against the planned amounts for those items. This will enable the project manager to refine estimates and initiate appropriate corrective actions as necessary.

Step 7: The schedule will be analyzed in the same manner as the budget.

Section: 6.1 Traditional Project Activity Planning Level: Easy Bloom’s: Comprehension AACSB: Analysis Page: 201

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Chapter 6

Chapter 7 Budgeting and Risk Management True/False 1. The budget expended measures the actual level of work completed on the project.

Ans: False Section: Introduction Level: Easy

2. The budget is a reflection of the WBS in another form.

Ans: True Section: Introduction Level: Easy

3. In order to develop a budget, we must forecast what resources the project will require.

Ans: True Section: 7.1 Estimating Project Budgets Level: Easy

4. Developing project budgets is much easier than developing budgets for more permanent organizational activities since a project is a one-time activity.

Ans: False Section: 7.1 Estimating Project Budgets Level: Easy

5. The longer the project life, the more the project manager (PM) can trust that traditional methods and costs will be relevant since there will be more time for variations to average out.

Ans: False Section: 7.1 Estimating Project Budgets Level: Easy

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Chapter 7

6. Every expenditure (or receipt) must be identified with a specific project task.

Ans: True Section: 7.1 Estimating Project Budgets Level: Easy

7. The advantage of the top-down budgeting process is that aggregate budgets can often be developed quite accurately.

Ans: True Section: 7.1 Estimating Project Budgets Level: Easy

8. It is far more difficult to develop a complete list of tasks when constructing that list from the bottom up than from the top down.

Ans: True Section: 7.1 Estimating Project Budgets Level: Easy

9. The advantages of the bottom-up process are those generally associated with participative management.

Ans: True Section: 7.1 Estimating Project Budgets Level: Easy

10. True bottom-up budgets are rare.

Ans: True Section: 7.1 Estimating Project Budgets Level: Easy

11. Direct costs for resources and machinery are charged directly to the project and but are also subject to overhead charges.

Ans: False Section: 7.1 Estimating Project Budgets Level: Easy

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Chapter 7

12. G&A is composed of the cost of senior management, the various staff functions, and any other expenses not included in overhead.

Ans: True Section: 7.1 Estimating Project Budgets Level: Easy

13. G&A is a part of overhead.

Ans: False Section: 7.1 Estimating Project Budgets Level: Easy

14. A fully costed work element would include direct costs (labor, resources, and special machinery) plus overhead and G&A charges. The project manager has control over all of these.

Ans: False Section: 7.1 Estimating Project Budgets Level: Intermediate

15. The project manager alone can prepare the cost estimates for their project.

Ans: False Section: 7.2 Improving the Process of Cost Estimation Level: Easy

16. The matter of what overhead costs are to be added and in what amounts is unique to the firm.

Ans: True Section: 7.2 Improving the Process of Cost Estimation Level: Easy

17. The matter of what overhead costs are to be added and in what amounts is within the control of the project manager.

Ans: False Section: 7.2 Improving the Process of Cost Estimation Level: Easy

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Chapter 7

18. Studies have shown that human performance usually improves when a task is repeated.

Ans: True Section: 7.2 Improving the Process of Cost Estimation Level: Easy

19. The risks faced by a project are dependent on the technological nature of the project.

Ans: True Section: 7.3 Project Risk Management Level: Easy

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Chapter 7

Multiple Choice 1. Which of the following is a plan for allocating resources? a) A budget b) Direct cost c) A management plan d) An allocation effort Ans: a Section: Introduction Level: Easy

2. If a project budget is over funded, it will often do what? a) Produce waste b) Encourage slack management c) Improve morale d) Produce waste and encourage slack management Ans: d Section: Introduction Level: Easy

3. If a project budget is underfunded, it will often do what? a) Stimulate increased performance b) Improve utilization of resources c) Frustrate committed stakeholders d) Reduce costs Ans: c Section: Introduction Level: Easy

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Chapter 7

4. Identify the statement that is not correct regarding a project budget. a) The budget is included in a project plan. b) The budget is not an expression of organizational policy. c) The budget serves as a control mechanism for the project. d) The budget serves as a basis for comparison of planned and actual usage of resources.

Ans: b Section: Introduction Level: Intermediate 5. The project’s budget should do which of the following? a) Associate resource use with the achievement of organizational goals b) Allow funds to be spent without linkage to achievement c) Not reflect the timing of expenses associated with the use of resources d) Never be changed during project execution Ans: a Section: Introduction Level: Easy

6. In order to develop a budget, the project manager must forecast what? a) The resources required b) When resources will be needed c) The cost of resources d) All of the above Ans: d Section: 7.1 Estimating Project Budgets Level: Intermediate

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Chapter 7

7. What form of estimating relies on well-known statistical correlations between various factors such as the total cost of a house relative to the square feet of living area? a) Parametric estimating b) Statistical equivalence c) Bottom-up estimating d) Top-down estimating Ans: a Section: 7.1 Estimating Project Budgets Level: Intermediate

8. The Pathfinder Mission was to go where? a) The moon b) Mars c) Saturn d) Venus Ans: b Section: 7.1 Estimating Project Budgets Level: Easy 9. Unless the project manager is familiar with the firm’s what, it will be very difficult to exercise budget control? a) Accounting system b) Budget plans c) Marketing procedures d) Cost accounting Ans: a Section: 7.1 Estimating Project Budgets Level: Easy

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Chapter 7

10. This form of budgeting has the advantage of using individuals closer to the work to provide estimates of resource requirements. a) Top-down budgeting b) Work element costing c) Bottom-up budgeting d) Iterative budgeting Ans: c Section: 7.1 Estimating Project Budgets Level: Easy

11. These are where the defined responses to the risks are detailed, but their amounts are not yet precisely known. a) Known unknowns b) Unknown knowns c) Known knowns d) Unknown unknowns Ans: a Section: 7.1 Estimating Project Budgets Level: Easy

12. Unknown unknowns are not part of the baseline budget and are referred to as what? a) Management reserves b) Contingency reserves c) PMBOK reserves d) Buffered reserves Ans: a Section: 7.1 Estimating Project Budgets Level: Easy

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Chapter 7

13. A work element whose cost is fully developed would do which of the following? a) Exclude the cost of labor and resources b) Include only the profit and direct costs c) Exclude the cost of special machinery and overheads d) Include direct costs plus overhead and G&A charges Ans: d Section: 7.1 Estimating Project Budgets Level: Intermediate

14. Which cost should the project manager completely ignore in managing a project? a) Labor b) Material c) Overhead and G&A d) Project manager should not ignore any costs Ans: c Section: 7.1 Estimating Project Budgets Level: Advanced

15. This type of budgeting allows income and expenditures to be aggregated across projects. a) Category-oriented b) Activity-oriented c) Project-oriented d) Expense-oriented Ans: c Section: 7.1 Estimating Project Budgets Level: Intermediate

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Chapter 7

16. The allowance for contingencies is usually in what range? a) One to five percent b) Five to ten percent c) Six to nine percent d) Seven to eleven percent Ans: b Section: 7.2 Better Cost Estimating and Bidding Level: Easy

17. Overhead costs are all of the following except which one? a) Generally within the project manager’s control b) Arbitrary c) Source of annoyance and frustration d) An amount that is unique to the firm Ans: a Section: 7.2 Better Cost Estimating and Bidding Level: Easy

18. When a firm has professional cost estimators, what is their main responsibility? a) Coordinate with the client to develop an acceptable cost estimate b) Work with senior management to keep costs in line c) Develop costs that maximize profits d) Reduce the level of uncertainty in cost estimates Ans: d Section: 7.2 Better Cost Estimating and Bidding Level: Easy

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Chapter 7

19. Several issues face firms preparing bid proposals, particularly firms in the aerospace, construction, defense, and consulting industries. Which of the following is not one of those issues? a) How should the proposal-preparation process be organized and staffed? b) How much should be spent on preparing proposals for bids? c) Is it ethical? d) How long will the project take?

Ans: d Section: 7.2 Better Cost Estimating and Bidding Level: Easy

20. This law states that adding manpower to a late software project makes it later. a) Brooks’ Law b) Murphy’s Law c) Smith’s Law d) The Rule of Thumb Ans: a Section: 7.2 Improving the Process of Cost Estimation Level: Easy

21. Which of the following is not one of the risk management subprocesses? a) Risk identification b) Qualitative risk analysis c) Work breakdown schedule d) Risk response planning Ans: c Section: 7.3 Project Risk Management Level: intermediate

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Chapter 7

22. Which of the following is not a type of quantitative risk analysis? a) FMEA b) Decision tree analysis c) Monte Carlo simulation d) Expert judgment Ans: d Section: 7.3 Project Risk Management Level: intermediate

23. Deciding how to approach and plan the risk management activities for a project. a) Risk management planning b) Risk identification c) Qualitative risk analysis d) Quantitative risk analysis Ans: a Section: 7.3 Project Risk Management Level: Easy

24. Determining which risks might affect the project and documenting their characteristics. a) Risk management planning b) Risk identification c) Qualitative risk analysis d) Quantitative risk analysis Ans: b Section: 7.3 Project Risk Management Level: Easy

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Chapter 7

25. Performing a qualitative analysis of risks and conditions to prioritize their impacts on project objectives. a) Risk management planning b) Risk identification c) Qualitative risk analysis d) Quantitative risk analysis Ans: c Section: 7.3 Project Risk Management Level: Easy

26. Estimating the probability and consequences of risks and hence the implications for project objectives. a) Risk management planning b) Risk identification c) Qualitative risk analysis d) Quantitative risk analysis Ans: d Section: 7.3 Project Risk Management Level: Easy

27. Developing procedures and techniques to enhance opportunities and reduce threats to the project’s objectives. a) Quantitative risk analysis b) Risk response planning c) Risk monitoring and control d) Risk management register Ans: b Section: 7.3 Project Risk Management Level: Easy

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Chapter 7

28. Monitoring residual risks, identifying new risks, executing risk reduction plans, and evaluating their effectiveness throughout the project life cycle. a) Quantitative risk analysis b) Risk response planning c) Risk monitoring and control d) Risk management register Ans: c Section: 7.3 Project Risk Management Level: Easy

29. Creating a permanent listing of identified risks, methods used to mitigate or resolve them, and the results of all risk management activities. a) Quantitative risk analysis b) Risk response planning c) Risk monitoring and control d) Risk management register Ans: d Section: 7.3 Project Risk Management Level: Easy

30. Kaplan et al. (2012) have concluded that managing risks depends on which of three types of risks are being faced. Which of the following is not one of those risks? a) Preventable risks b) Risks the organization takes to conduct profitable or viable activities c) Unpreventable risks d) External risks Ans: c Section: 7.3 Project Risk Management Level: Intermediate

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Chapter 7

31. The idea here is to eliminate the threat entirely. a) Avoid b) Transfer c) Mitigate d) Accept Ans: a Section: 7.3 Project Risk Management Level: Intermediate

32. Although this approach does not eliminate the threat, it does remove the project contractor from the danger of the threat. a) Avoid b) Transfer c) Mitigate d) Accept Ans: b Section: 7.3 Project Risk Management Level: Intermediate

33. The classic approach here for monetary risk is insurance, but other approaches are also available. a) Avoid b) Transfer c) Mitigate d) Accept Ans: b Section: 7.3 Project Risk Management Level: Intermediate

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Chapter 7

34. This is a “softening” of the danger of the threat, either through reducing the likelihood it will occur, or through reducing its impact if it does occur. a) Avoid b) Transfer c) Mitigate d) Accept Ans: c Section: 7.3 Project Risk Management Level: Intermediate

35. The risk is taken on, either because no other response is available or because the responses are deemed too costly relative to the risk threat. a) Avoid b) Transfer c) Mitigate d) Accept Ans: d Section: 7.3 Project Risk Management Level: Intermediate

36. The goal here is to try to increase the probability the opportunity will occur. a) Exploit b) Sharing c) Enhance d) Accept Ans: a Section: 7.3 Project Risk Management Level: Intermediate

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Chapter 7

37. This involves partnering with another party or parties who can better capture the value of the opportunity or at least reduce the cost of exploiting the opportunity. a) Exploit b) Sharing c) Enhance d) Accept Ans: b Section: 7.3 Project Risk Management Level: Intermediate

38. This involves either increasing the probability that the opportunity risk will occur or increasing its impact if it does. a) Exploit b) Sharing c) Enhance d) Accept Ans: c Section: 7.3 Project Risk Management Level: Intermediate

39. Here the project firm is prepared to capitalize on the opportunity should it occur, but is not willing to invest the resources to improve the probability or impact of the opportunity occurring. a) Exploit b) Sharing c) Enhance d) Accept Ans: d Section: 7.3 Project Risk Management Level: Intermediate

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Chapter 7

40. An easy method of evaluating risk in certain situations by modifying project parameters and evaluating the corresponding changes is which of the following? a) Monte Carlo simulations b) Risk mitigation c) Project budgeting d) Risk analysis Ans: a Section: 7.4 Quantitative Risk Assessment Level: Easy

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Chapter 7

Fill-in-the-Blanks 1. WBS stands for

.

Ans: work breakdown structure Section: Introduction Level: Easy

2. The pattern of constraints in a budget embodies organizational

.

Ans: policy Section: Introduction Level: Easy

3. A budget strategy that is based on collecting the judgments and experiences of top and middle managers is referred to as the estimating approach or method.

Ans: top-down Section: 7.1 Estimating Project Budgets Level: Easy

4. Many lower-level managers often treat the entire budgeting process as if it were a , a situation in which any individual’s gain is another individual’s loss. This can make competition among junior managers quite intense.

Ans: zero-sum game Section: 7.1 Estimating Project Budgets Level easy

5. The advantage of the budgeting process is that it is generally associated with participative management.

Ans: bottom-up Section: 7.1 Estimating Project Budgets Level: Easy

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6. The charge is composed of the costs of senior management, the various data functions, and any other expenses not included in overhead. Often, these charges are a fixed percentage of either the direct costs or the total of all direct and indirect costs.

Ans: G&A Section: 7.1 Estimating Project Budgets Level: Easy

7. The budget process generally begins when the top management invites each division to submit a for the upcoming year.

Ans: budget request Section: 7.1 Estimating Project Budgets Level: Easy

8. The traditional organizational budget is

.

Ans: category-oriented Section: 7.1 Estimating Project Budgets Level: Intermediate

9. In fields such as construction, costs can often be estimated by elements appropriately.

the various cost

Ans: scaling Section: 7.1 Estimating Project Budgets Level: Easy

10. The budgeting strategy is based on collecting the judgments and experiences of top and middle managers, and available past data concerning similar activities.

Ans: top-down Section: 7.1 Estimating Project Budgets Level: Easy

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11. In the budgeting method, elemental tasks, their schedules, and their individual budgets are constructed, again following the WBS. Ans: bottom-up Section: 7.1 Estimating Project Budgets Level: Easy

12. The reserve for risk is included within the baseline budget and is known as a reserve.

Ans: contingency Section: 7.1 Estimating Project Budgets Level: Easy

13. G&A stands for

.

Ans: General and Administrative Section: 7.1 Estimating Project Budgets Level: Easy

14. If projects include repetitive tasks with significant human input, the be factored into the cost estimate.

rate should

Ans: learning Section: 7.2 Better Cost Estimating and Bidding Level: Easy

15. Each time the output doubles, the worker hours per unit decrease to a fixed percentage of their previous value. That percentage is called the rate.

Ans: learning Section: 7.2 Better Cost Estimating and Bidding Level: Intermediate

16.

issues are present when bidders “low ball” a bid or when some bidders get a “last look.”

Ans: Ethical Section: 7.2 Improving the Process of Cost Estimating Level: Easy

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Chapter 7

17. RFP stands for

.

Ans: request for proposals Section: 7.2 Improving the Process of Cost Estimating Level: Easy

18. The set of documents submitted for evaluation in response to an RFP is called the project .

Ans: proposal Section: 7.2 Improving the Process of Cost Estimating Level: Easy

19. RFQ stands for

.

Ans: Request for Quotation Section: 7.2 Improving the Process of Cost Estimating Level: Easy

20. TPR stands for

.

Ans: Technical Proposal Requirements Section: 7.2 Improving the Process of Cost Estimating Level: Easy

21. CAD stands for

.

Ans: computer-assisted design (or computer-aided design) Section: 7.2 Improving the Process of Cost Estimating Level: Easy

22. A project manager must as a type of risk response planning in order to soften the danger of a threat by reducing the likelihood that it will occur or by reducing its impact if it does occur.

Ans: mitigate Section: 7.3 Project Risk Management Level: intermediate

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23. In risk response planning, where the goal of the project manager is to increase the probability that the opportunity will occur, the project manager must Ans: exploit Section: 7.3 Project Risk Management Level: intermediate

24. EWS stands for

.

Ans: early warning signs Section: 7.3 Project Risk Management Level: Intermediate

25. The determination of costs for a new process should utilize a , or operations sequence sheet, which describes the operation in which the new process would be used.

Ans: route sheet Section: 7.4 Quantitative Risk Assessment Level: Easy

26. FMEA stands for

.

Ans: Failure Mode and Effect Analysis Section: 7.4 Quantitative Risk Assessment Level: Easy

27. RPN stands for

.

Ans: risk priority number Section: 7.4 Quantitative Risk Assessment Level: Easy

28. If we are only interested in probabilities, we call the tree a

tree.

Ans: probability Section: 7.4 Quantitative Risk Assessment Level: Easy

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Chapter 7

29. EMV stands for

.

Ans: expected monetary value Section: 7.4 Quantitative Risk Assessment Level: Intermediate

30.

: A budgeting method that begins with those who will be doing the tasks estimating the resources needed. The advantage is more accurate estimates.

Ans: Bottom-Up Budgeting Section: Glossary Level: Easy

31.

: A chart showing all the factors and subfactors that can lead to a particular threat or opportunity.

Ans: Cause–Effect (Fishbone) Diagram Section: Glossary Level: Easy

32.

: These costs vary with output; e.g., labor costs, material costs, and sometimes the cost of capital equipment such as machinery that performs a specific function on each unit of output.

Ans: Direct (or Variable) Cost Section: Glossary Level: Easy

33.

: The cost of administration; e.g., Accounting, Human Resources, and Legal not charged as an Indirect Cost and not included in Overhead Cost.

Ans: General & Administrative Cost (G&A) Section: Glossary Level: Easy

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34.

: These costs are associated with output, but do not vary with each unit of output; e.g., the cost of capital equipment not charged per piece of output, advertising, distribution, or sales. Costs are charged as a lump sum or as a fixed percent of some direct cost such as labor.

Ans: Indirect (or Fixed) Cost Section: Glossary Level: Easy

35.

: Costs incurred by the firm, but not associated with any specific product or class of products; e.g., cost of building and ground maintenance, utilities, cost of plant security, cost of health insurance and pension plans. Typically charged as a fixed percent of some direct cost such as labor.

Ans: Overhead Costs Section: Glossary Level: Easy

36.

: A risk assessment process that multiplies the levels of probability, impact, and inability to detect the risk to arrive at an overall risk priority number.

Ans: Failure Mode and Effect Analysis (FMEA) Section: Glossary Level: Easy

37.

: The percentage of the previous worker hours per unit required for doubling the output.

Ans: Learning Rate Section: Glossary Level: Easy

38.

: A procedure that imitates real life by running thousands of values of distribution parameters to obtain an overall distribution of the outcomes of interest.

Ans: Monte Carlo Simulation Section: Glossary Level: Easy

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39.

: Budgeting by project task/activity and then aggregating income and expenditures by project or program, often in addition to aggregation by organizational unit or category.

Ans: Project Budgeting Section: Glossary Level: Easy

40.

: A procedure that uses a distribution of input factors and probabilities and returns a range of outcomes and their probabilities.

Ans: Risk Analysis Section: Glossary Level: Easy

41.

: A chart showing probability on one side and impact on the other where threats and opportunities can be segmented into critical, monitor, or ignore cells.

Ans: Risk Matrix Section: Glossary Level: Easy

42.

: A database of risk information created by and available to PMs for their projects.

Ans: Risk Register Section: Glossary Level: Easy

43.

: Investigation of the effect on the outcome of changing some parameters or data in the procedure or model.

Ans: Sensitivity Analysis Section: Glossary Level: Easy

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44.

: A process where the structure of a situation is programmed and the probability distributions of the events are selected to give a probability distribution for the variable of interest, such as time or cost.

Ans: Simulation Section: Glossary Level: Easy

45.

: A budgeting method that begins with top managers’ estimates of the resources needed for a project. Its primary advantage is that the aggregate budget is typically quite accurate because no element has been left out. Individual elements, however, may be quite inaccurate.

Ans: Top-Down Budgeting Section: Glossary Level: Easy

46.

: The pattern of deviations in costs and usage used for exception reporting to management.

Ans: Variances Section: Glossary Level: Easy

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Chapter 7

Essay 1. Identify some of the common problems faced by the project budgeter.

Answer The project budgeter cannot depend on tradition. At project inception there may be no past budgets to use as a base. At other times, the budgeter may have budgets and all other reports for similar projects to serve as guides, but these are rough guides at best.

Moreover, all projects are unique and all project budgets are based on forecasts of resource usage and associated cost. Therefore, budget estimates involve risk. A prudent estimator will incorporate the expected value of the resources being used in the project and provide a range of uncertainty around the expected monetary value. Moreover, as execution progresses, the authorized scope of work may change in a manner that alters resource usage. In addition, as the duration of a project lengthens, inflation and the time value of money may become important factors in assessing the cost-benefit relationship of the project. Budgets also depend on accounting assumptions. These assumptions will include how to recognize and allocate indirect costs during the project’s execution.

Section: 7.1 Estimating Project Budgets Level: Easy

2. Suggest some reasons why the authors insist that the project manager must be familiar with the organization’s accounting system.

Answer Since each organization has its own unique way of managing its accounts, its own idiosyncrasies, it is very important that the project manager be in tune with how the firm pays its bills and acquires its resources. Without such knowledge the project manager can run into serious difficulties with functional managers, the finance department, purchasing, Human Resources and others.

Section: 7.1 Estimating Project Budgets Level: Intermediate

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3. Describe the top-down budgeting process.

Answer This process collects the judgments and experiences of top and middle managers as well as any appropriate analogies concerning similar activities. Sometimes referred to as analogous estimating, the overall project costs and the costs of the major subprojects that comprise it are determined. Then, these cost estimates are given to lower-level managers, who are expected to continue the breakdown into budget estimates for the specific tasks and work packages that comprise the subprojects. This process parallels the hierarchical planning process used to create the WBS. Section: 7.1 Estimating Project Budgets Level: Easy

4. Describe the bottom-up budgeting process.

Answer Elemental tasks, their schedules, and their individual budgets are constructed using the WBS as a model. The people doing the work are consulted regarding times and budgets for the tasks to ensure the best level of accuracy. Initial estimates are made in terms of resources, such as labor hours and materials. These estimates are converted to dollar equivalents. Analytic tools such as the learning curve and work sampling are employed as appropriate to improve the estimates. Once differences of opinion have been resolved, the resulting task budgets are aggregated to give the total direct costs of the project. Then, indirect costs such as SG&A expenses are added along with contiguous the allowances and the desired profit.

Section: 7.1 Estimating Project Budgets Level: Easy

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5. Explain why senior managers view the bottom-up budgeting process as being risky.

Answer Senior managers may not be particularly trusting of ambitious subordinates who may overstate resource requirements in an attempt to ensure success and build empires.

Moreover, since the budget is an important tool for control of the organization, senior managers are reluctant to handover that control to subordinates whose experience and motives are questionable.

Section: 7.1 Estimating Project Budgets Level: Easy

6. Suggest some reasons why an organization would support projects that show a significant incremental profit over direct costs but are not profitable when costs fully accounted for.

Answer Reasons for undertaking this type of project would include: developing knowledge of the technology, getting the organization's foot in the door, obtaining the parts or service portion of the work, positioning for a follow-on contract, improving competitive position, broadening a product line or a line of business.

Section: 7.2 Improving the Process of Cost Estimating Level: Easy

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7. According to the authors, the task of risk identification will be horrendous if the risk management system has no memory. Discuss the important elements of a risk management system that would compensate for a lack of memory by the organization.

Answer A good risk management system should be a source of answers to the results and circumstances of previous projects. Such a system would record all the assumptions made at the outset of the project since these can be sources of risks. The system should also identify all the environments, external and internal, that can impact the project. If the organization has a risk management group, then all risks identified by that group should be recorded and easily accessible by all members of the project team. The data should be structured so that keyword searches can easily identify all categories of risks. Another key part of the system is a detailed listing of all qualitative and quantitative risk estimates along with an explanation of how the estimates were derived.

Section: 7.2 Improving the Process of Cost Estimating Level: Easy

8. Briefly describe the seven processes for risk management.

Answer Risk management planning is focused on how to approach and plan the risk management activities for a project. In risk identification, the risks that can affect the project for better or for worse are identified. In qualitative risk analysis, non-numerical priorities are established for the risk events identified previously. In quantitative risk analysis, probability and impact are converted into expected monetary value. In risk response planning, contingency plans are established to capture opportunities and respond to threats. In risk monitoring and control, warning signs and triggers are used to determine when corrective actions are required to bring the project back on track.

Creating the Risk Management Register is the last process. It creates a permanent register of identified risks, methods used to mitigate or resolve them, and the results of all risk management activities.

