Test Bank for Project Management: Achieving Competitive Advantage, 6th Edition by Jeffrey K. Pinto (

Test Bank For Project Management Achieving Competitive Advantage, 6th Edition Jeffrey K Pinto Chapter 1-14 Chapter 1 Introduction: Why Project Management?

1) Which of these countries is NOT identified in the text as having a developing economy with a substantial market?

A) Russia B) China C) India D) Europe Answer: D Diff: 1 Section: 1.2 Why Are Projects Important?

LO: 1.1: Understand why project management is becoming such a powerful and popular practice in business.

Classification: Application AACSB: Application of Knowledge 2) Low inflation is a trigger for improved project management skills because: A) Rampant cost increases must be passed along to the consumer.

B) Internal process improvement is accomplished via project management.

C) Lower inflation means narrower product launch windows.

D) Global markets are a prerequisite for low inflation.

Answer: B Diff: 1 Section: 1.2 Why Are Projects Important?

LO: 1.1: Understand why project management is becoming such a powerful and popular practice in business.

Classification: Concept AACSB: Application of Knowledge 3) Projects, rather than repetitive tasks, are now the basis for most value-added in business.

Answer: TRUE Diff: 1 Section: 1.0 Introduction LO: 1.1: Understand why project management is becoming such a powerful and popular practice in business.

Classification: Application AACSB: Application of Knowledge 4) The emergence of global markets has made project management skills more critical.

Answer: TRUE Diff: 1 Section: 1.2 Why Are Projects Important?

LO: 1.1: Understand why project management is becoming such a powerful and popular practice in business.

Classification: Application AACSB: Application of Knowledge 5) Since a business gains market share with day-to-day operations, senior managers value process management experience over project management experience.

Answer: FALSE Diff: 1 Section: 1.2 Why Are Projects Important?

LO: 1.1: Understand why project management is becoming such a powerful and popular practice in business.

Classification: Application AACSB: Application of Knowledge 6) What roles do traditional process management duties of planning, organizing, and controlling play in project management, if any?

Answer: The traditional managerial duties of planning, organizing, and controlling all apply to project management. Project managers must be technically well versed, proficient at administrative functions, willing and able to assume leadership roles, and above-all, goal oriented. The project manager is the person most responsible for keeping track of the big picture Diff: 2 Section: 1.1 What Is a Project?

LO: 1.1: Understand why project management is becoming such a powerful and popular practice in business.

Classification: Application AACSB: Application of Knowledge 7) Why is project management challenging?

Answer: Projects present challenges for a number of reasons; by their nature they are often dramatic departures from the routine process-oriented work that employees are accustomed to.

Projects face budget, time, and resource constraints and these resources must often be marshaled from across the organization.

Diff: 2 Section: 1.1 What Is a Project?

LO: 1.1: Understand why project management is becoming such a powerful and popular practice in business.

Classification: Application AACSB: Application of Knowledge 8) Why are projects important?

Answer: Today's businesses face a set of pressures that make projects crucial in helping an organization achieve its strategic goals. These pressures include shortened product life cycles, narrow product launch windows, increasingly complex and technical products, the emergence of global markets, and an economic period marked by low inflation.

Diff: 1 Section: 1.2 Why Are Projects Important?

LO: 1.1: Understand why project management is becoming such a powerful and popular practice in business.

Classification: Concept AACSB: Application of Knowledge 9) Why is project management considered an excellent training ground for future senior

executives in many organizations?

Answer: One of the unique aspects of projects is their unique blend of technical and behavioral challenges. The technical side of project management requires managers to become skilled in project selection, budgeting and resource management, planning and scheduling, and tracking their projects. The behavioral side of project management requires project managers to bring together individuals from across the organization, mold them into a team, manage conflict, provide leadership, and engage in negotiation and appropriate political behavior.

Diff: 2 Section: 1.2 Why Are Projects Important?

LO: 1.1: Understand why project management is becoming such a powerful and popular practice in business.

Classification: Application AACSB: Application of Knowledge 10) A project typically has: A) A defined start and end date.

B) A defined start date but no defined end date.

C) No defined start but a defined end date.

D) No defined start or end date.

Answer: A Diff: 1 Section: 1.1 What Is a Project?

LO: 1.2: Recognize the basic properties of projects, including their definition.

Classification: Concept AACSB: Application of Knowledge 11) The Project Management Body of Knowledge Guide definition of a project indicates that a project is: A) Multifunctional.

B) Permanent.

C) Designed to avoid using human resources.

D) Not limited by a budget.

Answer: A Diff: 1 Section: 1.1 What Is a Project?

LO: 1.2: Recognize the basic properties of projects, including their definition.

Classification: Application AACSB: Application of Knowledge 12) The acronym PMBoK stands for: A) The Personal Management Before or Kernel.

B) The Project Movement Behind our Kernel.

C) The Project Management Body of Knowledge.

D) The Performance Measurement Body of Knowledge.

Answer: C Diff: 1 Section: 1.1 What Is a Project?

LO: 1.2: Recognize the basic properties of projects, including their definition.

Classification: Application AACSB: Application of Knowledge

13) Project members may be from: A) Different departments.

B) Other organizational units.

C) One functional area.

D) All of the above.

Answer: D Diff: 2 Section: 1.1 What Is a Project?

LO: 1.2: Recognize the basic properties of projects, including their definition.

Classification: Concept AACSB: Application of Knowledge 14) There is no such thing as a project team: A) With a deliverable.

B) With an ongoing, non-specific purpose.

C) With a goal.

D) With a project manager.

Answer: B Diff: 2 Section: 1.1 What Is a Project?

LO: 1.2: Recognize the basic properties of projects, including their definition.

Classification: Application AACSB: Application of Knowledge 15) A project that results in "doing the wrong things well" has ignored the: A) Budgetary goal.

B) Technical goal.

C) Customer satisfaction goal.

D) Scheduling goal.

Answer: C Diff: 2 Section: 1.1 What Is a Project?

LO: 1.2: Recognize the basic properties of projects, including their definition.

Classification: Application AACSB: Application of Knowledge 16) Which of these is NOT characteristic of a project?

A) Projects are responsible for the newest and most improved products, services, and organizational processes.

B) Projects are ad hoc endeavors with a clear life cycle.

C) Projects provide a philosophy and strategy for the management of change.

D) Traditional process management functions of planning, organizing, and controlling do not apply to project management.

Answer: D Diff: 2 Section: 1.1 What Is a Project?

LO: 1.2: Recognize the basic properties of projects, including their definition.

Classification: Application AACSB: Application of Knowledge 17) Which of the following is NOT a project constraint?

A) The budget B) The customer requirements C) The schedule D) The technical specifications Answer: B Diff: 2 Section: 1.1 What Is a Project?

LO: 1.2: Recognize the basic properties of projects, including their definition.

Classification: Application AACSB: Application of Knowledge 18) A product is introduced into a market, gains the acceptance of a fickle public, and finally is supplanted by a new and improved offering. This phenomenon is known as the: A) Product life cycle.

B) Rule of 80.

C) Mendoza line.

D) Beta.

Answer: A Diff: 1 Section: 1.2 Why Are Projects Important?

LO: 1.2: Recognize the basic properties of projects, including their definition.

Classification: Application AACSB: Application of Knowledge 19) The period of time that is ideal to achieve the success of a new product is the: A) Moment.

B) Launch window.

C) Window of opportunity.

D) Momentito.

Answer: B Diff: 1 Section: 1.2 Why Are Projects Important?

LO: 1.2: Recognize the basic properties of projects, including their definition.

Classification: Concept AACSB: Application of Knowledge 20) A typical project stays within functional and organizational boundaries.

Answer: FALSE Diff: 2 Section: 1.1 What Is a Project?

LO: 1.2: Recognize the basic properties of projects, including their definition.

Classification: Concept AACSB: Application of Knowledge 21) A project exists outside of the standard line organization.

Answer: TRUE Diff: 2 Section: 1.1 What Is a Project?

LO: 1.2: Recognize the basic properties of projects, including their definition.

Classification: Application AACSB: Application of Knowledge

22) Product life cycles are longer now than twenty years ago.

Answer: FALSE Diff: 2 Section: 1.2 Why Are Projects Important?

LO: 1.2: Recognize the basic properties of projects, including their definition.

Classification: Application AACSB: Application of Knowledge 23) What is a project?

Answer: The author offers a number of definitions, including the Project Management Institute's statement "a temporary endeavor undertaken to create a unique product or service." A synthesis of the definitions offered might be that projects are customer-focused, complex, one-time processes limited by budget, schedule, and resources that are developed to resolve a clear goal or set of goals.

Diff: 1 Section: 1.1 What Is a Project?

LO: 1.2: Recognize the basic properties of projects, including their definition.

Classification: Concept AACSB: Application of Knowledge 24) Studies of IT projects reveal that: A) Initial cost estimates are overrun by an average of 15%.

B) Over 66% of IT projects were delivered to customers but not used.

C) About 25% of all IT projects become runaways by overshooting budgets and timetables.

D) Up to 75% of software projects are cancelled.

Answer: D Diff: 3 Section: 1.1 What Is a Project?

LO: 1.3: Understand why effective project management is such a challenge.

Classification: Application AACSB: Information Technology 25) A business reality that makes effective project management critical is the fact that: A) Products are becoming increasingly simple.

B) Inflation is rampant.

C) Product life cycles are compressing.

D) Product launch windows are widening.

Answer: C Diff: 1 Section: 1.2 Why Are Projects Important?

LO: 1.3: Understand why effective project management is such a challenge.

Classification: Application AACSB: Application of Knowledge 26) One of the things that the technical side of project management emphasizes is: A) Team building.

B) Conflict management.

C) Negotiation.

D) Budgeting.

Answer: D Diff: 1

Section: 1.2 Why Are Projects Important?

LO: 1.3: Understand why effective project management is such a challenge.

Classification: Application AACSB: Application of Knowledge 27) The behavioral side of project management emphasizes: A) Scheduling.

B) Leadership.

C) Planning.

D) Project selection.

Answer: B Diff: 1 Section: 1.2 Why Are Projects Important?

LO: 1.3: Understand why effective project management is such a challenge.

Classification: Concept AACSB: Application of Knowledge 28) One unique feature of projects is that they blend both: A) Financial and behavioral challenges.

B) Technical and temporal challenges.

C) Technical and behavioral challenges.

D) Financial and temporal challenges.

Answer: C Diff: 1 Section: 1.2 Why Are Projects Important?

LO: 1.3: Understand why effective project management is such a challenge.

Classification: Concept AACSB: Application of Knowledge 29) Project management is a useful training ground for: A) Interns.

B) Recent graduates C) Employees of recently acquired companies.

D) Senior executives.

Answer: D Diff: 1 Section: 1.2 Why Are Projects Important?

LO: 1.3: Understand why effective project management is such a challenge.

Classification: Concept AACSB: Application of Knowledge 30) What changes in the business environment have necessitated a greater use of project management skills?

Answer: Today's businesses face a set of pressures that make projects crucial in helping an organization achieve its strategic goals. These pressures include shortened product life cycles, narrow product launch windows, increasingly complex and technical products, the emergence of global markets, and an economic period marked by low inflation.

Diff: 2 Section: 1.2 Why Are Projects Important?

LO: 1.3: Understand why effective project management is such a challenge.

Classification: Application

AACSB: Application of Knowledge 31) Provide an example from the past year that demonstrates the criticality of achieving a narrow launch window by demonstrating two similar projects/products being launched in short succession or a product or service launch that was well or poorly timed to market conditions.

Answer: Examples will vary. Common examples include movies that made or missed the summer season of optimal time for Oscar consideration, or were released simultaneously with superior offerings; consumer electronic products that made or missed traditional peak demand times or were released shortly after or before a competitor's offering; and concept restaurants or retail stores that failed to live up to expectations.

Diff: 2 Section: 1.2 Why Are Projects Important?

LO: 1.3: Understand why effective project management is such a challenge.

Classification: Application AACSB: Application of Knowledge 32) Which of the following types of activities is more closely associated with projects rather than processes?

A) An activity that is ongoing B) An activity that is day-to-day C) An activity that uses existing systems D) An activity that establishes its own work rules Answer: D Diff: 1 Section: 1.1 What Is a Project?

LO: 1.4: Differentiate between project management practices and more traditional, processoriented business functions.

Classification: Application AACSB: Application of Knowledge 33) Which of the following is accomplished through project management?

A) A cellular phone company activates a new customer's service.

B) An automotive manufacturer produces a day's quota of vehicles.

C) A software developer creates a new crash-proof operating system.

D) A retailer restocks the shelves after a day of brisk sales.

Answer: C Diff: 1 Section: 1.1 What Is a Project?

LO: 1.4: Differentiate between project management practices and more traditional, processoriented business functions.

Classification: Application AACSB: Application of Knowledge 34) Projects differ from classic organizational processes because projects are: A) Discrete activities.

B) Part of line organization.

C) Well established systems in place to integrate efforts.

D) Multi-objective.

Answer: A

Diff: 2 Section: 1.1 What Is a Project?

LO: 1.4: Differentiate between project management practices and more traditional, processoriented business functions.

Classification: Application AACSB: Application of Knowledge 35) Process management features ________ with respect to project management.

A) greater team member heterogeneity B) greater certainty of performance C) fewer numbers of goals and objectives D) lower adherence to established practices Answer: C Diff: 2 Section: 1.1 What Is a Project?

LO: 1.4: Differentiate between project management practices and more traditional, processoriented business functions.

Classification: Application AACSB: Application of Knowledge 36) Projects are typically ongoing, day-to-day activities that have goods and services as outputs.

Answer: FALSE Diff: 2 Section: 1.1 What Is a Project?

LO: 1.4: Differentiate between project management practices and more traditional, processoriented business functions.

Classification: Concept AACSB: Application of Knowledge 37) The special nature of projects relieves project managers from their routine of planning, organizing, motivating, directing, and controlling.

Answer: FALSE Diff: 2 Section: 1.1 What Is a Project?

LO: 1.4: Differentiate between project management practices and more traditional, processoriented business functions.

Classification: Application AACSB: Application of Knowledge

38) What are key differences between projects and processes?

Answer: A process refers to ongoing, day-to-day activities in which an organization engages while producing goods and services. Processes use existing systems, properties, and capabilities in a continuous, fairly repetitive manner. Projects take place outside the normal, process-oriented world of the firm and project management activities remain unique and separate from the manner in which process-oriented work is performed. Differences are listed in the table reproduced below.

Process Repeat process of product Several objectives Ongoing People are homogeneous Well established systems in place to integrate efforts Greater certainty of performance, cost, schedule Part of line organization Bastions of established practice

Project New process or product One objective One shot — limited life More heterogeneous Systems must be created to integrate efforts Greater uncertainty of performance, cost, schedule Outside of line organization Violates established practice

Diff: 2 Section: 1.1 What Is a Project?

LO: 1.4: Differentiate between project management practices and more traditional, processoriented business functions.

Classification: Application AACSB: Application of Knowledge 39) The use of benchmarking allows companies that are relatively immature at project management to achieve quantum leaps of improvement.

Answer: FALSE Diff: 2 Section: 1.5 Developing Project Management Maturity LO: 1.5: Recognize the key motivators that are pushing companies to adopt project management practices.

Classification: Application AACSB: Application of Knowledge 40) Most effective project maturity models chart both a set of standards that are currently accepted as state-of-the-art as well as a process for achieving significant movement towards these benchmarks.

Answer: TRUE Diff: 2 Section: 1.5 Developing Project Management Maturity LO: 1.5: Recognize the key motivators that are pushing companies to adopt project management practices.

Classification: Application AACSB: Application of Knowledge

41) Acme uses no recognizable project management processes and has entertaining project meetings because each member has a unique way of reporting progress or lack thereof. Acme is most likely at the moderate level in the generic project management maturity model.

Answer: FALSE Diff: 2 Section: 1.5 Developing Project Management Maturity LO: 1.5: Recognize the key motivators that are pushing companies to adopt project management practices.

Classification: Application AACSB: Application of Knowledge 42) Any organization, no matter how initially unskilled in project management, can begin to chart a course toward the type of project organization they wish to become.

Answer: TRUE Diff: 2 Section: 1.5 Developing Project Management Maturity LO: 1.5: Recognize the key motivators that are pushing companies to adopt project management practices.

Classification: Concept AACSB: Application of Knowledge 43) A company's culture has little impact on whether projects are successfully implemented.

Answer: FALSE Diff: 2 Section: 1.6 Project Elements and Text Organization LO: 1.5: Recognize the key motivators that are pushing companies to adopt project management practices.

Classification: Application AACSB: Application of Knowledge 44) Pick any organization in the recent business news and provide examples of both project and process work that this company is well known for.

Answer: Examples will vary, but the project work examples should clearly depart from the day to day routine work of the company. The project examples should demonstrate the understanding that projects are complex, one-time processes limited by budget, schedule and resources that are developed to resolve a clear set of goals.

Diff: 2 Section: 1.1 What Is a Project?

LO: 1.5: Recognize the key motivators that are pushing companies to adopt project management practices.

Classification: Application AACSB: Application of Knowledge 45) Geoffco's project manager names three individuals and requests a project budget of $3,000,000 for the new 8-Pod, a backpack-sized personal music player for 8-track tapes capable of holding up to 100 songs from the '60s and '70s. This important step takes place during ________ of the project life cycle.

A) planning B) conceptualization C) execution D) termination

Answer: B Diff: 2 Section: 1.3 Project Life Cycles LO: 1.6: Understand and explain the project life cycle, its stages, and the activities that typically occur at each stage in the project.

Classification: Application AACSB: Application of Knowledge 46) The man-hours requirement is typically at a peak during the ________ phase of the project life cycle.

A) planning B) conceptualization C) execution D) termination Answer: C Diff: 2 Section: 1.3 Project Life Cycles LO: 1.6: Understand and explain the project life cycle, its stages, and the activities that typically occur at each stage in the project.

Classification: Application AACSB: Application of Knowledge 47) Individual activities and their durations are developed during the ________ phase of the project life cycle.

A) planning B) conceptualization C) execution D) termination Answer: A Diff: 2 Section: 1.3 Project Life Cycles LO: 1.6: Understand and explain the project life cycle, its stages, and the activities that typically occur at each stage in the project.

Classification: Concept AACSB: Application of Knowledge 48) The general contractor handed Antoni Gaudi the keys to his dream home during the ________ phase of the project life cycle.

A) planning B) conceptualization C) execution D) termination Answer: D Diff: 2 Section: 1.3 Project Life Cycles LO: 1.6: Understand and explain the project life cycle, its stages, and the activities that typically occur at each stage in the project.

Classification: Concept AACSB: Application of Knowledge 49) Keith Monroe nails hundreds of pieces of culled lumber in the blazing July sun to form a

parquet deck for his barn roof. He and his assistant are clearly in: A) The termination stage of the project life cycle.

B) The planning stage of the project life cycle.

C) The execution stage of the project life cycle.

D) Way over their heads.

Answer: C Diff: 1 Section: 1.3 Project Life Cycles LO: 1.6: Understand and explain the project life cycle, its stages, and the activities that typically occur at each stage in the project.

Classification: Concept AACSB: Application of Knowledge 50) The MBA redesign committee presents the results of their five-year project to their bemused Dean. They hope it is not just wishful thinking that they are in the: A) Planning phase.

B) Conceptualization phase.

C) Execution phase.

D) Termination phase.

Answer: D Diff: 1 Section: 1.3 Project Life Cycles LO: 1.6: Understand and explain the project life cycle, its stages, and the activities that typically occur at each stage in the project.

Classification: Concept AACSB: Application of Knowledge 51) Client interest is typically at its lowest during the: A) Conceptualization phase.

B) Planning phase.

C) Execution phase.

D) Termination phase.

Answer: C Diff: 3 Section: 1.3 Project Life Cycles LO: 1.6: Understand and explain the project life cycle, its stages, and the activities that typically occur at each stage in the project.

Classification: Application AACSB: Application of Knowledge 52) The degree of innovation and creativity is typically at its highest during the: A) Conceptualization phase.

B) Planning phase.

C) Execution phase.

D) Termination phase.

Answer: C Diff: 2 Section: 1.3 Project Life Cycles LO: 1.6: Understand and explain the project life cycle, its stages, and the activities that typically occur at each stage in the project.

Classification: Application

AACSB: Application of Knowledge 53) Which of these factors are essentially complete opposites from an intensity perspective across the project life cycle?

A) Client Interest and Creativity B) Creativity and Resources C) Resources and Project Stake D) Project Stake and Client Interest Answer: A Diff: 1 Section: 1.3 Project Life Cycles LO: 1.6: Understand and explain the project life cycle, its stages, and the activities that typically occur at each stage in the project.

Classification: Application AACSB: Application of Knowledge 54) Which of these factors are essentially complete opposites from an intensity perspective across the project life cycle?

A) Client Interest and Uncertainty B) Creativity and Resources C) Uncertainty and Project Stake D) Project Stake and Client Interest Answer: C Diff: 1 Section: 1.3 Project Life Cycles LO: 1.6: Understand and explain the project life cycle, its stages, and the activities that typically occur at each stage in the project.

Classification: Application AACSB: Application of Knowledge 55) Which of these factors are highly similar from an intensity perspective across the project life cycle?

A) Client Interest and Creativity B) Creativity and Resources C) Resources and Project Stake D) Project Stake and Uncertainty Answer: B Diff: 1 Section: 1.3 Project Life Cycles LO: 1.6: Understand and explain the project life cycle, its stages, and the activities that typically occur at each stage in the project.

Classification: Application AACSB: Application of Knowledge

56) The amount of corporate investment is typically at its lowest in the: A) Conceptualization phase.

B) Planning phase.

C) Execution phase.

D) Termination phase.

Answer: A Diff: 1 Section: 1.3 Project Life Cycles LO: 1.6: Understand and explain the project life cycle, its stages, and the activities that typically occur at each stage in the project.

Classification: Application AACSB: Application of Knowledge 57) The amount of corporate investment is typically at its highest in the: A) Conceptualization phase.

B) Planning phase.

C) Execution phase.

D) Termination phase.

Answer: D Diff: 2 Section: 1.3 Project Life Cycles LO: 1.6: Understand and explain the project life cycle, its stages, and the activities that typically occur at each stage in the project.