Section: 7.3 Project Risk Management Level: intermediate

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9. Kaplan et al. (2012) identified three types of risk that must be faced. List and describe each one.

Answer First, preventable risk. These are risks from within the organization and are controllable through active preventative measures. Second, strategic risk. These are risks the organization takes to conduct profitable or viable activities. And, third, external risks.

These are the risks from economical, legal, natural, political, and competitive pressures.

Section: 7.3 Project Risk Management Level: intermediate

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Chapter 7

Problems Many of the problems below are presented as multiple choice problems where the student picks the correct range. The exact answer is also given in case you want to convert the problem to one where the student calculates and shows the exact answer.

Top-Down Cost Estimate Note to instructors: All of these problems are worked using the formula 𝐶𝑜𝑠𝑡 𝑜𝑓 𝑐𝑎𝑝𝑖𝑡𝑎𝑙 𝑖𝑡𝑒𝑚 . 𝑃𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 𝑜𝑓 𝑐𝑜𝑠𝑡

1. You have been asked to estimate the costs for a project to build an industrial power plant. Based on historical data, the steam turbine accounts for 30 percent of the total costs for the plant. If the steam turbine costs $300,000, the expected top-down estimated cost for this project would be which of the following? a) $10,000 b) $100,000 c) $900,000 d) $1,000,000 Ans: d Section: 7.1 Estimating Project Budgets Level: Easy

2. You have been asked to estimate the costs for a project to build an industrial power plant. Based on historical data, the steam turbine accounts for 25 percent of the total costs for the plant. If the steam turbine costs $400,000, the expected top-down estimated cost for this project would be which of the following? a) $600,000 b) $900,000 c) $1,600,000 d) $1,800,000 Ans: c Section: 7.1 Estimating Project Budgets Level: Easy

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Chapter 7

3. You have been asked to estimate the costs for a project to build an industrial bakery.

Based on historical data, the ovens accounts for 40 percent of the total costs for the plant. If the ovens costs $50,000, the expected top-down estimated cost for this project would be which of the following? a) $20,000 b) $100,000 c) $125,000 d) $150,000 Ans: c Section: 7.1 Estimating Project Budgets Level: Easy

4. You have been asked to estimate the costs for a project to build an industrial bakery.

Based on historical data, the ovens accounts for 35 percent of the total costs for the plant. If the ovens costs $70,000, the expected top-down estimated cost for this project would be which of the following? a) $200,000 b) $250,000 c) $275,000 d) $300,000 Ans: a Section: 7.1 Estimating Project Budgets Level: Easy

5. You have been asked to estimate the costs for a project to build an industrial bakery.

Based on historical data, the ovens accounts for 35 percent of the total costs for the plant. If the ovens costs $70,000, the expected top-down estimated cost for this project would be which of the following? a) $200,000 b) $240,000 c) $300,000 d) $350,000 Ans: b Section: 7.1 Estimating Project Budgets Level: Easy

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Chapter 7

Work Element Costing Note to instructors: All of these problems are worked using the formula 𝐻𝑜𝑢𝑟𝑠 × 𝑁𝑜. 𝑤𝑜𝑟𝑘𝑒𝑟𝑠 × 𝐻𝑜𝑢𝑟𝑙𝑦 𝑟𝑎𝑡𝑒 × (1 + 𝑃𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 𝑜𝑓 𝑑𝑖𝑟𝑒𝑐𝑡 𝑙𝑎𝑏𝑜𝑟).

6. A work element in the project plan requires 50 hours of labor each by four carpenters.

The carpenters are paid $15 per hour and incur an overhead rate equal to 80 percent of their direct labor charges. Based on this data, the appropriate total cost is which of the following? a) $2,400 b) $3,000 c) $4,600 d) $5,400 Ans: d Section: 7.1 Estimating Project Budgets Level: Intermediate

7. A work element in the project plan requires 100 hours of labor each by three carpenters. The carpenters are paid $20 per hour and incur an overhead rate equal to 75 percent of their direct labor charges. Based on this data, the appropriate total cost is which of the following? a) Less than $5,000 b) $5,000 - $10,000 c) $10,001 - $15,000 d) Over $15,000 Ans: c ($10,500) Section: 7.1 Estimating Project Budgets Level: Intermediate

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Chapter 7

8. A work element in the project plan requires 25 hours of labor each by three carpenters. The carpenters are paid $25 per hour and incur an overhead rate equal to 70 percent of their direct labor charges. Based on this data, the appropriate total cost is which of the following? a) Less than $5,000 b) $5,000 - $10,000 c) $10,001 - $15,000 d) Over $15,000 Ans: a ($3,188) Section: 7.1 Estimating Project Budgets Level: Intermediate

9. A work element in the project plan requires 200 hours of labor each by five web designers. The web designers are paid $75 per hour and incur an overhead rate equal to 80 percent of their direct labor charges. Based on this data, the appropriate total cost is which of the following? a) Less than $100,000 b) $100,000 - $125,000 c) $125,001 - $150,000 d) Over $150,000 Ans: c ($135,000) Section: 7.1 Estimating Project Budgets Level: Intermediate

10. A work element in the project plan requires 150 hours of labor each by four web designers. The web designers are paid $95 per hour and incur an overhead rate equal to 75 percent of their direct labor charges. Based on this data, the appropriate total cost is which of the following? a) Less than $100,000 b) $100,000 - $125,000 c) $125,001 - $150,000 d) Over $150,000 Ans: a ($99,750) Section: 7.1 Estimating Project Budgets Level: Intermediate

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Chapter 7

Other Factors Note to instructors: All of these problems are worked using the formula 𝑇𝐶 = 𝐻𝑜𝑢𝑟𝑠 × 𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑤𝑜𝑟𝑘𝑒𝑟𝑠 × 𝑃𝑎𝑦 × (1 + 𝑂𝑣𝑒𝑟ℎ𝑒𝑎𝑑) × (1 + 𝑃𝑒𝑟𝑠𝑜𝑛𝑎𝑙).

11. A work element in the project plan requires 50 hours of labor each by four carpenters.

The carpenters are paid $15 per hour and incur an overhead rate equal to 80 percent of their direct labor charges. The total cost would be if the carpenters consume 10 percent of the workday performing personal activities. a) $4,860 b) $5,000 c) $5,360 d) $5,940 Ans: d Section: 7.2 Better Cost Estimating and Bidding Level: Intermediate

12. A work element in the project plan requires 100 hours of labor each by three carpenters. The carpenters are paid $25 per hour and incur an overhead rate equal to 80 percent of their direct labor charges. The total cost would be what if the carpenters consume 15 percent of the workday performing personal activities? a) Under $10,000 b) $10,000 - $15,000 c) $15,001 - $20,000 d) Over $20,000 Ans: c ($15,525) Section: 7.2 Better Cost Estimating and Bidding Level: Intermediate

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Chapter 7

13. A work element in the project plan requires 125 hours of labor each by two plumbers.

The plumbers are paid $26 per hour and incur an overhead rate equal to 85 percent of their direct labor charges. The total cost would be what if the carpenters consume 15 percent of the workday performing personal activities? a) Under $10,000 b) $10,000 - $15,000 c) $15,001 - $20,000 d) Over $20,000 Ans: b ($13,829) Section: 7.2 Better Cost Estimating and Bidding Level: Intermediate

14. A work element in the project plan requires 75 hours of labor each by three plumbers.

The plumbers are paid $35 per hour and incur an overhead rate equal to 75 percent of their direct labor charges. The total cost would be what if the carpenters consume 20 percent of the workday performing personal activities? a) Under $10,000 b) $10,000 - $15,000 c) $15,001 - $20,000 d) Over $20,000 Ans: c ($16,538) Section: 7.2 Better Cost Estimating and Bidding Level: Intermediate

15. A work element in the project plan requires 60 hours of labor each by two web designers. The web designers are paid $100 per hour and incur an overhead rate equal to 80 percent of their direct labor charges. The total cost would be what if the carpenters consume 10 percent of the workday performing personal activities? a) Under $10,000 b) $10,000 - $15,000 c) $15,001 - $20,000 d) Over $20,000 Ans: d ($23,760) Section: 7.2 Better Cost Estimating and Bidding Level: Intermediate

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Chapter 7

Wage Growth Note to instructors: All of these problems are worked using the formula 𝑇𝑜𝑡𝑎𝑙 𝑠𝑎𝑙𝑎𝑟𝑦 = ∑ 𝐵𝑎𝑠𝑒 𝑐𝑜𝑠𝑡 × (1 + 𝐺𝑟𝑜𝑤𝑡ℎ 𝑝𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒)𝑌𝑒𝑎𝑟𝑠. You must be careful with the calculations. There is no growth the first year so Years=0. There is one year of growth the second year so Years=1, and so on. By way of example, for the first problem, the values going out five years are as follows:

Year 1 2 3 4 5

Annual $400,000 $420,000 $441,000 $463,050 $486,203

Running Total $400,000 $820,000 $1,261,000 $1,724,050 $2,210,253

16. Given a project salary cost of $400,000 per year and forecasted wage increases of 5 percent per year, calculate the non-discounted total salary cost over a three-year project lifecycle. a) $61,000 b) $1,200,000 c) $1,240,000 d) $1,261,000 Ans: d Section: 7.2 Better Cost Estimating and Bidding Level: Intermediate

17. Given a project salary cost of $500,000 per year and forecasted wage increases of 7 percent per year, calculate the non-discounted total salary cost over a four-year project lifecycle. a) Under $1,000,000 b) $1,000,000 - $2,000,000 c) $2,000,001 - $3,000,000 d) Over $3,000,000 Ans: c ($2,219,972) Section: 7.2 Better Cost Estimating and Bidding Level: Intermediate

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Chapter 7

18. Given a project salary cost of $550,000 per year and forecasted wage increases of 10 percent per year, calculate the non-discounted total salary cost over a three-year project lifecycle. a) Under $1,000,000 b) $1,000,000 - $2,000,000 c) $2,000,001 - $3,000,000 d) Over $3,000,000 Ans: b ($1,820,500) Section: 7.2 Better Cost Estimating and Bidding Level: Intermediate

19. Given a project salary cost of $600,000 per year and forecasted wage increases of 12 percent per year, calculate the non-discounted total salary cost over a four-year project lifecycle. a) Under $1,000,000 b) $1,000,000 - $2,000,000 c) $2,000,001 - $3,000,000 d) Over $3,000,000 Ans: c ($2,867,597) Section: 7.2 Better Cost Estimating and Bidding Level: Intermediate

20. Given a project salary cost of $320,000 per year and forecasted wage increases of 3 percent per year, calculate the non-discounted total salary cost over a three-year project lifecycle. a) Under $1,000,000 b) $1,000,000 - $2,000,000 c) $2,000,001 - $3,000,000 d) Over $3,000,000 Ans: a ($989,088) Section: 7.2 Better Cost Estimating and Bidding Level: Intermediate

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Chapter 7

Learn Curves Note to instructors: All of these problems are worked using the formula 𝑇𝑛 = 𝑇1𝑛𝑟.

21. Suppose that a person requires eight hours to complete a work element on the first attempt. That person has a learning rate of 90 percent for this work element. This person should require how many hours to complete this work element on the fourth attempt? a) 5.83 b) 6.48 c) 7.2 d) 8.8 Ans: b Section: 7.2 Better Cost Estimating and Bidding Level: Intermediate

22. Suppose that a person requires ten hours to complete a work element on the first attempt. That person has a learning rate of 85 percent for this work element. This person should require how many hours to complete this work element on the fifth attempt? a) 1 – 3 hours b) 3.01 – 6 hours c) 6.01 – 9 hours d) Over 9 hours Ans: c (6.86) Section: 7.2 Better Cost Estimating and Bidding Level: Intermediate

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Chapter 7

23. Suppose that a person requires 15 hours to complete a work element on the first attempt. That person has a learning rate of 80 percent for this work element. This person should require how many hours to complete this work element on the fourth attempt? a) 1 – 3 hours b) 3.01 – 6 hours c) 6.01 – 9 hours d) Over 9 hours Ans: d (9.60) Section: 7.2 Better Cost Estimating and Bidding Level: Intermediate

24. Suppose that a person requires 55 hours to complete a work element on the first attempt. That person has a learning rate of 75 percent for this work element. This person should require how many hours to complete this work element on the twenty attempt? a) 1 – 3 hours b) 3.01 – 6 hours c) 6.01 – 9 hours d) Over 9 hours Ans: c (7.21) Section: 7.2 Better Cost Estimating and Bidding Level: Intermediate

25. Suppose that a person requires 14 hours to complete a work element on the first attempt. That person has a learning rate of 80 percent for this work element. This person should require how many hours to complete this work element on the one hundredth attempt? a) 1 – 3 hours b) 3.01 – 6 hours c) 6.01 – 9 hours d) Over 9 hours Ans: b (3.18) Section: 7.2 Better Cost Estimating and Bidding Level: Intermediate

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Chapter 7

Learning Rate Note to instructors: All of these problems are worked using the formula 𝑇𝑖𝑚𝑒 𝑓𝑜𝑟 𝑠𝑒𝑐𝑜𝑛𝑑 𝑅𝑎𝑡𝑒 = . 𝑇𝑖𝑚𝑒 𝑓𝑜𝑟 𝑓𝑖𝑟𝑠𝑡

26. Suppose that a person requires 60 minutes to complete a work element on the first attempt. On the second attempt, the work element is completed in 48 minutes. What is the learning rate for this person for this work element? a) 60 b) 70 c) 80 d) None of the above Ans: c Section: 7.2 Better Cost Estimating and Bidding Level: Intermediate

27. Suppose that a person requires 70 minutes to complete a work element on the first attempt. On the second attempt, the work element is completed in 48 minutes. What is the learning rate for this person for this work element? Round all calculations to a whole percentage point. a) 60 – 70% b) 71 – 80% c) 81 – 90% d) Over 90% Ans: a (69%) Section: 7.2 Better Cost Estimating and Bidding Level: Intermediate

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Chapter 7

28. Suppose that a person requires 80 minutes to complete a work element on the first attempt. On the second attempt, the work element is completed in 52 minutes. What is the learning rate for this person for this work element? Round all calculations to a whole percentage point. a) 60 – 70% b) 71 – 80% c) 81 – 90% d) Over 90% Ans: a (65%) Section: 7.2 Better Cost Estimating and Bidding Level: Intermediate

29. Suppose that a person requires 81 minutes to complete a work element on the first attempt. On the second attempt, the work element is completed in 62 minutes. What is the learning rate for this person for this work element? Round all calculations to a whole percentage point. a) 60 – 70% b) 71 – 80% c) 81 – 90% d) Over 90% Ans: b (77%) Section: 7.2 Better Cost Estimating and Bidding Level: Intermediate

30. Suppose that a person requires 81 minutes to complete a work element on the first attempt. On the second attempt, the work element is completed in 72 minutes. What is the learning rate for this person for this work element? Round all calculations to a whole percentage point. a) 60 – 70% b) 71 – 80% c) 81 – 90% d) Over 90% Ans: c (89%) Section: 7.2 Better Cost Estimating and Bidding Level: Intermediate

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Chapter 7

Risk Priority Number Note to instructor: All of the problems below require the table below. RPN is calculated using the formula 𝑆 × 𝐿 × 𝐷.

Table to Give with Problem

Threat Tight schedule Cannot acquire tech knowledge Client changes scope Costs escalate Recession

Severity, Likelihood, Ability to S L Detect, D 5 5 3 9 4 4 5

6 7 1 3

3 5 9 8

31. Based on the table shown above, the RPN for “Tight schedule” is

.

Ans: 75 Section: 7.4 Quantitative Risk Assessment Level: Intermediate 32. Based on the table shown above, the RPN for “Cannot acquire tech knowledge” is .

Ans: 162 Section: 7.4 Quantitative Risk Assessment Level: Intermediate 33. Based on the table shown above, the RPN for “Client changes scope” is

.

Ans: 140 Section: 7.4 Quantitative Risk Assessment Level: Intermediate 34. Based on the table shown above, the RPN for “Costs escalate” is

.

Ans: 36 Section: 7.4 Quantitative Risk Assessment Level: Intermediate

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Chapter 7

35. Based on the table shown above, the RPN for “Recession” is

.

Ans: 120 Section: 7.4 Quantitative Risk Assessment Level: Intermediate

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Chapter 7

Chapter 8 Scheduling True/False 1. With small or unimportant projects, the schedule for the project manager (PM) may only be two or three levels deep.

Ans: False Section: 8.1 Background Level: Easy

2. One of the benefits of using a network for planning a project is it is a consistent framework for planning, scheduling, monitoring, and controlling the project.

Ans: True Section: 8.1 Background Level: Easy

3. One of the benefits of using a network for planning a project is it illustrates the independence of all tasks, work packages, and work elements.

Ans: False Section: 8.1 Background Level: Easy

4. One of the benefits of using a network for planning a project is it denotes the times when specific individuals and resources must be available for work on a given task.

Ans: True Section: 8.1 Background Level: Easy

5. One of the benefits of using a network for planning a project is it tells you who must perform each task.

Ans: False Section: 8.1 Background Level: Easy

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Chapter 8

6. One of the benefits of using a network for planning a project is it aids in ensuring that the proper communications take place between departments and functions.

Ans: True Section: 8.1 Background Level: Easy

7. One of the benefits of using a network for planning a project is Ans: True Section: 8.1 Background Level: Easy

8. One of the benefits of using a network for planning a project is it determines an expected project completion date.

Ans: True Section: 8.1 Background Level: Easy

9. One of the benefits of using a network for planning a project is it identifies so-called critical activities that, if delayed, will also delay the project completion time.

Ans: True Section: 8.1 Background Level: Easy

10. One of the benefits of using a network for planning a project is it identifies tasks that may not need to be completed.

Ans: False Section: 8.1 Background Level: Easy

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Chapter 8

11. One of the benefits of using a network for planning a project is it also identifies activities with slack that can be delayed for specified periods.

Ans: True Section: 8.1 Background Level: Easy

12. One of the benefits of using a network for planning a project is It determines the dates on which tasks may be started.

Ans: True Section: 8.1 Background Level: Easy

13. One of the benefits of using a network for planning a project is it illustrates which tasks must be coordinated to avoid resource or timing conflicts.

Ans: True Section: 8.1 Background Level: Easy

14. One of the benefits of using a network for planning a project is it tells you which activities can be skipped.

Ans: False Section: 8.1 Background Level: Easy

15. One of the benefits of using a network for planning a project is It removes interpersonal conflict.

Ans: False Section: 8.1 Background Level: Easy

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Chapter 8

16. One of the benefits of using a network for planning a project is it always allows an estimate of the probability of project completion by various dates, or the date corresponding to a particular a priori probability.

Ans: False Section: 8.1 Background Level: Easy

17. PERT was developed by DuPont.

Ans: False Section: 8.2 Network Techniques: PERT and CPM Level: Easy

18. The most likely time estimate (m) equals the mode.

Ans: True Section: 8.2 Network Techniques: PERT and CPM Level: Easy

19. Float and free slack are the same thing.

Ans: False Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

20. The variance for a project is the sum of the variances for all the activities in the project.

Ans: False Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

21. Z-values cannot be negative.

Ans: False Section: 8.2 Network Techniques: PERT and CPM Level: Easy

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Chapter 8

22. The cost to complete a project is driven in a large part by the time required to complete the project.

Ans: True Section: 8.3 Risk Analysis Using Simulation with Crystal Ball Level: Easy

23. The cost to complete an activity can be uncertain.

Ans: True Section: 8.3 Risk Analysis Using Simulation with Crystal Ball Level: Easy

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Chapter 8

Multiple Choice 1. This is the conversion of the project work breakdown structure into an operating timetable. a) Chart b) Application c) Crash d) Schedule Ans: d Section: 8.1 Background Level: Easy

2. The basic approach of all scheduling techniques is to form a network of activity and event relationships that graphically portrays the sequential relations between what in a project? a) Activities b) Nodes c) Events d) Tasks Ans: c Level: Easy Section: 8.1 Background

3. Slack is also known as what? a) Critical path b) Scope c) Float d) Precedence Ans: c Section: 8.2 Network Techniques: PERT and CPM Level: Easy

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Chapter 8

4. In application, program evaluation and review technique has primarily been used for which type of projects? a) Construction b) Manufacturing c) Industrial d) Research and development Ans: d Section: 8.2 Network Techniques: PERT and CPM Level: Easy

5. Critical path method has primarily been used for which type of projects? a) Construction b) Manufacturing c) Industrial d) Research and development Ans: a Section: 8.2 Network Techniques: PERT and CPM Level: Easy

6. What is a specific task or set of tasks that are required by the project, use up resources, and take time to complete? a) Milestone b) Activity c) Node d) Path Ans: b Section: 8.2 Network Techniques: PERT and CPM Level: Easy

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Chapter 8

7. The critical activities in real-world projects typically constitute less than what percent of the total activities in the project? a) 5 b) 10 c) 30 d) 50 Ans: b Section: 8.2 Network Techniques: PERT and CPM Level: Easy

8. What type of time estimates are used in the critical path method? a) Deterministic b) Probabilistic c) Most likely d) Average Ans: a Section: 8.2 Network Techniques: PERT and CPM Level: Easy

9. The use of PERT has declined sharply in recent years because a large majority of project management software does what? a) Have become obsolete b) Use probabilistic techniques c) Generate CPM networks d) Are characterized by high prices Ans: c Section: 8.2 Network Techniques: PERT and CPM Level: Easy

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Chapter 8

10. The authors, when discussing networks, describe this as the result of completing one or more activities. It is an identifiable end state, which does not use any resources, occurring at a particular time. a) Crash b) Network c) Event d) Node Ans: c Section: 8.2 Network Techniques: PERT and CPM Level: Easy

11. The arrangement of all activities (and, in some cases, events) in a project arrayed in their logical sequence and represented by arcs and nodes is called a what? a) Network b) Critical path c) Path d) Crashed path Ans: a Section: 8.2 Network Techniques: PERT and CPM Level: Easy

12. The series of connected activities (or intermediate events) between any two events in a network is called what? a) Path b) Node c) Chart d) Arc Ans: a Section: 8.2 Network Techniques: PERT and CPM Level: Easy

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Chapter 8

13. In a network, if the delay of an activity will delay completion of the project, the activity is called a what? a) Valuable b) Efficient c) Critical d) Noteworthy Ans: c Section: 8.2 Network Techniques: PERT and CPM Level: Easy

14. All of the following are possible conditions for an activity except which one? a) It may have a successor(s) but no predecessor(s) b) It may have a predecessor(s) but no successor(s) c) It may have both predecessor(s) and successor(s) d) It may not have a predecessor(s) or a successor(s) Ans: d Section: Reference: 8.2 Network Techniques: PERT and CPM Level: Intermediate

15. In the AOA network, circles depict what? a) Networks b) Events c) Logical dependencies d) Dummy activities Ans: b Section: 8.2 Network Techniques: PERT and CPM Level: Easy

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Chapter 8

16. In the AOA network, arrows depict what? a) Networks b) Events c) Activities d) Dummy activities Ans: c Section: 8.2 Network Techniques: PERT and CPM Level: Easy

17. Most commercially available project management software applications use which of the following? a) GERT chart b) Bar chart c) AOA network d) AON network Ans: d Section: 8.2 Network Techniques: PERT and CPM Level: Easy

18. A type of activity that has no duration and uses no resources is called what? a) Crossover b) Dummy c) Critical d) Start Ans: b Section: 8.2 Network Techniques: PERT and CPM Level: Easy

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Chapter 8

19. In AOA networks, an activity of zero duration is called a what? a) Dummy activity b) Critical activity c) Important activity d) Critical activity Ans: a Section: 8.2 Network Techniques: PERT and CPM Level: Easy

20. What was developed by Henry Gantt in 1917? a) Gantt Chart b) PERT Diagram c) Delphi Method d) Gantt Diagram Ans: a Section: 8.2 Network Techniques: PERT and CPM Level: Easy

21. These have a weakness of being difficult to follow when multiple paths exist, but these are more helpful in the hands-on task of managing the project. a) Networks, Gantt charts b) Activity sets, networks c) Gantt charts, networks d) Gantt charts, activity sets Ans: c Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

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Chapter 8

22. This chart shows planned and actual progress for a number of tasks displayed against a horizontal timescale. a) PERT b) Timeline c) Critical d) Gantt Ans: d Section: 8.2 Network Techniques: PERT and CPM Level: Easy

23. Which of the following is not an advantage of a Gantt chart? a) It can be easily understood. b) Gantt charts are more effective for very large projects than ordinary projects. c) It provides a good picture of the state of the project. d) It is relatively easy to maintain.

Ans: b Section: 8.2 Network Techniques: PERT and CPM Level: Easy

24. Which law suggests that work expands to fill the allotted time? a) Parkinson’s b) Murphy’s c) Brooks’ d) Ronny’s Ans: a Section: 8.2 Network Techniques: PERT and CPM Level: Easy

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Chapter 8

25. When using the beta distribution, the denominator of the formula for standard deviation should by what? a) Approximately one-sixth of its range. b) Adjusted by converting the range into the correct statistical variance c) Adjusted by converting the range into the correct z-score value d) Adjusted by converting the range into 50 percent of the mean Ans: a Section: 8.2 Network Techniques: PERT and CPM Level: advanced

26. The calculation of the standard deviation for the beta distribution is based on what assumption? a) The range is divided by a count of the values used to compute the mean b) The range is approximately equal to six times the standard deviation c) The standard deviation is 50 percent of the mean d) The standard deviation is the square of the statistical variance Ans: b Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

27. The shortest time in which the entire network can be completed is referred to as the what? a) Critical time of the network b) Real duration of the network c) Elapsed time of the network d) Slack time of the network Ans: a Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

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Chapter 8

28. The difference between the late start and early start for an activity is called its what? a) Critical path b) Task c) Progress d) Float Ans: d Section: 8.2 Network Techniques: PERT and CPM Level: Easy Bloom’s: Knowledge AACSB: Analysis Page: 307 29. The authors define this as the time an activity can be delayed without affecting the start time of any successor activity a) Free slack b) Total slack c) Project slack d) Overhead slack Ans: a Section: 8.2 Network Techniques: PERT and CPM Level: Easy

30. A precedence relationship where the completion of a successor activity depends on the completion of a predecessor activity is called a what? a) Start to finish dependency b) Finish to start dependency c) Finish to finish dependency d) Start to start dependency Ans: c Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

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Chapter 8

31. A precedent relationship where the completion of a predecessor activity depends on the initiation of a successor activity is called a what? a) Start to finish dependency b) Finish to start dependency c) Finish to finish dependency d) Start to start dependency Ans: a Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate 32. The variance of a population is a measure of the population’s what? a) Dispersion b) Proportion c) Kurtosis d) Skewness Ans: a Section: 8.2 Network Techniques: PERT and CPM Level: Easy

33. Project completion probabilities computed using just the critical path are always what? a) Optimistic b) Correct c) Pessimistic d) Based on a 99 percent probability Ans: a Section: 8.2 Network Techniques: PERT and CPM Level: Easy

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Chapter 8

34. Given the formula 𝑇𝐸 =

(𝑎+4𝑚+𝑏) 6

, what does TE stand for?

a) Expected time b) Optimistic time estimate c) Pessimistic time estimate d) Most likely time estimate Ans: a Section: 8.2 Network Techniques: PERT and CPM Level: Easy

35. Given the formula 𝑇𝐸 =

(𝑎+4𝑚+𝑏) 6

, what does a stand for?

a) Expected time b) Optimistic time estimate c) Pessimistic time estimate d) Most likely time estimate Ans: b Section: 8.2 Network Techniques: PERT and CPM Level: Easy

36. Given the formula 𝑇𝐸 =

(𝑎+4𝑚+𝑏) 6

, what does b stand for?

a) Expected time b) Optimistic time estimate c) Pessimistic time estimate d) Most likely time estimate Ans: c Section: 8.2 Network Techniques: PERT and CPM Level: Easy

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Chapter 8

37. Given the formula 𝑇𝐸 =

(𝑎+4𝑚+𝑏) 6

, what does m stand for?

a) Expected time b) Optimistic time estimate c) Pessimistic time estimate d) Most likely time estimate Ans: d Section: 8.2 Network Techniques: PERT and CPM Level: Easy

38. The formula 𝑇𝐸 =

(𝑎+4𝑚+𝑏) 6

is based on which distribution?

a) Normal b) Standard normal c) Parkinson’s d) Beta Ans: d Section: 8.2 Network Techniques: PERT and CPM Level: Easy 39. “Activity 2 must not start before Activity 1 has been completed” is which type of restriction? a) Finish to Start b) Start to Start c) Finish to Finish d) Start to Finish Ans: a Section: 8.2 Network Techniques: PERT and CPM Level: Easy

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Chapter 8

40. “Activity 5 cannot begin until Activity 4 has been underway for at least 2 days” is which type of restriction? a) Finish to Start b) Start to Start c) Finish to Finish d) Start to Finish Ans: b Section: 8.2 Network Techniques: PERT and CPM Level: Easy 41. “Activity 7 must be complete at least 1 day before Activity 8 is completed” is which type of restriction? a) Finish to Start b) Start to Start c) Finish to Finish d) Start to Finish Ans: c Section: 8.2 Network Techniques: PERT and CPM Level: Easy 42. “Activity 11 cannot be completed before 7 days since the start of Activity 10” is which type of restriction? a) Finish to Start b) Start to Start c) Finish to Finish d) Start to Finish Ans: d Section: 8.2 Network Techniques: PERT and CPM Level: Easy

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Chapter 8

43. Given the formula 𝑍 =

(𝐷−𝜇)

, what does the D stand for?

2 √𝜎𝜇

a) The desired project completion time b) The critical time of the project c) The variance of the critical path d) The number of standard deviations of a standard normal distribution Ans: a Section: 8.2 Network Techniques: PERT and CPM Level: Easy

44. Given the formula 𝑍 =

(𝐷−𝜇)

, what does the μ stand for?

2 √𝜎𝜇

a) The desired project completion time b) The critical time of the project c) The variance of the critical path d) The number of standard deviations of a standard normal distribution Ans: b Section: 8.2 Network Techniques: PERT and CPM Level: Easy

45. Given the formula 𝑍 =

(𝐷−𝜇) 2 √𝜎𝜇

, what does the 𝜎𝜇2 stand for?

a) The desired project completion time b) The critical time of the project c) The variance of the critical path d) The number of standard deviations of a standard normal distribution Ans: c Section: 8.2 Network Techniques: PERT and CPM Level: Easy

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Chapter 8

46. Given the formula 𝑍 =

(𝐷−𝜇)

, what does the Z stand for?

2 √𝜎𝜇

a) The desired project completion time b) The critical time of the project c) The variance of the critical path d) The number of standard deviations of a standard normal distribution Ans: d Section: 8.2 Network Techniques: PERT and CPM Level: Easy

47. This is one possible way to check the nature and impacts of interactions between probabilistic paths in a network. a) Simulation b) Extrapolation c) Guessing d) Probabilistic time estimates Ans: a Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

48. Any time two or more paths of a network come together, the probability of both paths being on time is the product of the probabilities for the individual paths. This scenario is referred to as what? a) Merge bias b) Node bias c) Critical bias d) Critical merge Ans: a Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

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Chapter 8

49. The calculation of variance (𝜎2 =

(𝑏−𝑎)2 6

) is based on the assumption that the standard

deviation of a beta distribution is approximately one-sixth of its range and that the values of a and b are computed at the 99 percent level. When estimating these values at 95 percent, the 6 in the formula is replaced with what value? a) 5.15 b) 4.33 c) 3.29 d) 2.56 Ans: c Section: 8.2 Network Techniques: PERT and CPM Level: Hard

50. The calculation of variance (𝜎2 =

(𝑏−𝑎)2 6

) is based on the assumption that the standard

deviation of a beta distribution is approximately one-sixth of its range and that the values of a and b are computed at the 99 percent level. When estimating these values at 90 percent, the 6 in the formula is replaced with what value? a) 5.15 b) 4.33 c) 3.29 d) 2.56 Ans: d Section: 8.2 Network Techniques: PERT and CPM Level: Hard

51. On method of managing the uncertainty is to perform what on the data involved in our managerial decisions? a) Simulation b) Probability analysis c) Critical path analysis d) Risk analysis Ans: d Section: 8.3 Risk Analysis Using Simulation with Crystal Ball Level: Easy

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Chapter 8

52. With simulation, the model is repeated many times and the model’s output for each repetition is used to construct a statistical distribution of all the outcomes. This shows which of the following regarding the decision? a) Risk profile b) Critical path c) Maximum completion time d) Average completion time Ans: a Section: 8.3 Risk Analysis Using Simulation with Crystal Ball Level: Easy

53. Which of the following is not a software tool commonly used to manage projects, especially in relation to time and cost budgets? a) Microsoft Project b) Microsoft Excel c) Crystal Ball d) Microsoft Word Ans: d Section: 8.4 Using These Tools Level: Intermediate

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Chapter 8

Fill-in-the-Blanks 1. WBS stands for

.

Ans: work breakdown structure Section: 8.1 Background Level: Easy

2. A properly designed, detailed can serve as a key input in establishing the monitoring and control systems for the project.

Ans: schedule Section: 8.1 Background Level: Easy

3. In general, the schedule is developed down to the

level

Ans: work package Section: 8.1 Background Level: Easy

4. The basic approach of all scheduling techniques is to form a event relationships.

of activity and

Ans: network Section: 8.1 Background Level: Easy

5. PERT stands for

.

Ans: program evaluation and review technique Section: 8.2 Network Techniques: PERT and CPM Level: Easy

6. CPM stands for

.

Ans: critical path method Section: 8.2 Network Techniques: PERT and CPM Level: Easy

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Chapter 8

7.

was developed by the U.S. Navy.

Ans: PERT Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

8.

was developed by DuPont.

Ans: CPM Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

9. AOA stands for

.

Ans: activity-on-arrow Section: 8.2 Network Techniques: PERT and CPM Level: Easy

10. AON stands for

.

Ans: activity-on-node Section: 8.2 Network Techniques: PERT and CPM Level: Easy

11. It is important to good project management to be in estimating the time required to complete each of the various tasks included in the project.

Ans: honest Section: 8.2 Network Techniques: PERT and CPM Level: Easy

12. MSP stands for

.

Ans: Microsoft Project Management Section: 8.2 Network Techniques: PERT and CPM Level: Easy

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Chapter 8

13. Scum takes a more approach to project planning whereby planning is done as late as possible and when the most is known about the project.

Ans: just-in-time (JIT) Section: 8.5 Scheduling with Scrum Level: Easy

14. JIT stands for

.

Ans: just-in-time Section: 8.5 Scheduling with Scrum Level: Easy

15. Scrum employs a -based approach to develop estimates for the effort required to complete each product requirement listed in the product backlog.

Ans: consensus Section: 8.5 Scheduling with Scrum Level: Easy

16. Estimation poker is based on a

sequence.

Ans: Fibonacci Section: 8.5 Scheduling with Scrum Level: Intermediate

17. The sum of the requirement points completed during a given scrum sprint is referred to as the .

Ans: velocity Section: 8.5 Scheduling with Scrum Level: Easy

18. The average can be used to estimate the total number of sprints needed to complete the product backlog.

Ans: velocity Section: 8.5 Scheduling with Scrum Level: Easy

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Chapter 8

19. Average velocity can used to predict project

.

Ans: timelines Section: 8.5 Scheduling with Scrum Level: Easy

20.

: A specific project task that requires resources and time to complete.

Ans: Activity Section: Glossary Level: Easy

21.

: The two ways of illustrating a network: placing the activities on the arcs or on the nodes.

Ans: Activity-on-Arrow and Activity-on-Node Section: Glossary Level: Easy

22.

: The line connecting two nodes.

Ans: Arc Section: Glossary Level: Easy

23.

: In CPM, an activity can be conducted at a normal pace or at an expedited pace.

Ans: Crash Section: Glossary Level: Easy

24.

: An activity or event that, if delayed, will delay project completion.

Ans: Critical Section: Glossary Level: Easy

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Chapter 8

25.

: A process to break down broadly defined requirements into more specific requirements.

Ans: Decomposition Section: Glossary Level: Easy

26.

: A scrum method for developing consensus-based estimates for the effort required to complete each product requirement listed in the product backlog.

Ans: Estimation Poker Section: Glossary Level: Easy

27.

: An end state for one or more activities that occurs at a specific point in time.

Ans: Event Section: Glossary Level: Easy

28.

: A bar chart illustrating multiple, time-based activities on a horizontal timescale.

Ans: Gantt chart Section: Glossary Level: Easy

29.

: A clearly identifiable point in a project or set of activities that commonly denotes a reporting requirement or completion of a large or important set of activities.

Ans: Milestone Section: Glossary Level: Easy

30.

: A combination of interrelated activities and events depicted with arcs and nodes.

Ans: Network Section: Glossary Level: Easy

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Chapter 8

31.

: A point where one or more lines (arrows) begin or terminate, commonly used for depicting an event or activity.

Ans: Node Section: Glossary Level: Easy

32.

: A sequence of lines and nodes in a network.

Ans: Path Section: Glossary Level: Easy

33.

: Detailed requirements that often include specific customer desires and benefits.

Ans: User Stories Section: Glossary Level: Easy

34.

: The sum of the points completed during a given sprint.

Ans: Velocity Section: Glossary Level: Easy

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Chapter 8

Essay 1. Describe the benefits of forming a network of activity and event relationships that graphically portrays sequential relations between tasks in a project.

Answer The benefits of such a network are the following: (1) The interdependence of all tasks, work package, and network elements is documented. (2) It can be used to determine the expected project completion date. (3) It identifies the critical activities that if delayed will delay the project completion time. (4) It identifies activities with slack that can be used should schedule compression become necessary on the critical path. (5) It can be used to schedule resources.

Section: 8.1 Background Level: Easy

2. Explain the meaning of slack in a network.

Answer Slack is synonymous with float. Slack is the amount of time that an activity can be delayed without delaying completion of the project. In order to have slack, the activity will not be located on the critical path of the network. An activity with low slack can be classified as a near critical activity because the amount of slack is small in relation to the time required to complete the path it is in. Should it become necessary to crash a project, it may be possible to borrow resources from activities that have slack.

Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

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Chapter 8

3. Explain why it is important to evaluate non-critical paths that possess large variances and/or path times that are close to critical in duration.

Answer Assuming that the project is stable and under control, random uncertainty present in the network will exhibit cumulative interactions reflecting the inherent randomness of independent activities within the network. Therefore, an activity having only a relatively small amount of slack could potentially exceed the critical time calculated from the expected critical path. Moreover, as statistical variances rise in relation to expected duration, the range of uncertainty in near critical paths will exhibit wider dispersion.

The probabilities computed using just the critical path are always optimistic, sometimes just a little but occasionally by a great deal! If the paths are not independent, the calculations become more complicated. Therefore, it is a good idea to always check noncritical paths that have activities with large variances and/or path times that are close to critical in duration.

Section: 8.2 Network Techniques: PERT and CPM Level: advanced

4. Describe the process for determining the critical path in a network.

Answer (1) Draw the network and determine the logical relationships between the activities in it.

(2) Determine the duration for each activity. (3) Perform the forward pass calculation to determine the critical time for the network. (4) Perform the backward pass calculation to establish the slack for each activity in the network. (5) If an activity has 0 slack, then it is a critical activity. (6) The critical path is composed of the critical activities identified in this manner. (7) It is possible to have more than one critical path in a network.

Section: 8.2 Network Techniques: PERT and CPM Level: Easy

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Chapter 8

5. Explain the difference between total slack and free slack in a network.

Answer The total slack is the amount of time a scheduled activity may be delayed from its early start date without delaying the project finish date. The free slack is the amount of time that a scheduled activity can be delayed without delaying the early start date of any node immediately following scheduled activity.

Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

6. Explain why completion probabilities computed using the critical path are always optimistic. What can be done?

Answer Computing the probability using only the critical path ignores the probability that other paths will exceed the completion time of the critical path due to random variation. To rectify this bias, you must compute the probability of each possible path not exceeding the desired completion time. Then, you multiply these values together to get the overall project probability of being completed on time. One minus that value gives you the probability of the project being late.

Section: 8.2 Network Techniques: PERT and CPM Level: Easy

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Chapter 8

Problems Expected Activity Times, Variances, and Standard Deviations Notes to instructor: 1) This problem can be presented as a single problem where the students fill in the blanks on the table or as a series of fill-in-the-blank problems for automated grading. 2) Regardless of how the problem is presented, the students will need the table shown below. Two versions are included, one includes the blanks for the students to complete while the other does not. 3) All answers are rounded to one decimal point.

The Problem Version 1

Activity A B C D E

Optimistic Time 12 16 6 2 5

Most Likely Time 14 20 12 10 8

Pessimistic Time 19 22 18 22 21

Most Likely Time 14 20 12 10 8

Pessimistic Time 19 22 18 22 21

Most Likely Time 14 20 12 10 8

Pessimistic Time 19 22 18 22 21

Expected Time

Variance

Standard Deviation

Expected Time 14.5 19.7 12.0 10.7 9.7

Variance 1.4 1.0 4.0 11.1 7.1

Standard Deviation 1.2 1.0 2.0 3.3 2.7

The Problem Version 2

Activity A B C D E

Optimistic Time 12 16 6 2 5

Complete Solution

Activity A B C D E

Optimistic Time 12 16 6 2 5

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Chapter 8

1. Based on the table shown above, the expected complete time (TE) for Activity A is . Round your answer to one decimal point.

Ans: 14.5 Section: 8.2 Network Techniques: PERT and CPM Level: Easy

2. Based on the table shown above, the expected complete time (TE) for Activity B is . Round your answer to one decimal point.

Ans: 19.7 Section: 8.2 Network Techniques: PERT and CPM Level: Easy

3. Based on the table shown above, the expected complete time (TE) for Activity C is . Round your answer to one decimal point.

Ans: 12.0 Section: 8.2 Network Techniques: PERT and CPM Level: Easy

4. Based on the table shown above, the expected complete time (TE) for Activity D is . Round your answer to one decimal point.

Ans: 10.7 Section: 8.2 Network Techniques: PERT and CPM Level: Easy

5. Based on the table shown above, the expected complete time (TE) for Activity E is . Round your answer to one decimal point.

Ans: 9.7 Section: 8.2 Network Techniques: PERT and CPM Level: Easy 6. Based on the table shown above, the variance (2) for Activity A is your answer to one decimal point.

. Round

Ans: 1.4 Section: 8.2 Network Techniques: PERT and CPM Level: Easy

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Chapter 8

7. Based on the table shown above, the variance (2) for Activity B is your answer to one decimal point.

. Round

Ans: 1.0 Section: 8.2 Network Techniques: PERT and CPM Level: Easy 8. Based on the table shown above, the variance (2) for Activity C is your answer to one decimal point.

. Round

Ans: 4.0 Section: 8.2 Network Techniques: PERT and CPM Level: Easy 9. Based on the table shown above, the variance (2) for Activity D is your answer to one decimal point.

. Round

Ans: 11.1 Section: 8.2 Network Techniques: PERT and CPM Level: Easy 10. Based on the table shown above, the variance (2) for Activity E is your answer to one decimal point.

. Round

Ans: 7.1 Section: 8.2 Network Techniques: PERT and CPM Level: Easy

11. Based on the table shown above, the standard deviation () for Activity A is Round your answer to one decimal point.

.

Ans: 1.2 Section: 8.2 Network Techniques: PERT and CPM Level: Easy

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Chapter 8

12. Based on the table shown above, the standard deviation () for Activity B is Round your answer to one decimal point.

.

Ans: 1.0 Section: 8.2 Network Techniques: PERT and CPM Level: Easy

13. Based on the table shown above, the standard deviation () for Activity C is Round your answer to one decimal point.

.

Ans: 2.0 Section: 8.2 Network Techniques: PERT and CPM Level: Easy

14. Based on the table shown above, the standard deviation () for Activity D is Round your answer to one decimal point.

.

Ans: 3.3 Section: 8.2 Network Techniques: PERT and CPM Level: Easy

15. Based on the table shown above, the standard deviation () for Activity E is Round your answer to one decimal point.

.

Ans: 2.7 Section: 8.2 Network Techniques: PERT and CPM Level: Easy

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Chapter 8

Additional Problems The following are not based on the table above.

16. Project task Q has the following estimates: (1) optimistic time – 10 days, (2) Pessimistic time - 20 days, and (3) Most likely time – 12 Days. The standard deviation for time using the beta statistical distribution is days. a) 1.5 b) 1.67 c) 2 d) 2.33 Ans: b Section: 8.2 Network Techniques: PERT and CPM Level: Easy 17. Project task R has the following estimates: (1) optimistic time – 10 days, (2) Pessimistic time - 20 days, and (3) Most likely time - 12 Days. The expected time using the beta statistical distribution is days. a) 9 b) 13 c) 15 d) 22 Ans: b Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

18. Assume that task J has a most likely duration of 20 days, an optimistic duration of 13 days, and a pessimistic duration of 30 days. If the optimistic and pessimistic durations are 95 percent estimates, the standard deviation for task J is days. a) 5.167 b) 5 c) 4.67 d) 3.2 Ans: a Section: 8.2 Network Techniques: PERT and CPM Level: advanced

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Chapter 8

Network Problem Notes to instructor: 1) This problem can be presented as a single problem where the students draw the network and compute the times on their diagram or as a series of fill-inthe-blank problems for automated grading. 2) Regardless of how the problem is presented, the students will need the table shown below. Two versions are included, one includes the blanks for the students to complete while the other does not. 3) If you are using the fill-in-the-blank approach, it is not necessary to assign all the questions in order to get a feel for if the students know how to work the problem. I generally assign either the ES/EF or LS/LF questions but not both.

Problem Using the information below, construct the network and compute the ES, EF, LS, LF, and slack values for each activity.

Activity A B C D E F G H I

Expected Time 7 5 5 10 6 2 12 8 5

Immediate Predecessor Activities None None A A A,B B C,D E,F G,H

Solution The solution is shown below for instructors who wish to assign the problem as a single problem.

ES LS

Slack Activity Time

EF LF 7 12

0

0

0

Start 0

0

0 0 10

0 A 7

7

7

7

7

10 B 5

5

7

15

15 5 19

Project Management 11th Edition

5 C 5

12

0 D 10

17 17

17

8 E 6

13

13

21

21

14 F 2

7

17 17

0 G 12

29

8 H 8

21

29

29 29

0 I 5

34

34

34 End

34

34

34

29

21

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Chapter 8

19. For activity A, what is the ES value?

Ans: 0 Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

20. For activity A, what is the EF value?

Ans: 7 Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

21. For activity A, what is the LS value?

Ans: 0 Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

22. For activity A, what is the LF value?

Ans: 0 Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

23. For activity A, what is the slack value?

Ans: 0 Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

24. Activity A is on the critical path.

Ans: True Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

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Chapter 8

25. For activity B, what is the ES value?

Ans: 0 Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

26. For activity B, what is the EF value?

Ans: 5 Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

27. For activity B, what is the LS value?

Ans: 10 Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

28. For activity B, what is the LF value?

Ans: 15 Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

29. For activity B, what is the slack value?

Ans: 10 Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

30. Activity B is on the critical path.

Ans: False Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

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Chapter 8

31. For activity C, what is the ES value?

Ans: 7 Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

32. For activity C, what is the EF value?

Ans: 12 Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

33. For activity C, what is the LS value?

Ans: 12 Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

34. For activity C, what is the LF value?

Ans: 17 Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

35. For activity C, what is the slack value?

Ans: 5 Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

36. Activity C is on the critical path.

Ans: False Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

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Chapter 8

37. For activity D, what is the ES value?

Ans: 7 Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

38. For activity D, what is the EF value?

Ans: 17 Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

39. For activity D, what is the LS value?

Ans: 7 Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

40. For activity D, what is the LF value?

Ans: 17 Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

41. For activity D, what is the slack value?

Ans: 0 Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

42. Activity D is on the critical path.

Ans: True Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

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Chapter 8

43. For activity E, what is the ES value?

Ans: 7 Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

44. For activity E, what is the EF value?

Ans: 13 Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

45. For activity E, what is the LS value?

Ans: 15 Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

46. For activity E, what is the LF value?

Ans: 21 Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

47. For activity E, what is the slack value?

Ans: 8 Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

48. Activity E is on the critical path.

Ans: False Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

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Chapter 8

49. For activity F, what is the ES value?

Ans: 5 Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

50. For activity F, what is the EF value?

Ans: 7 Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

51. For activity F, what is the LS value?

Ans: 19 Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

52. For activity F, what is the EF value?

Ans: 21 Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

53. For activity F, what is the slack value?

Ans: 14 Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

54. Activity F is on the critical path.

Ans: False Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

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Chapter 8

55. For activity G, what is the ES value?

Ans: 17 Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

56. For activity G, what is the EF value?

Ans: 29 Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

57. For activity G, what is the LS value?

Ans: 17 Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

58. For activity G, what is the LF value?

Ans: 29 Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

59. For activity G, what is the slack value?

Ans: 0 Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

60. Activity G is on the critical path.

Ans: True Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

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Chapter 8

61. For activity H, what is the ES value?

Ans: 13 Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

62. For activity H, what is the EF value?

Ans: 21 Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

63. For activity H, what is the LS value?

Ans: 21 Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

64. For activity H, what is the LF value?

Ans: 29 Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

65. For activity H, what is the slack value?

Ans: 8 Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

66. Activity H is on the critical path.

Ans: False Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

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Chapter 8

67. For activity I, what is the ES value?

Ans: 29 Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

68. For activity I, what is the EF value?

Ans: 34 Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

69. For activity I, what is the LS value?

Ans: 29 Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

70. For activity I, what is the LF value?

Ans: 34 Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

71. For activity I, what is the slack value?

Ans: 0 Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

72. Activity I is on the critical path.

Ans: True Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

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Chapter 8

73. How many paths are there in the project?

Ans: 5 Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate Note: A-C-G-I, A-D-G-I, A-E-H-I, B-E-H-I, and B-F-H-I

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Chapter 8

Probability of Completing Within X Days Notes to instructors: 1) Each set of data has two questions. The first asks for the Z-value and the second asks for the probability. Since the Z-value is an interim calculation, you can skip that question if you wish. 2) How the student finds the answer and how they round makes a difference so look for probability answers that are close rather than exact.

For your information, the answers in the key were computed with Excel (Norm.Dist(D,μ,,True)) with the standard deviation rounded to three decimal points using the ROUND() function.

A project has a desired project completion time of 100 days, a sum of 105 days on the critical path, and a project variance of 30.