Classification: Application AACSB: Application of Knowledge 58) The degree of risk associated with the project is typically at its highest during the: A) Conceptualization phase.

B) Planning phase.

C) Execution phase.

D) Termination phase.

Answer: A Diff: 1 Section: 1.3 Project Life Cycles LO: 1.6: Understand and explain the project life cycle, its stages, and the activities that typically occur at each stage in the project.

Classification: Application AACSB: Application of Knowledge

59) The technical challenges that the project has to face are typically at their lowest during the: A) Conceptualization phase.

B) Planning phase.

C) Execution phase.

D) Termination phase.

Answer: D Diff: 1 Section: 1.3 Project Life Cycles LO: 1.6: Understand and explain the project life cycle, its stages, and the activities that typically occur at each stage in the project.

Classification: Application AACSB: Application of Knowledge 60) The commitment of financial, human, and technical resources is highest during the: A) Conceptualization phase.

B) Planning phase.

C) Execution phase.

D) Termination phase.

Answer: C Diff: 2 Section: 1.3 Project Life Cycles LO: 1.6: Understand and explain the project life cycle, its stages, and the activities that typically occur at each stage in the project.

Classification: Application AACSB: Application of Knowledge 61) The only component that does NOT exhibit a wave throughout the project life cycle is the: A) Client interest.

B) Resources.

C) Creativity.

D) Uncertainty.

Answer: D Diff: 2 Section: 1.3 Project Life Cycles LO: 1.6: Understand and explain the project life cycle, its stages, and the activities that typically occur at each stage in the project.

Classification: Application AACSB: Application of Knowledge

62) Which of these effects exhibits an intensity level that is a nearly perfect sinusoid?

A) Client interest B) Uncertainty C) Creativity D) Resources Answer: A Diff: 2 Section: 1.3 Project Life Cycles LO: 1.6: Understand and explain the project life cycle, its stages, and the activities that typically occur at each stage in the project.

Classification: Application AACSB: Application of Knowledge 63) The initial goal and technical specifications of the project are developed during the planning stage.

Answer: FALSE Diff: 2 Section: 1.3 Project Life Cycles LO: 1.6: Understand and explain the project life cycle, its stages, and the activities that typically occur at each stage in the project.

Classification: Application AACSB: Application of Knowledge 64) Client interest in a project is highest during the termination and conceptual phases.

Answer: TRUE Diff: 2 Section: 1.3 Project Life Cycles LO: 1.6: Understand and explain the project life cycle, its stages, and the activities that typically occur at each stage in the project.

Classification: Application AACSB: Application of Knowledge 65) Describe the activities that occur at each stage of a project.

Answer: Stages in a project's development are referred to as the project life cycle, which consists of conceptualization, planning, execution, and termination. In the conceptualization stage the scope of the work is determined, necessary resources are identified, and important organizational stakeholders signed on. In the planning stage all detailed specifications, schematics, schedules, and other plans are developed. Individual pieces of the project are broken down, individual assignments are made, and the process for completion is delineated. During the execution phase the system is developed or the product is created and fabricated. Termination occurs when the completed project is transferred to the customer, the project's resources are reassigned, and the project is formally closed out.

Diff: 1 Section: 1.3 Project Life Cycles LO: 1.6: Understand and explain the project life cycle, its stages, and the activities that typically occur at each stage in the project.

Classification: Concept AACSB: Application of Knowledge 66) Use the project life cycle and intensity level graph to describe your journey in your current degree program. Provide the number of credit hours you have earned and the number remaining

in your program and briefly describe key events that show peaks or valleys in the five components.

Answer: Examples will vary, but the student should construct the intensity level versus time plot and show uncertainty, creativity, resources, project stake, and client interest waxing and waning as he moves through the PLC. Diff: 1 Section: 1.3 Project Life Cycles LO: 1.6: Understand and explain the project life cycle, its stages, and the activities that typically occur at each stage in the project.

Classification: Concept AACSB: Application of Knowledge 67) Where in the project life cycle are the intensity level of resources and client interest at their highest? Why is this the case?

Answer: The intensity level of resources peaks during the execution phase of the project life cycle. The actual work is performed during this phase, so the commitment of financial, human, and technical resources peaks at this time. The level of enthusiasm or concern expressed by the project's intended customer peaks in both the conceptualization and termination phases. The client is initially very interested because they provide input on the goal and specifications of the project. Project work moves out of the conceptual phase to a more internal mode and the client's interest wanes until the project nears delivery. At this point the client's interest peaks again as they prepare to receive the completed project and all the associated benefits.

Diff: 2 Section: 1.3 Project Life Cycles LO: 1.6: Understand and explain the project life cycle, its stages, and the activities that typically occur at each stage in the project.

Classification: Application AACSB: Application of Knowledge 68) The most recent addition to the four criteria of project success is: A) Time.

B) Cost.

C) Performance.

D) Client acceptance.

Answer: D Diff: 1 Section: 1.4 Determinants of Project Success LO: 1.7: Understand the concept of project "success," including various definitions of success, as well as the alternative models of success.

Classification: Application AACSB: Application of Knowledge 69) The project success criteria that functions as a quality check is: A) Time.

B) Cost.

C) Performance.

D) Client acceptance.

Answer: C Diff: 1 Section: 1.4 Determinants of Project Success LO: 1.7: Understand the concept of project "success," including various definitions of success,

as well as the alternative models of success.

Classification: Application AACSB: Application of Knowledge 70) Which of the following statements about project success criteria is BEST? A) Project cost is an external performance measure.

B) Completion time is an internal performance measure.

C) Client acceptance is an internal performance measure.

D) Client acceptance is often referred to as conducting a "quality" check.

Answer: B Diff: 2 Section: 1.4 Determinants of Project Success LO: 1.7: Understand the concept of project "success," including various definitions of success, as well as the alternative models of success.

Classification: Application AACSB: Application of Knowledge 71) A project has achieved success. Which of the following statements is another way of expressing the same outcome?

A) The project achieved the dual constraint plus the two external conditions.

B) The project achieved the triple constraint plus the one internal condition.

C) The project achieved the triple constraint plus the one external condition.

D) The project achieved the dual constraint plus the two internal conditions.

Answer: C Diff: 3 Section: 1.4 Determinants of Project Success LO: 1.7: Understand the concept of project "success," including various definitions of success, as well as the alternative models of success.

Classification: Application AACSB: Application of Knowledge 72) A design project is completed on time, under budget, to the customer's satisfaction, and in adherence to the technical specifications agreed. The new product takes the market by storm and everyone associated with the project receives a coveted gold star. Under the four dimensions of project success model, the project still needs to show: A) Future potential.

B) Business success.

C) Impact on the customer.

D) Efficiency.

Answer: A Diff: 2 Section: 1.4 Determinants of Project Success LO: 1.7: Understand the concept of project "success," including various definitions of success, as well as the alternative models of success.

Classification: Application AACSB: Application of Knowledge 73) Some argue that the quadruple constraint is insufficient for determining the success of a project. Instead, the quadruple constraint must be considered along with: A) The project's potential for generating future opportunities.

B) The project's ability to harm competitors.

C) The project's risk in relation to its reward.

D) The project's efficiency as it approaches 100%.

Answer: A Diff: 2 Section: 1.4 Determinants of Project Success LO: 1.7: Understand the concept of project "success," including various definitions of success, as well as the alternative models of success.

Classification: Application AACSB: Application of Knowledge 74) The dimension of project success that is realized first (chronologically) is: A) Future potential.

B) Business success.

C) Impact on the customer.

D) Efficiency.

Answer: D Diff: 2 Section: 1.4 Determinants of Project Success LO: 1.7: Understand the concept of project "success," including various definitions of success, as well as the alternative models of success.

Classification: Application AACSB: Application of Knowledge 75) The dimension of project success that is realized last (chronologically) is: A) Future potential.

B) Business success.

C) Impact on the customer.

D) Efficiency.

Answer: A Diff: 2 Section: 1.4 Determinants of Project Success LO: 1.7: Understand the concept of project "success," including various definitions of success, as well as the alternative models of success.

Classification: Application AACSB: Application of Knowledge 76) The dimension of project success that is measured by both an internal and external criterion is: A) Future potential.

B) Business success.

C) Impact on the customer.

D) Efficiency.

Answer: C Diff: 3 Section: 1.4 Determinants of Project Success LO: 1.7: Understand the concept of project "success," including various definitions of success, as well as the alternative models of success.

Classification: Application AACSB: Application of Knowledge

77) In the Atkinson model of project success, a project's impact to the surrounding community would be classified as: A) An element of the iron triangle.

B) A stakeholder benefit.

C) An organizational benefit.

D) A strategic goal.

Answer: B Diff: 3 Section: 1.4 Determinants of Project Success LO: 1.7: Understand the concept of project "success," including various definitions of success, as well as the alternative models of success.

Classification: Application AACSB: Application of Knowledge 78) In the Atkinson model of project success, stakeholder benefits NOT accrued by the organization might include: A) Improved effectiveness.

B) Improved efficiency.

C) Social and environmental impact.

D) Increased profits.

Answer: C Diff: 3 Section: 1.4 Determinants of Project Success LO: 1.7: Understand the concept of project "success," including various definitions of success, as well as the alternative models of success.

Classification: Application AACSB: Application of Knowledge 79) The Atkinson model considers which of these benefits is being accrued by the organization if a project is successful?

A) Information quality B) Validity C) Satisfied users D) Increased profits Answer: D Diff: 3 Section: 1.4 Determinants of Project Success LO: 1.7: Understand the concept of project "success," including various definitions of success, as well as the alternative models of success.

Classification: Application AACSB: Application of Knowledge

80) All groups that are affected by a project are known by this name: A) Ombudsmen.

B) Team members.

C) Minions.

D) Stakeholders.

Answer: D Diff: 2 Section: 1.4 Determinants of Project Success LO: 1.7: Understand the concept of project "success," including various definitions of success, as well as the alternative models of success.

Classification: Application AACSB: Application of Knowledge 81) An information system project might be assessed by which of the following criteria?

A) Maintainability B) Reduced waste C) Time D) Personal development Answer: A Diff: 2 Section: 1.4 Determinants of Project Success LO: 1.7: Understand the concept of project "success," including various definitions of success, as well as the alternative models of success.

Classification: Application AACSB: Application of Knowledge 82) The classic triple constraint standard for project performance is composed of time, cost, and client acceptance.

Answer: FALSE Diff: 2 Section: 1.4 Determinants of Project Success LO: 1.7: Understand the concept of project "success," including various definitions of success, as well as the alternative models of success.

Classification: Concept AACSB: Application of Knowledge 83) The business success dimension of project success determines whether the project achieved significant commercial success.

Answer: TRUE Diff: 2 Section: 1.4 Determinants of Project Success LO: 1.7: Understand the concept of project "success," including various definitions of success, as well as the alternative models of success.

Classification: Application AACSB: Application of Knowledge

84) The Atkinson model for assessing project success gathers input from all of the project's stakeholders.

Answer: TRUE Diff: 2 Section: 1.4 Determinants of Project Success LO: 1.7: Understand the concept of project "success," including various definitions of success, as well as the alternative models of success.

Classification: Application AACSB: Application of Knowledge 85) Rank the determinants of project success from most important to least important and justify your rankings.

Answer: Answers with regard to ranking may vary since, for example, circumstances may dictate that time is an overriding concern at the expense of quality and cost. The determinants of project success are: conformance to budget, schedule, performance specifications, and client acceptance.

Time — Projects are constrained by a specified timeframe during which they must be completed; they are not supposed to continue indefinitely.

Cost — Projects must meet budgeted allowances in order to use resources as efficiently as possible.

Performance — Projects are developed in order to adhere to some initially determined technical specifications. Performance measurement means determining whether the finished product operates according to specifications.

Client acceptance — Projects are developed with customers in mind; their purpose is to satisfy customers' needs. If the completed project meets all internal criteria but does not satisfy the customer, then the project has not been a complete success.

Diff: 3 Section: 1.4 Determinants of Project Success LO: 1.7: Understand the concept of project "success," including various definitions of success, as well as the alternative models of success.

Classification: Application AACSB: Application of Knowledge 86) Discuss the internal and external measures of project success.

Answer: The determinants of project success are the internal measures of time, cost, and performance and the external measure of client acceptance.

Time — Projects are constrained by a specified timeframe during which they must be completed; they are not supposed to continue indefinitely.

Cost — Projects must meet budgeted allowances in order to use resources as efficiently as possible.

Performance — Projects are developed in order to adhere to some initially determined technical specifications. Performance measurement means determining whether the finished product operates according to specifications.

Client acceptance — Projects are developed with customers in mind; their purpose is to satisfy customers' needs. If the completed project meets all internal criteria but does not satisfy the customer, then the project has not been a complete success.

Diff: 1 Section: 1.4 Determinants of Project Success LO: 1.7: Understand the concept of project "success," including various definitions of success, as well as the alternative models of success.

Classification: Application

AACSB: Application of Knowledge 87) Describe the elements of the Atkinson model of project success.

Answer: The Atkinson model incorporates the input of all stakeholders in assessing project success. Stakeholders are all groups that are affected by a project, for example, employees, customers, end users, the community, suppliers, etc. The Atkinson model begins with the traditional iron triangle of time, cost, and performance and adds considerations of the benefits accrued by organizational end external stakeholders.

Diff: 2 Section: 1.4 Determinants of Project Success LO: 1.7: Understand the concept of project "success," including various definitions of success, as well as the alternative models of success.

Classification: Application AACSB: Application of Knowledge 88) One model of project success offered in the chapter looks beyond the current project into the future. Comment on the elements of this model and their impact along the timeline from project completion to well beyond this point in time.

Answer: This framework was proposed by Shenhar, Levy, and Dvir and contains in chronological order, the elements of project efficiency, impact on the customer, business success, and preparing for the future. The immediate measure of success is efficiency, that is, have the project budget and schedule been achieved? More important, have the customer needs, technical specifications been met? Next, has the project achieved the commercial success that was hoped for? Finally, has the project opened new markets or new product lines, helped develop new technologies, or developed new skills for the organization?

Diff: 2 Section: 1.4 Determinants of Project Success LO: 1.7: Understand the concept of project "success," including various definitions of success, as well as the alternative models of success.

Classification: Application AACSB: Application of Knowledge 89) ABC company compares the way they manage projects with the way rival NBC company manages projects. ABC company is engaged in: A) Corporate espionage B) Ring level 0.

C) Competitive benchmarking.

D) Cutting edge practices.

Answer: C Diff: 2 Section: 1.5 Developing Project Management Maturity LO: 1.8: Understand the purpose of project maturity models and the process of benchmarking in organizations.

Classification: Application AACSB: Application of Knowledge 90) Project management maturity models are NOT used to: A) Compare practices against an industry standard.

B) Define a systematic route for improving project management practices.

C) Evaluate current project management practices.

D) Ascertain all stakeholders relevant to a project in the conceptualization phase.

Answer: D Diff: 2 Section: 1.5 Developing Project Management Maturity LO: 1.8: Understand the purpose of project maturity models and the process of benchmarking in organizations.

Classification: Application AACSB: Application of Knowledge 91) A spider-web diagram is useful for: A) Showing company performance on a number of criteria simultaneously.

B) Collecting data on how a competitor manages projects.

C) Identifying industry standards for project management maturity.

D) Coaching, evaluating, and auditing projects.

Answer: A Diff: 1 Section: 1.5 Developing Project Management Maturity LO: 1.8: Understand the purpose of project maturity models and the process of benchmarking in organizations.

Classification: Concept AACSB: Application of Knowledge 92) Maynard and Zed construct a spider-web diagram for their latest initiative at the pawn shop.

The rings of their spider web diagram show: A) The dimensions or success factors that are most important to the pawn shop.

B) The scores achieved on each of the dimensions.

C) The competitive comparison among other pawn shop projects.

D) The relative importance of each of the dimensions or critical success factors.

Answer: B Diff: 2 Section: 1.5 Developing Project Management Maturity LO: 1.8: Understand the purpose of project maturity models and the process of benchmarking in organizations.

Classification: Concept AACSB: Application of Knowledge 93) The project maturity model developed by the Center for Business Practices would have ________ rings if a spider-web diagram were used.

A) Three B) Four C) Five D) Six Answer: C Diff: 2 Section: 1.5 Developing Project Management Maturity LO: 1.8: Understand the purpose of project maturity models and the process of benchmarking in organizations.

Classification: Application AACSB: Application of Knowledge

94) The most basic level in Kerzner's project management maturity model is: A) Common language.

B) Common processes.

C) Initial process.

D) Ad hoc.

Answer: A Diff: 1 Section: 1.5 Developing Project Management Maturity LO: 1.8: Understand the purpose of project maturity models and the process of benchmarking in organizations.

Classification: Concept AACSB: Application of Knowledge 95) Carnegie Mellon's SEI model, ESI International's project framework, and the Center for Business Practices all call their highest level of maturity: A) Continuous improvement.

B) Optimizing.

C) Ganbei.

D) Comprehensive.

Answer: B Diff: 2 Section: 1.5 Developing Project Management Maturity LO: 1.8: Understand the purpose of project maturity models and the process of benchmarking in organizations.

Classification: Application AACSB: Application of Knowledge 96) The author's synthesis of all well-known maturity models states that moderate project management maturity is characterized by: A) Ad hoc processes.

B) Little support from upper management.

C) Project management training programs.

D) Active exploration of ways to improve project management.

Answer: C Diff: 2 Section: 1.5 Developing Project Management Maturity LO: 1.8: Understand the purpose of project maturity models and the process of benchmarking in organizations.

Classification: Application AACSB: Application of Knowledge

97) The maturity models presented in this chapter all demonstrate that: A) Project management maturity must have at least three levels.

B) Project management maturity tends to stagnate and then improve in a sudden burst to the next level.

C) Project management maturity can be measured only imprecisely.

D) Project management maturity is an ongoing process based on continuous improvement.

Answer: D Diff: 2 Section: 1.5 Developing Project Management Maturity LO: 1.8: Understand the purpose of project maturity models and the process of benchmarking in organizations.

Classification: Application AACSB: Application of Knowledge 98) Among the maturity models presented in this chapter, the one term that could be used to characterize the lowest level of each is: A) Ad hoc.

B) Ad nauseam.

C) Integrated.

D) Derivative.

Answer: A Diff: 2 Section: 1.5 Developing Project Management Maturity LO: 1.8: Understand the purpose of project maturity models and the process of benchmarking in organizations.

Classification: Application AACSB: Application of Knowledge 99) Which statement regarding the Project Management Institute's Project Management Body of Knowledge (PMBoK) is BEST? A) The PMBoK consists of seven knowledge areas of project management skills and activities.

B) Each element of the iron triangle is represented by its own area.

C) Project risk management is part of the integration section.

D) The institute's position that a properly planned project will not require any changes precludes the need for change control in the model.

Answer: B Diff: 2 Section: 1.6 Project Elements and Text Organization LO: 1.8: Understand the purpose of project maturity models and the process of benchmarking in organizations.

Classification: Application AACSB: Application of Knowledge

100) What are project management maturity models used for?

Answer: Project management maturity models are used to allow organizations to benchmark the best practices of successful project management firms. Project maturity models recognize that different organizations are currently at different levels of sophistication in their best practices for managing projects.

Diff: 2 Section: 1.5 Developing Project Management Maturity LO: 1.8: Understand the purpose of project maturity models and the process of benchmarking in organizations.

Classification: Application AACSB: Application of Knowledge 101) Describe the spider-web methodology for displaying project management maturity and present any five components of project management practice that can be displayed using this technique.

Answer: A spider-web diagram (or radar chart) derives its name from its visual similarity to a spider-web, consisting of some number of spokes connected by concentric rings. The spokes represent the components of project management practice that the organization chooses to measure. The rings represent levels of achievement for each of the components.

Diff: 2 Section: 1.5 Developing Project Management Maturity LO: 1.9: Identify the relevant maturity stages that organizations go through to become proficient in their use of project management techniques.

Classification: Application AACSB: Application of Knowledge 102) Describe the project management characteristics of firms that reside at the lowest levels of the ESI, SEI, Center for Business Practice, and Kerzner maturity models and characteristics of firms that reside at the highest levels of these models.

Answer: The lowest level of each model is occupied by companies that have no clear sense of project management. There is no common project management language within these companies and management processes, if any exist, are ad hoc. Firms occupying the highest level of project management maturity are project savvy; having progressed beyond simply applying project management to processes. These firms actively explore ways to continuously improve project management techniques and procedures.

Diff: 3 Section: 1.5 Developing Project Management Maturity LO: 1.9: Identify the relevant maturity stages that organizations go through to become proficient in their use of project management techniques.

Classification: Application AACSB: Application of Knowledge 103) What are the three levels of the generic project management maturity model and what are the characteristics of a company at each level? Provide examples of organizations at each of these levels and support your choices.

Answer: The lowest maturity level of the generic model is reserved for companies that have an ad hoc approach to project management. There is no common language for project management and little support for project workers and the projects. At the moderate maturity level, the organization has defined practices, some training programs for project management and organizational support dedicated to these efforts. At the high maturity level, the process of project management is institutionalized and there are continuous improvement efforts underway

from one project to the next. Example organizations will vary.

Diff: 3 Section: 1.5 Developing Project Management Maturity LO: 1.9: Identify the relevant maturity stages that organizations go through to become proficient in their use of project management techniques.

Classification: Application AACSB: Application of KnowledgeProject Management: Achieving Competitive Advantage, 6e (Pinto) Chapter 2 The Organizational Context: Strategy, Structure, and Culture 1) Which of the following is NOT an element of strategic management?

A) Formulating cross-functional decisions B) Implementing cross-functional decisions C) Evaluating cross-functional decisions D) Eliminating cross-functional decisions Answer: D Diff: 1 Section: 2.1 Projects and Organizational Strategy LO: 2.1: Understand how effective project management contributed to achieving strategic objectives.

Classification: Concept AACSB: Application of Knowledge 2) Which of the following is descriptive of a vision statement?

A) Inspirational B) Functional C) Supportive D) Critical Answer: A Diff: 1 Section: 2.1 Projects and Organizational Strategy LO: 2.1: Understand how effective project management contributed to achieving strategic objectives.