74. What is the resulting Z-value?

Ans: -0.91 Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

75. What is the likelihood of completing the critical path within the desired time?

Ans: 0.1806 Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

A project has a desired project completion time of 60 days, a sum of 45 days on the critical path, and a project variance of 32.

76. What is the resulting Z-value?

Ans: 2.65 Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

77. What is the likelihood of completing the critical path within the desired time?

Ans: 0.9960 Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

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Chapter 8

A project has a desired project completion time of 60 days, a sum of 55 days on the critical path, and a project variance of 28.

78. What is the resulting Z-value?

Ans: 0.94 Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

79. What is the likelihood of completing the critical path within the desired time?

Ans: 0.8276 Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

A project has a desired project completion time of 565 days, a sum of 575 days on the critical path, and a project variance of 130.

80. What is the resulting Z-value?

Ans: -0.88 Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

81. What is the likelihood of completing the critical path within the desired time?

Ans: 0.1902 Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

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Chapter 8

Multiple Paths Note to instructor: All paths must be completed on time for the project to be completed on time so the formula is 𝑃(𝑂𝑛 𝑡𝑖𝑚𝑒) = 𝑃(𝑃𝑎𝑡ℎ1) × 𝑃(𝑃𝑎𝑡ℎ2) × 𝑃(𝑃𝑎𝑡ℎ3).

82. A project has three paths and a desired completion time of 43 days. The first path has a 70 percent probability of being completed in 43 days. The second has an 85 percent probability and the third haws a 90 percent probability. What is the probability that the project will be completed on time? a) 53.55 percent b) 70 percent c) 90 percent d) 99.55 percent Ans: a Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

83. A project has three paths and a desired completion time of 90 days. The first path has a 95 percent probability of being completed on time. The second has an 85 percent probability and the third haws a 90 percent probability. What is the probability that the project will be completed on time? a) Below 70 percent b) 70 percent – 79 percent c) 80 percent – 89 percent d) 90 percent or higher Ans: b (72.68%) Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

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Chapter 8

84. A project has three paths and a desired completion time of 180 days. The first path has a 95 percent probability of being completed on time. The second has a 93 percent probability and the third haws a 98 percent probability. What is the probability that the project will be completed on time? a) Below 70 percent b) 70 percent – 79 percent c) 80 percent – 89 percent d) 90 percent or higher Ans: c (86.58%) Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

85. A project has three paths and a desired completion time of 200 days. The first path has a 95 percent probability of being completed on time. The second has an 80 percent probability and the third haws a 85 percent probability. What is the probability that the project will be completed on time? a) Below 70 percent b) 70 percent – 79 percent c) 80 percent – 89 percent d) 90 percent or higher Ans: a (57.80%) Section: 8.2 Network Techniques: PERT and CPM Level: Intermediate

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Chapter 8

Chapter 9 Resource Allocation True/False 1. When computing the slope for crashing an activity, that slope is always negative.

Ans: True Section: 9.1 Critical Path Method – Crashing a Project Level: Easy

2. In order to compute the slope for crashing an activity, the activity time must be expressed in days.

Ans: False Section: 9.1 Critical Path Method – Crashing a Project Level: Intermediate

3. The more negative the crash slope, the more economical it is for the project.

Ans: False Section: 9.1 Critical Path Method – Crashing a Project Level: Intermediate

4. Discussing time requirements for an activity does not require knowing the level of resources devoted to the activity.

Ans: False Section: 9.1 Critical Path Method – Crashing a Project Level: Easy

5. When we expedite a project, we tend to create problems.

Ans: True Section: 9.1 Critical Path Method – Crashing a Project Level: Easy

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Chapter 9

6. Any activity can be crashed in increments of one period.

Ans: False Section: 9.1 Critical Path Method – Crashing a Project Level: Easy

7. A given activity may have only two or three technically feasible durations.

Ans: True Section: 9.1 Critical Path Method – Crashing a Project Level: Easy

8. There are times when the PM may expedite activities that have little or no impact on the network’s critical time.

Ans: True Section: 9.1 Critical Path Method – Crashing a Project Level: Easy

9. When dealing with a system-constrained task or project, no tradeoffs are possible.

Ans: True Section: 9.2 The Resource Allocation Problem Level: Easy

10. Much more hands-on management is required if the use of a given resource is nearly constant over its period of use.

Ans: False Section: 9.4 Resource Leveling Level: Easy 11. If resource usage is level, the project manager using a “just-in-time” inventory policy has to worry constantly that the quantity delivered will be wrong.

Ans: False Section: 9.4 Resource Leveling Level: Easy

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Chapter 9

12. Resource leveling improves morale and results in fewer problems in the personnel and payroll offices.

Ans: True Section: 9.4 Resource Leveling Level: Easy

13. When resources are leveled, the associated costs also tend to be leveled.

Ans: True Section: 9.4 Resource Leveling Level: Easy

14. For larger networks and multiple resources, resource leveling is fairly straightforward.

Ans: False Section: 9.4 Resource Leveling Level: Easy

15. The schedules that heuristics generate for resource scheduling are optimal.

Ans: False Section: 9.5 Constrained Resource Scheduling Level: Easy

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Chapter 9

Multiple Choice 1. In CPM, what is specified? a) Exact levels of uncertainty associated with activities b) An expected time, a crash time, and the standard deviation time c) Three costs d) Two activity times and two costs Ans: d Section: 9.1 Critical Path Method – Crashing a Project Level: Intermediate

2. If deterministic time estimates are used, and if project deadlines are firm, there is a high likelihood that it will what? a) Not be necessary to crash any activities in projects b) Be necessary to crash the last few activities of most projects c) Be completed on time and within budget d) Be completed as per schedule Ans: b Section: 9.1 Critical Path Method – Crashing a Project Level: Easy

3. The formula for computing the cost/time slope for each activity that can be crashed is which of the following? a) (Crash cost + normal cost) / (crash time + normal time) b) (Crash cost - normal cost) / (crash time - normal time) c) (Normal cost + crash cost) / (normal time + crash time) d) (Normal cost - crash cost) / (normal time - crash time) Ans: b Section: 9.1 Critical Path Method – Crashing a Project Level: Intermediate

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Chapter 9

4. When we change technology, we may also be changing the level of what in carrying out the activity? a) Risk b) Money c) Time d) All of the above Ans: d Section: 9.1 Critical Path Method – Crashing a Project Level: Intermediate

5. Economically speaking, crashing a project creates a technology change in what function for an activity? a) Deliverable demand function b) Production function c) Audit function d) Deliverable supply function Ans: b Section: 9.1 Critical Path Method – Crashing a Project Level: Advanced

6. When crashing a project, our first task is to develop what? a) A table or graph of the cost of a project as a function of the project’s possible completion dates b) A schedule that shows the risks associated with each activity in the project c) A list that shows the activities and the events of a project without referring to the costs d) A table showing the noncritical activities and the cost associated with each of those activities Ans: a Section: 9.1 Critical Path Method – Crashing a Project Level: Intermediate

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Chapter 9

7. The two principles to follow when crashing a project focuses on the what? a) Critical path and selects the least expensive alternative b) Critical path and selects the most expensive alternative c) Shortest path and selects the least expensive alternative d) Critical path and selects the most expensive alternative Ans: a Section: 9.1 Critical Path Method – Crashing a Project Level: Easy

8. The points between the extreme points of the relationship between time use and resource use represent what? a) Time constrained projects b) Resource constrained projects c) Alternative trade-offs between time and resources d) A non-feasible solution space of trade-off alternatives related to time and resource use Ans: c Section: 9.2 The Resource Allocation Problem Level: Advanced

9. This describes the amounts of individual resources an existing schedule requires during specific time periods. a) Resource loading b) Resource leveling c) Scope loading d) Resource succeeding Ans: a Section: 9.3 Resource Loading Level: Easy

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Chapter 9

10. This aims to minimize the period-by-period variations in resource loading by shifting tasks within their slack allowances. The purpose is to create a smoother distribution of resource usage. a) Resource loading b) Resource leveling c) Scope loading d) Resource succeeding Ans: b Section: 9.4 Resource Leveling Level: Easy

11. A good rule-of-thumb is not to schedule a scarce resource for more than what percentage of capacity? a) 70-75 percent b) 75-80 percent c) 80-85 percent d) 85-90 percent Ans: d Section: 9.4 Resource Leveling Level: Easy

12. The principal reason why a project manager is surprised by resource constraints on a project is the failure to include what in risk identification activities? a) Resource availability b) Resource cost c) Resource mobility d) Resource skill Ans: a Section: 9.5 Constrained Resource Scheduling Level: Easy

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Chapter 9

13. The two fundamental approaches to constrained allocation problems are which of the following? a) Heuristic approaches and rules of thumb b) Linear programming approaches and optimization models c) Heuristic approaches and optimization models d) Goal programming and trial and error Ans: c Section: 9.5 Constrained Resource Scheduling Level: Easy

14. Which approach to constrained resource scheduling problems is the only feasible method of attacking large, nonlinear, complex problems that tend to occur in the real world of project management? a) Goal programming b) Heuristic c) Optimization modeling d) Linear programming Ans: b Section: 9.5 Constrained Resource Scheduling Level: Easy

15. Most heuristic solution methods start with what and analyze resource usage period by period, resource by resource? a) GERT schedule b) Gantt chart c) PERT/CPM schedule d) Master schedule Ans: c Section: 9.5 Constrained Resource Scheduling Level: Intermediate

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Chapter 9

16. If a contradiction or conflict between constraints is detected, what should always take precedence? a) Technological necessities b) Time constraints c) Resource constraints d) Managerial preferences Ans: a Section: 9.5 Constrained Resource Scheduling Level: Easy

17. This heuristic provides a general solution for critical path and time and is usually the default rule for a schedule. a) As soon as possible b) As late as possible c) Minimum slack first d) Shortest task first Ans: a Section: 9.5 Constrained Resource Scheduling Level: Easy

18. The usual purpose of this scheduling heuristic is to delay cash outflows as long as possible. a) Minimum slack first b) Shortest task first c) Most successors d) As late as possible Ans: d Section: 9.5 Constrained Resource Scheduling Level: Intermediate

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Chapter 9

19. The methods to find an optimal solution to the constrained resource scheduling problem fall into two categories. What are they? a) Mathematical programming and linear programming b) Mathematical programming and enumeration c) Statistical analysis and simulation d) Quantified heuristics and gaming Ans: b Section: 9.5 Constrained Resource Scheduling Level: Easy

20. Using this heuristic method, the project team should be able to complete the maximum number of tasks during a given period of time. a) As soon as possible b) As late as possible c) Shortest task first d) Minimum slack first Ans: c Section: 9.5 Constrained Resource Scheduling Level: Intermediate

21. Studies have shown that this scheduling heuristic method usually results in the minimum amount of project schedule slippage, best utilization of facilities, and minimum total system occupancy time. a) As soon as possible b) As late as possible c) Shortest task first d) Minimum slack first Ans: d Section: 9.5 Constrained Resource Scheduling Level: Intermediate

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Chapter 9

22. Which of the following describes a situation where priorities are assigned to activities according to some rule not associated with task length, slack, or resource requirements? a) Student’s syndrome b) Arbitrary c) Most successors d) Most resources Ans: b Section: 9.5 Constrained Resource Scheduling Level: Easy

23. Using this priority rule, activities are ordered by use of a specific resource, with the largest user heading the list. a) As Soon As Possible b) As Late As Possible c) Shortest Task First d) Most Resources First Ans: d Section: 9.5 Constrained Resource Scheduling Level: Easy

24. Using this priority rule, tasks are ordered in terms of duration, with the shortest first. a) As Soon As Possible b) As Late As Possible c) Shortest Task First d) Most Resources First Ans: c Section: 9.5 Constrained Resource Scheduling Level: Easy

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Chapter 9

25. Using this priority rule, all activities are scheduled as late as possible without delaying the project. a) As Soon As Possible b) As Late As Possible c) Shortest Task First d) Most Resources First Ans: b Section: 9.5 Constrained Resource Scheduling Level: Easy

26. This is the default rule for scheduling. This provides the general solution for critical path and time. a) As Soon As Possible b) As Late As Possible c) Shortest Task First d) Most Resources First Ans: a Section: 9.5 Constrained Resource Scheduling Level: Easy

27. This heuristic orders activities by the amount of slack, least slack going first. a) Minimum Slack First b) Most Critical Followers c) Most Successors d) Arbitrary Ans: a Section: 9.5 Constrained Resource Scheduling Level: Easy

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Chapter 9

28. Tasks are arranged by number of activities following them. a) Minimum Slack First b) Most Critical Followers c) Most Successors d) Arbitrary Ans: c Section: 9.5 Constrained Resource Scheduling Level: Easy

29. Priorities are assigned to activities according to some rule not associated with task length, slack, or resource requirements. a) Minimum Slack First b) Most Critical Followers c) Most Successors d) Arbitrary Ans: d Section: 9.5 Constrained Resource Scheduling Level: Easy

30. Tasks are arranged by number of critical activities following them. a) Minimum Slack First b) Most Critical Followers c) Most Successors d) Arbitrary Ans: b Section: 9.5 Constrained Resource Scheduling Level: Easy

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Chapter 9

31. The usual purpose of this heuristic is to defer cash outflows as long as possible. a) As Soon As Possible b) As Late As Possible c) Shortest Task First d) Most Resources First Ans: b Section: 9.5 Constrained Resource Scheduling Level: Easy

32. The assumption behind this rule is that more important tasks usually place a higher demand on scarce resources. a) As Soon As Possible b) As Late As Possible c) Shortest Task First d) Most Resources First Ans: d Section: 9.5 Constrained Resource Scheduling Level: Easy

33. This provides the general solution for critical path and time. a) As Soon As Possible b) As Late As Possible c) Shortest Task First d) Most Resources First Ans: a Section: 9.5 Constrained Resource Scheduling Level: Easy

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Chapter 9

34. In general, this rule will maximize the number of tasks that can be completed by a system during some time period. a) As Soon As Possible b) As Late As Possible c) Shortest Task First d) Most Resources First Ans: c Section: 9.5 Constrained Resource Scheduling Level: Easy

35. One of the problems that Goldratt observed was that if an activity has slack time, the task might become delayed until the slack is removed. This is referred to as what? a) Goldratt’s Law b) Murphy’s Law c) The delay game d) The student syndrome Ans: d Section: 9.6 Goldratt’s Critical Chain Level: Intermediate 36. Thoughtless optimism, the “student syndrome,” and multitasking to reduce idle time can each contribute to what? a) Slack b) Pessimistic bias c) Optimistic bias d) Feeder buffer Ans: c Section: 9.6 Goldratt’s Critical Chain Level: Intermediate

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Chapter 9

37. Using Goldratt’s meaning of the word “dependent,” the activities of a project can be ordered into paths based on their resource dependencies as well as on their technological precedence requirements. The longest of these paths of sequentially time-dependent activities is known as the what? a) Priority chain b) Critical chain c) Dependency path d) Heuristic path Ans: b Section: 9.6 Goldratt’s Critical Chain Level: Easy

38. The tasks that logically precede a particular task in time are referred to as what? a) Successors b) Followers c) Predecessors d) Priorities Ans: c Section: Glossary Level: Easy

39. Three important parameters used to assess the effectiveness of a scheduling system include schedule slippage, in-process inventory, and what? a) Resource utilization b) Time utilization c) Management delay d) Schedule utilization Ans: a Section: Summary Level: Intermediate

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Chapter 9

40. With respect to project scheduling, what is the amount of work waiting to be processed because there is a shortage of some resource> a) In-process inventory b) Schedule slippage c) Resource utilization d) Management delay Ans: a Section: Summary Level: Easy

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Chapter 9

Fill-in-the-Blanks 1. The standard practice with AOA and AON is to estimate activity times under the assumption of resource loadings that are .

Ans: normal Section: 9.1 Critical Path Method – Crashing a Project Level: Easy

2. The use of probabilistic activity time estimates may reduce the chance that crashing the project will be needed.

Ans: three Section: 9.1 Critical Path Method – Crashing a Project Level: Easy

3.

times result from an attempt to expedite the activity by the application of additional resources.

Ans: Crash Section: 9.1 Critical Path Method – Crashing a Project Level: Easy

4. The technique overlaps the design and build phases of a project to expedite its completion.

Ans: fast-tracking Section: 9.1 Critical Path Method – Crashing a Project Level: Easy

5. Fast-tracking is a partial use of the basic concept in project management and is dependent on effective feedback and feedforward communication.

Ans: phase-gate Section: 9.1 Critical Path Method – Crashing a Project Level: Easy

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Chapter 9

6. CPM stands for

.

Ans: critical path method Section: Level: Easy

7. AON stands for

.

Ans: activity-on-node Section: 9.1 Critical Path Method – Crashing a Project Level: Easy

8. AOA stands for

.

Ans: activity-on-arrow Section: 9.1 Critical Path Method – Crashing a Project Level: Easy

9. In CPM, two activity times and two costs were often specified for each activity. The first time/cost combination was called , and the second set was referred to as .

Ans: normal, crash Section: 9.1 Critical Path Method – Crashing a Project Level: Easy

10. Fast-tracking refers to overlapping the

and

phases of a project.

Ans: design, build (either order) Section: Level: Easy

11. One cannot save

, rather one can only spend more or less of it.

Ans: time Section: 9.2 The Resource Allocation Problem Level: Easy

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Chapter 9

12.

itself is always a critical resource in project management, one that is unique because it can neither be inventoried nor renewed.

Ans: Time Section: 9.2 The Resource Allocation Problem Level: Easy

13. A project task is said to be known quantities of resources.

constrained if it requires a fixed amount of time and

Ans: system Section: 9.2 The Resource Allocation Problem Level: Easy

14. If all three variables—time, cost, scope (specifications)—are fixed, the system is said to be .

Ans: overdetermined Section: 9.2 The Resource Allocation Problem Level: Easy 15. Because the project is the source of information on activity precedence’s, durations, and resources requirements, it is the primary input for both the project schedule and its budget.

Ans: WBS or work breakdown structure Section: 9.3 Resource Loading Level: Easy

16. Resource describes the amounts of individual resources an existing schedule requires during specific time periods.

Ans: loading Section: 9.3 Resource Loading Level: Easy

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Chapter 9

17. Resource aims to minimize the period-by-period variations in resource loading by shifting tasks within their slack allowances.

Ans: leveling Section: 9.4 Resource Leveling Level: Easy

18. There are two fundamental approaches to constrained resource allocation problems: and models.

Ans: heuristics and optimization (in either order) Section: 9.5 Constrained Resource Scheduling Level: Easy

19.

approaches are the only feasible methods of attacking resource scheduling the large, nonlinear, complex problems that tend to occur in the real world of project management.

Ans: Heuristics Section: 9.5 Constrained Resource Scheduling Level: Easy

20. Assume two activities, printing and binding. Printing is a predecessor of binding. If printing is , then binding will start late by whatever amount of lateness is bequeathed to it by printing.

Ans: late Section: 9.6 Goldratt's Critical Chain Level: Easy

21. In some situations, two activities are scheduled to be carried out in parallel and using the same scarce resource. If the supply of the scarce resource is not sufficient to allow both activities to be carried out simultaneously, then whichever of the two is given priority immediately lengthens the other activity’s path but not its actual .

Ans: duration Section: 9.6 Goldratt’s Critical Chain Level: Intermediate

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Chapter 9

22.

: The resource(s) with limited capacity that restrict the rate of progress on the project.

Ans: Bottleneck Section: Glossary Level: Easy

23.

: The longest chain of activities in a project when no buffers are considered.

Ans: Critical chain Section: Glossary Level: Easy

24.

: The ratio of the increased cost for expediting to the decreased amount of time for the activity.

Ans: Cost/time slope Section: Glossary Level: Easy

25.

: The tasks that logically come after a particular task in time.

Ans: Followers Section: Glossary Level: Easy

26.

: A formal process for solving a problem, like a rule of thumb, that results in an acceptable solution.

Ans: Heuristic Section: Glossary Level: Easy

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Chapter 9

27.

: A general term for certain mathematical approaches to solving constrained optimization problems, including linear programming, integer programming, and so on.

Ans: Mathematical Programming Section: Glossary Level: Easy

28.

: The tasks that logically precede a particular task in time.

Ans: Predecessors Section: Glossary Level: Easy

29.

: Formal methods, such as ratios, that rank items to determine which one should be next.

Ans: Priority Rules Section: Glossary Level: Easy

30.

: Safety time taken from individual activities and added as buffer for the entire project.

Ans: Project buffer Section: Glossary Level: Easy

31.

: Approaches to even out the peaks and valleys of resource requirements so that a fixed amount of resources can be employed over time.

Ans: Resource Leveling Section: Glossary Level: Easy

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Chapter 9

32.

: The amount of resources of each kind that are to be devoted to a specific activity in a certain time period.

Ans: Resource Loading Section: Glossary Level: Easy

33.

: Tendency to delay starting tasks until the last possible moment.

Ans: Student Syndrome Section: Glossary Level: Easy

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Chapter 9

Essay 1. Describe the extreme points of the relationship between time use and resource use.

Answer If the project is time-limited, it will seek to use as few resources as possible but will be constrained by time. If the project is resource limited, it will seek to finish as soon as possible but will be resource constrained. The points between these two extremes represent time/resource use trade-offs available to the project manager.

Section: 9.2 The Resource Allocation Problem Level: Advanced

2. Discuss the advantages obtained from resource leveling.

Answer First, less hands-on management is required if the use of a given resource is nearly constant over its period of use. Second, if resource usage is level, the project manager may be able to use a just-in-time inventory policy without much worry that the quantity delivered will be wrong. For human resources, leveling can improve morale and lead to fewer problems in the personnel and payroll offices due to increasing and decreasing labor levels. When resources are leveled, the associated costs also tend to be leveled.

Section: 9.4 Resource Leveling Level: Easy

3. Describe the basic procedure for resource leveling.

Answer Identify the type and quantity of resources that are required to complete activities in the network. Once the logical relationships between tasks and their duration have been established, resource assignments will establish the initial load required to accomplish the work. Working within project constraints for time and resources, fluctuations in load for each resource will be minimized.

Section: 9.4 Resource Leveling Level: Easy

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Chapter 9

4. Suggest some options for leveling the load placed on resources.

Answer Leveling demand arrival patterns would be one possible option. If this were not possible, personnel could be asked to alter working hours to accommodate the demand arrival patterns. The third possibility would be to hire temporary workers to handle peak demand patterns exceeding the internal capacity of the organization. It is also important to allow for unexpected delays associated with resource availability problems. For example, is generally unwise to load scarce resources with demand exceeding 85 to 90 percent of the resources’ available capacity. Thus, if future load will consistently exceed the existing capacity of the organization, it may be appropriate to hire additional resources in the affected resource category.

Section: 9.4 Resource Leveling Level: Intermediate

5. List some of the common priority rules utilized when following heuristic solution methods.

Answer These methods include: As soon as possible As late as possible Shortest task first Most resources first Minimum slack first Most critical followers Most successors Arbitrary Section: 9.5 Constrained Resource Scheduling Level: Intermediate

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Chapter 9

6. Discuss some other causes of the strong optimistic bias in a project schedule.

Answer Overly optimistic project managers ignore the need to perform risk management. When problems arise, they treat the problem as an act of chance that cannot be forecasted.

When senior managers refuse to recognize the capacity to undertake projects will exceed the demand for projects, resources will be overloaded. Goldratt described the student syndrome as a scenario where students always want more time to complete a project.

Then, the project will be delayed until the last possible moment. Engaging in multitasking to reduce idle time actually increases the time taken to accomplish work.

The perception that people need a reason to work hard will often result in arbitrary reductions to the allotted time to complete activities. To mitigate the impact of arbitrary cuts in the schedule, game playing may take place during planning.

Section: 9.6 Goldratt’s Critical Chain Level: Intermediate

7. List the factors that lead to strong optimistic bias.

Answer There are seven factors that impact strong optimistic bias. These include: 1. Thoughtless optimism 2. Capacity should be set to equal demand 3. The “Student Syndrome” 4. Multitasking to reduce idle time 5. Complexity of networks makes no difference 6. People need a reason to work hard 7. Game playing Section: 9.6 Goldratt’s Critical Chain Level: Intermediate

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Chapter 9

8. If a predecessor activity finishes early, will the following activity start early? Why? Answer If a predecessor finishes late, the following activity will begin late also. If the predecessor finishes early, the following activity will most likely not begin early due to a couple of reasons. One is that that many workers might not admit to finishing early. The second reason is that the resources for the following activity may not be available yet.

Section: 9.6 Multiproject Scheduling and Resource Allocation Level: Intermediate

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Chapter 9

Problems Note to instructor: 𝑆𝑙𝑜𝑝𝑒 =

(𝑐𝑟𝑎𝑠ℎ 𝑐𝑜𝑠𝑡−𝑛𝑜𝑟𝑚𝑎𝑙 𝑐𝑜𝑠𝑡)

.

(𝑐𝑟𝑎𝑠ℎ 𝑡𝑖𝑚𝑒−𝑛𝑜𝑟𝑚𝑎𝑙 𝑡𝑖𝑚𝑒)

Crash Slope 1. If the crash cost is $1,000, the normal cost is $500, the crash time is 3, and the normal time is 5, what is the slope? a) -500 b) -250 c) 250 d) 500 Ans: b Section: 9.1 Critical Path Method – Crashing a Project Level: Intermediate

2. If the crash cost is $2,500, the normal cost is $1,500, the crash time is 4, and the normal time is 6, what is the slope? a) -1,500 b) -1,000 c) -750 d) -500 Ans: d Section: 9.1 Critical Path Method – Crashing a Project Level: Intermediate

3. If the crash cost is $2,500, the normal cost is $2,000, the crash time is 1, and the normal time is 6, what is the slope? a) -300 b) -200 c) -100 d) None of the above are correct Ans: c Section: 9.1 Critical Path Method – Crashing a Project Level: Intermediate

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Chapter 9

4. If the crash cost is $1,000,000, the normal cost is $5,000, the crash time is 15, and the normal time is 25, what is the slope? a) -50,000 b) -25,000 c) 50,000 d) None of the above are correct Ans: a Section: 9.1 Critical Path Method – Crashing a Project Level: Intermediate

5. If the crash cost is $1,000,000, the normal cost is $5,000, the crash time is 15, and the normal time is 25, what is the slope? a) 0 – -10,000 b) -10,000 – -20,000 c) -20,000 – -30,000 d) Less than -30,000 Ans: c (-23,333) Section: 9.1 Critical Path Method – Crashing a Project Level: Intermediate

6. If the crash cost is $700,000, the normal cost is $350,000, the crash time is 12, and the normal time is 30, what is the slope? a) 0 – -10,000 b) -10,000 – -20,000 c) -20,000 – -30,000 d) Less than -30,000 Ans: b (-19,444) Section: 9.1 Critical Path Method – Crashing a Project Level: Intermediate

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Chapter 9

7. If the crash cost is $700,000, the normal cost is $400,000, the crash time is 9, and the normal time is 32, what is the slope? a) 0 – -10,000 b) -10,000 – -20,000 c) -20,000 – -30,000 d) Less than -30,000 Ans: b (-13,043) Section: 9.1 Critical Path Method – Crashing a Project Level: Intermediate

8. If the crash cost is $750,000, the normal cost is $500,000, the crash time is 7, and the normal time is 35, what is the slope? a) 0 – -10,000 b) -10,000 – -20,000 c) -20,000 – -30,000 d) Less than -30,000 Ans: a (-8,929) Section: 9.1 Critical Path Method – Crashing a Project Level: Intermediate

9. If the crash cost is $950,000, the normal cost is $400,000, the crash time is 22, and the normal time is 45, what is the slope? a) 0 – -10,000 b) -10,000 – -20,000 c) -20,000 – -30,000 d) Less than -30,000 Ans: c (-23,913) Section: 9.1 Critical Path Method – Crashing a Project Level: Intermediate

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Chapter 9

10. If the crash cost is $950,000, the normal cost is $450,000, the crash time is 0, and the normal time is 55, what is the slope? a) 0 – -10,000 b) -10,000 – -20,000 c) -20,000 – -30,000 d) Less than -30,000 Ans: a (-9,091) Section: 9.1 Critical Path Method – Crashing a Project Level: Hard Note: This represents outsourcing the activity

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Chapter 10 Monitoring and Information Systems True/False 1. Variances cannot be negative.

Ans: False Section: 10.3 Earned Value Analysis Level: Easy

2. A negative variance is undesirable.

Ans: True Section: 10.3 Earned Value Analysis Level: Easy

3. Cost variance and spending variance are the same thing.

Ans: True Section: 10.3 Earned Value Analysis Level: Easy

4. Indices (CPI, SPI, and TPI) can be negative.

Ans: False Section: 10.3 Earned Value Analysis Level: Easy

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Chapter 10

Multiple Choice 1. This is collecting, recording, and reporting information concerning any and all aspects of project performance that the project manager or others in the organization wish to know. a) Initiating b) Planning c) Controlling d) Monitoring Ans: d Section: Introduction Level: Easy

2. An appropriate and common secondary user for monitoring includes what? a) Auditing, learning from mistakes, and reporting progress and status b) Exercising effective control over the project c) Evaluating current status of the project d) Fixing the blame when things go wrong Ans: a Section: Introduction Level: Intermediate

3. Alderton suggests telltale signs of project trouble. The following description is for which one? Knowing how much leeway there is in your schedule and budget for each task, and where delays or cost overruns can be made up, keeps a project out of trouble. a) Muddy waters b) Unconstrained constraints c) Suspicious status reports d) Discord and drama Ans: b Section: 10.1 The Planning-Monitoring-Controlling Cycle Level: Intermediate

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Chapter 10

4. Alderton suggests telltale signs of project trouble. The following description is for which one? Vague or overly optimistic language such as “very soon” or “marginal increase” in costs also indicates trouble ahead. a) Muddy waters b) Unconstrained constraints c) Suspicious status reports d) Discord and drama Ans: c Section: 10.1 The Planning-Monitoring-Controlling Cycle Level: Intermediate

5. Alderton suggests telltale signs of project trouble. The following description is for which one? Unhappy team members can cause major trouble in the project. a) Muddy waters b) Unconstrained constraints c) Suspicious status reports d) Discord and drama Ans: d Section: 10.1 The Planning-Monitoring-Controlling Cycle Level: Intermediate

6. Alderton suggests telltale signs of project trouble. The following description is for which one? The scope is not well defined or well understood.” Vague or incomplete project requirements are a major red flag. a) Muddy waters b) Unconstrained constraints c) Suspicious status reports d) Discord and drama Ans: a Section: 10.1 The Planning-Monitoring-Controlling Cycle Level: Intermediate

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Chapter 10

7. The project control process should be viewed as this, with revised plans and schedules (if warranted) following corrective actions. The project control process should run continuously until the project is completed. a) Closed loop system b) Open loop system c) Open environment d) Earned value plan Ans: a Section: 10.1 The Planning-Monitoring-Controlling Cycle Level: Intermediate

8. According to the authors, the key items to be planned, monitored, and controlled are what? a) Schedule, budget, and financial stability b) Schedule, quality, performance, and customer satisfaction c) Schedule, budget, and feasibility d) Schedule, budget, and performance Ans: d Section: 10.1 The Planning-Monitoring-Controlling Cycle Level: Easy

9. The first step in setting up a monitoring system is to what? a) Collect existing data to see what data is relevant and available b) Collect every available piece of information so it can be analyzed c) Use whatever information is available d) Identify the key factors to be controlled Ans: d Section: 10.1 The Planning-Monitoring-Controlling Cycle Level: Easy

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Chapter 10

10. For each factor to be measured during monitoring; performance criteria, standards, and what should be established? a) Data collection procedures b) Mechanized systems c) Automated systems d) Audit checks Ans: a Section: 10.1 The Planning-Monitoring-Controlling Cycle Level: Intermediate

11. The most common mistake made when monitoring data is to gather information that is clearly related to project performance but what? a) Is so volatile that trends cannot be detected b) Has little or no probability of changing significantly between collection periods c) Is too unusual to use d) Cannot be captured in the mechanized PMIS Ans: b Section: 10.1 The Planning-Monitoring-Controlling Cycle Level: Intermediate 12. A status report that is vague or contains overly optimistic language like “very soon” or “marginal increase” in costs is referred to as what? a) Suspicious b) Paralyzed c) Incomplete d) Risky Ans: a Section: 10.1 The Planning-Monitoring-Controlling Cycle Level: Easy

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Chapter 10

13. Vague or incomplete project requirements are an example of which telltale sign that a project is in trouble? a) Muddy waters b) Mysterious stakeholders c) Unconstrained constraints d) Scope creep Ans: a Section: 10.1 The Planning-Monitoring-Controlling Cycle Level: Easy

14. There are several conventions used to aid in estimating percent completion. Which does the following describe? This commonly used rule is also based on percentages, but uses time (or cost) as the critical input. a) 50-50 rule b) 0-100 percent rule c) Critical input use d) Proportionality Ans: d Section: 10.2 Information Needs and Reporting Level: Easy

15. There are several conventions used to aid in estimating percent completion. Which does the following describe? This rule assigns task progress according to the amount of an important input that has been used. a) 50-50 rule b) 0-100 percent rule c) Critical input use d) Proportionality Ans: c Section: 10.2 Information Needs and Reporting Level: Easy

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Chapter 10

16. There are several conventions used to aid in estimating percent completion. Which does the following describe? This rule allows no credit for work until the task is complete. a) 50-50 rule b) 0-100 percent rule c) Critical input use d) Proportionality Ans: b Section: 10.2 Information Needs and Reporting Level: Easy

17. There are several conventions used to aid in estimating percent completion. Which does the following describe? Fifty percent completion is assumed when the task is begun, and the remaining 50 percent when the work is complete. a) 50-50 rule b) 0-100 percent rule c) Critical input use d) Proportionality Ans: a Section: 10.2 Information Needs and Reporting Level: Easy

18. Reports for these stakeholders have a need for detailed information about individual tasks and the factors affecting such tasks. a) Top executives b) Lower-level personnel c) All the stakeholders d) Client Ans: b Section: 10.2 Information Needs and Reporting Level: Easy

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Chapter 10

19. What is the most likely project report to be issued periodically? a) Milestone report b) Resource report c) Variances report for senior financial management d) Progress reports for senior management Ans: d Section: 10.2 Information Needs and Reporting Level: Easy

20. What is the relationship between management level and report details? a) Senior management receives more reports than lower levels b) Senior management receives the reports as lower levels c) Senior management receives fewer reports than lower levels d) There is no relationship Ans: c Section: 10.2 Information Needs and Reporting Level: Easy

21. For project management, there are three distinct types of reports. Which of the following would be used in response to a special problem? a) Daily b) Routine c) Exception d) Special analysis Ans: d Section: 10.2 Information Needs and Reporting Level: Easy

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Chapter 10

22. For project management, there are three distinct types of reports. Which of the following is not one of those three types? a) Daily b) Routine c) Exception d) Special analysis Ans: a Section: 10.2 Information Needs and Reporting Level: Easy

23. This can often give the project manager early warning signals of potential problems in a project and help understand the relationships of individual tasks to one another and to the overall project. a) Detailed and timely reports b) Executive summaries c) Scope change reports d) The WBS Ans: a Section: 10.2 Information Needs and Reporting Level: Advanced

24. Which of the following is not a common difficulty in the design of project reports? a) Providing too much detail b) Having too many interface modules c) Poor correspondence to the parent firm’s reporting system d) Poor correspondence between the planning and monitoring systems Ans: b Section: 10.2 Information Needs and Reporting Level: Easy

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Chapter 10

25. The earned value rule that divides the actual task time-to-date by the scheduled time for the task to calculate percent complete is called what rule? a) 50-50 b) 0-100 percent c) Critical input use d) Proportionality Ans: d Section: 10.3 Earned Value Analysis Level: Easy

26. In earned value analysis, the 50-50 rule assumes what? a) 50 percent is earned when the task is half done and 50 percent is earned at completion b) 50 percent is earned when the task begins and 50 percent is earned at completion c) 50 percent is earned when the task begins and 50 percent is earned at the halfway stage d) 50 percent is earned when the project is planned and 50 percent is earned when the project is over Ans: b Section: 10.3 Earned Value Analysis Level: Easy

27. There are several conventions used to aid in estimating percentage completion. Which of the following is the most conservative? a) 50-50 rule b) 0-100 percent rule c) Critical input use d) Proportionality Ans: b Section: 10.3 Earned Value Analysis Level: Easy

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Chapter 10

28. There are several conventions used to aid in estimating percentage completion. Which of the following is the most popular? a) 50-50 rule b) 0-100 percent rule c) Critical input use d) Proportionality Ans: a Section: 10.3 Earned Value Analysis Level: Easy

29. In earned value Analysis, the 0 - 100 percent rule allows what? a) 100 percent credit before starting work and 0 percent credit after the completion b) 0 percent credit when work begins and 100 percent credit when the project is complete c) 0 percent credit when work begins and 100 percent credit at completion of the activity d) 0 percent credit at completion of the activity and 100 percent credit at formal acceptance during scope verification Ans: c Section: 10.3 Earned Value Analysis Level: Easy

30. In earned value analysis, if the cost variance is (-$10,000), then what? a) The cost variance is favorable b) The cost variance is unfavorable c) The scheduled variance is favorable d) The scheduled cost avoidance is unfavorable Ans: b Section: 10.3 Earned Value Analysis Level: Intermediate

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Chapter 10

31. In earned value analysis, EAC refers to the what? a) Estimated cost at completion b) Estimated actual cost c) Eliminated annual cost d) Estimated annual cost Ans: a Section: 10.3 Earned Value Analysis Level: Easy

32. In earned value analysis, BAC refers to the what? a) Budgeted annual cost b) Budget at completion c) Budget at close-out d) Big annual cost Ans: b Section: 10.3 Earned Value Analysis Level: Easy 33. If CPI = 1.05, then this is favorable. a) Time variance b) Schedule variance c) Cost variance d) Performance variance Ans: c Section: 10.3 Earned Value Analysis Level: Easy

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Chapter 10

34. In earned value analysis, which variance is computed as the earned value minus the actual cost of work performed? a) Schedule variance b) Cost variance c) Time variance d) CPI Ans: b Section: 10.3 Earned Value Analysis Level: Easy

35. If CSI is less than 1, it is indicative of a what? a) Problem b) Good project c) Efficient project d) Budget error Ans: a Section: 10.3 Earned Value Analysis Level: Easy

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Chapter 10

Fill-in-the-Blanks 1. Monitoring, as an activity, should be kept distinct from , which uses data supplied by monitoring to bring actual performance into approximate congruence with planned performance.

Ans: controlling Section: Introduction Level: Easy

2. Monitoring, as an activity, should be kept distinct from , which is the process of making judgments about the quality and effectiveness of project performance.

Ans: evaluation Section: Introduction Level: Easy

3.

is collecting, recording, and reporting information concerning any and all aspects of project performance that the stakeholders wish to know.

Ans: Monitoring Section: Introduction Level: Easy

4. The project describes what is being done, when and the planned level of resource usage for each task, work-package or element in the project.

Ans: WBS Section: 10.1 The Planning-Monitoring-Controlling Cycle Level: Easy

5. The best sources of items to be monitored are the project risk management plan, change of scope orders, and .

Ans: WBS Section: 10.1 The Planning-Monitoring-Controlling Cycle Level: Easy

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Chapter 10

6. Unfortunately, it is common to focus monitoring activities on data that are easily but not necessarily important.

Ans: gathered (or similar word, like collected) Section: 10.1 The Planning-Monitoring-Controlling Cycle Level: Easy

7. WBS stands for

.

Ans: work breakdown structure Section: 10.1 The Planning-Monitoring-Controlling Cycle Level: Easy

8. There is a strong tendency to let project

serve as surrogate measures for output.

Ans: inputs Section: 10.1 The Planning-Monitoring-Controlling Cycle Level: Easy

9. For projects, the

reports are those issued on a regular basis.

Ans: routine Section: 10.2 Information Needs and Reporting Level: Easy

10.

reports are directly oriented to project management decision-making and should be distributed to the team members who will have prime responsibility for decisions or who have a clear “need to know.”

Ans: Exception Section: 10.2 Information Needs and Reporting Level: Easy

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11. The main complaints about are that they are interminably long, come to no conclusions, and waste everyone’s time.

Ans: meetings Section: 10.2 Information Needs and Reporting Level: Easy 12. EV – PV =

.

Ans: SV Section: 10.3 Earned Value Analysis Level: Easy

13. In earned value analysis, (CPI)(SPI) =

.

Ans: CSI Section: 10.3 Earned Value Analysis Level: Easy

14. In earned value analysis, (EV/AC)(EV/PV) =

.

Ans: CSI Section: 10.3 Earned Value Analysis Level: Easy

15. ST-AT =

.

Ans: TV Section: 10.3 Earned Value Analysis Level: Easy

16. (BAC + EV) / CPI =

.

Ans: ETC Section: 10.3 Earned Value Analysis Level: Easy

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Chapter 10

17. ETC + AC =

.

Ans: EAC Section: 10.3 Earned Value Analysis Level: Easy

18. Conceptually, EAC represents the amount spent to date plus

.

Ans: ETC Section: 10.3 Earned Value Analysis Level: Intermediate

19. EV stands for

.

Ans: earned value Section: 10.3 Earned Value Analysis Level: Easy

20. BAC stands for

.

Ans: budget at completion Section: 10.3 Earned Value Analysis Level: Easy

21. EAC stands for

.

Ans: estimated cost at completion Section: 10.3 Earned Value Analysis Level: Easy

22. CV stands for

.

Ans: cost variance (spending variance would also be acceptable) Section: 10.3 Earned Value Analysis Level: Easy

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23. AC stands for

.

Ans: actual cost Section: 10.3 Earned Value Analysis Level: Easy

24. SV stands for

.

Ans: schedule variance Section: 10.3 Earned Value Analysis Level: Easy

25. TV stands for

.

Ans: time variance Section: 10.3 Earned Value Analysis Level: Easy

26. CPI stands for

.

Ans: cost performance index Section: 10.3 Earned Value Analysis Level: Easy

27. SPI stands for

.

Ans: schedule performance index Section: 10.3 Earned Value Analysis Level: Easy

28. TPI stands for

.

Ans: time performance index Section: 10.3 Earned Value Analysis Level: Easy

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Chapter 10

29. CSI stands for

.

Ans: cost-schedule index Section: 10.3 Earned Value Analysis Level: Easy

30. ETC stands for

.

Ans: estimated cost to complete Section: 10.3 Earned Value Analysis Level: Easy

31.

: Chart used to monitor sprint progress where the remaining work for the sprint is on the vertical axis and time is shown on the horizontal axis.

Ans: Burndown Chart Section: Glossary Level: Easy

32.

: Contains the same axes as the burndown chart but includes lines showing the amount of work completed to date and the total amount of work yet to be completed.

Ans: Burnup chart Section: Glossary Level: Easy

33.

: Excessive fascination or activity with the computer rather than the project itself such that the project suffers.

Ans: Computer Paralysis Section: Glossary Level: Easy

34.

: The budgeted cost of the work performed less the actual cost of the work performed.

Ans: Cost (or Spending) Variance Section: Glossary Level: Easy

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35.

: An approach for monitoring project progress that relies on the budgeted cost of activities completed to ascribe value.

Ans: Earned Value Section: Glossary Level: Easy

36.

: Having an excess of information so that the information desired is difficult to locate.

Ans: Information Overload Section: Glossary Level: Easy

37.

: To keep watch in order to take action when progress fails to match plans.

Ans: Monitor Section: Glossary Level: Easy

38.

: The budgeted cost of work completed less the budgeted cost of work scheduled at this time.

Ans: Schedule Variance Section: Glossary Level: Easy

39.

: An Agile visual tool for monitoring the progress made during a sprint. Shows the status of the tasks associated with each user story to be completed during a sprint as To Do, In Progress, or Done.

Ans: Task Board Section: Glossary Level: Easy

40.

: The scheduled time for the work completed less the actual time.

Ans: Time Variance Section: Glossary Level: Easy

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Chapter 10

41.

: A deviation from plan or expectation.

Ans: Variance Section: Glossary Level: Easy

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Chapter 10

Essay 1. Identify some of the benefits when timely reports are delivered to the proper people by the project management information system.

Answer Benefits of timely reporting to the proper people include: mutual understanding of project goals, awareness of progress and problems associated with coordination among activities, understanding of the relationships of individual tasks to one another and to the overall project, early warning signals of potential problems and delays in the project, reduced confusion associated with changes in the, quicker responsiveness to unacceptable or inappropriate work, higher visibility for the project and its results, managing stakeholder perceptions and expectations related to project results.

Section: 10.2 Information Needs and Reporting Level: Easy

2. Identify the main complaints associated with meetings.

Answer The main complaints are that meetings are interminably long, come to no conclusions, and waste everyone's time.

Section: 10.2 Information Needs and Reporting Level: Easy

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Chapter 10

3. Suggest some practical measures that can be used to improve the perception about the benefits of meetings.

Answer The following rules can help remove most of the onus associated with project meetings.

Use meetings for making group decisions or getting input for important problems. Avoid show-and-tell meetings that function as status and review meetings. Have a written agenda with preset starting and stopping times. Make sure that attendees have done their homework prior to the meeting. If you chair the meeting, take your own minutes.

Distribute the minutes as soon as possible after the meeting. Avoid attributing remarks or viewpoints to individuals in the minutes. Do not report votes on controversial matters.

Avoid overly formal rules of procedure. If a serious problem or crisis arises, call a meeting for the purpose of dealing with that issue only.

Section: 10.2 Information Needs and Reporting Level: Intermediate Bloom’s: Application

4. Describe the three common difficulties in designing project reports.

Answer First, there is usually too much detail, both in the reports themselves and in the input being solicited from workers. Unnecessary detail usually results in the report not being read. It also makes it difficult to find needed information quickly. Moreover, the demand for large quantities of highly detailed input information often results in careless preparation of the data, thereby casting doubt on the validity of reports based on such data. Second, there may be a poor interface between the project information system and the parent firm’s information system. In many respects, the project manager will be expected to report costs and resource usage in a manner compatible with the parent firm's information system. Third, there may be poor correspondence between the planning and the monitoring systems. If the monitoring system is not tracking information directly related to the project’s plans, control is meaningless.

Section: 10.2 Information Needs and Reporting Level: Intermediate

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5. When using earned value analysis, identify the three conditions that can exist with respect to the completion of activities in a project.

Answer At a specified point in the project lifecycle, some work units have been finished and are 100 percent complete. At the same point in time, some work units have yet to be started and are 0 percent complete. The remaining work units have been started but are not complete. For this group of work units, it is possible to estimate a percent completion.

Section: 10.3 Earned Value Analysis Level: Intermediate

6. List the four conventions used to aid in estimating percent completion.

Answer The 50-50 rule, the 0-100 percent rule, critical input use rule, and the proportionality rule.

Section: 10.3 Earned Value Analysis Level: Easy

7. List and describe five telltale signs of project trouble it is wise to monitor.

Answer 1. Muddy Waters: Vague or incomplete project requirements that result from the scope not being well defined.

2. Mysterious Stakeholders: Incomplete documentation of all stakeholders is a major risk for any project that results when full and detailed stakeholder descriptions and Analysis is not included.

3. Unconstrained Constraints: Knowing how much leeway there is in your schedule and budget for each task, and where delays or cost overruns can be made up.

4. Suspicious Status Reports: Status reports that are unclear, inconsistent, late, or lack specific measures. These can include vague or overly optimistic language like “very soon” or “marginal increase” in costs.