Classification: Concept AACSB: Application of Knowledge 3) One purpose of a mission statement is to: A) Establish a sense of what the organization hopes to accomplish.

B) Explain the company's reason for existence.

C) Support the tactical plans of the organization.

D) Explicitly enumerate the projects in the company's portfolio.

Answer: B Diff: 1 Section: 2.1 Projects and Organizational Strategy LO: 2.1: Understand how effective project management contributed to achieving strategic objectives.

Classification: Concept AACSB: Application of Knowledge

4) A strategic perspective on project management might ask which of the following questions prior to undertaking a project?

A) What is our corporate culture?

B) Does this project support the company vision?

C) Do we have the necessary budget for this project?

D) Can we define the problem?

Answer: D Diff: 1 Section: 2.1 Projects and Organizational Strategy LO: 2.1: Understand how effective project management contributed to achieving strategic objectives.

Classification: Concept AACSB: Application of Knowledge 5) The highest priority among strategic choice elements is: A) Objective.

B) Strategy.

C) Mission.

D) Goal.

Answer: C Diff: 2 Section: 2.1 Projects and Organizational Strategy LO: 2.1: Understand how effective project management contributed to achieving strategic objectives.

Classification: Concept AACSB: Application of Knowledge 6) Which of these strategic elements exists at a higher level than the others?

A) Programs B) Objectives C) Goals D) Strategies Answer: B Diff: 2 Section: 2.1 Projects and Organizational Strategy LO: 2.1: Understand how effective project management contributed to achieving strategic objectives.

Classification: Concept AACSB: Application of Knowledge

7) A strategic element consisting of statements such as "a 5% increase in freshman to sophomore retention" and "a 10% increase in the six-year graduation rate" is BEST described as a: A) Goal.

B) Program.

C) Strategy.

D) Mission.

Answer: A Diff: 2 Section: 2.1 Projects and Organizational Strategy LO: 2.1: Understand how effective project management contributed to achieving strategic objectives.

Classification: Application AACSB: Application of Knowledge 8) A strategic element that contains formally titled initiatives such as the Customer Survey Project, the Small Business Alliance Project, and the Employee Relations Project is most likely a: A) Mission.

B) Strategy.

C) Goal.

D) Program.

Answer: D Diff: 2 Section: 2.1 Projects and Organizational Strategy LO: 2.1: Understand how effective project management contributed to achieving strategic objectives.

Classification: Concept AACSB: Application of Knowledge 9) The same project managed in the same fashion may succeed in one organization but fail in another.

Answer: TRUE Diff: 2 Section: 2.0 Introduction LO: 2.1: Understand how effective project management contributed to achieving strategic objectives.

Classification: Concept AACSB: Application of Knowledge

10) Most companies are well suited to allow for successful completion of projects in conjunction with other ongoing corporate activities.

Answer: FALSE Diff: 1 Section: 2.0 Introduction LO: 2.1: Understand how effective project management contributed to achieving strategic objectives.

Classification: Concept AACSB: Application of Knowledge 11) Developing vision and mission statements is an important tactical step in project management.

Answer: FALSE Diff: 2 Section: 2.1 Projects and Organizational Strategy LO: 2.1: Understand how effective project management contributed to achieving strategic objectives.

Classification: Concept AACSB: Application of Knowledge 12) One element of strategic management is cross-functional decision making.

Answer: FALSE Diff: 1 Section: 2.1 Projects and Organizational Strategy LO: 2.1: Understand how effective project management contributed to achieving strategic objectives.

Classification: Concept AACSB: Application of Knowledge 13) Strategy, goals, and programs support the organizational mission.

Answer: TRUE Diff: 1 Section: 2.1 Projects and Organizational Strategy LO: 2.1: Understand how effective project management contributed to achieving strategic objectives.

Classification: Concept AACSB: Application of Knowledge

14) What is meant by the statement, "successful project management is contextual"?

Answer: The author indicates that the organization itself really matters—its culture, its structure, and its strategy each play an integral part, and together they create the environment in which a project will flourish or founder. Contextual issues provide the backdrop around which project activities must operate, so understanding what is beneath these issues truly contributes to understanding how to manage projects.

Diff: 2 Section: 2.0 Introduction LO: 2.1: Understand how effective project management contributed to achieving strategic objectives.

Classification: Critical Thinking AACSB: Reflective Thinking 15) What is strategic management and what role do projects play in it?

Answer: Strategic management is the science of formulating, implementing, and evaluating cross-functional decisions that enable an organization to achieve its objectives. Projects have been called "stepping stones" of corporate strategy because an organization's overall strategic vision is the driving force behind its project development. Many firms apply their vision statement or mission to evaluating new project opportunities as a first screening device.

Diff: 2 Section: 2.1 Projects and Organizational Strategy LO: 2.1: Understand how effective project management contributed to achieving strategic objectives.

Classification: Critical Thinking AACSB: Application of Knowledge 16) What are the essential components of corporate strategy and how are they related?

Answer: The essential components of corporate strategy are mission, objectives, strategy, goals, and programs. A hierarchical model is presented in the chapter where mission resides at the tip of a pyramid, objectives that more formally define the mission support it, and strategy, goals, and programs underlie the objectives. These strategic elements must align with each other in order for an organization to be successful long term.

Diff: 3 Section: 2.1 Projects and Organizational Strategy LO: 2.2: Recognize three components of the corporate strategy model: formulation, implementations, and evaluation Classification: Application AACSB: Application of Knowledge

17) Develop a TOWS matrix for a Fortune 100 firm that has announced a new project within the past year. Demonstrate how the new project, which could be any revenue-generating new product or service, fits or doesn't fit the organization based on your TOWS analysis.

Answer: Examples will vary, but the TOWS analysis must contain the elements of Threats, Opportunities, Weaknesses, and Strengths. Ideally the matrix should reference specific internal strengths and weaknesses and external opportunities and threats and the project offered as an example should reference at least some of these elements specifically.

Diff: 3 Section: 2.1 Projects and Organizational Strategy LO: 2.2: Recognize three components of the corporate strategy model: formulation, implementations, and evaluation Classification: Critical Thinking AACSB: Analytical Thinking 18) Define the term stakeholder and discuss the major groups of stakeholders.

Answer: Stakeholders are defined as all individuals or groups who have an active stake in the project and can potentially impact, either positively or negatively, its development. Internal and external are the broad categories of stakeholder groups. Internal stakeholders include top management, project team members, and other functional managers, among others. External stakeholder groups include clients, competitors, suppliers, and intervenor groups.

Diff: 2 Section: 2.2 Stakeholder Management LO: 2.2: Recognize three components of the corporate strategy model: formulation, implementations, and evaluation Classification: Concept AACSB: Application of Knowledge 19) The management department at the university decides to add a new program in restaurant, hotel, and institutional management. As part of the development process they hold focus groups consisting of area business leaders, current and former students, and restaurant and hotel owners.

These groups can be described as: A) Project leaders.

B) Project workers.

C) Stakeholders.

D) Clients.

Answer: C Diff: 2 Section: 2.2 Stakeholder Management LO: 2.3: See the importance of identifying critical project stakeholders and managing them within the context of project development.

Classification: Concept AACSB: Application of Knowledge

20) Which statement about stakeholders is BEST? A) Stakeholders wield considerable power.

B) Stakeholders can potentially impact project development.

C) Stakeholders are external to a company.

D) By definition, clients are not stakeholders, they are customers.

Answer: B Diff: 2 Section: 2.2 Stakeholder Management LO: 2.3: See the importance of identifying critical project stakeholders and managing them within the context of project development.

Classification: Concept AACSB: Application of Knowledge 21) External stakeholders that are external to a project but possess the power to effectively disrupt the project's development are: A) Intervenor groups.

B) Environmental groups.

C) Stressor groups.

D) Special-interest groups.

Answer: A Diff: 2 Section: 2.2 Stakeholder Management LO: 2.3: See the importance of identifying critical project stakeholders and managing them within the context of project development.

Classification: Concept AACSB: Application of Knowledge 22) Which of the following statements about clients is BEST? A) Client refers to the entire customer organization.

B) Clients tend to be concerned with receiving the project as quickly as they can possibly get it.

C) Client groups tend to have similar agendas.

D) A single presentation is best when dealing with all client groups in an organization so that everyone hears exactly the same message.

Answer: B Diff: 2 Section: 2.2 Stakeholder Management LO: 2.3: See the importance of identifying critical project stakeholders and managing them within the context of project development.

Classification: Application AACSB: Application of Knowledge

23) Which of the following is an internal project stakeholder group?

A) Clients B) Suppliers C) Functional managers D) Competitors Answer: C Diff: 2 Section: 2.2 Stakeholder Management LO: 2.3: See the importance of identifying critical project stakeholders and managing them within the context of project development.

Classification: Concept AACSB: Application of Knowledge 24) Which of the following is an external stakeholder group?

A) Project team members B) Top management C) Internal accountants D) Environmental groups Answer: D Diff: 1 Section: 2.2 Stakeholder Management LO: 2.3: See the importance of identifying critical project stakeholders and managing them within the context of project development.

Classification: Concept AACSB: Application of Knowledge 25) The group that provides raw materials or resources that the project team needs to complete the project is: A) Suppliers.

B) Intervenor groups.

C) Top management.

D) Functional managers.

Answer: A Diff: 1 Section: 2.2 Stakeholder Management LO: 2.3: See the importance of identifying critical project stakeholders and managing them within the context of project development.

Classification: Concept AACSB: Application of Knowledge

26) The first step in Block's framework of the political process as applied to stakeholder management is to: A) Assess your own capabilities.

B) Assess the environment.

C) Identify the goals of the principal actors.

D) Define the problem.

Answer: B Diff: 2 Section: 2.2 Stakeholder Management LO: 2.3: See the importance of identifying critical project stakeholders and managing them within the context of project development.

Classification: Concept AACSB: Application of Knowledge 27) Creating action plans to address the needs of various stakeholder groups is part of the ________ step of Block's framework for stakeholder management.

A) define the problem B) test and refine the solutions C) develop solutions D) identify the goals of the principal actors Answer: C Diff: 2 Section: 2.2 Stakeholder Management LO: 2.3: See the importance of identifying critical project stakeholders and managing them within the context of project development.

Classification: Concept AACSB: Application of Knowledge 28) Cleland's project stakeholder management cycle: A) Requires all stakeholders to be identified and locked in as a first step.

B) Is used to identify only internal stakeholders.

C) Is used to identify only external stakeholders.

D) Is a recurring cycle that allows new stakeholders to be considered at any time.

Answer: D Diff: 1 Section: 2.2 Stakeholder Management LO: 2.3: See the importance of identifying critical project stakeholders and managing them within the context of project development.

Classification: Concept AACSB: Application of Knowledge

29) Stakeholder analysis looks at a project's customers and determines whether their needs are being met.

Answer: FALSE Diff: 2 Section: 2.2 Stakeholder Management LO: 2.3: See the importance of identifying critical project stakeholders and managing them within the context of project development.

Classification: Concept AACSB: Application of Knowledge 30) Suppliers and competitors are possible intervenor groups in a project.

Answer: TRUE Diff: 1 Section: 2.2 Stakeholder Management LO: 2.3: See the importance of identifying critical project stakeholders and managing them within the context of project development.

Classification: Concept AACSB: Application of Knowledge 31) An important step in stakeholder management is the assessment of your own capabilities.

Answer: TRUE Diff: 1 Section: 2.2 Stakeholder Management LO: 2.3: See the importance of identifying critical project stakeholders and managing them within the context of project development.

Classification: Concept AACSB: Application of Knowledge 32) Consider your current major and the courses that comprise it. From the perspective of your university, and more specifically, from the department that "owns" this major, identify the stakeholders of this major. List the stakeholders in two categories, internal and external and assess the environment and the goals of each of these stakeholders.

Answer: Examples will vary, but internal stakeholders might include the students pursuing this major, the faculty in the department and any service department teaching the constituent courses, and other university faculty or staff, e.g., advisors, placement offices, continuing education, etc.

External stakeholders could include graduates, area employers, the community, and the state legislature for public institutions. Goals for internal stakeholders might be to grow the program, place students in well-compensated and high-profile jobs, score well on nationally normed certification tests, secure research funding and consultancies, and retain and graduate a high percentage of matriculants.

Diff: 2 Section: 2.2 Stakeholder Management LO: 2.3: See the importance of identifying critical project stakeholders and managing them within the context of project development.

Classification: Critical Thinking AACSB: Analytical Thinking

33) What are Block's six steps to stakeholder management and what should be accomplished in each step?

Answer: Block's six steps as applied to stakeholder management include: 1) assess the environment; 2) identify the goals of the principal actors; 3) assess your own capabilities; 4) define the problem; 5) develop solutions; 6) test and refine the solutions.

Assessing the environment calls for an investigation into the project's impact – will it be very high profile or low key? Identification of the principal actors' goals is a first step in defusing negative reaction. The project team should also look for hidden agendas in goal assessment.

Assessment of your own capabilities means taking inventory of the organization and identifying strengths and weaknesses. Solution development means creating an action plan to address the needs of the stakeholder groups and doing political homework. Testing and refining the solution requires acknowledging that the project manager and team are operating under imperfect information.

Diff: 3 Section: 2.2 Stakeholder Management LO: 2.3: See the importance of identifying critical project stakeholders and managing them within the context of project development.

Classification: Application AACSB: Application of Knowledge

34) Sketch the Cleland project stakeholder management cycle and discuss the salient elements.

Answer: The Cleland Project Stakeholder Management Cycle (below) stresses that all stakeholder management functions are interlocked and repetitive. As time and the project progress, and as investigation work is done, new stakeholders are discovered and must, in turn, be managed. As the environment changes, the project team must cycle through the model again to verify that existing strategies are effective.

Diff: 3 Section: 2.2 Stakeholder Management LO: 2.3: See the importance of identifying critical project stakeholders and managing them within the context of project development.

Classification: Concept AACSB: Application of Knowledge 35) What are the elements of organizational structure?

Answer: Organizational structure consists of three key elements. It designates formal reporting relationships, including the number of levels in the hierarchy and the span of control of managers and supervisors. Organizational structure identifies the grouping together of individuals into departments and departments into the total organization. Organizational structure includes the design of systems to ensure effective communication, coordination, and integration of effort across departments.

Diff: 1 Section: 2.2 Stakeholder Management LO: 2.3: See the importance of identifying critical project stakeholders and managing them within the context of project development.

Classification: Concept AACSB: Application of Knowledge 36) Describe the ways that individuals are grouped within an organization.

Answer: The most common reasons for creating a department are by function, product, geography, and project. Functional structures group people performing similar activities into departments. Product structures cluster together all employees responsible for a single product

line or family of products. Geography ignores product and function and groups people by geographical region or physical location. Project grouping puts people involved in the same project in the same department.

Diff: 1 Section: 2.3 Organizational Structure LO: 2.3: See the importance of identifying critical project stakeholders and managing them within the context of project development.

Classification: Concept AACSB: Application of Knowledge 37) Which of the following is NOT an element of organizational structure?

A) Well-articulated mission, vision, and value statements B) Formal reporting relationships C) Grouping together of individuals into departments D) Systems designed to ensure effective communication Answer: A Diff: 1 Section: 2.3 Organizational Structure LO: 2.4: Recognize the strengths and weaknesses of three basic forms of organizational structure and their implications for managing projects.

Classification: Concept AACSB: Application of Knowledge 38) The assistant to the manager did not report to the assistant manager, only to the manager.

This reporting relationship was clearly delineated in the: A) Company culture.

B) Organizational structure.

C) Stakeholder analysis.

D) Company mission statement.

Answer: B Diff: 1 Section: 2.3 Organizational Structure LO: 2.4: Recognize the strengths and weaknesses of three basic forms of organizational structure and their implications for managing projects.

Classification: Application AACSB: Application of Knowledge

39) Organizational structure identifies the grouping of individuals into: A) Organizations.

B) Companies.

C) Silos.

D) Departments.

Answer: D Diff: 1 Section: 2.3 Organizational Structure LO: 2.4: Recognize the strengths and weaknesses of three basic forms of organizational structure and their implications for managing projects.

Classification: Concept AACSB: Application of Knowledge 40) Individuals are commonly organized into departments for all of the following reasons EXCEPT: A) Seniority.

B) Function.

C) Product.

D) Geography.

Answer: D Diff: 1 Section: 2.3 Organizational Structure LO: 2.4: Recognize the strengths and weaknesses of three basic forms of organizational structure and their implications for managing projects.

Classification: Concept AACSB: Application of Knowledge 41) Span of control refers to: A) The number of departments involved in a project.

B) The number of days that the project manager is allowed to complete the project.

C) The number of employees one person supervises.

D) The number of levels from top to bottom in an organization.

Answer: C Diff: 2 Section: 2.3 Organizational Structure LO: 2.4: Recognize the strengths and weaknesses of three basic forms of organizational structure and their implications for managing projects.

Classification: Concept AACSB: Application of Knowledge

42) The University of Puhonicks hires several professors that specialize in accounting, management, and economics and clusters each into one of three departments. The dean has obviously decided to group employees by: A) Function.

B) Geography.

C) Project.

D) Product.

Answer: D Diff: 3 Section: 2.3 Organizational Structure LO: 2.4: Recognize the strengths and weaknesses of three basic forms of organizational structure and their implications for managing projects.

Classification: Concept AACSB: Application of Knowledge 43) One thing that organizational structure must include is: A) The design of systems for effective communication.

B) The standards of performance for all employees.

C) The expected outcomes for all projects in the company portfolio.

D) The mission and vision statements.

Answer: A Diff: 3 Section: 2.3 Organizational Structure LO: 2.4: Recognize the strengths and weaknesses of three basic forms of organizational structure and their implications for managing projects.

Classification: Concept AACSB: Application of Knowledge 44) Which statement about organization for project management is BEST? A) The overall structure of the organization specifies how project team members should communicate with the project manager.

B) The internal project team structure specifies the arrangement of all units or interest groups participating in the development of the project.

C) Two distinct organizational structures operate simultaneously within the project management context: the organizational structure and the project team structure.

D) All of these statements are correct.

Answer: B Diff: 2 Section: 2.3 Organizational Structure LO: 2.4: Recognize the strengths and weaknesses of three basic forms of organizational structure and their implications for managing projects.

Classification: Concept AACSB: Application of Knowledge

45) Probably the most common type of organizational structure today is: A) Project.

B) Functional.

C) Matrix.

D) Organic.

Answer: B Diff: 1 Section: 2.4 Forms of Organizational Structure LO: 2.4: Recognize the strengths and weaknesses of three basic forms of organizational structure and their implications for managing projects.

Classification: Concept AACSB: Application of Knowledge 46) Companies that are structured by grouping people performing similar activities into departments are: A) Project organizations.

B) Functional organizations.

C) Matrix organizations.

D) Departmental organizations.

Answer: B Diff: 1 Section: 2.4 Forms of Organizational Structure LO: 2.4: Recognize the strengths and weaknesses of three basic forms of organizational structure and their implications for managing projects.

Classification: Concept AACSB: Application of Knowledge 47) A major player in the software industry stumbles from one new edition of its operating system and office automation package to another. As soon as one package is released, the programmers and developers have two weeks to latch onto a different team that is updating a different package. Failure to find another team to work for means an end to their employment.

This organizational structure is BEST classified as a: A) Functional organization.

B) Matrix organization C) Project organization.

D) Flexible organization.

Answer: C Diff: 1 Section: 2.4 Forms of Organizational Structure LO: 2.4: Recognize the strengths and weaknesses of three basic forms of organizational structure and their implications for managing projects.

Classification: Concept AACSB: Application of Knowledge

48) John Drone toils endlessly at Hurts Corporation on his routine assignment and also on a number of project teams. His annual evaluation features input from his line manager and each of the project managers, all of whom have equal say in how his 12-hour work day is partitioned.

John Drone is employed by a: A) Functional organization.

B) Project organization.

C) Cross-functional organization.

D) Matrix organization.

Answer: D Diff: 2 Section: 2.4 Forms of Organizational Structure LO: 2.4: Recognize the strengths and weaknesses of three basic forms of organizational structure and their implications for managing projects.

Classification: Concept AACSB: Application of Knowledge 49) A functional organization structure is a weakness for project management because: A) In-depth knowledge and intellectual capital development are enabled.

B) No disruption or changes to a firm's design are necessitated by projects developed within this structure.

C) Priorities among functional departments may be different and competing.

D) Standard career paths are enabled so team members only perform their duties as needed.

Answer: C Diff: 2 Section: 2.4 Forms of Organizational Structure LO: 2.4: Recognize the strengths and weaknesses of three basic forms of organizational structure and their implications for managing projects.

Classification: Concept AACSB: Application of Knowledge 50) The tendency of employees in a functionally organized company to become fixated on their own concerns and work assignments to the exclusion of the needs of other departments is known as: A) Layering.

B) Myopia.

C) Nepotism.

D) Siloing.

Answer: D Diff: 2 Section: 2.4 Forms of Organizational Structure LO: 2.4: Recognize the strengths and weaknesses of three basic forms of organizational structure and their implications for managing projects.

Classification: Concept AACSB: Application of Knowledge

51) The functional structure is well-suited when: A) There are low levels of external uncertainty.

B) There is high instability in the environment.

C) Project coordination is assigned to the lowest levels in an organization.

D) There must be rapid response to external opportunities and threats.

Answer: A Diff: 2 Section: 2.4 Forms of Organizational Structure LO: 2.4: Recognize the strengths and weaknesses of three basic forms of organizational structure and their implications for managing projects.

Classification: Application AACSB: Application of Knowledge 52) In general, the poorest organizational structure when it comes to managing projects is probably the: A) Matrix structure.

B) Functional structure.

C) Project structure.

D) Process structure.

Answer: B Diff: 2 Section: 2.4 Forms of Organizational Structure LO: 2.4: Recognize the strengths and weaknesses of three basic forms of organizational structure and their implications for managing projects.

Classification: Application AACSB: Application of Knowledge 53) All major decisions and authority are under the control of the project manager in a: A) Matrix structure.

B) Functional structure.

C) Project structure.

D) Process structure.

Answer: C Diff: 2 Section: 2.4 Forms of Organizational Structure LO: 2.4: Recognize the strengths and weaknesses of three basic forms of organizational structure and their implications for managing projects.

Classification: Concept AACSB: Application of Knowledge

54) A project structure for an organization is a peach when you consider how well it: A) Creates legions of project management experts.

B) Maintains a pooled supply of intellectual capital.

C) Assuages the fear of unemployment by project team members once the project has ended.

D) Fosters loyalty to the overall organization by project team members.

Answer: A Diff: 2 Section: 2.4 Forms of Organizational Structure LO: 2.4: Recognize the strengths and weaknesses of three basic forms of organizational structure and their implications for managing projects.

Classification: Concept AACSB: Application of Knowledge 55) Staffing fluctuations associated with project completion and initiation are most likely to occur in organizations that are: A) Functionally structured.

B) Project structured.

C) Matrix structured.

D) Process structured.

Answer: B Diff: 3 Section: 2.4 Forms of Organizational Structure LO: 2.4: Recognize the strengths and weaknesses of three basic forms of organizational structure and their implications for managing projects.

Classification: Concept AACSB: Application of Knowledge 56) A dual hierarchy is the salient feature of a: A) Project structure.

B) Matrix structure.

C) Functional structure.

D) Bi-modal structure.

Answer: B Diff: 1 Section: 2.4 Forms of Organizational Structure LO: 2.4: Recognize the strengths and weaknesses of three basic forms of organizational structure and their implications for managing projects.

Classification: Concept AACSB: Application of Knowledge

57) The project manager controls most of the project activities and functions, including the assignment and control of project resources in the: A) Strong matrix.

B) Weak matrix.

C) Dual matrix.

D) Primal matrix.

Answer: A Diff: 2 Section: 2.4 Forms of Organizational Structure LO: 2.4: Recognize the strengths and weaknesses of three basic forms of organizational structure and their implications for managing projects.

Classification: Concept AACSB: Application of Knowledge 58) The manager of the Super Burrito Project is in the midst of an important project team meeting but Fred Fromage, the representative from the Cheese department, is nowhere to be found. After a brief investigation it is determined that Fred's manager in the Cheese department has other plans for Fred's time and efforts over the next several days and he simply won't be available for Super Burrito Project work. The organizational structure being used here is unquestionably a: A) Strong matrix.

B) Weak matrix.

C) Project organization.

D) Chevre organization.

Answer: B Diff: 2 Section: 2.4 Forms of Organizational Structure LO: 2.4: Recognize the strengths and weaknesses of three basic forms of organizational structure and their implications for managing projects.

Classification: Application AACSB: Application of Knowledge 59) A major weakness of a matrix organizational structure for project management occurs when: A) The environment is dynamic.

B) Resources are scarce and shared between functional responsibilities and the competing project.

C) The number of human resource coordination meetings is considered.

D) One considers the dual importance of project management and functional efficiency.

Answer: C Diff: 2 Section: 2.4 Forms of Organizational Structure LO: 2.4: Recognize the strengths and weaknesses of three basic forms of organizational structure and their implications for managing projects.

Classification: Concept AACSB: Application of Knowledge

60) A matrix organization for project management has a distinct advantage because: A) Dual hierarchies mean two bosses.

B) A significant amount of time is spent negotiating the sharing of critical resources.

C) Workers must reconcile competing project and functional demands.

D) Project importance is enhanced by setting authority equal to that of functional departments.

Answer: D Diff: 1 Section: 2.4 Forms of Organizational Structure LO: 2.4: Recognize the strengths and weaknesses of three basic forms of organizational structure and their implications for managing projects.

Classification: Application AACSB: Application of Knowledge 61) Policies and procedures are examples of an organization's external environment.

Answer: FALSE Diff: 2 Section: 2.4 Forms of Organizational Structure LO: 2.4: Recognize the strengths and weaknesses of three basic forms of organizational structure and their implications for managing projects.

Classification: Concept AACSB: Application of Knowledge 62) A project organization does not have functional departments.

Answer: FALSE Diff: 1 Section: 2.4 Forms of Organizational Structure LO: 2.4: Recognize the strengths and weaknesses of three basic forms of organizational structure and their implications for managing projects.

Classification: Concept AACSB: Application of Knowledge 63) What are the three types of organizations presented by the author and how are they different?

Answer: The three organizational structures presented by the author are the functional organization, the project organization, and the matrix organization. The functional structure is probably the most common organization and consists of grouping people by business activity or duties in the organization. A project organization is set up with their exclusive focus aimed at running projects. Resources are assigned to the project for as long as the project needs them. A matrix organization is a combination of functional and project alternatives and seeks a balance between these two extremes. The matrix structure creates a dual hierarchy where there is a balance of authority between project emphasis and functional departmentalization.

Diff: 2 Section: 2.4 Forms of Organizational Structure LO: 2.4: Recognize the strengths and weaknesses of three basic forms of organizational structure and their implications for managing projects.

Classification: Critical Thinking AACSB: Reflective Thinking 64) What are the advantages and disadvantages of using a functional structure to manage a project?

Answer: A functional structure groups people and departments performing similar activities into units. Division of labor in the functional structure is not based on the type of product or project

supported, but rather according to the type of work performed. In an organization having a functional structure, members routinely work on multiple projects or support multiple product lines simultaneously. The most common weakness in a functional structure is the tendency for employees organized this way to become fixated on their concerns and work assignments to the exclusion of the needs of other departments (called functional siloing). An additional weakness of the functional structure is it provides no logical location for a central project management function and that projects operating in this environment must be layered on top of the duties of functional groups. Finally, there is a tendency to sub-optimize efforts on a project that is not tightly bound to a group. A department that is not directly affected by a project may put forth only the minimum effort.

Diff: 2 Section: 2.4 Forms of Organizational Structure LO: 2.4: Recognize the strengths and weaknesses of three basic forms of organizational structure and their implications for managing projects.

Classification: Application AACSB: Application of Knowledge 65) Describe the two forms of a matrix organization and indicate the advantages of each for project management.

Answer: A matrix organization may be further classified as being a weak matrix (sometimes called functional matrix) and a strong matrix (sometimes referred to as a project matrix). A weak matrix has a great deal of functional organization character; the manager still controls resources and manages project components. The strong matrix cedes much of this control over to the project manager. If the functional and project managers differ in skills, then the form having the superior manager would be ideal. The strong matrix is the closest that a matrix environment can come to be a true project organization. If the competitive environment is such that a project organization form is ideal, then the strong matrix is superior to the weak matrix.

Diff: 2 Section: 2.4 Forms of Organizational Structure LO: 2.4: Recognize the strengths and weaknesses of three basic forms of organizational structure and their implications for managing projects.

Classification: Application AACSB: Application of Knowledge

66) What is a pure project structure for an organization? What are the advantages of using this structure?

Answer: A project structure is set up such that the exclusive focus is on running projects. Each project is a self-contained business unit with a dedicated project team. The project manager is the leader of the project and the staff all report to the leader. The staffing decisions and duration of the employees' tenure with the project are left to the discretion of the project manager, who is the chief point of authority for the project. The four advantages of this structure as presented in the text are: the project manager is the authority and in control of the project; improved communication among project team members; there is a ready supply of trained project management professionals; and increased flexibility and rapid response to environmental opportunities.

Diff: 2 Section: 2.4 Forms of Organizational Structure LO: 2.4: Recognize the strengths and weaknesses of three basic forms of organizational structure and their implications for managing projects.

Classification: Critical Thinking AACSB: Application of Knowledge 67) The belief that organizations can sometimes gain tremendous benefit from creating a fully dedicated project organization is captured by the term: A) Heavyweight project organization.

B) Matrix organization.

C) Benevolent society.

D) Leveraged benefits.

Answer: A Diff: 1 Section: 2.4 Forms of Organizational Structure LO: 2.5: Understand how companies can change their structure into a "heavyweight project organization" structure to facilitate effective project management practices.

Classification: Application AACSB: Application of Knowledge 68) The Larson and Gobeli study that compared projects that had been managed in a variety of structural types revealed that new product development projects tended to be most effectively executed when the organizational structure was a: A) Project matrix.

B) Project organization.

C) Balanced matrix.

D) Functional matrix.

Answer: B Diff: 2 Section: 2.4 Forms of Organizational Structure LO: 2.5: Understand how companies can change their structure into a "heavyweight project organization" structure to facilitate effective project management practices.

Classification: Concept AACSB: Application of Knowledge 69) The Larson and Gobeli study that compared projects that had been managed in a variety of structural types revealed that construction projects tended to be most effectively executed when the organizational structure was a: A) Project organization.

B) Balanced matrix.

C) Project matrix.

D) Functional matrix.

Answer: C Diff: 3 Section: 2.4 Forms of Organizational Structure LO: 2.5: Understand how companies can change their structure into a "heavyweight project organization" structure to facilitate effective project management practices.

Classification: Application AACSB: Application of Knowledge 70) The Larson and Gobeli study that compared projects that had been managed in a variety of structural types revealed that both new product development and construction projects tended to be least effectively executed when the organizational structure was a: A) Project matrix.

B) Project organization.

C) Balanced matrix.

D) Functional organization.

Answer: D Diff: 1 Section: 2.4 Forms of Organizational Structure LO: 2.5: Understand how companies can change their structure into a "heavyweight project organization" structure to facilitate effective project management practices.

Classification: Application AACSB: Application of Knowledge 71) A project management office is designed to oversee or improve the management of projects without stripping responsibility from the project manager.

Answer: TRUE Diff: 2 Section: 2.5 Project Management Offices LO: 2.5: Understand how companies can change their structure into a "heavyweight project organization" structure to facilitate effective project management practices.

Classification: Concept AACSB: Application of Knowledge

72) The weather station model of the project management office (PMO) uses the PMO as only a tracking and monitoring device.

Answer: TRUE Diff: 2 Section: 2.5 Project Management Offices LO: 2.5: Understand how companies can change their structure into a "heavyweight project organization" structure to facilitate effective project management practices.

Classification: Concept AACSB: Application of Knowledge 73) The resource pool model of the project management office (PMO) provides skilled labor to an organization's projects.

Answer: TRUE Diff: 1 Section: 2.5 Project Management Offices LO: 2.5: Understand how companies can change their structure into a "heavyweight project organization" structure to facilitate effective project management practices.

Classification: Concept AACSB: Application of Knowledge 74) The resource pool model of the project management office (PMO) works best when the PMO is generally viewed as a Level 1 support structure.

Answer: FALSE Diff: 1 Section: 2.5 Project Management Offices LO: 2.5: Understand how companies can change their structure into a "heavyweight project organization" structure to facilitate effective project management practices.

Classification: Concept AACSB: Application of Knowledge 75) Consider your weekly routine and how it might be managed as a pure project structure. What changes would be required for you to convert from a process mentality to a project mentality?

Answer: A project structure is set up such that the exclusive focus is on running projects. As such, the student's degree plan could be considered to be a college degree project, the student's employment could be considered a company president or VP project, and any children they might have could be considered their retirement plan. Given my current failure-to-launch progeny, perhaps the last example is a stretch. The idea would be to take a long-term view of end goals and see the day to day as constituent activities of each. The student is the project manager and to a great extent, the project team, operating autonomously perhaps for the more personal degree and child-rearing projects and less so for the career ladder project.

Diff: 2 Section: 2.4 Forms of Organizational Structure LO: 2.5: Understand how companies can change their structure into a "heavyweight project organization" structure to facilitate effective project management practices.

Classification: Critical Thinking AACSB: Reflective Thinking 76) Centralized units within an organization or department that oversee or improve the management of projects are called: A) Project management offices.

B) PERT units.

C) Tiger teams.

D) Central clearinghouses.

Answer: A Diff: 1 Section: 2.5 Project Management Offices LO: 2.6: Identify the characteristics of three forms of project management office (PMO).

Classification: Concept AACSB: Application of Knowledge 77) A PMO is NOT used: A) As a resource center.

B) To act as a central repository for project documentation.

C) To replace the project manager as being responsible for the project.

D) As the place where project management improvements are identified and then disseminated to the rest of the organization.

Answer: C Diff: 1 Section: 2.5 Project Management Offices LO: 2.6: Identify the characteristics of three forms of project management office (PMO).

Classification: Concept AACSB: Application of Knowledge 78) A typical PMO could supply a company's project manager with assistance in: A) Composing a project culture document.

B) Establishing organizational structure.

C) Crafting a mission statement.

D) Resource allocation.

Answer: D Diff: 2 Section: 2.5 Project Management Offices LO: 2.6: Identify the characteristics of three forms of project management office (PMO).

Classification: Concept AACSB: Application of Knowledge

79) A typical PMO could supply a company's project manager with assistance in: A) Activity scheduling.

B) Establishing organizational structure.

C) Crafting a mission statement.

D) Day-to-day process improvement.

Answer: A Diff: 2 Section: 2.5 Project Management Offices LO: 2.6: Identify the characteristics of three forms of project management office (PMO).

Classification: Concept AACSB: Application of Knowledge 80) The PMO is used as a tracking and monitoring device under the: A) Control tower model.

B) Resource pool model.

C) Weather station model.

D) Radar model.

Answer: C Diff: 1 Section: 2.5 Project Management Offices LO: 2.6: Identify the characteristics of three forms of project management office (PMO).

Classification: Concept AACSB: Application of Knowledge 81) The PMO is used to protect and support the skill of project management under the: A) Resource pool model.

B) Weather station model.

C) Control tower model.

D) Project model.

Answer: C Diff: 2 Section: 2.5 Project Management Offices LO: 2.6: Identify the characteristics of three forms of project management office (PMO).

Classification: Concept AACSB: Application of Knowledge

82) The PMO is used to maintain and provide a cadre of skilled and trained project professionals as needed under the: A) Control tower model.

B) Cadre model.

C) Weather station model.

D) Resource pool model.

Answer: D Diff: 2 Section: 2.5 Project Management Offices LO: 2.6: Identify the characteristics of three forms of project management office (PMO).

Classification: Concept AACSB: Application of Knowledge 83) The weather station model performs the invaluable function of: A) Keeping an eye on project status without influencing the project.

B) Establishing standards for managing projects.

C) Enforcing the adherence to accepted protocols for project management.

D) Improving the current state of project management procedures.

Answer: A Diff: 1 Section: 2.5 Project Management Offices LO: 2.6: Identify the characteristics of three forms of project management office (PMO).

Classification: Concept AACSB: Application of Knowledge 84) The greatest advantage of a PMO is that: A) It is essentially another layer of oversight within the organization.

B) It helps an organization develop project management skills.

C) It serves as a bottleneck for communication across the organization.

D) All project management skills are located at one point in an organization.

Answer: B Diff: 2 Section: 2.5 Project Management Offices LO: 2.6: Identify the characteristics of three forms of project management office (PMO).

Classification: Application AACSB: Application of Knowledge

85) Compare and contrast the three types of project management offices with regards to place in organization, function, and effectiveness in project management.

Answer: A project management office (PMO) is a centralized unit within an organization or department that oversees or improves the management of projects. PMOs have been described as operating under one of three alternative forms and purposes within companies: 1) weather station, 2) control tower, and 3) resource pool. The major difference among the three forms is the level of involvement in the project management process. The weather station form is used only when the PMO is needed for tracking and monitoring project progress. The control tower model treats project management as a business skill to be protected and supported, focusing on developing methods for continually improving project management skills. The goal of the resource pool PMO is to maintain and provide a cadre of trained and skilled project professionals as they are needed.

Diff: 2 Section: 2.5 Project Management Offices LO: 2.6: Identify the characteristics of three forms of project management office (PMO).

Classification: Critical Thinking AACSB: Reflective Thinking 86) The solution to external and internal problems that has worked consistently for a group and that is therefore taught to new members as the correct way to perceive, think about, and feel in relation to these problems is known as: A) Groupthink.

B) Socialization.

C) Organizational culture.

D) A frame of reference.

Answer: C Diff: 1 Section: 2.6 Organizational Culture LO: 2.7: Understand key concepts of corporate culture and how cultures are formed.

Classification: Concept AACSB: Application of Knowledge 87) Which of the following statements about culture is BEST? A) Rules of behavior are formally written down so they can be learned as quickly as possible.

B) Rules of behavior are common across the entire organization regardless of how large it is.

C) Rules of behavior, since they are informal, may be accepted or rejected by new employees in the organization.

D) The conversion process a company uses can influence its culture.

Answer: D Diff: 1 Section: 2.6 Organizational Culture LO: 2.7: Understand key concepts of corporate culture and how cultures are formed.

Classification: Application AACSB: Application of Knowledge

88) The tale of Professor Larry Foster and his grade book filled with Fs was told by one generation of faculty to the next with a mix of envy, awe and delight. If there was one thing you could be sure of, there was no grade inflation in his department, whose culture was formed primarily by: A) Critical incident.

B) Reward system.

C) Rules and procedures.

D) Environment.

Answer: A Diff: 2 Section: 2.6 Organizational Culture LO: 2.7: Understand key concepts of corporate culture and how cultures are formed.

Classification: Concept AACSB: Application of Knowledge 89) The information systems department prides itself on being on the often bleeding edge of high-tech course offerings. They were the first department to create online classes and the first to battle all of the issues associated with these offerings. When Wally interviewed for the new assistant professor position, he knew that his subcutaneous chip was only a hiring decision away.

Corporate culture in this department is probably most affected by: A) The environment.

B) Technology.

C) Geographical location.

D) Critical incidents.

Answer: B Diff: 1 Section: 2.6 Organizational Culture LO: 2.7: Understand key concepts of corporate culture and how cultures are formed.

Classification: Application AACSB: Application of Knowledge 90) Herb Kelleher of Southwest Airlines frequently takes Southwest flights to check out operations and informally interview passengers to find out how satisfied they are with their service. Herb's attention to customer service and emphasis of it over profits permeates the organization. Southwest's corporate culture is influenced strongly by: A) Reward systems.

B) Rules and procedures.

C) Key organizational members.

D) Environment.

Answer: C Diff: 1 Section: 2.6 Organizational Culture LO: 2.7: Understand key concepts of corporate culture and how cultures are formed.

Classification: Application AACSB: Application of Knowledge

91) The Luther Post Office closes the customer service window promptly at noon for their lunch break and opens again at one, perhaps a little after if the town's Sonic is busy. The Jones Post Office workers are aghast at this policy, preferring to stagger their lunch breaks so that the customer service window is always attended. It would appear that this difference in culture is primarily driven by: A) Reward systems.

B) Key organizational members.

C) Critical incidents.

D) Geographical location.

Answer: D Diff: 1 Section: 2.6 Organizational Culture LO: 2.7: Understand key concepts of corporate culture and how cultures are formed.

Classification: Application AACSB: Application of Knowledge 92) When grades aren't submitted in a timely fashion, the course management system assigns an incomplete. When a graduating student receives an incomplete in a senior level course, his job offer is withdrawn. When his job offer is withdrawn, the student has to crash at his buddy's apartment. When a student crashes at his buddy's apartment, he has to sleep on the couch. When a student sleeps on the couch, he wakes up covered with cat hair. In an effort to keep students free from cat hair, college leadership demands that all grades are submitted within ten hours of administering a final exam. This college's corporate culture is influenced strongly by: A) Reward systems.

B) Rules and procedures.

C) Key organizational members.

D) Environment.

Answer: B Diff: 1 Section: 2.6 Organizational Culture LO: 2.7: Understand key concepts of corporate culture and how cultures are formed.

Classification: Application AACSB: Application of Knowledge 93) One way that organizational culture affects project management is by: A) How the environment is affected by the culture.

B) Where the project occurs and how much it ultimately costs.

C) The level of resources needed to complete the project.

D) How departments are expected to interact with each other.

Answer: D Diff: 2 Section: 2.6 Organizational Culture LO: 2.7: Understand key concepts of corporate culture and how cultures are formed.

Classification: Concept AACSB: Application of Knowledge

94) Which of the following does NOT constitute an impact of organizational culture on project management?

A) The way departments interact with each other B) How much trust exists among project team members C) How customers perceive mission and vision D) How committed employees are to goals Answer: C Diff: 1 Section: 2.6 Organizational Culture LO: 2.7: Understand key concepts of corporate culture and how cultures are formed.

Classification: Concept AACSB: Application of Knowledge 95) A failing project becomes a black hole for money, time, and personnel as management continues to pour resources into it despite the growing expectation that it will fail miserably. This phenomenon is known in project management circles as: A) The vanishing horizon.

B) The Pareto principle.

C) Escalation of commitment.

D) Negative outcome disposition.

Answer: C Diff: 2 Section: 2.6 Organizational Culture LO: 2.7: Understand key concepts of corporate culture and how cultures are formed.

Classification: Concept AACSB: Application of Knowledge 96) Which of these is NOT considered a critical contextual factor in project management?

A) Organizational strategy B) Organizational function C) Organizational structure D) Organizational culture Answer: B Diff: 2 Section: 2.6 Organizational Culture LO: 2.7: Understand key concepts of corporate culture and how cultures are formed.

Classification: Concept AACSB: Application of Knowledge 97) Organizational culture can be influenced in a variety of ways, including by reward systems and by key organizational members.

Answer: TRUE Diff: 2 Section: 2.6 Organizational Culture LO: 2.7: Understand key concepts of corporate culture and how cultures are formed.

Classification: Concept AACSB: Application of Knowledge 98) Typically, organizational culture consists of formally written rules and guidelines that members can refer to as needed.

Answer: FALSE

Diff: 1 Section: 2.6 Organizational Culture LO: 2.7: Understand key concepts of corporate culture and how cultures are formed.

Classification: Concept AACSB: Application of Knowledge 99) Technology, environment, rules, and reward systems can all contribute to a company's culture.

Answer: TRUE Diff: 1 Section: 2.6 Organizational Culture LO: 2.7: Understand key concepts of corporate culture and how cultures are formed.

Classification: Concept AACSB: Application of Knowledge 100) Define organizational culture and explain how it is developed.

Answer: Organizational culture is the unwritten rules of behavior or norms that are used to shape and guide behavior, as shared by some subset of organizational members and is taught to all new members of the company. Organizational cultures may form from an organization's technology, environment, and geographical location. An organization's reward system and rules and procedures also influence the culture. Key organizational members and critical incidents may make a strong enough impression to help form organizational culture.