5. Discord and Drama: Unhappy team members that cause major trouble in the project.

Section: 10.2 Information Needs and Reporting Level: Intermediate

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Chapter 10

Problems Cost Variance Note to instructors: 𝐸𝑉 − 𝐴𝐶 = 𝐶𝑉 1. If EV=$2,000, AC=$1,800, PV=$1,500, ST=10, and AT=8, what is CV? Ans: 200 Section: 10.3 Earned Value Analysis Level: Easy

2. If EV=$2,500, AC=$2,600, PV=$3,000, ST=10, and AT=14, what is CV? Ans: (100) Section: 10.3 Earned Value Analysis Level: Easy

3. If EV=$2,500,000, AC=$2,800,000, PV=$2,400,000, ST=125, and AT=123, what is CV? Ans: (300,000) Section: 10.3 Earned Value Analysis Level: Easy

4. If EV=$2,800,000, AC=$2,500,000, PV=$2,700,000, ST=125, and AT=115, what is CV? Ans: 300,000 Section: 10.3 Earned Value Analysis Level: Easy

5. If EV=$5,500, AC=$5,400, PV=$5,600, ST=8, and AT=7, what is CV? Ans: 100 Section: 10.3 Earned Value Analysis Level: Easy

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Chapter 10

Schedule Variance Note to instructor: 𝐸𝑉 − 𝑃𝑉 = 𝑆𝑉 6. If EV=$2,000, AC=$1,800, PV=$1,500, ST=10, and AT=8, what is SV? Ans: 500 Section: 10.3 Earned Value Analysis Level: Easy

7. If EV=$2,500, AC=$2,600, PV=$3,000, ST=10, and AT=14, what is SV? Ans: (500) Section: 10.3 Earned Value Analysis Level: Easy

8. If EV=$2,500,000, AC=$2,800,000, PV=$2,400,000, ST=125, and AT=123, what is SV? Ans: 100,000 Section: 10.3 Earned Value Analysis Level: Easy

9. If EV=$2,800,000, AC=$2,500,000, PV=$2,700,000, ST=125, and AT=115, what is SV? Ans: 100,000 Section: 10.3 Earned Value Analysis Level: Easy

10. If EV=$5,500, AC=$5,400, PV=$5,600, ST=8, and AT=7, what is SV? Ans: (100) Section: 10.3 Earned Value Analysis Level: Easy

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Chapter 10

Time Variance Note to instructor: 𝑆𝑇 − 𝐴𝑇 = 𝑇𝑉 11. If EV=$2,000, AC=$1,800, PV=$1,500, ST=10, and AT=8, what is TV? Ans: 2.0 Section: 10.3 Earned Value Analysis Level: Easy

12. If EV=$2,500, AC=$2,600, PV=$3,000, ST=10, and AT=14, what is TV? Ans: (4.0) Section: 10.3 Earned Value Analysis Level: Easy

13. If EV=$2,500,000, AC=$2,800,000, PV=$2,400,000, ST=125, and AT=123, what is TV? Ans: 2.00 Section: 10.3 Earned Value Analysis Level: Easy

14. If EV=$2,800,000, AC=$2,500,000, PV=$2,700,000, ST=125, and AT=115, what is TV? Ans: 10.0 Section: 10.3 Earned Value Analysis Level: Easy

15. If EV=$5,500, AC=$5,400, PV=$5,600, ST=8, and AT=7, what is TV? Ans: 1.00 Section: 10.3 Earned Value Analysis Level: Easy

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Chapter 10

Cost Performance Index Note to instructor: 𝐸𝑉 = 𝐶𝑃𝐼 𝐴𝐶

16. If EV=$2,000, AC=$1,800, PV=$1,500, ST=10, and AT=8, what is CPI? Answer to two decimal points.

Ans: 1.11 Section: 10.3 Earned Value Analysis Level: Easy

17. If EV=$2,500, AC=$2,600, PV=$3,000, ST=10, and AT=14, what is CPI? Answer to two decimal points.

Ans: 0.96 Section: 10.3 Earned Value Analysis Level: Easy

18. If EV=$2,500,000, AC=$2,800,000, PV=$2,400,000, ST=125, and AT=123, what is CPI? Answer to two decimal points.

Ans: 0.89 Section: 10.3 Earned Value Analysis Level: Easy

19. If EV=$2,800,000, AC=$2,500,000, PV=$2,700,000, ST=125, and AT=115, what is CPI? Answer to two decimal points.

Ans: 1.12 Section: 10.3 Earned Value Analysis Level: Easy

20. If EV=$5,500, AC=$5,400, PV=$5,600, ST=8, and AT=7, what is CPI? Answer to two decimal points.

Ans: 1.02 Section: 10.3 Earned Value Analysis Level: Easy

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Chapter 10

Schedule Performance Index Note to instructor: 𝐸𝑉 = 𝑆𝑃𝐼 𝑃𝑉

21. If EV=$2,000, AC=$1,800, PV=$1,500, ST=10, and AT=8, what is SPI? Answer to two decimal points.

Ans: 1.33 Section: 10.3 Earned Value Analysis Level: Easy

22. If EV=$2,500, AC=$2,600, PV=$3,000, ST=10, and AT=14, what is SPI? Answer to two decimal points.

Ans: 0.83 Section: 10.3 Earned Value Analysis Level: Easy

23. If EV=$2,500,000, AC=$2,800,000, PV=$2,400,000, ST=125, and AT=123, what is SPI? Answer to two decimal points.

Ans: 1.04 Section: 10.3 Earned Value Analysis Level: Easy

24. If EV=$2,800,000, AC=$2,500,000, PV=$2,700,000, ST=125, and AT=115, what is SPI? Answer to two decimal points.

Ans: 1.04 Section: 10.3 Earned Value Analysis Level: Easy

25. If EV=$5,500, AC=$5,400, PV=$5,600, ST=8, and AT=7, what is SPI? Answer to two decimal points.

Ans: 0.98 Section: 10.3 Earned Value Analysis Level: Easy

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Chapter 10

Time Performance Index Note to instructor: 𝑆𝑇 = 𝑇𝑃𝐼 𝐴𝑇

26. If EV=$2,000, AC=$1,800, PV=$1,500, ST=10, and AT=8, what is TPI? Answer to two decimal points.

Ans: 1.25 Section: 10.3 Earned Value Analysis Level: Easy

27. If EV=$2,500, AC=$2,600, PV=$3,000, ST=10, and AT=14, what is TPI? Answer to two decimal points.

Ans: 0.71 Section: 10.3 Earned Value Analysis Level: Easy

28. If EV=$2,500,000, AC=$2,800,000, PV=$2,400,000, ST=125, and AT=123, what is TPI? Answer to two decimal points.

Ans: 1.02 Section: 10.3 Earned Value Analysis Level: Easy

29. If EV=$2,800,000, AC=$2,500,000, PV=$2,700,000, ST=125, and AT=115, what is TPI? Answer to two decimal points.

Ans: 1.09 Section: 10.3 Earned Value Analysis Level: Easy

30. If EV=$5,500, AC=$5,400, PV=$5,600, ST=8, and AT=7, what is TPI? Answer to two decimal points.

Ans: 1.14 Section: 10.3 Earned Value Analysis Level: Easy

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Chapter 10

Cost-Schedule Index Note to instructor: 𝐶𝑆𝐼 = (𝐶𝑃𝐼)(𝑆𝑃𝐼). This is the approach taken with these problems.

They give a value for EV that is not required to work the problem.2Note that there are two additional ways to compute CSI: 𝐶𝑆𝐼 = (𝐸𝑉⁄ )(𝐸𝑉⁄ ) = 𝐸𝑉 . ⁄(𝐴𝐶)(𝑃𝑉) 𝐴𝐶 𝑃𝑉

31. If CPI=1.15, SPI=0.98, and EV=$1,500, what is CSI? Answer to two decimal points.

Ans: 1.13 Section: 10.3 Earned Value Analysis Level: Easy

32. If CPI=1.22, SPI=1.15, and EV=$2,000, what is CSI? Answer to two decimal points.

Ans: 1.40 Section: 10.3 Earned Value Analysis Level: Easy

33. If CPI=0.87, SPI=0.86, and EV=$3,000, what is CSI? Answer to two decimal points.

Ans: 0.75 Section: 10.3 Earned Value Analysis Level: Easy

34. If CPI=0.85, SPI=0.85, and EV=$3,000,000, what is CSI? Answer to two decimal points.

Ans: 0.72 Section: 10.3 Earned Value Analysis Level: Easy

35. If CPI=1.17, SPI=1.13, and EV=$3,500,000, what is CSI? Answer to two decimal points.

Ans: 1.32 Section: 10.3 Earned Value Analysis Level: Easy

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Chapter 10

Chapter 11 Project Control True/False 1. It is easier to control something later rather than earlier.

Ans: False Section: Introduction Level: Easy

2. The project manager is responsible for all control on a project.

Ans: False Section: Introduction Level: Easy

3. All problems have a human element.

Ans: True Section: Introduction Level: Easy

4. It is helpful to think of control as coercive.

Ans: False Section: Introduction Level: Easy

5. The measurement of human resource conservation is fairly standardized.

Ans: False Section: 11.1 The Fundamental Purposes of Control Level: Easy

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Chapter 11

6. Human resource accounting is well accepted by the accounting profession.

Ans: False Section: 11.1 The Fundamental Purposes of Control Level: Easy

7. The techniques of financial control, both conservation and regulation, are well known.

Ans: True Section: 11.1 The Fundamental Purposes of Control Level: Easy

8. The client organization, through its agent, the PM, is responsible for the conservation and proper use of resources owned by the client or owned by the parent and charged to the client.

Ans: False Section: 11.1 The Fundamental Purposes of Control Level: Easy

9. The process of controlling a project (or any system) is simply waiting for something to go wrong and then, if possible, fixing it.

Ans: False Section: 11.2 Three Types of Control Processes Level: Easy

10. No matter what our purpose in controlling a project, there are four basic types of control mechanisms we can use.

Ans: False Section: 11.2 Three Types of Control Processes Level: Easy

11. Cybernetic controls are also called steering controls.

Ans: True Section: 11.2 Three Types of Control Processes Level: Easy

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Chapter 11

12. Cybernetic control is by far the most common type of control system.

Ans: True Section: 11.2 Three Types of Control Processes Level: Easy

13. A cybernetic control system that acts to reduce deviations from standard is called a reduction feedback loop.

Ans: False Section: 11.2 Three Types of Control Processes Level: Easy

14. In order to establish total control over a system, the controller must be able to take a counteraction for every action the system can take.

Ans: True Section: 11.2 Three Types of Control Processes Level: Easy

15. Human response to steering controls tends to be positive.

Ans: True Section: 11.2 Three Types of Control Processes Level: Easy

16. The project plan, budget, and schedule are all control documents.

Ans: True Section: 11.2 Three Types of Control Processes Level: Easy

17. Go/no-go controls operate only when and if the controller uses them.

Ans: True Section: 11.2 Three Types of Control Processes Level: Easy

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Chapter 11

18. Phase-gated processes are a form of go/no-go control.

Ans: True Section: 11.2 Three Types of Control Processes Level: Easy

19. Phase-gated processes are also known as tool gates.

Ans: True Section: 11.2 Three Types of Control Processes Level: Easy

20. The phase-gated process is most commonly used for new product/service development.

Ans: True Section: 11.2 Three Types of Control Processes Level: Easy

21. DMAIC is part of Six Sigma.

Ans: True Section: 11.2 Three Types of Control Processes Level: Easy

22. Milestones and phase-gates are essentially the same thing.

Ans: False Section: 11.2 Three Types of Control Processes Level: Easy

23. The criteria for passing each phase-gate are developed in the project planning stage.

Ans: True Section: 11.2 Three Types of Control Processes Level: Easy

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Chapter 11

24. Postcontrols are applied after the fact.

Ans: True Section: 11.2 Three Types of Control Processes Level: Easy

25. Postcontrols are seen as much the same as a report card.

Ans: True Section: 11.2 Three Types of Control Processes Level: Easy

26. Actual project performance depends in part on uncontrollable events.

Ans: True Section: 11.2 Three Types of Control Processes Level: Easy

27. A control system should be rigid.

Ans: False Section: 11.3 The Design of Control Systems Level: Easy

28. Some of the most important analytic tools available for the PM to use in controlling the project are variance analysis and trend projection.

Ans: True Section: 11.3 The Design of Control Systems Level: Easy

29. A critical ratio below one is desired.

Ans: False Section: 11.3 The Design of Control Systems Level: Easy

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Chapter 11

30. A project that is exactly on time and on budget will have a critical ratio of zero.

Ans: False Section: 11.3 The Design of Control Systems Level: Easy

31. Benchmarking controls the project management process rather than the project itself.

Ans: True Section: 11.3 The Design of Control Systems Level: Easy

32. In traditional approaches to project management the scope of the project is fixed at the beginning of the project and changes in scope are discouraged.

Ans: True Section: 11.3 The Design of Control Systems Level: Easy

33. With Agile approaches, project scope is assumed to be variable as change is a welcome opportunity to incorporate new information and customer feedback.

Ans: True Section: 11.3 The Design of Control Systems Level: Easy

34. The more creativity involved, the smaller the degree of uncertainty surrounding outcomes.

Ans: False Section: 11.4 Control of Change and Scope Creep Level: Easy

35. Too much control tends to inhibit creativity.

Ans: True Section: 11.4 Control of Change and Scope Creep Level: Easy

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Chapter 11

Multiple Choice 1. A majority of uncertainty has its source in systems that lie outside the project, in its what? a) Environment b) Stakeholder area c) Sourcing model d) Control zone Ans: a Section: Introduction Level: Easy

2. There are no purely mechanistic problems on projects. All problems have this element, too. a) Computer b) Client c) Workers d) Human Ans: d Section: Introduction Level: Easy

3. By and large, people respond to the goal-directedness of control systems in one of three general ways. Which of the following is not one of these ways? a) By active and positive participation and goal seeking b) By passive participation in order to avoid loss c) By active but negative participation and resistance d) By actively working to change the goals of the project Ans: d Section: Introduction Level: Easy

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Chapter 11

4. Control is focused on three elements of a project. What are they? a) Scope, quality, and customer satisfaction b) Performance, delivery, and cost c) Scope, cost, and time d) Cost, time, and customer satisfaction Ans: c Section: Introduction Level: Easy

5. On a project, which area does the following impact? Quality or reliability problems occur. a) Scope b) Cost c) Time d) None of the above Ans: a Section: Introduction Level: Easy

6. On a project, which area does the following impact? Technological breakthroughs affect the project. a) Scope b) Cost c) Time d) None of the above Ans: a Section: Introduction Level: Easy

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Chapter 11

7. On a project, which area does the following impact? The scope of the work increases. a) Scope b) Cost c) Time d) None of the above Ans: b Section: Introduction Level: Easy

8. On a project, which area does the following impact? Corrective control was not exercised in time. a) Scope b) Cost c) Time d) None of the above Ans: b Section: Introduction Level: Easy

9. On a project, which area does the following impact? Task sequencing was incorrect. a) Scope b) Cost c) Time d) None of the above Ans: c Section: Introduction Level: Easy

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Chapter 11

10. On a project, which area does the following impact? Necessary preceding tasks were incomplete. a) Scope b) Cost c) Time d) None of the above Ans: c Section: Introduction Level: Easy

11. Physical asset control is concerned with these types of asset maintenance. a) Detective or estimative b) Addition or removal c) Detection or estimation d) Preventive or corrective Ans: d Section: 11.1 The Fundamental Purposes of Control Level: Easy

12. When performing control, project managers need to be attentive to what? a) Maintaining laissez faire leadership b) Avoiding directive behaviors c) Regulation and conservation equally d) Regulation more than conservation Ans: c Section: 11.1 The Fundamental Purposes of Control Level: Easy

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Chapter 11

13. The two fundamental objectives of control are the regulation of results and what? a) Procurement of organizational assets b) Distribution of organizational assets c) Stewardship of organizational assets d) Refurbishing of organizational assets Ans: c Section: 11.1 The Fundamental Purposes of Control Level: Easy

14. Identify the item that is not one of the three types of control processes described by the authors. a) Cybernetic control b) Robotic control c) Go/no-go control d) Postcontrol Ans: b Section: 11.2 Three Types of Control Processes Level: Easy

15. Most control systems used in project management today fall into this category of control system. a) Cybernetic control b) Robotic control c) Go/no-go control d) Postcontrol Ans: c Section: 11.2 Three Types of Control Processes Level: Easy

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Chapter 11

16. Which of the following is the key feature of cybernetic control systems? a) Manual operations b) Directional controls c) Automatic operation d) Specific preconditions Ans: c Section: 11.2 Three Types of Control Processes Level: Easy

17. An automatic control system containing a negative feedback loop is referred to as a) Cybernetic b) Go/no-go c) Postcontrol d) Critical ratio Ans: a Section: 11.2 Three Types of Control Processes Level: Easy

18. The cybernetic control system that acts to reduce deviations from standard is called a what? a) Nonautomatic modification b) Critical ratio c) Positive feedback loop d) Negative feedback loop Ans: d Section: 11.2 Three Types of Control Processes Level: Easy

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Chapter 11

19. This controls take the form of testing to see if some specific precondition has been met. a) Postcontrol b) Go/no-go c) Cybernetic d) Monitoring Ans: b Section: 11.2 Three Types of Control Processes Level: Easy

20. These controls are usually viewed as helpful rather than as a source of unwelcome pressure if the controlees perceive themselves as able to perform inside the prescribed limits. a) Steering b) Negative feedback c) Postcontrols d) Cybernetic Ans: a Section: 11.2 Three Types of Control Processes Level: Easy

21. Perhaps the most difficult task in creating a cybernetic control system is what? a) Finding a common standard for all the elements we wish to control b) Limiting the elements we wish to control to a reasonable number c) Setting the standards for each element of output we wish to control d) Selling top management on the list of elements to be controlled Ans: c Section: 11.2 Three Types of Control Processes Level: Easy

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Chapter 11

22. Go/no-go controls operate how? a) Continuously b) Only when exceptions are detected c) Only when and if the controller uses them d) Only at phase gate reviews Ans: c Section: 11.2 Three Types of Control Processes Level: Easy

23. Because project milestones may not occur at periodic intervals, go/no-go controls should be linked to what, not simply to the calendar. a) Actual plans and to the occurrence of real events b) Corporate budgeting process c) Portfolio management review process d) Capital budgeting process Ans: a Section: 11.2 Three Types of Control Processes Level: Easy

24. The most important rule for any subordinate is the Prime Law of Life on any project is what? a) Never let the boss be surprised! b) Newton’s Law c) Parkinson’s Law d) Prime Directive Ans: a Section: 11.2 Three Types of Control Processes Level: Easy

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Chapter 11

25. This process controls the project at various points in the life cycle to make sure that the project remains on course. This is opposed to waiting until the project is completed and then finding out it doesn’t meet the objectives of the organization a) Portfolio b) Phased-step c) Phase-gate d) Overarching Ans: c Section: 11.2 Three Types of Control Processes Level: Easy

26. The project manager should ensure that the status reports given to senior management contain information that is current enough to be what? a) Understandable b) Explainable c) Meaningful d) Actionable Ans: d Section: 11.2 Three Types of Control Processes Level: Intermediate

27. PMBOK recognizes the importance of what is called OPA. What does OPA stand for? a) Organizational Process Assets b) Operational Project Accounts c) Optimal Program Arrangements d) Original Procedural Architecture Ans: a Section: 11.2 Three Types of Control Processes Level: Intermediate

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28. These controls are seen as much the same as a report card. a) Postcontrols b) WBSs c) Critical ratios d) Cybernetics Ans: a Section: 11.2 Three Types of Control Processes Level: Easy

29. These controls are directed towards improving chances for future projects to meet their goals. a) Postcontrols b) Go/no-go decisions c) Cybernetics d) Negative feedback loops Ans: a Section: 11.2 Three Types of Control Processes Level: Easy

30. Post-project controls or reviews are examples of what? a) Postcontrols b) Go/no-go decisions c) Cybernetics d) Inefficiencies Ans: a Section: 11.2 Three Types of Control Processes Level: Easy

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31. The culmination of the postcontrol report is a set of recommendations covering what? a) Everything that went wrong with the project b) Who was at fault for the errors in the project c) How the project performed relative to the initial project plan d) The ways that future projects can be improved Ans: d Section: 11.3 The Design of Control Systems Level: Easy

32. Scope creep can be caused by who? a) Customer b) Team members c) Audit team d) Customer and team members Ans: d Section: 11.3 The Design of Control Systems Level: Easy

33. The critical ratio control chart uses a ratio made up of two parts -- the ratio of actual progress to scheduled progress, and the what? a) Ratio of earned value to planned cost b) Ratio of budgeted cost to actual cost c) Ratio of actual cost to budgeted cost d) Ratio of planned cost to earned value Ans: b Section: 11.3 The Design of Control Systems Level: Easy

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34. This is calculated as (actual progress/scheduled progress) × (budgeted cost/actual cost) a) Critical ratio b) Highlighted ratio c) Cybernetic ratio d) Efficiency ratio Ans: a Section: 11.3 The Design of Control Systems Level: Easy 35. This is a management approach that may be used to make comparisons to “best in class” practices across organizations a) Processing b) Benchmarking c) Leveling d) Standardizing Ans: b Section: 11.3 The Design of Control Systems Level: Easy

36. Project changes result from three basic causes. Which of the following is not one of those causes? a) Uncertainty about the technology on which the work of the project or its output is based b) An increase in the knowledge base or sophistication of the client/user leading to scope creep c) Changes to the environment in which the project is being completed d) A modification of the rules applying to the process of carrying out the project or to its output Ans: c Section: 11.4 Control of Change and Scope Creep Level: Easy

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37. Thamhain (2013) found that this was not only the most frequent risk class but also had the most impact on project performance. a) Increasing stakeholder involvement b) Changing leadership c) Decreasing costs d) Changing project requirements Ans: d Section: 11.4 Control of Change and Scope Creep Level: Easy 38. Change control systems, in some industries, are part of a firm’s what? a) Configuration management system b) Internal IDC system c) Cybernetic system d) Early warning system Ans: a Section: 11.4 Control of Change and Scope Creep Level: Easy

39. In order to control creative projects the project manager must adopt one or some combination of three general approaches to the problem. Which of the following is not one of these approaches? a) Control of input resources b) Creativity check c) Process review d) Personnel reassignments Ans: b Section: 11.4 Control of Change and Scope Creep Level: Intermediate

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Fill-in-the-Blanks 1. Physical asset control requires control of the of physical assets and is concerned with asset maintenance, whether preventative or corrective.

Ans: use Section: 11.1 The Fundamental Purposes of Control Level: Intermediate

2. With respect to financial controls, courts will require the practice of financial controls, practices, and record-keeping.

regarding

Ans: due diligence Section: 11.1 The Fundamental Purposes of Control Level: Easy

3. The stewardship of human resources requires development of people.

and

the growth and

Ans: controlling and maintaining Section: 11.1 The Fundamental Purposes of Control Level: Easy

4. One of the two fundamental objectives of control is the alteration of activities.

of results through the

Ans: regulation Section: 11.1 The Fundamental Purposes of Control Level: Easy

5. One of the two fundamental objectives of control is the stewardship of organizational .

Ans: assets Section: 11.1 The Fundamental Purposes of Control Level: Easy

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6.

asset control is concerned with asset maintenance.

Ans: Physical Section: 11.1 The Fundamental Purposes of Control Level: Easy

7. Stewardship of resources requires controlling and maintaining the growth and development of people.

Ans: human Section: 11.1 The Fundamental Purposes of Control Level: Easy

8. The most common type of control system is the

, or steering control.

Ans: cybernetic Section: 11.2 Three Types of Control Processes Level: Easy

9. In a cybernetic control system using a negative feedback loop, the speed or force with which the control operates is, in general, to the size of the deviation from standard.

Ans: proportional Section: 11.2 Three Types of Control Processes Level: Intermediate

10. Perhaps the most difficult task in creating a cybernetic control system is setting the for each element of output we wish to control.

Ans: standards Section: 11.2 Three Types of Control Processes Level: Easy

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11. CR stands for

.

Ans: critical ratio Section: 11.2 Three Types of Control Processes Level: Easy

12. All control systems are merely variants, extensions, or nonautomatic modifications of controls.

Ans: cybernetic Section: 11.2 Three Types of Control Processes Level: Intermediate

13. Most of the control in project management falls into the

category.

Ans: go/no-go Section: 11.2 Three Types of Control Processes Level: Easy

14. DMAIC stands for

.

Ans: define-measure-analyze-improve-control Section: 11.2 Three Types of Control Processes Level: Intermediate

15. Postcontrol is directed toward improving the chances for goals.

projects to meet their

Ans: future Section: 11.2 Three Types of Control Processes Level: Easy

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16. OPA stands for

.

Ans: organizational process assets Section: 11.2 Three Types of Control Processes Level: Easy

17.

is making comparisons to “best in class” practices across organizations.

Ans: Benchmarking Section: 11.2 Three Types of Control Processes Level: Easy

18. The sprint sprint.

and sprint

are two scrum events that are held at the end of the

Ans: review, retrospective (in either order) Section: 11.2 Three Types of Control Processes Level: Easy

19. The purpose of the sprint meeting is to demonstrate the product functionality that was created during the sprint and to obtain feedback from key stakeholders to optimize future value.

Ans: review Section: 11.2 Three Types of Control Processes Level: Easy

20. It is to be expected that the feedback obtained during a sprint review may lead to new tasks being added to the product .

Ans: backlog Section: 11.2 Three Types of Control Processes Level: Easy

21. Changes to the product

effectively change the scope of the project.

Ans: backlog Section: 11.2 Three Types of Control Processes Level: Easy

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22. The sprint meeting.

is held between the sprint review and the next sprint planning

Ans: retrospective Section: 11.2 Three Types of Control Processes Level: Easy

23. For all but

changes, a risk identification and analysis should be performed.

Ans: minor Section: 11.4 Control of Change and Scope Creep Level: Easy

24. The process review focuses on the process of outcomes per se.

outcomes rather than the

Ans: reaching Section: 11.4 Control of Change and Scope Creep Level: Easy

25.

: A person with organizational clout who takes on personal responsibility (though not usually day-to-day management) for the successful completion of a project for the organization.

Ans: Champion Section: Glossary Level: Easy

26.

: Assuring that reality meets expectations or plans. Usually involves the process of keeping actions within limits to assure that certain outcomes will in fact happen.

Ans: Control Section: Glossary Level: Easy

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27.

: A chart of a measure of performance—commonly a quality characteristic— over time, showing how it changes compared to a desired mean and the upper and lower limits.

Ans: Control chart Section: Glossary Level: Easy

28.

: A ratio of progress (actual/scheduled) times a cost ratio (budgeted/actual).

Ans: Critical ratio Section: Glossary Level: Easy

29.

: A monitoring system that forewarns the PM if trouble arises.

Ans: Early warning system Section: Glossary Level: Easy

30.

: Initially, a type of gauge that quickly tells an inspector if an object’s dimension is within certain limits. In the case of project management, this can be any measure that allows a manager to decide whether to continue, change, or terminate an activity or a project.

Ans: Go/no-go Section: Glossary Level: Easy

31.

: Meeting held between the sprint review and the next sprint planning meeting.

During the meeting the scrum team discusses what worked well during the sprint, what did not work well, and identifies opportunities for improvement.

Ans: Sprint retrospective Section: Glossary Level: Easy

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32.

: Meeting where product functionality that was created during the sprint is demonstrated and feedback obtained from key stakeholders to optimize future value.

Ans: Sprint review Section: Glossary Level: Easy

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Essay 1. Identify some of the factors that can cause a project to require control of performance.

Answer Potential factors suggesting a need for control of performance include: the recognition of an unexpected technical problem, insufficient resources are available when needed, insurmountable technical difficulties are present, quality or reliability problems occur, clients require changes in system specifications, interfunctional complications arise, or technological breakthroughs affect the project.

Section: Introduction Level: Easy

2. Identify some of the factors that can cause a project to require control of cost.

Answer Potential factors suggesting a need for control of cost include: technical difficulties require more resources, the scope of work increases, initial bids or estimates were too low, reporting was poor or untimely, budgeting was inadequate, corrective control was not exercised in time, or input price changes occurred.