Diff: 1 Section: 2.6 Organizational Culture LO: 2.7: Understand key concepts of corporate culture and how cultures are formed.

Classification: Concept AACSB: Application of Knowledge 101) Compare the organizational culture among the students in this class with a contrasting student organizational culture from another class at this or another institution. Identify key differences in how these two different cultures developed using factors discussed in this book.

Answer: Examples will vary, but the student should identify differences stemming from the technology, environment, geographical location, reward system, rules and procedures, key organizational members and/or critical incidents.

Diff: 1 Section: 2.6 Organizational Culture LO: 2.7: Understand key concepts of corporate culture and how cultures are formed.

Classification: Critical Thinking AACSB: Reflective Thinking

102) What are three ways that organizational culture impacts project management?

Answer: Organizational culture may affect project management in at least four ways. First, it affects how departments are expected to interact and support each other in pursuit of project goals. Second, the culture influences the level of employee commitment to the goals of the project on balance with other, potentially competing goals. Third, the culture influences project planning processes such as the way work is estimated or how resources are assigned to projects.

Finally, the culture affects how managers evaluate the performance of project teams and how they view the outcomes of projects.

Diff: 2 Section: 2.6 Organizational Culture LO: 2.8: Recognize the positive effects of a supportive organizational culture on project management practices versus those of a culture that works against project management.

Classification: Concept AACSB: Application of Knowledge 103) Describe the phenomenon called "escalation of commitment" and where it fits in the lore of organizational culture.

Answer: Escalation of commitment occurs when, in spite of evidence identifying a project as failing, no longer necessary, beset by huge technical or other difficulties, and just an all around bad idea, organizations continue to support it past the point where an objective viewpoint would suggest that it should be terminated. Escalation of commitment that is well known to an entire organization might fit most neatly alongside such culture affecting factors as key organizational members and critical incidents. Although there are a number of reasons for escalation of commitment to a failed decision, one important reason is the unwillingness of the organization to acknowledge failure or its culture working toward blinding key decision makers to the need to take corrective action.

I had a car like this once.

Diff: 2 Section: 2.6 Organizational Culture LO: 2.8: Recognize the positive effects of a supportive organizational culture on project management practices versus those of a culture that works against project management.

Classification: Concept AACSB: Application of Knowledge Project Management: Achieving Competitive Advantage, 6e (Pinto) Chapter 3 Project Selection and Portfolio Management 1) Souder's project screening criterion that indicates an effective model must reflect organization objectives, including a firm's strategic goals and mission is called: A) Realism.

B) Capability.

C) Comparability.

D) Ease of use.

Answer: A Diff: 2 Section: 3.1 Project Selection LO: 3.1: Explain six criteria for a useful project selection/screen model.

Classification: Concept AACSB: Application of Knowledge 2) Souder's project screening criterion of realism addresses the question:

A) How many workers will the project need?

B) Will the project work as intended?

C) Who are the stakeholders?

D) How often should the project team meet?

Answer: B Diff: 2 Section: 3.1 Project Selection LO: 3.1: Explain six criteria for a useful project selection/screen model.

Classification: Concept AACSB: Application of Knowledge 3) A selection model that is broad enough to be applied to multiple projects has the benefit of: A) Ease of use.

B) Comparability.

C) Capability.

D) Flexibility.

Answer: B Diff: 2 Section: 3.1 Project Selection LO: 3.1: Explain six criteria for a useful project selection/screen model.

Classification: Factual AACSB: Application of Knowledge

4) A project screening criterion that allows the company to compare long-term versus short-term projects, projects with different technologies, and projects with different commercial objectives is: A) Flexibility.

B) Ease of use.

C) Capability.

D) Realistic.

Answer: C Diff: 2 Section: 3.1 Project Selection LO: 3.1: Explain six criteria for a useful project selection/screen model.

Classification: Application AACSB: Application of Knowledge 5) If a model can be applied successfully by people in all areas and levels of an organization, it is said to possess the trait of: A) Capability.

B) Ease of use.

C) Flexibility.

D) Realism.

Answer: B Diff: 2 Section: 3.1 Project Selection LO: 3.1: Explain six criteria for a useful project selection/screen model.

Classification: Concept AACSB: Application of Knowledge 6) An MBA redesign committee plans to spend a decade traveling the world to benchmark graduate programs at other universities. Regardless of the screening model being used, it will suffer from poor performance in the area of: A) flexibility.

B) Capability.

C) Comparability.

D) Cost.

Answer: D Diff: 1 Section: 3.1 Project Selection LO: 3.1: Explain six criteria for a useful project selection/screen model.

Classification: Concept AACSB: Application of Knowledge

7) Souder's model selection criterion that encourages ease of adaptation to changes in tax laws, building codes, among others, is called: A) Ease of use.

B) Cost.

C) Capability.

D) Flexibility.

Answer: D Diff: 2 Section: 3.1 Project Selection LO: 3.1: Explain six criteria for a useful project selection/screen model.

Classification: Concept AACSB: Application of Knowledge 8) A writer estimates it will take three months to generate spiffy documents to accompany a seminal work in operations management. He grossly underestimates the time required and misses his deadline by two months. This estimate was: A) Objective and accurate.

B) Subjective and accurate.

C) Objective and inaccurate.

D) Subjective and inaccurate.

Answer: D Diff: 2 Section: 3.1 Project Selection LO: 3.1: Explain six criteria for a useful project selection/screen model.

Classification: Concept AACSB: Application of Knowledge 9) A wedding planner allows $10,000 for flowers and three weeks to receive all RSVPs back from the list of 700 guests. Both estimates are correct within a fraction of a percent. We could describe this factoid as: A) Numeric and subjective.

B) Numeric and objective.

C) Non-numeric and subjective.

D) Non-numeric and objective.

Answer: A Diff: 2 Section: 3.1 Project Selection LO: 3.1: Explain six criteria for a useful project selection/screen model.

Classification: Concept AACSB: Application of Knowledge

10) An internal operating issue in project screening and selection is: A) Expected return on investment.

B) Change in physical environment.

C) Patent protection.

D) The chance that the firm's goodwill will suffer due to the quality of the finished project.

Answer: B Diff: 2 Section: 3.1 Project Selection LO: 3.1: Explain six criteria for a useful project selection/screen model.

Classification: Factual AACSB: Application of Knowledge 11) Quality risk refers to the chance that: A) The project relies on developing new or untested technologies.

B) The firm's reputation may suffer when the product becomes available.

C) The well-being of the users or developers may decline dramatically.

D) The firm may face a lawsuit.

Answer: B Diff: 1 Section: 3.1 Project Selection LO: 3.1: Explain six criteria for a useful project selection/screen model.

Classification: Concept AACSB: Application of Knowledge 12) One facet of risk in project screening is: A) The change in manufacturing operations resulting from the project.

B) The initial cash outlay.

C) The potential for lawsuits or legal obligation.

D) The strategic fit of the project with the company.

Answer: C Diff: 2 Section: 3.1 Project Selection LO: 3.1: Explain six criteria for a useful project selection/screen model.

Classification: Application AACSB: Application of Knowledge 13) One project factor that directly impacts a firm's internal operations is the: A) Expected return on investment.

B) Financial risk.

C) Need to develop employees.

D) Impact on company's image.

Answer: C Diff: 2 Section: 3.1 Project Selection LO: 3.1: Explain six criteria for a useful project selection/screen model.

Classification: Application AACSB: Application of Knowledge 14) A commercial factor in project selection and screening might be: A) A need to develop employees.

B) The likelihood that users of the project are injured.

C) The long-term market dominance.

D) The impact on the company's image.

Answer: C Diff: 2 Section: 3.1 Project Selection LO: 3.1: Explain six criteria for a useful project selection/screen model.

Classification: Application AACSB: Application of Knowledge 15) Which statement regarding project selection is BEST? A) Organizational reality can be perfectly captured by most decision-making models.

B) Before selecting any project, the team should identify all the relevant issues that play a role in project selection.

C) Decision models must contain either objective or subjective factors.

D) Every decision model has both objective and subjective factors.

Answer: D Diff: 3 Section: 3.1 Project Selection LO: 3.1: Explain six criteria for a useful project selection/screen model.

Classification: Application AACSB: Application of Knowledge 16) Which statement regarding project selection and screening criteria is BEST? A) The most complete model in the world is still only a partial reflection of organization reality.

B) It is possible, given enough time and effort, to identify all relevant issues that play a role in project selection.

C) Decision models are either objective or subjective.

D) For many projects, more than 80% of the decision criteria are vital.

Answer: A Diff: 1 Section: 3.1 Project Selection LO: 3.1: Explain six criteria for a useful project selection/screen model.

Classification: Application AACSB: Application of Knowledge 17) An effective project selection model must reflect organizational objectives, including a firm's strategic goals and mission.

Answer: TRUE Diff: 2 Section: 3.1 Project Selection LO: 3.1: Explain six criteria for a useful project selection/screen model.

Classification: Concept AACSB: Application of Knowledge 18) An expert's opinion on an issue may be subjective but very accurate.

Answer: TRUE Diff: 1 Section: 3.1 Project Selection LO: 3.1: Explain six criteria for a useful project selection/screen model.

Classification: Concept AACSB: Application of Knowledge

19) Numeric project selection models, by their very nature, employ objective values.

Answer: FALSE Diff: 2 Section: 3.1 Project Selection LO: 3.1: Explain six criteria for a useful project selection/screen model.

Classification: Concept AACSB: Application of Knowledge 20) Every decision model contains both objective and subjective factors.

Answer: TRUE Diff: 3 Section: 3.1 Project Selection LO: 3.1: Explain six criteria for a useful project selection/screen model.

Classification: Factual AACSB: Application of Knowledge 21) Describe or define any four important attributes for screening models used to evaluate projects.

Answer: Souder identifies five important issues that managers should consider when evaluating screening models: realism, capability, flexibility, ease of use, and cost, and the text offers up comparability. Taking these in reverse order, comparability refers to the ability of the criterion to be applied to multiple projects without bias. Cost can be defined as the expense in either time or money (or both) that is required to use the model. Ease of use calls for the model to be simple enough to be used by people in all areas of the organization, both in specific project roles and in those related to functional positions. Flexibility is the quality of ease of modification if trial applications require changes. Capability is the ability of the model to respond to changes in the conditions under which projects are carried out. Finally, realism is the ability of the model to reflect organizational objectives, including a firm's strategic goals and mission.

Diff: 2 Section: 3.1 Project Selection LO: 3.1: Explain six criteria for a useful project selection/screen model.

Classification: Concept AACSB: Application of Knowledge

22) Provide an example of a numeric and non-numeric project selection model and indicate what advantage each might hold over the other.

Answer: Project selection models come in two general classes: numeric and non-numeric.

Numeric models seek to use numbers for the decision process involved in selecting projects.

These values can either be derived objectively or subjectively. Non-numeric models do not employ numbers at decision inputs, relying instead on other data. Each technique has its own merits and may be employed successfully, and a choice between the two should be tempered by the adage GIGO. If a numeric model uses objective, external values that are "correct," then a decision maker can have a high degree of confidence that the values under study will lead to a reasonable decision. A non-numeric model might appeal to decision makers that have less of a quantitative bent or those that operate in a less quantifiable decision arena.

Diff: 2 Section: 3.1 Project Selection LO: 3.1: Explain six criteria for a useful project selection/screen model.

Classification: Application AACSB: Analytical Thinking 23) Describe any four types of risk that projects may hold.

Answer: Risk factors reflect elements of unpredictability for the firm. Technical risks occur due to the development of new or untested technologies. Financial risks arise from the financial exposure caused by investing in the project. Safety risk may arise as the well-being of users or developers of the project is compromised. Any risks to the firm's goodwill or reputation due to the quality of the completed project are termed quality risks. Finally, the potential for lawsuits or legal obligation is legal exposure.

Diff: 2 Section: 3.1 Project Selection LO: 3.1: Explain six criteria for a useful project selection/screen model.

Classification: Factual AACSB: Application of Knowledge 24) A checklist screening model does NOT consider: A) Whether one criterion is more important than another.

B) Governmental or stakeholder interference.

C) Product durability and future market potential of the product line.

D) The riskiness of the new venture.

Answer: A Diff: 3 Section: 3.2 Approaches to Project Screening and Selection LO: 3.2: Understand how to employ checklists and simple scoring models to select projects.

Classification: Application AACSB: Application of Knowledge

25) A simple scoring model for project evaluation requires: A) Importance weights from 1 to 10 assigned to each criterion.

B) Score values assigned to each criterion in terms of its rating.

C) A division of weights by scores to arrive at a standardized score for each criterion.

D) A summation for each criterion to achieve an overall criterion score.

Answer: B Diff: 2 Section: 3.2 Approaches to Project Screening and Selection LO: 3.2: Understand how to employ checklists and simple scoring models to select projects.

Classification: Application AACSB: Application of Knowledge 26) The simple scoring model has this advantage over a checklist model for screening projects.

A) Scaling from 1 to 5 is extremely accurate.

B) Scaling models ensure a reasonable link between the selected and weighted criteria and the business objectives that motivated their selection.

C) Scaling models allow decision makers to treat one criterion as more important than another.

D) Scaling models have been proven to make correct decisions better than 95% of the time while checklists only achieve 80% accuracy.

Answer: C Diff: 2 Section: 3.2 Approaches to Project Screening and Selection LO: 3.2: Understand how to employ checklists and simple scoring models to select projects.

Classification: Application AACSB: Application of Knowledge

27) A project manager is using a simple scoring model to decide which of four projects is best, given the company's limited resources. The criteria, importance weights, and scores for each are shown in the table. Which project should be chosen?

Project

Criteria

Importance Weight Score

1 Greenlight 2 3

1 2 3

3 2 1

Runway

1 2 3

1 2 3

2 1 3

X

1 2 3

1 2 3

1 2 2

1 1 2 2 2 2 Ilevomit 3 3 2 A) Project Greenlight B) Project Runway C) Project X D) Project Ilevomit Answer: B Diff: 2 Section: 3.2 Approaches to Project Screening and Selection LO: 3.2: Understand how to employ checklists and simple scoring models to select projects.

Classification: Application AACSB: Analytical Thinking

28) A project manager is using a simple scoring model to decide which of four projects is best, given the company's limited resources. The criteria, importance weights, and scores for each are shown in the table. Which project should be chosen?

Project

Criteria

Importance Weight Score

White

1 2 3

1 2 3

2 2 3

Pinkman

1 2 3

1 2 3

3 3 2

Fring

1 2 3

1 2 3

3 2 3

1 1 3 2 1 Salamanca 2 3 3 3 A) Project White B) Project Pinkman C) Project Fring D) Project Salamanca Answer: C Diff: 2 Section: 3.2 Approaches to Project Screening and Selection LO: 3.2: Understand how to employ checklists and simple scoring models to select projects.

Classification: Application AACSB: Analytical Thinking

29) A simple scoring model is used to decide among three projects that we'll call A, B, and C. The total score for project A is 30, for project B is 20, and for project C is 10. Which of the following statements is BEST? A) If project A is successfully completed, it will yield three times the benefits that project C would have provided.

B) If project C is chosen, the company would benefit only half as much as if they had chosen project B. C) Project C is better than project B for this company at this point in time.

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

Answer: D Diff: 2 Section: 3.2 Approaches to Project Screening and Selection LO: 3.2: Understand how to employ checklists and simple scoring models to select projects.

Classification: Application AACSB: Application of Knowledge 30) The pairwise comparison approach: A) Is a method to split the weights assigned to subcriteria.

B) Is a method to compare pairs of hierarchies prior to any further analysis.

C) Is a means of achieving all project objectives within the allocated time frame.

D) May be used instead of AHP if time is limited.

Answer: A Diff: 1 Section: 3.2 Approaches to Project Screening and Selection LO: 3.2: Understand how to employ checklists and simple scoring models to select projects.

Classification: Application AACSB: Application of Knowledge 31) The simplest method of project screening and selection is developing a list of criteria that pertain to the choice of projects and then applying them to alternatives.

Answer: TRUE Diff: 1 Section: 3.2 Approaches to Project Screening and Selection LO: 3.2: Understand how to employ checklists and simple scoring models to select projects.

Classification: Application AACSB: Application of Knowledge 32) The checklist model of project screening has a mechanism to accommodate the differential importance of relevant criteria.

Answer: FALSE Diff: 1 Section: 3.2 Approaches to Project Screening and Selection LO: 3.2: Understand how to employ checklists and simple scoring models to select projects.

Classification: Application AACSB: Application of Knowledge

33) A simplified scoring model addresses all the weakness of a checklist model for project screening.

Answer: TRUE Diff: 1 Section: 3.2 Approaches to Project Screening and Selection LO: 3.2: Understand how to employ checklists and simple scoring models to select projects.

Classification: Application AACSB: Application of Knowledge 34) A simplified scoring model is used to determine that project Cow has a score of 38 and project GiGi has a score of 30. Project Cow is therefore 26.7% better than project GiGi. Answer: FALSE Diff: 2 Section: 3.2 Approaches to Project Screening and Selection LO: 3.2: Understand how to employ checklists and simple scoring models to select projects.

Classification: Application AACSB: Application of Knowledge 35) How does a checklist project screening model work?

Answer: The simplest method of project screening and selection is developing a checklist of criteria that pertain to a choice of projects and then applying them to the projects. Each potential project is scored against the list of criteria and is rated as performing high, medium, or low with the project scoring highest overall being selected as the project to undertake.

Diff: 2 Section: 3.2 Approaches to Project Screening and Selection LO: 3.2: Understand how to employ checklists and simple scoring models to select projects.

Classification: Factual AACSB: Application of Knowledge

36) Your university is considering two projects to increase enrollment: offering traditional classes from midnight to 6 a.m. or offering house call classes where the professor would visit your home to provide instruction. Use a simple scoring model with at least three criteria to evaluate these two potential projects and indicate which project should be chosen.

Answer: Answers may vary widely. A simplified scoring model ranks criteria according to their relative importance. Each project is evaluated for performance on each criterion and an overall score for each project is computed by summing the products of each score times its weight. A simple scoring model might be as follows with House Calls narrowly edging out Midnight Classes.

Weighted Total Project Criteria & Weight Score Score Score Midnight Classes Time 2 2 4 Cost 1 1 1 Market Potential 3 2 6 11 House Calls Time 2 3 6 Cost 1 3 3 Market Potential 3 1 3 12 Diff: 2 Section: 3.2 Approaches to Project Screening and Selection LO: 3.2: Understand how to employ checklists and simple scoring models to select projects.

Classification: Application AACSB: Analytical Thinking 37) What are the advantages and limitations of simple scoring models?

Answer: The simple scoring model has some useful advantages as a project selection device.

First, it is easy to tie to critical strategic goals for the company and second, it is easy to comprehend and use. The major limitation of simple scoring models is that the scaling is not very accurate and is often treated as if ratios and difference in scoring levels have real meaning.

Another drawback of these models is that they depend on the relevance of the selected criteria and the accuracy of weight given them.

Diff: 1 Section: 3.2 Approaches to Project Screening and Selection LO: 3.2: Understand how to employ checklists and simple scoring models to select projects.

Classification: Factual AACSB: Application of Knowledge

38) The first step in the Analytical Hierarchy Process: A) Requires supporting requirements to be combined into Level II challenges.

B) Is analyzing the process you intend to improve before undertaking any improvement project.

C) Requires Saatyfication of the team members.

D) Consists of constructing a hierarchy of criteria and subcriteria.

Answer: D Diff: 1 Section: 3.2 Approaches to Project Screening and Selection LO: 3.3: Use more sophisticated scoring models, such as the Analytical Hierarchy Process.

Classification: Application AACSB: Application of Knowledge 39) Which statement about the Analytical Hierarchy Process is FALSE? A) AHP scores are significant.

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

C) AHP can improve the process of developing project proposals.

D) AHP groups subcriteria that share the weight of a common higher-level criterion.

Answer: B Diff: 2 Section: 3.2 Approaches to Project Screening and Selection LO: 3.3: Use more sophisticated scoring models, such as the Analytical Hierarchy Process.

Classification: Application AACSB: Application of Knowledge 40) The Analytic Hierarchy Process is being employed in a project selection decision. One major criteria, cost, receives a weighting value of 40%, which is split into short term (50%), intermediate term (30%), and long term (20%). Which of these statements is BEST? A) Short term, intermediate term, and long term must receive overall weightings that total 100%.

B) There must be at least one other major criteria that has 40% weighting.

C) Intermediate-term cost receives a weighting of 12%.

D) Long-term cost receives an overall weighting of 80%.

Answer: C Diff: 2 Section: 3.2 Approaches to Project Screening and Selection LO: 3.3: Use more sophisticated scoring models, such as the Analytical Hierarchy Process.

Classification: Application AACSB: Analytical Thinking

41) The Analytical Hierarchy Process is used to decide among three projects that we'll call A, B, and C. The total score for project A is .650, for project B is .514, and for project C is .321.

Which of the following statements is BEST? A) Project A is twice as good as project C. B) The analysis must be incorrect because the total scores should sum to 1.00.

C) The analysis must be incorrect because there are two total scores that exceed 0.50.

D) The analysis must be incorrect because project C's total score is odd.

Answer: A Diff: 1 Section: 3.2 Approaches to Project Screening and Selection LO: 3.3: Use more sophisticated scoring models, such as the Analytical Hierarchy Process.

Classification: Application AACSB: Analytical Thinking 42) The profile model plots a graph on a(n): A) Perception-reality pair of axes.

B) Risk-return pair of axes.

C) Efficiency-effectiveness pair of axes.

D) Saxon-Norman pair of axes.

Answer: B Diff: 1 Section: 3.2 Approaches to Project Screening and Selection LO: 3.3: Use more sophisticated scoring models, such as the Analytical Hierarchy Process.

Classification: Application AACSB: Application of Knowledge 43) The Analytical Hierarchy Process elegantly addresses scaling issues in criteria and negative utility in alternative scores.

Answer: FALSE Diff: 1 Section: 3.2 Approaches to Project Screening and Selection LO: 3.3: Use more sophisticated scoring models, such as the Analytical Hierarchy Process.

Classification: Application AACSB: Analytical Thinking

44) How does the Analytical Hierarchy Process differ from a simple scoring model? Is it worth the extra effort?

Answer: The Analytical Hierarchy Process (AHP) is a four-step process that consists of structuring the hierarchy of criteria, allocating weights to criteria, assigning numerical values to evaluation dimensions, and evaluating project proposals. Primary differences between the two approaches are that AHP takes a more rigorous view of the assignment of criteria weights and values to the evaluation dimensions. Differences among evaluation scale items are not necessarily equal and can be adjusted as managers and decision makers see fit. The resulting product sums have meaning, unlike the values computed in a simple scoring model. AHP methodology can dramatically improve the project selection process over use of the simple scoring model. AHP is not without limitations and does require more effort to configure and use.

The authors caution against using a project screening tool that has a poor cost/benefit ratio, so determination of the value derived from use of AHP versus a simple scoring model can best be made on a case-by-case basis.

Diff: 3 Section: 3.2 Approaches to Project Screening and Selection LO: 3.3: Use more sophisticated scoring models, such as the Analytical Hierarchy Process.

Classification: Application AACSB: Application of Knowledge 45) The efficient frontier in project management is the set of portfolio options that offer: A) A minimum return for a minimum risk.

B) A minimum return for a maximum risk.

C) A maximum return for a minimum risk.

D) A maximum return for a maximum risk.

Answer: C Diff: 1 Section: 3.2 Approaches to Project Screening and Selection LO: 3.4: Learn how to use financial concepts, such as the efficient frontier and risk/return models.

Classification: Application AACSB: Application of Knowledge 46) Which statement about the use of the profile model is BEST? A) The profile model requires careful calculation of the percentage risk for each possible project.

B) The scale used for the profile model can be any two numerical variables that a company deems important.

C) The efficient frontier in the profile model is where return is 100% (or greater) and risk is 0%.

D) For a given level of risk, a positive move on the return axes would indicate a superior project.

Answer: D Diff: 2 Section: 3.2 Approaches to Project Screening and Selection LO: 3.4: Learn how to use financial concepts, such as the efficient frontier and risk/return models.

Classification: Application AACSB: Application of Knowledge 47) Between projects A and B, project A will be considered a superior financial undertaking if it has: A) A shorter payback period than project B. B) A lower average rate of return than project B.

C) A lower net present value than project B. D) A longer payback period than project B. Answer: A Diff: 1 Section: 3.3 Financial Models LO: 3.4: Learn how to use financial concepts, such as the efficient frontier and risk/return models.

Classification: Application AACSB: Application of Knowledge 48) The efficient frontier in a profile model is the set of options that offers a maximum return for a given level of risk or a minimum risk for every level of return.

Answer: TRUE Diff: 2 Section: 3.2 Approaches to Project Screening and Selection LO: 3.4: Learn how to use financial concepts, such as the efficient frontier and risk/return models.

Classification: Factual AACSB: Analytical Thinking 49) The present value of money is lower the further out in the future I expect to spend it.

Answer: FALSE Diff: 2 Section: 3.3 Financial Models LO: 3.4: Learn how to use financial concepts, such as the efficient frontier and risk/return models.

Classification: Application AACSB: Analytical Thinking 50) The reciprocal of the payback period is used to calculate the average rate of return for a project.

Answer: TRUE Diff: 2 Section: 3.3 Financial Models LO: 3.4: Learn how to use financial concepts, such as the efficient frontier and risk/return models.

Classification: Application AACSB: Analytical Thinking

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

Answer: FALSE Diff: 3 Section: 3.3 Financial Models LO: 3.4: Learn how to use financial concepts, such as the efficient frontier and risk/return models.

Classification: Application AACSB: Analytical Thinking 52) Describe the use of a profile model and sketch an example, clearly labeling every component and the best alternative in your example.

Answer: Profile models allow managers to plot risk/return options for various alternatives and then select the project that maximizes return while staying within a certain range of minimum acceptable risk. The profile model makes use of a concept known as the efficient frontier—the set of project portfolio options that offers either a maximum return for every given level of risk or the minimum risk for every level of return. A profile model appears below.

Diff: 3 Section: 3.2 Approaches to Project Screening and Selection LO: 3.4: Learn how to use financial concepts, such as the efficient frontier and risk/return models.

Classification: Application AACSB: Application of Knowledge

53) Net present value is being used to break the tie among four otherwise equal projects. If the interest rate is 4%, which of these anticipated four-year flows would yield the greatest net present value?

A) $10,000 in year 1; $11,000 in year 2; $12,000 in year 3; and $13,000 in year 4 B) $13,000 in year 1; $12,000 in year 2; $11,000 in year 3; and $10,000 in year 4 C) $10,000 in year 1; $10,000 in year 2; $13,000 in year 3; and $13,000 in year 4 D) $11,000 in year 1; $11,000 in year 2; $12,000 in year 3; and $12,000 in year 4 Answer: B Diff: 3 Section: 3.3 Financial Models LO: 3.5: Employ financial analyses and options analyses to evaluate the potential for new project investments.

Classification: Application AACSB: Analytical Thinking 54) A company facing an interest rate of 8% must choose among projects offering the following four-year cash flows. If the company is employing the net present value criterion, which project should they choose?

A) $25,000 in year 1; $15,000 in year 2; $10,000 in year 3; and $5,000 in year 4 B) $5,000 in year 1; $5,000 in year 2; $20,000 in year 3; and $30,000 in year 4 C) $15,000 in year 1; $15,000 in year 2; $15,000 in year 3; and $15,000 in year 4 D) $5,000 in year 1; $5,000 in year 2; $25,000 in year 3; and $25,000 in year 4 Answer: C Diff: 3 Section: 3.3 Financial Models LO: 3.5: Employ financial analyses and options analyses to evaluate the potential for new project investments.

Classification: Application AACSB: Analytical Thinking 55) Which of these statements about internal rate of return analysis is BEST? A) If the IRR is less than the company's required rate of return, the project is worth funding.

B) Projects having lower IRR are generally superior to those having higher IRR. C) IRR and NPV calculations always make the same investment recommendations.

D) If net outflows follow a period of net inflows, IRR may give conflicting results.

Answer: D Diff: 3 Section: 3.3 Financial Models LO: 3.5: Employ financial analyses and options analyses to evaluate the potential for new project investments.

Classification: Application AACSB: Analytical Thinking

56) Which of these statements about valuation models is NOT correct?

A) NPV employs a weighted average cost of capital discount rate that reflects potential reinvestment.

B) IRR and NPV calculations typically make the same investment recommendations only when the projects are independent of each other.

C) If cash flows are not normal, IRR may arrive at multiple solutions.

D) IRR is a more robust determinant of project viability than NPV. Answer: D Diff: 3 Section: 3.3 Financial Models LO: 3.5: Employ financial analyses and options analyses to evaluate the potential for new project investments.

Classification: Application AACSB: Analytical Thinking 57) A project manager is using the internal rate of return method to make the final decision on which project to undertake. Which of these four projects has the highest internal rate of return?

A) $25,000 initial outlay with $10,000 cash inflows during the following five years B) $12,500 initial outlay with $10,000 cash inflows during the following five years C) $25,000 initial outlay with $5,000 cash inflows during the following five years D) $12,500 initial outlay with $5,000 cash inflows during the following five years Answer: B Diff: 3 Section: 3.3 Financial Models LO: 3.5: Employ financial analyses and options analyses to evaluate the potential for new project investments.

Classification: Application AACSB: Analytical Thinking 58) A project manager is using the internal rate of return method to make the final decision on which project to undertake. Which of these four projects has the highest internal rate of return?

A) $100,000 initial outlay with $10,000 cash inflows during the first two years, $20,000 during the third and fourth years, and $30,000 during the fifth year B) $100,000 initial outlay with a $5,000 cash inflow during the first year, $15,000 cash inflow during the second year, and $25,000 cash inflows during years three through five C) $75,000 initial outlay with a $5,000 cash inflow during the first year, increasing by $5,000 per year through the fifth year D) $50,000 initial outlay with $5,000 cash inflows during the first two years, $15,000 during the third and fourth years, and $20,000 during the fifth year Answer: D Diff: 3 Section: 3.3 Financial Models LO: 3.5: Employ financial analyses and options analyses to evaluate the potential for new project investments.

Classification: Application AACSB: Analytical Thinking 59) A project manager is using the net present value method to make the final decision on which project to undertake. The company has a 12% required rate of return and expects a 3% rate of inflation for the following four years. What is the NPV of a project that has cash flows as shown in the table?

Year Cash Flow 0 -$250,000 1 $50,000 2 $60,000 3 $70,000 4 $80,000 A) -$9,762 B) -$56,859 C) -$69,387 D) -$98,780 Answer: C Diff: 3 Section: 3.3 Financial Models LO: 3.5: Employ financial analyses and options analyses to evaluate the potential for new project investments.

Classification: Application AACSB: Analytical Thinking 60) A project manager is using the payback method to make the final decision on which project to undertake. The company has a 10% required rate of return and expects a 4% rate of inflation for the following four years. What is the non-discounted payback of a project that has cash flows as shown in the table?

Year Cash Flow 0 -$250,000 1 $50,000 2 $60,000 3 $70,000 4 $80,000 A) 3.875 years B) 3.625 years C) 3.750 years D) 3.500 years Answer: A Diff: 3 Section: 3.3 Financial Models LO: 3.5: Employ financial analyses and options analyses to evaluate the potential for new project investments.

Classification: Application AACSB: Analytical Thinking

61) A project manager is using the payback method to make the final decision on which project to undertake. The company has a 10% required rate of return and expects a 4% rate of inflation for the following five years. What is the discounted payback of a project that has cash flows as shown in the table?

Year Cash Flow 0 -$100,000 1 $20,000 2 $50,000 3 $50,000 4 $25,000 5 $500,000 A) 3.4 years B) 2.6 years C) 5.0 years D) 4.2 years Answer: C Diff: 3 Section: 3.3 Financial Models LO: 3.5: Employ financial analyses and options analyses to evaluate the potential for new project investments.

Classification: Application AACSB: Analytical Thinking 62) A project manager is using the net present value method to make the final decision on which project to undertake. The company has a 15% required rate of return and expects a 5% rate of inflation for the following four years. What is the NPV of a project that has cash flows as shown in the table?

Year Cash Flow 0 -$350,000 1 $50,000 2 $80,000 3 $100,000 4 $150,000 A) $4.955 B) $42,586 C) -$23,667 D) -$122,569 Answer: D Diff: 3 Section: 3.3 Financial Models LO: 3.5: Employ financial analyses and options analyses to evaluate the potential for new project investments.

Classification: Application AACSB: Analytical Thinking 63) A project manager is using the payback method to make the final decision on which project to undertake. The company has a 10% required rate of return and expects a 4% rate of inflation for the following five years. What is the non-discounted payback of a project that has cash flows

as shown in the table?

Year Cash Flow 0 -$500,000 1 $50,000 2 $75,000 3 $150,000 4 $150,000 5 $750,000 A) 3.7 years B) 4.1 years C) 5.0 years D) 4.8 years Answer: B Diff: 3 Section: 3.3 Financial Models LO: 3.5: Employ financial analyses and options analyses to evaluate the potential for new project investments.

Classification: Application AACSB: Analytical Thinking 64) A project manager is using the payback method to make the final decision on which project to undertake. The company has a 15% required rate of return and expects a 5% rate of inflation for the following five years. What is the discounted payback of a project that has cash flows as shown in the table?

Year Cash Flow 0 -$500,000 1 $50,000 2 $75,000 3 $150,000 4 $150,000 5 $750,000 A) 3.9 years B) 4.3 years C) 4.6 years D) 4.1 years Answer: B Diff: 3 Section: 3.3 Financial Models LO: 3.5: Employ financial analyses and options analyses to evaluate the potential for new project investments.

Classification: Application AACSB: Analytical Thinking 65) Options models are used to assist in project selection decisions: A) When IRR calculations are favorable but NPV calculations are unfavorable.

B) When a company may not recover the money it invests in a project.

C) When NPV calculations are favorable but IRR calculations are unfavorable.

D) When a company is guaranteed to recover the money it invests in a project.

Answer: B Diff: 2 Section: 3.3 Financial Models LO: 3.5: Employ financial analyses and options analyses to evaluate the potential for new project investments.

Classification: Application AACSB: Application of Knowledge 66) Regardless of which selection method a firm uses, it should always: A) Be able to predict how much revenue will be returned to the firm each year.

B) Know which project will ultimately succeed and which ones will fail.

C) Be objective in their selection method.

D) Use a weighted scoring technique.

Answer: C Diff: 2 Section: 3.3 Financial Models LO: 3.5: Employ financial analyses and options analyses to evaluate the potential for new project investments.

Classification: Application AACSB: Application of Knowledge 67) An options model could be used when financial criteria would change significantly over time.

Answer: TRUE Diff: 2 Section: 3.3 Financial Models LO: 3.5: Employ financial analyses and options analyses to evaluate the potential for new project investments.

Classification: Application AACSB: Application of Knowledge 68) The most important thing to remember when using project selection models is to be consistent and objective.

Answer: TRUE Diff: 1 Section: 3.3 Financial Models LO: 3.5: Employ financial analyses and options analyses to evaluate the potential for new project investments.

Classification: Application AACSB: Application of Knowledge

69) What is the time value of money principle and how does it apply to project selection?

Answer: The time value of money principle suggests that money earned today is worth more than money expected in the future. Future money is expected to be worth less for two reasons: 1) the impact of inflation, and 2) the inability to invest the money. The time value of money principle may be applied to project selection as one criterion to ascertain which project will generate the greatest return on a company's investment. Projects that have a relatively certain return of greater sums of money would be preferred over projects that stand a chance of returning less money in today's dollars.

Diff: 1 Section: 3.3 Financial Models LO: 3.5: Employ financial analyses and options analyses to evaluate the potential for new project investments.

Classification: Application AACSB: Analytical Thinking 70) How can a payback period approach be used to evaluate potential projects?

Answer: The project payback period approach estimates the amount of time that will be necessary to recoup the investment in a project; that is, how long will it take the project to pay back its initial budget and begin to generate positive cash flow for the company. The discounted cash flow method is used to estimate cash outlays and inflows resulting from investment in a project, and these positive and negative flows are compared using the ratio: Payback Period = Shorter paybacks are preferable to longer paybacks.

Diff: 2 Section: 3.3 Financial Models LO: 3.5: Employ financial analyses and options analyses to evaluate the potential for new project investments.

Classification: Application AACSB: Analytical Thinking 71) What is an internal rate of return and what advantages and disadvantages are accrued by using it to evaluate projects?

Answer: Internal rate of return (IRR) is a method of evaluating the expected outlays and income associated with a new project investment opportunity. IRR is the discount rate that equates the present values of a project's revenue and expense streams. If IRR is greater than or equal to the company's required rate of return, the project is worth funding. The advantage of using IRR analysis is its ability to compare alternative projects from the perspective of expected return on investment. IRR suffers from difficulty in conflicting solutions if cash flows are not normal, e.g., if net outflows follow a period of net cash inflows. IRR is not the rate of return for a project.

Diff: 2 Section: 3.3 Financial Models LO: 3.5: Employ financial analyses and options analyses to evaluate the potential for new project investments.

Classification: Application AACSB: Analytical Thinking 72) Inatech is contemplating two different projects and decides to perform a financial analysis to determine which is more financially lucrative. Project A and B have the cash flows as shown and Inatech uses a required rate of return of 10% and an inflation rate of 4%. Compute the payback in years and the net present value for both projects and offer advice as to the best course of

action.

Year 0 1 2 3 4 5 Answer:

A -$250,000 $75,000 $155,000 $200,000 $175,000 $160,000

B -$400,000 $125,000 $230,000 $288,000 $265,000 $225,000

Cumulativ Cumulativ Year A eA Discount NPV A B eB NPV B 0 $250,000 -$250,000 1.000 $250,000 $400,000 -$400,000 $400,000 1 $75,000 -$175,000 0.877 $65,789 $125,000 -$275,000 $109,649 2 $155,000 -$20,000 0.769 $119,267 $230,000 -$45,000 $176,978 3 $200,000 $180,000 0.675 $134,994 $288,000 $243,000 $194,392 4 $175,000 $355,000 0.592 $103,614 $265,000 $508,000 $156,901 5 $160,000 $515,000 0.519 $83,099 $225,000 $733,000 $116,858 The NPV for project A is $256,764 and the NPV for project B is higher at $354,778. Project A has a longer discounted payback, 3.3 years, compared to project B's payback of 3.2 years. The best course of action based solely on financial considerations is to opt for project B if only one can be implemented.

Diff: 2 Section: 3.3 Financial Models LO: 3.5: Employ financial analyses and options analyses to evaluate the potential for new project investments.

Classification: Application AACSB: Analytical Thinking

73) Inatech is contemplating two different projects and decides to perform a financial analysis to determine which is more financially lucrative. Project A and B have the cash flows as shown and Inatech uses a required rate of return of 8%. Compute the internal rate of return for both projects to determine which is worth of funding.

Year A B 0 -$500,000 -$400,000 1 $260,000 $200,000 2 $170,000 $100,000 3 $125,000 $100,000 4 $75,000 $50,000 5 $25,000 $25,000 Answer: Project A has an IRR of 1.85%. The net present value table based on this percentage is as follows: Year 0 1 2 3 4 5

A -$500,000 $260,000 $170,000 $125,000 $75,000 $25,000

Discount 1 0.893 0.797 0.712 0.636 0.567

NPV -$500,000 $232,143 $135,523 $89,973 $47,664 $14,186

Project B has an IRR of 1.91%. The net present value table based on this percentage is: Year 0 1 2 3 4 5

B -$400,000 $200,000 $100,000 $100,000 $50,000 $25,000

Discount 1 0.893 0.797 0.712 0.636 0.567

NPV -$400,000 $178,571 $119,579 $71,178 $31,776 $14,186

Both projects fall short of the hurdle rate of 8%, so Inatech should avoid both. The NPV for project A is $18,488 and for project B is $15,290.

Diff: 2 Section: 3.3 Financial Models LO: 3.5: Employ financial analyses and options analyses to evaluate the potential for new project investments.

Classification: Application AACSB: Analytical Thinking

74) What are options models and when should they be used to evaluate projects? Provide an example.

Answer: Options models open financial analysis to consider a greater range of alternatives to immediate investment. Organizations can factor the benefit of postponing decisions (and projects) until financial models indicate projects are worth pursuing. Examples may vary, but suppose firm A can wait until more market research is performed or until a supplier solves quality and logistics issues. The cash flows may be superior to those that would come from immediate investment if company A had to suffer through those issues with their supplier.

Because company A can wait a year, the project scores better on the NPV calculations, clearing the company's predetermined financial hurdle and will just have to wait to begin rather than being counted as too great a financial risk.

Diff: 2 Section: 3.3 Financial Models LO: 3.5: Employ financial analyses and options analyses to evaluate the potential for new project investments.

Classification: Concept AACSB: Application of Knowledge 75) What two simple rules should be followed when choosing a project selection approach?

Answer: First and foremost, objectivity and consistency in selection method is paramount.

Achieving both objectivity and consistency allows a firm to avoid the pitfall of tweaking results and starting projects that are personal favorites but don't merit pursuit. Second, a wide variety of selection methods may be appropriate for specific companies and project circumstances. As with most things, over-reliance on one end of a scale, whether it is financial, quantitative, or any other, is not the best approach. A broad algorithm that embraces both financial and non-financial considerations is often best.

Diff: 2 Section: 3.3 Financial Models LO: 3.5: Employ financial analyses and options analyses to evaluate the potential for new project investments.

Classification: Factual AACSB: Application of Knowledge 76) The systematic process of selecting, supporting, and managing a firm's collection of projects is called: A) Heavyweight project management.

B) Matrix project organization.

C) Profile management.

D) Project portfolio management.

Answer: D Diff: 2 Section: 3.4 Project Portfolio Management LO: 3.6: Recognize the challenges that arise in maintaining an optimal project portfolio for an organization.

Classification: Application AACSB: Application of Knowledge 77) The concept of project portfolio management holds that firms should: A) Regard all projects as unified assets.

B) Manage projects as independent entities.

C) Focus on short-term strategic goals.

D) Focus on long-term constraints.

Answer: A Diff: 2 Section: 3.4 Project Portfolio Management LO: 3.6: Recognize the challenges that arise in maintaining an optimal project portfolio for an organization.

Classification: Application AACSB: Application of Knowledge 78) A project with the chance for a big payout may be funded if an important criterion is: A) Cost.

B) Opportunity.

C) Top management pressure.

D) Risk.

Answer: B Diff: 2 Section: 3.4 Project Portfolio Management LO: 3.6: Recognize the challenges that arise in maintaining an optimal project portfolio for an organization.

Classification: Application AACSB: Application of Knowledge 79) A project that is exceptionally risky might still be undertaken by a firm if they have several other projects underway that are considered more of a sure thing. This approach to project selection is BEST described by the criterion called: A) Strategic "fit."

B) Risk.

C) Desire for portfolio balance.

D) Top management pressure.

Answer: C Diff: 2 Section: 3.4 Project Portfolio Management LO: 3.6: Recognize the challenges that arise in maintaining an optimal project portfolio for an organization.

Classification: Application AACSB: Application of Knowledge

80) Evaluating projects in terms of their strategic fit with existing project lines or their ability to augment the current product family is known as: A) Balance.

B) An open criterion.

C) Weighted criterion.

D) Complementarity.

Answer: D Diff: 2 Section: 3.4 Project Portfolio Management LO: 3.6: Recognize the challenges that arise in maintaining an optimal project portfolio for an organization.

Classification: Application AACSB: Application of Knowledge 81) Realignment describes: A) The change in a project portfolio with an addition of a new project.

B) The shifting of project resources from one to another.

C) The change in strategy for a firm.

D) The annual recasting of all project managers.

Answer: A Diff: 2 Section: 3.4 Project Portfolio Management LO: 3.6: Recognize the challenges that arise in maintaining an optimal project portfolio for an organization.

Classification: Application AACSB: Application of Knowledge 82) A proactive project portfolio: A) Is as simple as moving from one project opportunity to another project opportunity.

B) Is an integrated family of projects with a common strategic goal.

C) Is a collection of projects under the umbrella of single project manager carrying the title of portfolio manager.

D) Is developed with respect to short-term operational concerns.