Section: Introduction Level: Easy

3. Identify some of the factors that can cause a project to require control of time.

Answer Potential factors suggesting a need for control of time include: technical difficulties took longer than planned to solve, initial time estimates were optimistic, task sequencing was incorrect, required inputs of material, personnel, or equipment were unavailable when needed, necessary preceding task were incomplete, customer-generated change orders required rework, or government regulations were altered.

Section: Introduction Level: Easy

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4. What are the two fundamental objectives of control?

Answer The two fundamental objectives of control are: the regulation of results through the alteration of activities, and the stewardship of organizational assets.

Section: 11.1 The Fundamental Purposes of Control Level: Easy

5. Describe the information requirements of a cybernetic controller.

Answer First, the project manager must define the precise characteristics of an output to be controlled. Second, standards must be set for each characteristic. Third, sensors must be acquired that will measure those characteristics at the desired level of precision. Fourth, these measurements must be transformed into a signal that can be compared to a standard signal. Fifth, the difference between the two is sent to the decision maker, which detects it. If it is sufficiently large, the decision maker transmits a signal to the effector that causes the operating system to react in a way that will counteract the deviation from standard. If the effector can take multiple actions, criteria must be built in to instruct the effector on which actions to take.

Section: 11.2 Three Types of Control Processes Level: Advanced

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Chapter 11

Problems Notes to instructor: 1) All of the problems below require the table shown below. 2) The problem can be presented as a single problem for the students to work or using the five fill-in-the-blank problems below. If the second approach is used, it is not necessary to assign all five problems.

Table for Students Task Actual Scheduled Budgeted Number Progress Progress Cost A 3 4 2 B 5 4 4 C 4 5 5 D 4 2 5 E 5 7 4

Actual Cost 3 3 5 4 5

Critical Ratio

Actual Cost 3 3 5 4 5

Critical Ratio 0.50 1.67 0.80 2.50 0.57

Solution Task Actual Scheduled Budgeted Number Progress Progress Cost A 3 4 2 B 5 4 4 C 4 5 5 D 4 2 5 E 5 7 4

1. Using the data in the table above and rounding your answer to two decimal points, what is the critical ratio for activity A? Ans: 0.50 Section: 11.3 The Design of Control Systems Level: Easy

2. Using the data in the table above and rounding your answer to two decimal points, what is the critical ratio for activity B? Ans: 1.67 Section: 11.3 The Design of Control Systems Level: Easy

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3. Using the data in the table above and rounding your answer to two decimal points, what is the critical ratio for activity C? Ans: 0.80 Section: 11.3 The Design of Control Systems Level: Easy

4. Using the data in the table above and rounding your answer to two decimal points, what is the critical ratio for activity D? Ans: 2.50 Section: 11.3 The Design of Control Systems Level: Easy

5. Using the data in the table above and rounding your answer to two decimal points, what is the critical ratio for activity E? Ans: 0.57 Section: 11.3 The Design of Control Systems Level: Easy

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Chapter 12 Project Auditing True/False 1. Project audits play an important role by helping ensure project success.

Ans: True Section: Introduction Level: Easy 2. The first and most straightforward dimension of project success is the project’s efficiency in meeting both the budget and the schedule.

Ans: True Section: 12.1 Purposes of Evaluation – Goals of the System Level: Easy

3. Six Sigma and TQM are for production management and are not applied to projects.

Ans: False Section: 12.1 Purposes of Evaluation – Goals of the System Level: Intermediate

4. Direct project goals are the only goals the PM needs to be concerned with.

Ans: False Section: 12.1 Purposes of Evaluation – Goals of the System Level: Easy

5. The identification of ancillary project goals is fairly straight forward.

Ans: False Section: 12.1 Purposes of Evaluation – Goals of the System Level: Easy

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6. One cannot measure performance against an unknown goal.

Ans: True Section: 12.1 Purposes of Evaluation – Goals of the System Level: Easy

7. Members of a project team are never quite comfortable in the presence of an auditor/evaluator.

Ans: True Section: 12.1 Purposes of Evaluation – Goals of the System Level: Easy

8. Projects have a single purpose.

Ans: False Section: 12.1 Purposes of Evaluation – Goals of the System Level: Easy

9. Project audits and management audits are essentially the same thing.

Ans: False Section: 12.2 The Project Audit Level: Easy

10. Computer-based projects are ordinarily very capital-intensive.

Ans: False Section: 12.2 The Project Audit Level: Easy 11. There are no practical constraints that may limit the depth of the project auditor’s investigation.

Ans: False Section: 12.2 The Project Audit Level: Easy

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12. Audits tend to lower the productivity on the project being audited.

Ans: True Section: 12.2 The Project Audit Level: Easy

13. While an audit can be performed at any level the organization wishes, four distinct levels are easily recognized and widely used. One of these is the general audit.

Ans: True Section: 12.2 The Project Audit Level: Easy

14. While an audit can be performed at any level the organization wishes, four distinct levels are easily recognized and widely used. One of these is the technical audit.

Ans: True Section: 12.2 The Project Audit Level: Easy

15. While an audit can be performed at any level the organization wishes, four distinct levels are easily recognized and widely used. One of these is the computer audit.

Ans: False Section: 12.2 The Project Audit Level: Easy

16. While an audit can be performed at any level the organization wishes, four distinct levels are easily recognized and widely used. One of these is the risk audit.

Ans: True Section: 12.2 The Project Audit Level: Easy

17. While an audit can be performed at any level the organization wishes, four distinct levels are easily recognized and widely used. One of these is the reward audit.

Ans: False Section: 12.2 The Project Audit Level: Easy

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18. The technical audit is usually the most detailed.

Ans: True Section: 12.2 The Project Audit Level: Easy

19. All audits take place at the end of the project.

Ans: False Section: 12.2 The Project Audit Level: Easy

20. Audits done later in the life cycle of a project are more valuable to the project.

Ans: False Section: 12.2 The Project Audit Level: Easy

21. Audits done later in the life cycle of a project are more valuable to the parent organization.

Ans: True Section: 12.2 The Project Audit Level: Easy

22. If the client is the federal government, the nature of the project audit is more or less precisely defined, as is the audit process.

Ans: True Section: 12.3 The Project Audit Life Cycle Level: Easy

23. The choice of the a/e team is critical to the success of the entire process.

Ans: True Section: 12.4 Some Essentials of An Audit/Evaluation Level: Easy

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24. The project manager cannot be on the a/e team.

Ans: False Section: 12.4 Some Essentials of An Audit/Evaluation Level: Easy

25. The main role of the a/e team is to conduct a thorough and complete examination of the project or some prespecified aspect of the project.

Ans: True Section: 12.4 Some Essentials of An Audit/Evaluation Level: Easy

26. All of the information for an a/e audit will come from the project itself.

Ans: False Section: 12.4 Some Essentials of An Audit/Evaluation Level: Intermediate

27. Contact between a/e team members and project team members, or between the a/e team and other members of the organization who have knowledge of the project, should always go through the PM. Ans: False Section: 12.4 Some Essentials of An Audit/Evaluation Level: Easy

28. Measurement is an integral part of the a/e process.

Ans: True Section: 12.5 Measurement Level: Easy

29. It can be difficult to know when a milestone has been completed.

Ans: False Section: 12.5 Measurement Level: Easy

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30. Performance against planned budget and schedule usually poses no major measurement problems.

Ans: True Section: 12.5 Measurement Level: Easy

31. When the objectives of a project have been stated in terms of profits, rates of return, or discounted cash flows, evaluation is easier.

Ans: False Section: 12.5 Measurement Level: Easy

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Multiple Choice 1. This tries to capture the essence of project successes and failures so that future projects can benefit from past experiences. a) Auditing b) Postcontrol c) Baselining d) Ruling Ans: b Section: Introduction Level: Easy

2. The project audit covers what? a) Only financial matters b) Everything except operating matters c) Only ethical and financial matters d) Any specified scope of importance to management Ans: d Section: Introduction Level: Easy

3. This appraises the progress and performance of a project compared to its planned progress and performance or to the progress and performance of other similar projects. a) Project control b) Project evaluation c) Project monitoring d) Risk management Ans: b Section: Introduction Level: Easy

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4. Postcontrol cannot change the past, but it tries to capture the essence of project successes and failures so that future projects can benefit from past experiences. The PMBOK refers to this as a) audits b) lessons learned c) feedback loops d) evaluation cycles Ans: b Section: Introduction Level: Easy

5. This is one of the four independent dimensions of project success, and is focused on meeting both the budget and schedule established in the project plan. a) Project efficiency b) Customer impact/satisfaction c) Business/direct success d) Future potential Ans: a Section: 12.1 Purposes of Evaluation – Goals of the System Level: Easy

6. Which of the following is not one of the top three project success factors, from a project manager’s perspective? a) Customer impact/satisfaction b) Business/direct success c) Future potential d) Efficiency Ans: c Section: 12.1 Purposes of Evaluation – Goals of the System Level: Intermediate

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7. This dimension of project success includes the obvious factors of meeting the project's technical and operational specifications. It also includes factors relating to loyalty and repurchase. a) Project efficiency b) Customer impact/satisfaction c) Business/direct success d) Future potential Ans: b Section: 12.1 Purposes of Evaluation – Goals of the System Level: Easy

8. This dimension of project success is measured primarily in terms of the level of commercial success and market share. For internal projects, however, the factors might include such measures as yields, cycle times, processing steps, quality, and so on. a) Business/direct success b) Customer impact/satisfaction c) Project efficiency d) Future potential Ans: a Section: 12.1 Purposes of Evaluation – Goals of the System Level: Easy

9. This dimension of project success includes factors relating to opening a new market, developing a new line of products or services. Alternatively, if an internal project, success factors include developing new technologies, skills, or competencies. a) Project efficiency b) Customer impact/satisfaction c) Business/direct success d) Future potential Ans: d Section: 12.1 Purposes of Evaluation – Goals of the System Level: Easy Bloom’s: Comprehension AACSB: Analysis Page: 462

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10. Identification of the direct goals of a project requires what? a) A reading of the project structure b) A reading of the project proposal c) A reading of the budget d) A reading of the WBS Ans: b Section: 12.1 Purposes of Evaluation – Goals of the System Level: Intermediate

11. These goals are unplanned but important contributions to the project and its parent. a) Direct b) Secondary c) Off-book d) Ancillary Ans: d Section: 12.1 Purposes of Evaluation – Goals of the System Level: Advanced

12. There are tough problems associated with finding the ancillary goals of a project. a) If a goal is not openly acknowledged, project team members need not fear that their performance can be weighed and found wanting. b) Members of a project team are never quite comfortable in the presence of an auditor/evaluator. c) It is often very difficult for the project manager and senior management to agree on the ancillary goals. d) The diverse set of direct and ancillary, project, and individual goals do not bear clear, organizationally determined priorities.

Ans: c Section: 12.1 Purposes of Evaluation – Goals of the System Level: Advanced

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13. A meeting place for the project team, a display area for the charts that show the project’s progress, a central repository for project files and reports, and an office for the project management and other project administrators. a) Project office b) Project conference room c) War room d) Project club house Ans: c Section: 12.1 Purposes of Evaluation – Goals of the System Level: Advanced 14. This section of the project audit report contains the auditor’s conclusions regarding progress together with recommendations for any changes. a) Future project status b) Critical management issues c) Introduction d) Risk management Ans: a Section: 12.1 Purposes of Evaluation – Goals of the System Level: Easy

15. This section of the project audit report contains a description of the project to provide a framework of understanding for the reader. a) Future project status b) Critical management issues c) Introduction d) Risk management Ans: c Section: 12.1 Purposes of Evaluation – Goals of the System Level: Easy

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16. This section of the project audit report should contain a review of major issues associated with the project and their projected impact on project time/cost/scope. a) Future project status b) Critical management issues c) Introduction d) Risk management Ans: d Section: 12.1 Purposes of Evaluation – Goals of the System Level: Easy

17. This section of the project audit report should contain all issues that the auditor feels require close monitoring by senior management. a) Future project status b) Critical management issues c) Introduction d) Risk management Ans: b Section: 12.1 Purposes of Evaluation – Goals of the System Level: Easy

18. The formal audit report may be presented in various formats but should, at a minimum, contain comments on a number of points. Indicate which part of the report discusses the following: What assumptions or limitations affect the data in the audit? a) Current status of the project b) Risk assessment c) Information pertinent to other projects d) Limitations of the audit Ans: d Section: 12.2 The Project Audit Level: Easy

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19. The formal audit report may be presented in various formats but should, at a minimum, contain comments on a number of points. Indicate which part of the report discusses the following: Does the work actually completed match the planned level of completion? a) Current status of the project b) Risk assessment c) Information pertinent to other projects d) Limitations of the audit Ans: a Section: 12.2 The Project Audit Level: Easy

20. The formal audit report may be presented in various formats but should, at a minimum, contain comments on a number of points. Indicate which part of the report discusses the following: What is the potential for project failure or monetary loss? a) Current status of the project b) Risk assessment c) Information pertinent to other projects d) Limitations of the audit Ans: b Section: 12.2 The Project Audit Level: Easy

21. The formal audit report may be presented in various formats but should, at a minimum, contain comments on a number of points. Indicate which part of the report discusses the following: What lessons learned from the project being audited can be applied to other projects being undertaken by the organization? a) Current status of the project b) Risk assessment c) Information pertinent to other projects d) Limitations of the audit Ans: c Section: 12.2 The Project Audit Level: Easy

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22. This is a thorough examination of the management of a project, its methodology and procedures, its records, its properties, its budgets and expenditures, and its degree of completion. It may deal with the project as a whole, or only with a part of the project. a) ethical audit b) project methodology c) project audit d) project well-check Ans: c Section: 12.2 The Project Audit Level: Easy

23. We have seen a rise in agile management for projects with what? a) High costs b) Uncertain scope c) Low employee morale d) Low quality Ans: b Section: 12.2 The Project Audit Level: Easy

24. Two of the most common limits on the depth of an investigation and level of detail presented in an audit report are what? a) The personality of the auditor and cooperation received b) Scope and objectives c) Computer support and existing documentation d) Money and time Ans: d Section: 12.2 The Project Audit Level: Easy

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25. The accumulation, storage, and maintenance of auditable data are important cost elements. Such storage may be critically important in meeting the legal test of what? a) Completeness b) Accuracy c) Due diligence d) Capacity Ans: c Section: 12.2 The Project Audit Level: Intermediate

26. Project morale may suffer if the project audit report is not written with what? a) Honest tone b) Complete story c) Stakeholder’s perspective d) Constructive tone Ans: d Section: 12.2 The Project Audit Level: Easy

27. Audits done early in the project lifecycle are often focused on what? a) Technical issues b) Management issues c) Financial issues d) Personnel issues Ans: a Section: 12.2 The Project Audit Level: Easy

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28. A typical detailed audit is conducted when what is required? a) A follow-up to the general audit b) Effectiveness c) An ethical audit d) Full disclosure Ans: a Section: 12.2 The Project Audit Level: Easy

29. For audits made late in the project's life, these are major matters of interest. a) Technical issues b) Management issues c) Financial issues d) Personnel issues Ans: b Section: 12.2 The Project Audit Level: Easy

30. The value of project audits/evaluations conducted during the post-project stage will depend on the what? a) Links to future projects b) Costs of future projects c) Applicability of findings to future projects d) Conformity of future projects Ans: c Section: 12.2 The Project Audit Level: Easy

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31. If the audit report is to serve as a communication device, there should be a what for such documents? a) Repository b) Predetermined distribution list c) Stakeholder register d) Communication manager Ans: b Section: 12.2 The Project Audit Level: Intermediate 32. This section of an audit report contains the auditor’s conclusions regarding progress together with recommendations for any changes in technical approach, schedule, or budget that should be made in the remaining tasks. a) Introduction b) Current status c) Future project status d) Critical management issues Ans: c Section: 12.2 The Project Audit Level: Easy

33. This section of an audit report should contain the following measures of performance: cost, schedule, scope, and quality. a) Introduction b) Current status c) Future project status d) Critical management issues Ans: b Section: 12.2 The Project Audit Level: Easy

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34. This section of an audit report contains a description of the project to provide a framework of understanding for the reader. a) Introduction b) Current status c) Future project status d) Critical management issues Ans: a Section: 12.2 The Project Audit Level: Easy

35. This section of an audit report contains a description of the project to provide a framework of understanding for the reader. Project objectives are clearly delineated. a) Current status b) Future project status c) Introduction d) Risk management Ans: c Section: 12.2 The Project Audit Level: Easy

36. This section of the audit should be reported as of the time of the audit. It should contain the following measures of performance: cost, schedule, progress, and quality. a) Future project status b) Introduction c) Risk management d) Current status Ans: d Section: 12.2 The Project Audit Level: Easy

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37. This is a measure of the degree to which the output of a system conforms to prespecified characteristics. a) Scope b) Quality c) Cost d) Schedule Ans: b Section: 12.2 The Project Audit Level: Intermediate

38. This section of the audit report contains the auditor's conclusions regarding progress together with recommendations for any changes in technical approach, schedule, or budget that should be made in the remaining tasks. a) Introduction b) Current project status c) Future project status d) Risk management Ans: c Section: 12.2 The Project Audit Level: Easy

39. This section of an audit report includes all issues the auditor feels require close monitoring by senior management. a) Introduction b) Current status c) Future project status d) Critical management issues Ans: d Section: 12.2 The Project Audit Level: Easy

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Chapter 12

40. This section of the audit report should contain a review of major risks associated with the project and their projected impact on project time/cost/performance. a) Risk management b) Current project status c) Future project status d) Introduction Ans: a Section: 12.2 The Project Audit Level: Easy

41. This section of the audit report should contain all issues that the auditor feels require close monitoring by senior management, along with a brief explanation of the relationships between these issues and the objectives of the project. a) Introduction b) Critical management issues c) Current project status d) Future project status Ans: b Section: 12.2 The Project Audit Level: Easy

42. During the audit, the auditor/evaluator must maintain what and treat all materials gathered as confidential until the audit is formally released? a) Political and technical independence b) Political independence c) Technical independence d) Technical dependence Ans: a Section: 12.2 The Project Audit Level: Intermediate

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43. Which part of a financial audit deals with format dictated by legal regulations and professional standards? a) Measurement b) Record-keeping system c) Recommendations d) Qualifications to the audit report Ans: b Section: 12.2 The Project Audit Level: Easy

44. Which part of a financial audit deals mostly in financial terms? a) Measurement b) Record-keeping system c) Recommendations d) Qualifications to the audit report Ans: a Section: 12.2 The Project Audit Level: Easy

45. In which part of a financial audit is it customary to qualify statements if conditions dictate, but strong managerial pressure not to do so? a) Measurement b) Record-keeping system c) Recommendations d) Qualifications to the audit report Ans: d Section: 12.2 The Project Audit Level: Easy

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46. Which part of a financial audit usually has few or none, often restricted to management of accounting system? a) Measurement b) Record-keeping system c) Recommendations d) Qualifications to the audit report Ans: c Section: 12.2 The Project Audit Level: Easy

47. Which component of project audits has the characteristic of no standard system, uses any system desired by individual organization or dictated by contract? a) Measurement b) Record-keeping system c) Recommendations d) Qualifications to the audit report Ans: b Section: 12.2 The Project Audit Level: Easy

48. Which component of project audits has the characteristic of financial terms plus schedule, progress, resource usage, status of ancillary goals? a) Measurement b) Record-keeping system c) Recommendations d) Qualifications to the audit report Ans: a Section: 12.2 The Project Audit Level: Easy

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49. Which component of project audits has the characteristic of focusing on shortcomings of audit process? a) Measurement b) Record-keeping system c) Recommendations d) Qualifications to the audit report Ans: d Section: 12.2 The Project Audit Level: Easy

50. Which component of project audits has the characteristic of often required, and may cover any aspect of the project or its management? a) Measurement b) Record-keeping system c) Recommendations d) Qualifications to the audit report Ans: c Section: 12.2 The Project Audit Level: Easy

51. Which stage of a project has the following associated value of a project audit? Less useful, plan frozen, flexibility of team limited. a) Initiation b) Baseline schedule c) Implementation d) Preliminary plan/schedule budget Ans: b Section: 12.2 The Project Audit Level: Easy

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52. Which stage of a project has the following associated value of a project audit? More or less useful, depending on importance of project methodology to successful implementation. a) Initiation b) Baseline schedule c) Implementation d) Preliminary plan/schedule budget Ans: c Section: 12.2 The Project Audit Level: Easy

53. Which stage of a project has the following associated value of a project audit? Very useful, particularly for setting measurement standards to ensure conformance with standards. a) Initiation b) Baseline schedule c) Implementation d) Preliminary plan/schedule budget Ans: d Section: 12.2 The Project Audit Level: Easy

54. Which stage of a project has the following associated value of a project audit?

Significant value if audit takes place early—prior to 25 percent completion of initial planning stage. a) Initiation b) Baseline schedule c) Implementation d) Preliminary plan/schedule budget Ans: a Section: 12.2 The Project Audit Level: Easy

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55. This step involves starting the audit process, defining the purpose and scope of the audit, and gathering sufficient information to determine the proper audit methodology. a) Project audit initiation b) Project baseline definition c) Establishing an audit database d) Preliminary analysis of the project Ans: a Section: 12.3 The Project Audit Life Cycle Level: Easy

56. This step is to create a storage file for use by the audit team. a) Project audit initiation b) Project baseline definition c) Establishing an audit database d) Preliminary analysis of the project Ans: c Section: 12.3 The Project Audit Life Cycle Level: Easy

57. This phase of the cycle normally consists of identifying the performance areas to be evaluated, determining standards for each area through benchmarking, and so on. a) Project audit initiation b) Project baseline definition c) Establishing an audit database d) Preliminary analysis of the project Ans: b Section: 12.3 The Project Audit Life Cycle Level: Easy

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58. In this stage of the project, judgments are made. a) Project audit initiation b) Project baseline definition c) Establishing an audit database d) Preliminary analysis of the project Ans: d Section: 12.3 The Project Audit Life Cycle Level: Easy

59. This part of the audit life cycle includes the preparation of the audit report, organized by whatever format has been selected for use. a) Audit report preparation b) Project audit termination c) Establishing an audit database d) Preliminary analysis of the project Ans: a Section: 12.3 The Project Audit Life Cycle Level: Easy

60. This stage concludes the project audit. a) Audit report preparation b) Project audit termination c) Establishing an audit database d) Preliminary analysis of the project Ans: b Section: 12.3 The Project Audit Life Cycle Level: Easy

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61. Which of the following is not a project audit life cycle event? a) Project audit initiation b) Project baseline definition c) Establishing an audit database d) Post-completion analysis of the project Ans: d Section: 12.4 Some Essentials of an Audit/Evaluation Level: Easy

62. In order for an audit/evaluation team to be conducted with skill and precision, all of the following conditions must be met, except what? a) Proper selection of the team b) Setting a schedule convenient for the auditors c) Accessibility of all records and files d) Preservation of free contact with the project members Ans: b Section: 12.4 Some Essentials of an Audit/Evaluation Level: Easy

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Fill-in-the-Blanks 1. A major vehicle for evaluation is the inquiry into any aspect of the project.

audit, which is a more or less formal

Ans: project Section: Introduction Level: Easy

2. The term

means to set the value of or appraise.

Ans: evaluate Section: Introduction Level: Easy 3. The most immediate dimension of project success is the project’s both budget and schedule.

in meeting

Ans: effectiveness Section: 12.1 Purposes of Evaluation – Goals of the System Level: Easy

4. The

goals of a project are usually not overtly identified.

Ans: ancillary Section: 12.1 Purposes of Evaluation – Goals of the System Level: Easy 5. The stated project objectives, including funder satisfaction, are part of the project’s goals Ans: direct Section: 12.1 Purposes of Evaluation – Goals of the System Level: Intermediate

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6. Identification of the ancillary goals of a project requires the most part the goals were not overtly identified.

reasoning because; for

Ans: deductive Section: 12.1 Purposes of Evaluation – Goals of the System Level: Advanced

7. Managerial audits look at

systems and their use.

Ans: managerial Section: 12.2 The Project Audit Level: Easy

8. In the audit report, negative comments about individuals or groups associated with the project should be .

Ans: avoided Section: 12.2 The Project Audit Level: Easy

9. In the current status section of an audit report, the subheading labeled compare the work completed with the resources expended.

will

Ans: scope Section: 12.2 The Project Audit Level: Intermediate

10. In the future project status section of the audit report, no assumptions should be made about problems that are still under investigation at the time of the audit.

Ans: technical Section: 12.2 The Project Audit Level: Advanced 11. Research by Walker argues that is essential for management’s ability to assemble information that is both timely and accurate.

Ans: independence Section: 12.2 The Project Audit Level: Intermediate

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12. Contact between the a/e team and the senior management.

are not made without clearance from

Ans: customer Section: 12.4 Some Essentials of An Audit/Evaluation Level: Easy

13. A/E stands for

.

Ans: audit/evaluation Section: 12.4 Some Essentials of An Audit/Evaluation Level: Easy

14. The key rule of engagement for the project auditor is to gain system.

to enter the

Ans: permission Section: 12.5 Measurement Level: Easy

15.

: A formal inquiry into some issue or aspect of a system.

Ans: Audit Section: Glossary Level: Easy

16.

: A standard for performance, commonly established early on for later comparisons.

Ans: Baseline Section: Glossary Level: Easy

17.

: An evaluation of the likely outcomes of a policy and their probability of occurrence, usually conducted to compare two or more scenarios or policies.