Answer: B Diff: 2 Section: 3.4 Project Portfolio Management LO: 3.6: Recognize the challenges that arise in maintaining an optimal project portfolio for an organization.

Classification: Application AACSB: Application of Knowledge

83) If an organization that currently is managing a vast and well-balanced portfolio of projects decides on a new strategic direction, it will initially face the problem of: A) Scarce resources.

B) A conservative technical community.

C) Out-of-sync projects and portfolios.

D) Unpromising projects.

Answer: C Diff: 1 Section: 3.4 Project Portfolio Management LO: 3.6: Recognize the challenges that arise in maintaining an optimal project portfolio for an organization.

Classification: Application AACSB: Application of Knowledge 84) A principal cause of portfolio underperformance is: A) Conservative technical communities.

B) Government intervention.

C) Out-of-sync projects.

D) Scarce resources.

Answer: D Diff: 2 Section: 3.4 Project Portfolio Management LO: 3.6: Recognize the challenges that arise in maintaining an optimal project portfolio for an organization.

Classification: Application AACSB: Application of Knowledge 85) Project portfolio management is typically NOT used to balance: A) Human and technical resources.

B) Risk and return.

C) Efficiently run projects and nonperformers.

D) Various families of projects.

Answer: A Diff: 2 Section: 3.4 Project Portfolio Management LO: 3.6: Recognize the challenges that arise in maintaining an optimal project portfolio for an organization.

Classification: Application AACSB: Application of Knowledge

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

Answer: FALSE Diff: 1 Section: 3.4 Project Portfolio Management LO: 3.6: Recognize the challenges that arise in maintaining an optimal project portfolio for an organization.

Classification: Application AACSB: Application of Knowledge 87) A balanced project portfolio may be interpreted to mean that a single portfolio contains both high and low risk, low growth and high growth, and risky and safe projects.

Answer: FALSE Diff: 2 Section: 3.4 Project Portfolio Management LO: 3.6: Recognize the challenges that arise in maintaining an optimal project portfolio for an organization.

Classification: Factual AACSB: Application of Knowledge 88) Successful project management firms rely on home runs and narrowly concentrated efforts since specialization creates name recognition and market share.

Answer: FALSE Diff: 1 Section: 3.4 Project Portfolio Management LO: 3.6: Recognize the challenges that arise in maintaining an optimal project portfolio for an organization.

Classification: Application AACSB: Application of Knowledge 89) Personnel costs comprise one of the highest sources of project expense.

Answer: TRUE Diff: 1 Section: 3.4 Project Portfolio Management LO: 3.6: Recognize the challenges that arise in maintaining an optimal project portfolio for an organization.

Classification: Factual AACSB: Application of Knowledge

90) If strategy and portfolio are not in sync, the firm is poised on the cusp of success.

Answer: FALSE Diff: 1 Section: 3.4 Project Portfolio Management LO: 3.6: Recognize the challenges that arise in maintaining an optimal project portfolio for an organization.

Classification: Application AACSB: Application of Knowledge 91) What is project portfolio management and what are its objectives and initiatives?

Answer: Project portfolio management is the systematic process of selecting, supporting and managing a firm's collection of projects. Projects are managed concurrently under a single umbrella and may be either related or independent of each other. Portfolio management entails decision making, prioritization, review, realignment, and reprioritization of a firm's project.

Diff: 2 Section: 3.4 Project Portfolio Management LO: 3.6: Recognize the challenges that arise in maintaining an optimal project portfolio for an organization.

Classification: Concept AACSB: Application of Knowledge 92) What criteria might be employed to prioritize projects in a project portfolio? Choose any example project from recent business news and deduce which criteria were most important to the company in question.

Answer: The criteria that are commonly used to prioritize projects include cost, opportunity, top management pressure, risk, strategic fit, and desire for portfolio balance. Choice of criteria will vary with example selected.

Diff: 2 Section: 3.4 Project Portfolio Management LO: 3.6: Recognize the challenges that arise in maintaining an optimal project portfolio for an organization.

Classification: Concept AACSB: Application of Knowledge

93) Rank the problems in implementing portfolio management from largest to smallest and justify your rankings.

Answer: Recent research seems to suggest that the following are among the most common problems in effective portfolio management: conservative technical committees that are beholden to favorite projects, methods or technologies that no longer fit the market or company's strategic thrust; out-of-sync projects and portfolios that may contain worthwhile projects but these projects won't take the company in the direction it is currently targeted; unpromising projects that won't improve a company's operations or revenues; and scarce resources such as human labor, cash, and raw materials. Of these, the text suggests that scarce resources may be the most pernicious problem, although answers will vary in students' rankings.

Diff: 3 Section: 3.4 Project Portfolio Management LO: 3.6: Recognize the challenges that arise in maintaining an optimal project portfolio for an organization.

Classification: Application AACSB: Application of Knowledge 94) Which of these is NOT a factor in successful project portfolio management?

A) Flexible structure and freedom of communication B) Low-cost environmental setting C) Emphasis on quality D) Time-paced transition Answer: C Diff: 2 Section: 3.4 Project Portfolio Management LO: 3.7: Understand the three keys to successful project portfolio management.

Classification: Application AACSB: Application of Knowledge 95) Multiple project environments thrive on: A) Multi-layered bureaucracy.

B) Rigid development processes.

C) Narrow communication channels.

D) Improvisation by project teams.

Answer: D Diff: 2 Section: 3.4 Project Portfolio Management LO: 3.7: Understand the three keys to successful project portfolio management.

Classification: Application AACSB: Application of Knowledge

96) A firm is BEST served if its project portfolio: A) Has a number of low-cost experimental prototypes.

B) Devotes significant resources to hit product "home runs."

C) Aims to take the marketplace by storm regardless of future trends.

D) Represents narrowly concentrated efforts.

Answer: A Diff: 1 Section: 3.4 Project Portfolio Management LO: 3.7: Understand the three keys to successful project portfolio management.

Classification: Application AACSB: Application of Knowledge 97) Successful firms use project portfolio planning routinely to: A) Make quantum jumps from one product to another.

B) Develop products with long lead times and plan ahead.

C) Move as quickly as possible into new territory.

D) Move at glacial pace always within the same product line.

Answer: B Diff: 2 Section: 3.4 Project Portfolio Management LO: 3.7: Understand the three keys to successful project portfolio management.

Classification: Application AACSB: Application of Knowledge 98) What are three keys to success for project portfolio management? Which is most important?

Answer: The author indicates that the keys to successful project portfolio management are: flexible structure and freedom of communication; low-cost environmental scanning; and timepaced transition. Answers may vary on the importance ranking. Some may argue that unfettered experimentation is most important in achieving new project or product breakthroughs. Others may tout continuous environmental scanning as a vehicle for quickly adapting a firm's project portfolio and strategy to the changing market conditions. Finally, others may suggest that in both project portfolio management and comedy, timing is everything. Having a stable of projects that are time-phased to launch when others are nearing the end of their useful cycle and still others are bearing maximum fruit will assure a firm of continued success.

Diff: 1 Section: 3.4 Project Portfolio Management LO: 3.7: Understand the three keys to successful project portfolio management.

Classification: Factual AACSB: Application of Knowledge

99) Choose any example from recent news media and explain why their project failed.

Answer: Examples will vary and may include product launches, public programs, building projects, or any number of other projects.

Diff: 2 Section: 3.4 Project Portfolio Management LO: 3.7: Understand the three keys to successful project portfolio management.

Classification: Application AACSB: Application of Knowledge Project Management: Achieving Competitive Advantage, 6e (Pinto) Chapter 4 Leadership and the Project Manager 1) For the project manager, leadership is: A) The process by which she influences the project team.

B) The process of assembling a group of individuals.

C) The process of building skills among all team members.

D) The process of maintaining control of the budget.

Answer: A Diff: 2 Section: 4.0 Introduction LO: 4.1: Understand how project management is a "leader intensive" profession.

Classification: Concept AACSB: Application of Knowledge 2) The idea that all members of a project team have the ability to offer a contrary position in order to achieve true partnership between the project manager and the team is called: A) Exchange of purpose.

B) A right to say no.

C) Joint accountability.

D) Absolute honesty.

Answer: B Diff: 1 Section: 4.1 Leaders vs. Managers LO: 4.1: Understand how project management is a "leader intensive" profession.

Classification: Concept AACSB: Application of Knowledge 3) In a partnership, each member of the project team is responsible for the project's outcomes and the current situation, whether it is positive or shows evidence of project problems. The term that BEST describes this responsibility is: A) Exchange of purpose.

B) A right to say no.

C) Joint accountability.

D) Absolute honesty.

Answer: C Diff: 1 Section: 4.1 Leaders vs. Managers LO: 4.1: Understand how project management is a "leader intensive" profession.

Classification: Concept AACSB: Application of Knowledge

4) The authentic atmosphere of straightforwardness that is vital for project manager and team to function in can be described as: A) Exchange of purpose.

B) A right to say no.

C) Joint accountability.

D) Absolute honesty.

Answer: D Diff: 1 Section: 4.1 Leaders vs. Managers LO: 4.1: Understand how project management is a "leader intensive" profession.

Classification: Concept AACSB: Application of Knowledge 5) Comment on the project profiles Aziza Chaouni and Her Project to Save a River and Dr. Elattuvalapil Sreedharan, India's Project Management Rock Star. What evidence is offered of project leadership skills in these vignettes?

Answer: The Aziza Chaouni profile speaks to the leadership skills of creating vision, taking a long-term (20 years for this project) view, and working with a diverse group of stakeholders. The success of Dr. Elattuvalapil Sreedharan is attributed in large part to his ability to create and articulate a clear vision, to hold team members accountable for both financial and temporal resources. He demonstrates transparency with all stakeholders, holds frequent communication meetings, and stresses punctuality, integrity, and professional competence as basic qualities for success.

Diff: 2 Section: 4.1 Leaders vs. Managers LO: 4.1: Understand how project management is a "leader intensive" profession.

Classification: Concept AACSB: Application of Knowledge 6) The facet of partnership that describes the requirement that every worker be responsible for defining the project's vision and goals is called: A) Exchange of purpose.

B) A right to say no.

C) Joint accountability.

D) Absolute honesty.

Answer: A Diff: 2 Section: 4.1 Leaders vs. Managers LO: 4.2: Distinguish between the role of a manager and the characteristics of a leader.

Classification: Concept AACSB: Application of Knowledge

7) Which statement regarding the duties of leaders and managers is BEST? A) Leaders embrace the status quo while managers support change.

B) A manager's title is bestowed by the organization.

C) Leaders aim for efficiency.

D) Managers aim for effectiveness.

Answer: B Diff: 1 Section: 4.1 Leaders vs. Managers LO: 4.2: Distinguish between the role of a manager and the characteristics of a leader.

Classification: Concept AACSB: Application of Knowledge 8) Which statement regarding the duties of leaders and managers is BEST? A) Leaders embrace change while managers support the status quo.

B) Management is more about interpersonal relationships than leadership is.

C) Leaders aim for efficiency.

D) Managers aim for effectiveness.

Answer: A Diff: 1 Section: 4.1 Leaders vs. Managers LO: 4.2: Distinguish between the role of a manager and the characteristics of a leader.

Classification: Concept AACSB: Application of Knowledge 9) Which of these lists of duties is more reflective of managerial tasks?

A) Creating vision and strategies B) Problem solving C) Long-term risk taking D) Communication by word and deed Answer: B Diff: 2 Section: 4.1 Leaders vs. Managers LO: 4.2: Distinguish between the role of a manager and the characteristics of a leader.

Classification: Concept AACSB: Application of Knowledge 10) Which of these duties is more reflective of a leader's tasks?

A) Efficiency of operations B) Delegation and maintaining C) Motivation and inspiration D) Marshalling resources Answer: C Diff: 2 Section: 4.1 Leaders vs. Managers LO: 4.2: Distinguish between the role of a manager and the characteristics of a leader.

Classification: Concept AACSB: Application of Knowledge 11) Which of these is more characteristic of a manager?

A) Develop new processes B) Originate

C) State their position D) Focus on people Answer: C Diff: 2 Section: 4.1 Leaders vs. Managers LO: 4.2: Distinguish between the role of a manager and the characteristics of a leader.

Classification: Concept AACSB: Application of Knowledge 12) Which of these is more characteristic of a leader?

A) Strive for control B) Do things right C) Demand respect D) Inspire trust Answer: D Diff: 2 Section: 4.1 Leaders vs. Managers LO: 4.2: Distinguish between the role of a manager and the characteristics of a leader.

Classification: Concept AACSB: Application of Knowledge 13) A more apt title for a project manager is: A) Controller.

B) Comptroller.

C) Project director.

D) Project leader.

Answer: D Diff: 2 Section: 4.1 Leaders vs. Managers LO: 4.2: Distinguish between the role of a manager and the characteristics of a leader.

Classification: Application AACSB: Application of Knowledge

14) Projects are often underfunded in the concept stage because: A) The project requirements were deliberately understated.

B) There is complete trust in project managers by top management so more resources can be asked for at any time.

C) The project's goals are too clearly defined.

D) The project's top management sponsor is too influential.

Answer: A Diff: 2 Section: 4.2 How the Project Manager Leads LO: 4.2: Distinguish between the role of a manager and the characteristics of a leader.

Classification: Concept AACSB: Application of Knowledge 15) A common tactic project managers use when they realize their project is underfunded is to rely on: A) Intimidation.

B) Political tactics.

C) Asking for forgiveness rather than permission.

D) The kindness of strangers.

Answer: B Diff: 2 Section: 4.2 How the Project Manager Leads LO: 4.2: Distinguish between the role of a manager and the characteristics of a leader.

Classification: Concept AACSB: Application of Knowledge 16) Project team motivation comes primarily from: A) The project manager.

B) The project champion.

C) Within each team member.

D) The project client's acceptance.

Answer: C Diff: 2 Section: 4.2 How the Project Manager Leads LO: 4.2: Distinguish between the role of a manager and the characteristics of a leader.

Classification: Concept AACSB: Application of Knowledge

17) It is most important that a project manager: A) Focuses on meeting daily challenges head on.

B) Focuses on meetings.

C) Remembers the overall picture, or goals, that define the project.

D) Operates on the boundary between strategy and tactics.

Answer: D Diff: 2 Section: 4.2 How the Project Manager Leads LO: 4.2: Distinguish between the role of a manager and the characteristics of a leader.

Classification: Concept AACSB: Application of Knowledge 18) The project management pearl of wisdom that declares, "If they know nothing of what you are doing, they assume you are doing nothing," means that: A) Stakeholders must be communicated with on a continual basis throughout the project's development.

B) The duration of most projects is sufficiently long as to contain many days when no actual progress is being made.

C) The more complex a project is, the more likely that the client who will ultimately receive the project has no idea how it is being executed.

D) A project manager that holds lengthy progress meetings with his team will generally complete projects more successfully.

Answer: A Diff: 2 Section: 4.2 How the Project Manager Leads LO: 4.2: Distinguish between the role of a manager and the characteristics of a leader.

Classification: Application AACSB: Application of Knowledge 19) Task-oriented leadership behavior is characterized by: A) Showing trust in project team members.

B) Acting friendly and supportive towards project team members.

C) Contributing to the completion of project assignments.

D) Recognizing the accomplishments of team members.

Answer: C Diff: 1 Section: 4.2 How the Project Manager Leads LO: 4.2: Distinguish between the role of a manager and the characteristics of a leader.

Classification: Concept AACSB: Application of Knowledge

20) Which of these behaviors is task-oriented?

A) Every Friday is ice-cream day at the job site; everyone gets a double dip of their favorite flavor.

B) The employee of the month plaque is updated monthly and placed in a prominent position near the checkout stand.

C) The dean reached into his pocket, extracted his money clip and peeled off $3,000, saying, "Why don't you pick out some window treatments for the office? Something nice."

D) When my computer broke, the project manager had it replaced immediately.

Answer: D Diff: 1 Section: 4.2 How the Project Manager Leads LO: 4.2: Distinguish between the role of a manager and the characteristics of a leader.

Classification: Concept AACSB: Application of Knowledge 21) Group maintenance behavior would be exhibited by a project manager who: A) Provides the necessary support and technical assistance.

B) Plans and schedules activities and resources appropriately.

C) Contributes to the completion of project assignments.

D) Works with subordinates to understand their problems.

Answer: D Diff: 1 Section: 4.2 How the Project Manager Leads LO: 4.2: Distinguish between the role of a manager and the characteristics of a leader.

Classification: Concept AACSB: Application of Knowledge 22) The group maintenance behavior of gatekeeping helps to: A) Increase and equalize participation.

B) Reduce tension and hostility.

C) Regulate behavior.

D) Increase comprehension.

Answer: A Diff: 3 Section: 4.2 How the Project Manager Leads LO: 4.2: Distinguish between the role of a manager and the characteristics of a leader.

Classification: Concept AACSB: Application of Knowledge

23) The task-oriented behavior of summarizing accomplishes which specific outcome?

A) Check on understanding and assess progress.

B) Guide and sequence discussion.

C) Check on agreement.

D) Increase comprehension.

Answer: A Diff: 3 Section: 4.2 How the Project Manager Leads LO: 4.2: Distinguish between the role of a manager and the characteristics of a leader.

Classification: Concept AACSB: Application of Knowledge 24) Which of these behaviors is indicative of group maintenance?

A) Stimulating communication B) Clarifying communication C) Process analyzing D) Process structuring Answer: C Diff: 3 Section: 4.2 How the Project Manager Leads LO: 4.2: Distinguish between the role of a manager and the characteristics of a leader.

Classification: Concept AACSB: Application of Knowledge 25) Based on a study of successful American project managers as perceived by project team members, the most important characteristic of a project manager is: A) Visionary.

B) Good communicator.

C) Good motivator.

D) Leadership by example.

Answer: D Diff: 2 Section: 4.2 How the Project Manager Leads LO: 4.2: Distinguish between the role of a manager and the characteristics of a leader.

Classification: Concept AACSB: Application of Knowledge

26) Project management is first and foremost: A) A people management challenge.

B) A customer service challenge.

C) A perception management challenge.

D) A budget management challenge.

Answer: A Diff: 2 Section: 4.2 How the Project Manager Leads LO: 4.2: Distinguish between the role of a manager and the characteristics of a leader.

Classification: Concept AACSB: Application of Knowledge 27) Leadership may be part of a manager's job but other managerial roles are not necessarily part of a leader's job.

Answer: TRUE Diff: 1 Section: 4.1 Leaders vs. Managers LO: 4.2: Distinguish between the role of a manager and the characteristics of a leader.

Classification: Concept AACSB: Application of Knowledge 28) Leadership is an innate characteristic that some people have and some don't.

Answer: FALSE Diff: 1 Section: 4.1 Leaders vs. Managers LO: 4.2: Distinguish between the role of a manager and the characteristics of a leader.

Classification: Concept AACSB: Application of Knowledge 29) One way to distinguish the two roles is to realize that leaders aim for efficiency while managers aim for effectiveness.

Answer: FALSE Diff: 1 Section: 4.1 Leaders vs. Managers LO: 4.2: Distinguish between the role of a manager and the characteristics of a leader.

Classification: Concept AACSB: Application of Knowledge 30) One reason projects are initially underfunded is because their requirements are sometimes deliberately understated.

Answer: TRUE Diff: 2 Section: 4.2 How the Project Manager Leads LO: 4.2: Distinguish between the role of a manager and the characteristics of a leader.

Classification: Concept AACSB: Application of Knowledge 31) Summarizing and consensus testing are two group maintenance behaviors that a project manager uses to show support for project team members.

Answer: FALSE Diff: 2

Section: 4.2 How the Project Manager Leads LO: 4.2: Distinguish between the role of a manager and the characteristics of a leader.

Classification: Concept AACSB: Application of Knowledge 32) The number one flaw that makes a project manager a poor leader is setting a bad example.

Answer: TRUE Diff: 2 Section: 4.2 How the Project Manager Leads LO: 4.2: Distinguish between the role of a manager and the characteristics of a leader.

Classification: Concept AACSB: Application of Knowledge 33) The organizational factor that is most vital in preventing a project manager from being recognized as a leader is lack of resources.

Answer: FALSE Diff: 3 Section: 4.2 How the Project Manager Leads LO: 4.2: Distinguish between the role of a manager and the characteristics of a leader.

Classification: Concept AACSB: Application of Knowledge 34) Describe the four things that are necessary to promote the partnership idea between the project manager and the team.

Answer: The four things that are necessary to promote the partnership idea between the project manager and the team are exchange of purpose, a right to say no, joint accountability, and absolute honesty. Exchange of purpose means that partnerships require that every worker be responsible for defining the project's vision and goals with steady dialogue between manager and team members. A right to say no is important so that team members can offer contrary positions and debate these positions. Joint accountability exists if each member of the project team is responsible for the project's outcomes and the current situation, positive or otherwise. Finally, absolute honesty is vital as a vehicle for promoting straightforwardness and open communication.

Diff: 2 Section: 4.1 Leaders vs. Managers LO: 4.2: Distinguish between the role of a manager and the characteristics of a leader.

Classification: Concept AACSB: Application of Knowledge

35) What are any four key differences between managers and leaders?

Answer: The text offers these differences between managers and leaders in Table 4.1. Answers will vary as only four are needed for the question.

Concerns

Managers Focuses on plans and budgets; creates steps, timetables for achieving results and looks for Creation of purpose resources to support goals.

Organizes and staffs; creates structure for achieving the plans; delegates responsibility and authority; develops Developing a network procedures to guide behavior; for achieving the agenda creates monitoring systems.

Execution

Outcomes Focus

Leaders

Establishes direction; creates a vision and the strategies needed to achieve it.

Aligns people with the target; communicates direction by word and deed to those whose cooperation is needed; creates teams that understand and share the project's vision.

Motivates and inspires; Controls and solves problems; energizes people to overcome monitors results and applies obstacles and show personal corrective action. initiative.

Produces a degree of predictability and order; seeks Produces change; challenges to maintain the status quo. the status quo.

Efficiency of operations.

Effectiveness of outcomes.

Short term, avoiding risks, Long term; taking risks, maintain and imitating. innovating and originating.

Time-Frame Diff: 2 Section: 4.1 Leaders vs. Managers LO: 4.2: Distinguish between the role of a manager and the characteristics of a leader.