Ans: Risk analysis Section: Glossary Level: Easy

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18.

: To set a value for or appraise.

Ans: Evaluate Section: Glossary Level: Easy

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Essay 1. A primary purpose of evaluation is to help translate the achievement of the project's goals into a contribution to the parent organization's direct goals. List some potential benefits that could be applied to ongoing and future projects from recommendations obtained from such an evaluation.

Answer The potential benefits of evaluation on direct goals include: identifying problems earlier; clarifying performance, cost, and time relationships; improving project performance; locating opportunities for future technological advances; evaluating the quality of project management; reducing costs; speeding the achievement of results; identifying mistakes, remedying them, and avoiding them in the future; providing information to the client; and reconfirming the organization's interest in and commitment to the project.

Section: 12.1 Purposes of Evaluation – Goals of the System Level: Easy

2. Project evaluation often makes recommendations that relate to the ancillary objectives of the parent organization. List some of these potential ancillary benefits of project evaluation.

Answer The potential ancillary benefits of project evaluation include improving understanding of the ways in which projects may be of value to the organization; improving the processes for organizing and managing projects; providing a congenial environment in which project team members can work creatively together; identifying organizational strengths and weaknesses in project related-personnel, management, and decision-making techniques and systems; identifying and improving the response to risk factors in the firm's use of projects; improving the way projects contribute to the professional growth of project team members; and identifying project personnel who have high potential for managerial leadership.

Section: 12.1 Purposes of Evaluation – Goals of the System Level: Intermediate

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3. Discuss some of the problems associated with finding the ancillary goals of a project.

Answer First, and probably most important, is the fact that one cannot measure performance against an unknown goal. Unwritten goals can often be ignored. Accordingly, ancillary goals are rarely disclaimed; they are merely not mentioned. Second, individuals pursue their own individual ends while working for organizations. However, people may be unwilling to admit to personal goals, especially goals they may see as not entirely consistent with organizational objectives. Third, members of a project team are never quite comfortable in the presence of an auditor/evaluator. Therefore, project team members have little or no incentive to be forthcoming about their individual or project ancillary goals. Finally, projects have multiple purposes. The diverse set of direct and ancillary project and individual goals do not bear clear, organizationally determined or accepted priorities. Various members of the project team may have quite different ideas about which purposes are most important, which come next in line, and which are least important.

Section: 12.1 Purposes of Evaluation – Goals of the System Level: Intermediate

4. List the minimum points that should be contained in the formal report of a project audit.

Answer At a minimum, the following points should be included: the current status of the project; future status; the status of crucial tasks; a risk assessment; information pertinent to other projects; and limitations of the audit.

Section: 12.2 The Project Audit Level: Easy

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5. List and describe the points that should be contained in the formal report of a project audit.

Answer 1. Current status of the project. Does the work actually completed match the planned level of completion?

2. Future status. Are significant schedule/cost/scope changes likely? If so, indicate the nature of the changes.

3. Status of crucial tasks. What progress has been made on tasks that could decide the success or failure of the project?

4. Risk assessment. What is the potential for project failure or monetary loss?

5. Information pertinent to other projects. What lessons learned from the project being audited can be applied to other projects being undertaken by the organization?

6. Limitations of the audit. What assumptions or limitations affect the data in the audit?

Section: 12.2 The Project Audit Level: Intermediate

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6. Discuss the differences between a project audit and a financial audit.

Answer Although similar in that each represents a careful investigation of the subject of the audit, the outputs of these processes are quite different. The principal distinction between the two is that the financial audit has a limited scope. The financial audit concentrates on the use and preservation of the organization's assets. The project audit is far broader in scope and may deal with the project as a whole or any component or set of components of the project. It may be concerned with any aspect of project management. Whereas a financial audit confirms status of the business in relation to accepted standards, the project audit must create the basis for and confirm status on each project. The financial audit makes predictions about the Company's state of economic well-being whereas the project audit makes predictions about the future status of the project. The financial audit is concerned mostly with financial measurements whereas the project audit includes financial terms plus schedule, progress, resource usage, and status of ancillary goals. The record-keeping system for financial audits uses formats dictated by legal regulations and professional standards whereas project audits use any system desired by individual organizations or dictated by contract. A financial audit can be started with minimal records whereas in a project audit, a databank must be designed and used to start the audit. The recommendations of a financial audit are often restricted to management of the accounting system whereas recommendations from a project audit are required and may cover any aspect of the project or its management. In financial audits, is customary to qualify statements if conditions dictate but there is strong managerial pressure not to do so. In project audits, qualifications focus on shortcomings of the audit process.

Section: 12.2 The Project Audit Level: Advanced

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7. List and describe the events that comprise the project audit life cycle.

Answer The student should describe the following events: • Project audit initiation • Project baseline definition • Establishing an audit database • Preliminary analysis of the project • Audit report preparation • Project audit termination Section: 12.3 The Project Audit Life Cycle Level: Intermediate

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Chapter 13 Project Closure and Benefits Realization True/False 1. Closure comes to every project.

Ans: True Section: Introduction Level: Easy

2. The closure stage of the project rarely has much impact on the technical success or failure of the project.

Ans: True Section: Introduction Level: Easy

3. For projects organized as weak matrices, most of the individuals on the project “belong” to the project.

Ans: False Section: Introduction Level: Easy

4. The process of project closure is usually easy.

Ans: False Section: Introduction Level: Easy

5. Closure by extinction always means the project failed.

Ans: False Section: 13.1 The Varieties of Project Closure Level: Easy

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6. Termination by murder is usually signaled well in advance of the actual termination so everyone can get ready.

Ans: False Section: 13.1 The Varieties of Project Closure Level: Easy

7. Termination by murder usually happens slowly.

Ans: False Section: 13.1 The Varieties of Project Closure Level: Easy

8. Most projects are carried out for other organizations, like a construction company building a new office building for a client.

Ans: False Section: 13.1 The Varieties of Project Closure Level: Easy

9. Closure by starvation is not really closure.

Ans: True Section: 13.1 The Varieties of Project Closure Level: Easy

10. Factors associated with project success are different for different industries.

Ans: True Section: 13.2 When to Close a Project Level: Easy

11. Poor planning is rarely the cause of a project failure.

Ans: False Section: 13.2 When to Close a Project Level: Easy

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12. In Agile approaches the project may be terminated at any time.

Ans: True Section: 13.2 When to Close a Project Level: Easy

13. There is no stigma associated with closing a project early in Agile.

Ans: True Section: 13.2 When to Close a Project Level: Easy

14. Sunk costs are not relevant to current investment decisions.

Ans: True Section: 13.3 The Closure Process Level: Easy

15. The primary criterion for project continuance or closure is whether or not the organization is willing to invest the estimated time and cost required to complete the project, given the project’s current status and current expected outcome.

Ans: True Section: 13.3 The Closure Process Level: Easy

16. Good project management systems have a memory.

Ans: True Section: 13.4 The Final Report—A Project History Level: Easy

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Multiple Choice 1. The closure stage of the project rarely has much impact on what? a) Residual attitudes of the client towards the project b) Technical success or failure of the project c) Residual attitudes of senior management towards the project d) The preparedness of the project team for the project Ans: b Section: Introduction Level: Easy

2. The process of closure is all of the following except which one? a) Always complicated b) Almost always inevitable c) Never easy d) Straight-forward Ans: d Section: Introduction Level: Easy

3. The four types of project closures are what? a) Extinction, addition, integration, and aggravation b) Extinction, addition, integration, and starvation c) Extinction, inclination, integration, and starvation d) Extinction, addition, implementation, and starvation Ans: b Section: 13.1 The Varieties of Project Closure Level: Easy

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4. The special case of closure by extinction wherein the project experiences a sudden demise even though it was lacking obvious signals that death was imminent is known as what? a) Closure by integration b) Closure by addition c) Termination by murder d) Closure by starvation Ans: c Section: 13.1 The Varieties of Project Closure Level: Easy

5. When a decision is made to terminate a project by extinction, the most noticeable event is what? a) All activity on the substance of the project ceases b) All organizational activity related to the project ceases c) All further expenditures related to the project are immediately blocked d) All activity on the project ceases Ans: a Section: 13.1 The Varieties of Project Closure Level: Easy

6. The special case of closure by extinction wherein the project experiences a sudden demise even though it was lacking obvious signals that death was imminent is known as what? a) Closure by integration b) Closure by addition c) Termination by murder d) Closure by starvation Ans: c Section: 13.1 The Varieties of Project Closure Level: Easy

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7. Bringing the project into the organization as a separate, ongoing entity is called what? a) Closure by starvation b) Closure by integration c) Closure by extinction d) Closure by addition Ans: d Section: 13.1 The Varieties of Project Closure Level: Easy

8. In closure by integration, project assets are what? a) Liquidated b) Reassigned to another project c) Transferred from the dying project to the newly born division d) Distributed among the existing elements of the parent organization Ans: d Section: 13.1 The Varieties of Project Closure Level: Easy

9. If a project is a major success and it is terminated, by institutionalizing it as a formal part of the parent organization, this is an example of closure by what? a) Closure by integration b) Closure by addition c) Termination by murder d) Closure by starvation Ans: b Section: 13.1 The Varieties of Project Closure Level: Easy

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10. When an in-house project is a major success and it is terminated by institutionalizing it as a formal part of the parent organization; this is closure by what? a) Addition b) Starvation c) Integration d) Extinction Ans: a Section: 13.1 The Varieties of Project Closure Level: Easy

11. In general, the problems of integration are related to the level of experience that the parent organization has had with the technology being integrated and to the successful integration of other projects, regardless of technology, how? a) Directly proportional b) Not proportional c) Inversely proportional d) Unrelated Ans: c Section: 13.1 The Varieties of Project Closure Level: Easy

12. Closure by this happens when decrements to the budget are large enough to prevent further progress on the project and to force the reassignment of many project team members. a) Starvation b) Addition c) Murder d) Integration Ans: a Section: 13.1 The Varieties of Project Closure Level: Easy

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13. This is the reduction of the amount of funds available for an activity. a) Budget decrement b) Black budget c) Budget freeze d) Budget set Ans: a Section: 13.1 The Varieties of Project Closure Level: Easy

14. Following is a list of a few of the more important aspects of the transition from project to integrated operation that must be considered when the project functions are distributed. Which does the following describe? Where will the project team go? a) Personnel b) Manufacturing c) Accounting/finance d) Engineering Ans: a Section: 13.1 The Varieties of Project Closure Level: Easy

15. Following is a list of a few of the more important aspects of the transition from project to integrated operation that must be considered when the project functions are distributed. Which does the following describe? Have the project accounts been closed and audited? Do the new department budgets include the additional work needed by the project? a) Personnel b) Manufacturing c) Accounting/finance d) Engineering Ans: c Section: 13.1 The Varieties of Project Closure Level: Easy

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16. Following is a list of a few of the more important aspects of the transition from project to integrated operation that must be considered when the project functions are distributed. Which does the following describe? Are all drawings complete and on file? Are operating manuals and change procedures understood? a) Personnel b) Manufacturing c) Accounting/finance d) Engineering Ans: d Section: 13.1 The Varieties of Project Closure Level: Easy

17. Following is a list of a few of the more important aspects of the transition from project to integrated operation that must be considered when the project functions are distributed. Which does the following describe? Is training complete? Are input materials and the required facilities available? Does the production system layout have to be replanned? a) Personnel b) Manufacturing c) Accounting/finance d) Engineering Ans: b Section: 13.1 The Varieties of Project Closure Level: Easy

18. Following is a list of a few of the more important aspects of the transition from project to integrated operation that must be considered when the project functions are distributed. Which one matches the following description? Are all the functional areas aware of the change? Has each made sure that the transition from project to standard operation has been accomplished within standard organizational guidelines? a) Information systems/software b) Marketing c) Purchasing, distribution, legal, and so on d) Risk identification and management Ans: c Section: 13.1 The Varieties of Project Closure Level: Easy

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19. Following is a list of a few of the more important aspects of the transition from project to integrated operation that must be considered when the project functions are distributed. Which one matches the following description? Have all possible threats to the project been faced, subjected to analysis, and dealt with accordingly? a) Information systems/software b) Marketing c) Purchasing, distribution, legal, and so on d) Risk identification and management Ans: d Section: 13.1 The Varieties of Project Closure Level: Easy

20. Following is a list of a few of the more important aspects of the transition from project to integrated operation that must be considered when the project functions are distributed. Which one matches the following description? Has the new system been thoroughly tested? Have the potential users been properly trained to use the new system? a) Information systems/software b) Marketing c) Purchasing, distribution, legal, and so on d) Risk identification and management Ans: a Section: 13.1 The Varieties of Project Closure Level: Easy

21. Following is a list of a few of the more important aspects of the transition from project to integrated operation that must be considered when the project functions are distributed. Which one matches the following description? Is the sales department aware of the change? a) Information systems/software b) Marketing c) Purchasing, distribution, legal, and so on d) Risk identification and management Ans: b Section: 13.1 The Varieties of Project Closure Level: Easy

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22. According to research by Pinto, the two most important critical success factors are what? a) Project mission and top-management support b) Trouble-shooting and communication c) Communication and personnel d) Project mission and communication Ans: a Section: 13.2 When to Close a Project Level: Easy

23. Most studies have shown that the factors associated with project success or failure are what? a) Similar across different industries and the various types of projects b) Different across different industries and the various types of projects c) Similar across different industries but different for the various types of projects d) Different across different industries but similar for the various types of projects Ans: b Section: 13.2 When to Close a Project Level: Easy

24. These closures are a result of conflicts that arise when poor communication or diverse working styles cause employees from different countries to compete for ascendancy or to engage in win/lose negotiations. a) Senescence closures b) Political closures c) Cross-cultural closures d) Chain closures Ans: c Section: 13.2 When to Close a Project Level: Easy

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25. Closures that are typically the result of conflict between senior managers, one of whom may be terminated along with the project, are known as what? a) Political closures b) Closure by addition c) Closure by integration d) Conflict closures Ans: a Section: 13.2 When to Close a Project Level: Easy

26. There are several non-technical reasons why projects are terminated. The authors cite three cases where these closures seem to be associated with conflict, even when the conflict was anticipated at the beginning of the project. Which of the following is not one of these reasons? a) Technological closures b) Political closures c) Senescence closures d) Cross-cultural closures Ans: a Section: 13.2 When to Close a Project Level: Easy

27. Projects that pass away simply because senior managers, the project champion, the PM, and even key project workers lose interest in the project are known as what? a) Political closures b) Senescence closures c) Conflict closures d) Closures by addition Ans: b Section: 13.2 When to Close a Project Level: Easy

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28. It is important to select a project manager who has strong what? a) Trouble-shooting skills b) Technical skills c) Monitoring skills d) Managerial skills Ans: d Section: 13.3 The Closure Process Level: Easy

29. The primary criterion for this is whether or not the organization is willing to invest the estimated time and cost required to complete the project, given the project’s current status and current expected outcome. a) Continuance b) Closure c) Continuance or closure d) Extinction Ans: c Section: 13.3 The Closure Process Level: Easy

30. During the implementation of project closure, if personnel performance evaluations are required, they should be prepared by who? a) Closure manager b) Senior manager c) Project manager or immediate supervisor of the team member d) Project management office Ans: c Section: 13.3 The Closure Process Level: Easy

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31. During the implementation of project closure, the closure manager should ensure that what happens? a) Delivery and implementation of project results were accomplished regardless of closure method b) Formal acceptance of the project is obtained from the project team c) Formal acceptance of the project is acknowledged by the client d) The project's documentation is shredded Ans: c Section: 13.3 The Closure Process Level: Easy

32. Which of the following is not a common task for a closure manager? a) Ensuring completion of the work b) Redistributing personnel materials, and equipment c) Communicating with all stakeholders why the project was terminated d) Overseeing the closing of the project's books Ans: c Section: 13.3 The Closure Process Level: Easy

33. When considering the closure of a project most project managers delay personnel reassignments/release issues as long as possible for all of the following reasons, except what? a) Strong reluctance to face interpersonal conflict. b) Worry that personnel will lose interest once it becomes known that closure is being considered. c) Unwillingness to approach functional managers about releasing their personnel d) Concern that the team members will try to avoid death by stretching out the project as long as possible.

Ans: c Section: 13.3 The Closure Process Level: Easy

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Chapter 13

34. Listed below are four critical success factors for projects. Which one matches the following description? Recruitment, selection, and training of the necessary personnel for the project team. a) Project mission b) Project schedule/plan c) Client consultation d) Personnel Ans: d Section: 13.3 The Closure Process Level: Easy

35. Listed below are four critical success factors for projects. Which one matches the following description? Communication, consultation, and active listening to all impacted parties. a) Project mission b) Project schedule/plan c) Client consultation d) Personnel Ans: c Section: 13.3 The Closure Process Level: Easy

36. Listed below are four critical success factors for projects. Which one matches the following description? A detailed specification of the individual action steps for project implementation. a) Project mission b) Project schedule/plan c) Client consultation d) Personnel Ans: b Section: 13.3 The Closure Process Level: Easy

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Chapter 13

37. Listed below are four critical success factors for projects. Which one matches the following description? Initial clearly defined goals and general directions. a) Project mission b) Project schedule/plan c) Client consultation d) Personnel Ans: a Section: 13.3 The Closure Process Level: Easy

38. Listed below are four critical success factors for projects. Which one matches the following description? Timely provision of comprehensive control information at each stage in the implementation process. a) Technical tasks b) Monitoring and feedback c) Communication d) Trouble-shooting Ans: b Section: 13.3 The Closure Process Level: Easy

39. Listed below are four critical success factors for projects. Which one matches the following description? Availability of the required technology and expertise to accomplish the specific technical action steps. a) Technical tasks b) Monitoring and feedback c) Communication d) Trouble-shooting Ans: a Section: 13.3 The Closure Process Level: Easy

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Chapter 13

40. Listed below are four critical success factors for projects. Which one matches the following description? Ability to handle unexpected crises and deviations from plan. a) Technical tasks b) Monitoring and feedback c) Communication d) Trouble-shooting Ans: d Section: 13.3 The Closure Process Level: Easy

41. Listed below are four critical success factors for projects. Which one matches the following description? The provision of an appropriate network and necessary data to all key actors in the project implementation. a) Technical tasks b) Monitoring and feedback c) Communication d) Trouble-shooting Ans: c Section: 13.3 The Closure Process Level: Easy

42. The project performance section of the final report does what? a) Analyzes the impact of organizational structure on the project b) Offers solutions to technical problems that may have occurred c) Reviews the administrative practices used during the project d) Compares what the project achieved with what it aimed for Ans: d Section: 13.4 The Final Report—A Project History Level: Easy

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43. The administrative performance section of the final report does what? a) Analyzes the impact of administrative structure on the project b) Offers solutions to technical problems that may have occurred c) Reviews the administrative practices used during the project d) Compares what the project achieved with what it aimed for Ans: c Section: 13.4 The Final Report—A Project History Level: Easy

44. The techniques of project management section of the final report does what? a) Analyzes the impact of organizational structure on the project b) Offers solutions to technical problems that may have occurred c) Reviews the administrative practices used during the project d) Scrutinizes the methods of planning, control, and risk management Ans: d Section: 13.4 The Final Report—A Project History Level: Easy

45. What section of the final project report is a comparison of what the project achieved with what the project tried to achieve?

a) Project performance b) Administrative performance c) Organizational structure d) Personnel suggestions Ans: a Section: 13.4 The Final Report—A Project History Level: Easy

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46. What section of the final project report contains a review of administrative practices? a) Project performance b) Administrative performance c) Organizational structure d) Personnel suggestions Ans: b Section: 13.4 The Final Report—A Project History Level: Easy

47. What section of the final project report contains comments regarding how the organizational structure aided or impeded the progress of the project? a) Project performance b) Administrative performance c) Organizational structure d) Personnel suggestions Ans: c Section: 13.4 The Final Report—A Project History Level: Easy

48. The fundamental purpose of the final project report is to do what? a) Devote more resources to the project b) Finish the work so that payment can be collected c) Improve future projects d) Document the errors in the project Ans: c Section: 13.4 The Final Report—A Project History Level: Easy

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49. The end of all activity on a project without extending it in some form is referred to as what? a) Extinction b) Addition c) Integration d) Starvation Ans: a Section: Glossary Level: Easy

50. Bringing the project activities into the organization and distributing them among existing functions is referred to as what? a) Closure by extinction b) Closure by integration c) Closure by addition d) Termination by murder Ans: b Section: Glossary Level: Easy

51. Cutting a project's budget sufficiently to stop progress without actually killing the project is referred to as what? a) Closure by addition b) Closure by extinction c) Closure by starvation d) Closure by subtraction Ans: c Section: Glossary Level: Easy

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52. This is an administrator responsible for wrapping up the administrative details of a project. a) Stakeholder b) Project manager c) Program administrator d) Closure manager Ans: d Section: Glossary Level: Easy

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Fill-in-the-Blanks` 1. Closure by is the most common way of dealing with successful projects, and the most complex.

Ans: integration Section: 13.1 The Varieties of Project Closure Level: Easy

2. Changes in the external

can kill projects.

Ans: environment Section: 13.1 The Varieties of Project Closure Level: Easy

3. A special case of closure by extinction is termination by

.

Ans: murder Section: 13.1 The Varieties of Project Closure Level: Easy

4. When a decision is made to close a project by extinction, all activity on the substance of the project ceases. A great deal of activity, however, remains to be done.

Ans: organizational Section: 13.1 The Varieties of Project Closure Level: Easy

5. The project final report is also known as the project

.

Ans: history Section: 13.1 The Varieties of Project Closure Level: Easy

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6. When the project is made a full-fledged member of the parent, it lives its first years in a protected status—carrying less than an its full share of cost.

Ans: overhead Section: 13.1 The Varieties of Project Closure Level: Intermediate

7. When project success results in closure by , project personnel, property, and equipment are often simply transferred from the dying project to the newly born division.

Ans: addition Section: 13.1 The Varieties of Project Closure Level: Easy

8. Closure by is the most common way of dealing with successful projects and the most complex.

Ans: integration Section: 13.1 The Varieties of Project Closure Level: Easy

9. With closure by , the project is closed, but the project still exists as a legal entity complete with sufficient staff to maintain some sort of presence such as an administrative assistant who issues a project “no-progress” report each year.

Ans: starvation Section: 13.1 The Varieties of Project Closure Level: Easy

10. Agile projects may conclude with a special sprint referred to as the

sprint.

Ans: release Section: 13.2 When to Close a Project Level: Easy

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11. A common mistake in project management is to appoint as project manager an individual with excellent skills but weak skills.

Ans: technical; managerial Section: 13.3 The Closure Process Level: Easy

12. According to the text, a cost is generally not relevant to current investment decisions. Rather, decision-makers should focus on the time and cost required to complete the project.

Ans: sunk Section: 13.3 The Closure Process Level: Easy

13. Special managers are sometimes useful in completing the long and involved process of shutting down the project.

Ans: closure Section: 13.3 The Closure Process Level: Easy

14. DSS stands for

.

Ans: decision support system Section: 13.3 The Closure Process Level: Easy

15. A good project management system will have a the project final report.

that should be documented in

Ans: memory Section: 13.4 The Final Report—A Project History Level: Easy

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Essay 1. Discuss the conditions where it can be said that a project has been closed.

Answer A project can be said to be closed when work on the substance of the project has ceased or slowed to the point that further progress on the project is no longer possible, when the project has been indefinitely delayed, when its resources have been deployed to other projects, or when project personnel (especially the PM) become personae non gratae with senior management and in the company lunchroom.

Section: 13.1 The Varieties of Project Closure Level: Intermediate

2. Briefly describe the four fundamentally different ways to close out a project.

Answer Extinction: The project is stopped.

Addition: The project is made a more or less full-fledged member of the parent.

Integration: The property, equipment, material, personnel, and functions of the project are distributed among the existing elements of the parent organization. The output of the project becomes a standard part of the operating systems of the parent or client.

Starvation: It is “slow starvation by budget decrement.”

Section: 13.1 The Varieties of Project Closure Level: Intermediate

3. Identify some of the more important aspects of the transition from project to integrated operation that should be considered when the project functions are distributed.

Answer Aspects to consider include: personnel, manufacturing, accounting/finance, engineering, information systems/software, marketing, purchasing, distribution, legal, and administrative procedures.

Section: 13.1 The Varieties of Project Closure Level: Intermediate

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4. Identify a few of the fundamental reasons why some projects fail to produce satisfactory results.

Answer Reasons include: a project organization is not required; there is insufficient support from senior management; the wrong person was selected as project manager; and a poor plan was used to execute a project.

Section: 13.2 When to Close a Project Level: Intermediate

5. Identify the generic categories of decision-making models used for making project closure decisions.

Answer First, there are models that base the decision on the degree to which the project qualifies against the set of factors generally held to be associated with successful (or failed) projects. Second, there are models that base the decision on the degree to which the project meets the goals and objectives set for it. Third, there are projects that have fallen far enough behind their schedules and planned progress that the cost to complete them is no longer justifiable.

Section: 13.2 When to Close a Project Level: Intermediate

6. Describe the subjects that should be addressed in the final report.

Answer The student should describe each of the following subjects: • Project performance • Administrative performance • Organizational structure • Project and administrative teams • Techniques of project management Section: 13.4 The Final Report-A Project History Level: Intermediate

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