Classification: Application AACSB: Application of Knowledge

36) Why are projects often underfunded in the concept stage?

Answer: Projects lack resource support in the concept stage for a number of reasons including: The project's goals are deliberately vague.

The project lacks a top management sponsor.

The project requirements were deliberately understated.

There are other projects under development competing for the same scarce resources.

An attitude of distrust exists between top management and project managers.

Diff: 2 Section: 4.2 How the Project Manager Leads LO: 4.2: Distinguish between the role of a manager and the characteristics of a leader.

Classification: Concept AACSB: Application of Knowledge

37) What are some ways project managers can acquire additional resources if they feel their project lacks sufficient support?

Answer: If the resource problem is a personnel issue, project managers may seek alternative avenues to solve the difficulty. Project managers might seek to hire temporary contract employees if labor skills are in short supply. The key point to remember is that recognizing and responding to resource needs is a critical function of project leadership. Another common tactic project managers use in the face of resource shortfalls is to rely on negotiation or political tactics to influence top management to provide additional support. Because resources must often be negotiated with top management, clearly the ability to successfully negotiate and apply influence where the project manager has no direct authority is a critical skill. Again, leadership is best demonstrated by the skills a project manager uses to maintain the viability of the project, whether dealing with top management, clients, the project team, or other significant stakeholders.

Diff: 2 Section: 4.2 How the Project Manager Leads LO: 4.2: Distinguish between the role of a manager and the characteristics of a leader.

Classification: Concept AACSB: Application of Knowledge 38) Your author makes the statement that "Successful project managers must operate on the boundaries." Explain what is meant by this statement and provide an example.

Answer: Project managers must be able to work in sometimes ill-defined situations that require a sense of both technical and behavioral issues; when the focus should be on long-term strategic issues or on more day-to-day operational concerns. Project managers must be comfortable working with people at all levels of an organization, speaking their language, understanding their motivations, and inspiring them to perform at their best. It is not enough for a manager to be technically competent in one area if he is to be successful. Examples will vary.

Diff: 2 Section: 4.2 How the Project Manager Leads LO: 4.2: Distinguish between the role of a manager and the characteristics of a leader.

Classification: Critical Thinking AACSB: Application of Knowledge 39) What can a project manager do to motivate project team members?

Answer: Motivation comes from within each individual, so it cannot be created solely by the project manager. A skillful project manager recognizes this and is knowledgeable about his project team members, enabling him to recruit talent, mold the team, and apply motivational techniques as necessary.

Diff: 2 Section: 4.2 How the Project Manager Leads LO: 4.2: Distinguish between the role of a manager and the characteristics of a leader.

Classification: Application AACSB: Application of Knowledge

40) Communicating is an important aspect of a project leader's job and what better way to do so than through project meetings! What purposes do project team meetings serve?

Answer: Meetings serve a number of purposes for the project team, including: They define the project and major team players.

They provide an opportunity to revise , update, and add to all participants' knowledge base on the subject.

They assist team members to understand how their individual efforts fit into the overall whole of the project.

They help all stakeholders increase their commitment to the project.

They provide a collective opportunity to discuss the project and decide on individual work assignments.

They provide visibility for the project manager's role in managing the project.

Diff: 2 Section: 4.2 How the Project Manager Leads LO: 4.2: Distinguish between the role of a manager and the characteristics of a leader.

Classification: Concept AACSB: Written and Oral Communication 41) The authors draw a contrast between having a vision and fighting fires. Briefly describe these skills within the context of project management and support your position that one skill is more important than the other for a project manager.

Answer: The skill of having a vision is related to the project manager's ability to maintain focus on the ultimate goal of the project from the scope, to the conceptual planning stage, the manager must understand how the project fits with the organization's objectives. The firefighting skill is needed when a crisis occurs that threatens a key element of the project. Then the project manager must solve the immediate problem quickly and effectively as not to derail the project. Choices as to which skill is most important may vary, however it is likely that the visionary skills are selected and defended by most students.

Diff: 2 Section: 4.2 How the Project Manager Leads LO: 4.2: Distinguish between the role of a manager and the characteristics of a leader.

Classification: Critical Thinking AACSB: Written and Oral Communication

42) What are the differences between task-oriented behavior and group maintenance behavior?

Give three examples of each type of behavior.

Answer: The two leadership behaviors that are critical for effectively running project meetings are task-oriented; that is, behavior that emphasizes the importance of completing project assignments, and group maintenance that involves supportive, touchy-feely activities that make sure everyone is happy and wants to continue working for you on the project. Task-oriented behavior includes process structuring, stimulating and clarifying communication, summarizing, and consensus testing. Group maintenance behavior includes gatekeeping, harmonizing, supporting, standard setting, and process analyzing.

Diff: 2 Section: 4.2 How the Project Manager Leads LO: 4.2: Distinguish between the role of a manager and the characteristics of a leader.

Classification: Critical Thinking AACSB: Application of Knowledge 43) Which of these is the more meaningful measure of leadership effectiveness?

A) Subject matter knowledge B) Emotional intelligence C) Technical skill D) Analytical ability Answer: B Diff: 1 Section: 4.2 How the Project Manager Leads LO: 4.3: Understand the concept of emotional intelligence as it relates to how project managers lead.

Classification: Concept AACSB: Application of Knowledge 44) The emotional intelligence element that implies having a deep understanding of one's own strengths and weaknesses, ego needs, drives, and motives is called: A) Motivation.

B) Self-regulation.

C) Self-awareness.

D) Social skill.

Answer: C Diff: 2 Section: 4.2 How the Project Manager Leads LO: 4.3: Understand the concept of emotional intelligence as it relates to how project managers lead.

Classification: Concept AACSB: Application of Knowledge

45) Friendliness with a purpose describes: A) Empathy.

B) Self-regulation.

C) Obsequiousness.

D) Social skill.

Answer: D Diff: 2 Section: 4.2 How the Project Manager Leads LO: 4.3: Understand the concept of emotional intelligence as it relates to how project managers lead.

Classification: Concept AACSB: Application of Knowledge 46) Emotional intelligence is a more important measure of leadership effectiveness than technical skill, analytical ability, and intelligence.

Answer: TRUE Diff: 2 Section: 4.2 How the Project Manager Leads LO: 4.3: Understand the concept of emotional intelligence as it relates to how project managers lead.

Classification: Concept AACSB: Application of Knowledge 47) What is emotional intelligence and why is it important for a project leader to possess?

Answer: Emotional intelligence refers to the leader's ability to understand that effective leadership is part of the emotional and relational transaction between subordinates and themselves. With the five elements of emotional intelligence (self-awareness, self-regulation, motivation, empathy, and social skill), a project manager can develop the kind of direct, supportive relationships with the project team members that are critical to creating and guiding an effective team.

Diff: 1 Section: 4.2 How the Project Manager Leads LO: 4.3: Understand the concept of emotional intelligence as it relates to how project managers lead.

Classification: Concept AACSB: Application of Knowledge

48) A large sample survey was used to ask a total of 2,615 managers within U.S. corporations what they considered to be the most important characteristic of effective leaders. The item that ranked #1 was: A) Inspiring.

B) Honest.

C) Imaginative.

D) Dependable.

Answer: B Diff: 2 Section: 4.3 Traits of Effective Project Leaders LO: 4.4: Recognize traits that are strongly linked to effective project leadership.

Classification: Concept AACSB: Application of Knowledge 49) Among the essential abilities for effective project managers identified by a survey of 58 firms on their project management practices and skills was: A) Obfuscation.

B) Humor.

C) Speed.

D) Experience.

Answer: D Diff: 2 Section: 4.3 Traits of Effective Project Leaders LO: 4.4: Recognize traits that are strongly linked to effective project leadership.

Classification: Concept AACSB: Application of Knowledge 50) Pettersen's study of project managers found that most do not have the capacity to exercise power that derives from formal positional authority and therefore they must develop: A) Project champions.

B) Cadres of trained professionals.

C) Effective influencing skills.

D) Efficient communications networks.

Answer: C Diff: 2 Section: 4.3 Traits of Effective Project Leaders LO: 4.4: Recognize traits that are strongly linked to effective project leadership.

Classification: Concept AACSB: Application of Knowledge

51) If all the project management studies discussed in the text are synthesized, it quickly becomes apparent that the key to understanding leadership behavior is to focus on: A) Where in the organizational hierarchy the project leaders are located.

B) Where in the organizational hierarchy the project team members are located.

C) Who the leaders are.

D) What the leaders do.

Answer: D Diff: 2 Section: 4.3 Traits of Effective Project Leaders LO: 4.4: Recognize traits that are strongly linked to effective project leadership.

Classification: Synthesis AACSB: Application of Knowledge 52) The most important characteristic of a project leader is ability to inspire.

Answer: FALSE Diff: 3 Section: 4.3 Traits of Effective Project Leaders LO: 4.4: Recognize traits that are strongly linked to effective project leadership.

Classification: Concept AACSB: Application of Knowledge 53) In a survey of thousands of managers within U.S. corporations, a significant majority felt that the most important characteristic of superior leaders is honesty.

Answer: TRUE Diff: 1 Section: 4.3 Traits of Effective Project Leaders LO: 4.4: Recognize traits that are strongly linked to effective project leadership.

Classification: Concept AACSB: Application of Knowledge 54) A project manager must be able to shift temporal orientation from past, to present, to future.

Answer: TRUE Diff: 2 Section: 4.3 Traits of Effective Project Leaders LO: 4.4: Recognize traits that are strongly linked to effective project leadership.

Classification: Concept AACSB: Application of Knowledge 55) Someone with a polychronic preference functions in two different temporal orientations, such as past and present.

Answer: FALSE Diff: 2 Section: 4.3 Traits of Effective Project Leaders LO: 4.4: Recognize traits that are strongly linked to effective project leadership.

Classification: Concept AACSB: Application of Knowledge 56) Project leader duties include present-oriented and future-oriented tasks, but do not include past-oriented tasks.

Answer: FALSE Diff: 2

Section: 4.3 Traits of Effective Project Leaders LO: 4.4: Recognize traits that are strongly linked to effective project leadership.

Classification: Concept AACSB: Application of Knowledge 57) Much research has been published regarding the important characteristics of effective leaders. What are five traits that surveys have found to be important and which of your five is most important?

Answer: Table 4.3 in the text lists the results of a survey on characteristics of effective leaders.

The list contains these traits, listed in order of percentage of respondents: honest, competent, forward-looking, inspiring, intelligent, fair-minded, broad-minded, straightforward, imaginative, and dependable. Answers may vary as to personal importance.

Diff: 2 Section: 4.3 Traits of Effective Project Leaders LO: 4.4: Recognize traits that are strongly linked to effective project leadership.

Classification: Application AACSB: Application of Knowledge 58) Define the concept of time orientation. What are its implications for project leadership behavior?

Answer: Time orientation refers to the temporal context or space to which an individual is oriented. Each of us has a natural tendency to focus on one of three time orientations: past, present, or future. Time orientation is a useful concept to consider when developing project management skills because while we each have an orientation, each of these orientations has its own advantages and drawbacks for project management. Further, as part of a project management team, we must work with others that may have a different orientation.

Diff: 2 Section: 4.3 Traits of Effective Project Leaders LO: 4.4: Recognize traits that are strongly linked to effective project leadership.

Classification: Application AACSB: Application of Knowledge

59) What are the temporal skills discussed in the text and what impact would they have on a project manager's success?

Answer: The temporal skills discussed in the text are time warping, creating future vision, chunking time, predicting, and recapturing the past. A project manager must draw on these skills at various stages during the project management cycle. Some, such as recapturing the past, which is useful at the end of a project during a lessons-learned session, are past-oriented. Other tasks, such as creating future vision, have a future orientation and are vital at the beginning of a project.

Project managers must be able to switch hats and orient their thinking in the required temporal mode.

Diff: 2 Section: 4.3 Traits of Effective Project Leaders LO: 4.4: Recognize traits that are strongly linked to effective project leadership.

Classification: Application AACSB: Application of Knowledge 60) A project champion is: A) A project manager that always completes projects within the allotted time frame.

B) A sponsor in top management that is keenly interested in the project's success.

C) A project manager that always completes projects within the allotted budget.

D) A project manager that always completes projects within the allotted time frame and under budget.

Answer: B Diff: 2 Section: 4.4 Project Champions LO: 4.5: Identify the key roles project champions play in project success.

Classification: Concept AACSB: Application of Knowledge 61) Your professor (yes, that person that has been informing and entertaining you for the past few weeks) has tirelessly advocated for a project management class. When the Dean and most of the rest of the faculty said "no," your professor took the case for project management to the streets, ultimately securing it on the schedule this semester. The project management term that BEST describes your professor's role is: A) Director.

B) Advocate.

C) Instigator.

D) Champion.

Answer: D Diff: 1 Section: 4.4 Project Champions LO: 4.5: Identify the key roles project champions play in project success.

Classification: Concept AACSB: Application of Knowledge

62) A champion that is an engineer, scientist, or similar person who is the driving force behind an idea is termed a(n): A) Creative originator.

B) Entrepreneur.

C) Godfather.

D) Sponsor.

Answer: A Diff: 2 Section: 4.4 Project Champions LO: 4.5: Identify the key roles project champions play in project success.

Classification: Concept AACSB: Application of Knowledge 63) Tim slapped together his first web page and proudly showed it to all his colleagues, pointing out what he thought were obvious and overwhelming advantages in simplicity and portability.

His championing of web pages that he had read about in a trade journal ultimately shamed everyone else into adopting a web-based approach for all communication and cemented his status as a true: A) Creative originator.

B) Entrepreneur.

C) Godfather.

D) Project manager.

Answer: B Diff: 2 Section: 4.4 Project Champions LO: 4.5: Identify the key roles project champions play in project success.

Classification: Application AACSB: Application of Knowledge 64) Michael wants to carry out his mentor's long-range strategic vision of expanding the company's customer base by entering the casino business in Las Vegas. He issues a series of memos that explain the importance of these projects and makes sure that all necessary resources are at the disposal of the project management team, which is fortunate to have such a(n): A) Creative originator at the helm.

B) Entrepreneur.

C) Godfather.

D) Project manager.

Answer: C Diff: 2 Section: 4.4 Project Champions LO: 4.5: Identify the key roles project champions play in project success.

Classification: Application AACSB: Application of Knowledge

65) Which of the following is a traditional duty of a project champion?

A) Cheerleader B) Visionary C) Politician D) Technical understanding Answer: D Diff: 2 Section: 4.4 Project Champions LO: 4.5: Identify the key roles project champions play in project success.

Classification: Concept AACSB: Application of Knowledge 66) Which of the following is a non-traditional role of a project champion?

A) Cheerleader B) Leadership C) Administrative D) Control Answer: A Diff: 2 Section: 4.4 Project Champions LO: 4.5: Identify the key roles project champions play in project success.

Classification: Concept AACSB: Application of Knowledge 67) A project manager puts on his "nontraditional hat" and smoothly works the room, networking among functional managers and attempting to secure their cooperation with the project. This nontraditional role is BEST described as that of a(n): A) Ambassador.

B) Politician.

C) Cheerleader.

D) Visionary.

Answer: B Diff: 2 Section: 4.4 Project Champions LO: 4.5: Identify the key roles project champions play in project success.

Classification: Concept AACSB: Application of Knowledge

68) There is a significant chance that the project can be executed successfully but if it can't, the project manager and team may be updating their resumes. This champion can BEST be described as a(n): A) Administrator.

B) Ambassador.

C) Risk taker.

D) Visionary.

Answer: C Diff: 1 Section: 4.4 Project Champions LO: 4.5: Identify the key roles project champions play in project success.

Classification: Concept AACSB: Application of Knowledge 69) A(n) ________ maintains a clear sense of purpose and a firm idea of what is involved in creating the project.

A) politician B) ambassador C) cheerleader D) visionary Answer: D Diff: 2 Section: 4.4 Project Champions LO: 4.5: Identify the key roles project champions play in project success.

Classification: Concept AACSB: Application of Knowledge 70) The administrative duty is BEST described by: A) Managing and controlling the activities of the team.

B) Gaining access to the necessary resources to ensure a smooth development process.

C) The ability to provide leadership for the project team.

D) Handling the important executive side of the project.

Answer: D Diff: 2 Section: 4.4 Project Champions LO: 4.5: Identify the key roles project champions play in project success.

Classification: Concept AACSB: Application of Knowledge

71) The traditional project champion duties of coordination and control are on display when the project champion: A) Manages and runs the activities of the team.

B) Handles the important administrative side of the project.

C) Maintains a clear sense of purpose and a firm idea of what is involved in creating the project.

D) Provides the needed motivation for the team.

Answer: A Diff: 2 Section: 4.4 Project Champions LO: 4.5: Identify the key roles project champions play in project success.

Classification: Concept AACSB: Application of Knowledge 72) Which project champion role is least likely to be emphasized in the next project management article you read?

A) Leadership B) Ambassador C) Administrative D) Technical Answer: B Diff: 2 Section: 4.4 Project Champions LO: 4.5: Identify the key roles project champions play in project success.

Classification: Application AACSB: Application of Knowledge 73) Risk taking can be encouraged in an organization by: A) Seeking out projects that stand little chance of success.

B) Avoiding the inclination to punish failure.

C) Promotion of workers that are ill-equipped to lead projects.

D) Demoting project managers that are too conservative.

Answer: B Diff: 1 Section: 4.4 Project Champions LO: 4.5: Identify the key roles project champions play in project success.

Classification: Concept AACSB: Application of Knowledge

74) Champions bring a great deal of energy and emotional commitment to their project ideas, but: A) Most organizations have an oversupply of this.

B) Cannot effectively be the manager of a project.

C) Often refuse to give up on a project that has completely failed.

D) Must spend an equal amount of time and effort discouraging other projects that compete for the same resources.

Answer: C Diff: 2 Section: 4.4 Project Champions LO: 4.5: Identify the key roles project champions play in project success.

Classification: Concept AACSB: Application of Knowledge 75) Classic project champions are often more comfortable: A) Performing traditional project activities.

B) Avoiding their projects during the early stages.

C) Avoiding their projects through the final stages.

D) Performing nontraditional project activities.

Answer: D Diff: 2 Section: 4.4 Project Champions LO: 4.5: Identify the key roles project champions play in project success.

Classification: Concept AACSB: Application of Knowledge 76) A project manager may also be the project champion.

Answer: TRUE Diff: 1 Section: 4.4 Project Champions LO: 4.5: Identify the key roles project champions play in project success.

Classification: Concept AACSB: Application of Knowledge 77) An entrepreneur type of project champion is the source of the idea and also the main sponsor.

Answer: FALSE Diff: 1 Section: 4.4 Project Champions LO: 4.5: Identify the key roles project champions play in project success.

Classification: Concept AACSB: Application of Knowledge

78) Providing the needed motivation for the project team is a nontraditional duty of a project champion.

Answer: TRUE Diff: 3 Section: 4.4 Project Champions LO: 4.5: Identify the key roles project champions play in project success.

Classification: Concept AACSB: Application of Knowledge 79) The majority of a champion's time is spent performing the traditional project management duties of leadership, administration, obtaining resources, and coordination and control.

Answer: FALSE Diff: 3 Section: 4.4 Project Champions LO: 4.5: Identify the key roles project champions play in project success.

Classification: Concept AACSB: Application of Knowledge 80) What is a project champion and why is it important to have one?

Answer: A project champion is an individual who identifies with a new development, using all weapons at his command, against the funded resistance of the organization. Project champions are important because worthwhile projects and ideas must have someone that advances their cause when the rest of the organization is not as enthusiastic. Without champions, the project could not be carried forward to fruition.

Diff: 2 Section: 4.4 Project Champions LO: 4.5: Identify the key roles project champions play in project success.

Classification: Application AACSB: Application of Knowledge 81) What are any three types of project champions and how are they different?

Answer: The project champion types presented in the text are the creative originator, the entrepreneur, the godfather or sponsor, and the project manager. The creative originator is the source and driving force behind the idea and is the de facto resident expert. The entrepreneur does not have the initial idea but is the person who adopts the idea or technology and actively works to sell the system throughout the organization, eventually pushing it to success. The godfather or sponsor is a senior level manager who does everything in his power to promote the project, including obtaining the needed resources, coaching the team, protecting the project, and running political interference. The project manager at times may play the role of champion as long as he or she has sufficient authority in the organization (not just over the project) to effectively advocate for it.

Diff: 2 Section: 4.4 Project Champions LO: 4.5: Identify the key roles project champions play in project success.

Classification: Critical Thinking AACSB: Application of Knowledge 82) Give two examples each of traditional and nontraditional project champion duties. Which set of duties is more important? Why? Answer: Examples may vary, but the traditional duties of a project champion are technical understanding, leadership, coordination and control, obtaining resources, and administrative. The

nontraditional duties of a project champion are cheerleader, visionary, politician risk taker, and ambassador. Both sets of duties are essential; the author points out that the traditional duties have been the focus of much of the project management literature and are classically teachable. The nontraditional skills have experience as the best teacher and seem to require the greatest amount of the project manager's time.

Diff: 2 Section: 4.4 Project Champions LO: 4.5: Identify the key roles project champions play in project success.

Classification: Critical Thinking AACSB: Application of Knowledge 83) Recent research in organizational leadership declares that the new project leader should be adept at: A) Analytics regarding project team performance.

B) Recognizing and rewarding talent.

C) Managing the progressive discipline process.

D) Analytics regarding the project's performance.

Answer: B Diff: 2 Section: 4.5 The New Project Leadership LO: 4.6: Recognize the principles that typify the new project leadership.

Classification: Concept AACSB: Application of Knowledge 84) Recent research in organizational leadership declares that the new project leader generates and sustains: A) Trust.

B) Revolution.

C) Innovation.

D) Joy. Answer: A Diff: 2 Section: 4.5 The New Project Leadership LO: 4.6: Recognize the principles that typify the new project leadership.

Classification: Concept AACSB: Application of Knowledge

85) The Bennis article on competencies that determine a project leader's success indicates that it is crucial to continually remind the team: A) What the deadline is.

B) What is important.

C) Who their leader is.

D) Who the customer is.

Answer: B Diff: 2 Section: 4.5 The New Project Leadership LO: 4.6: Recognize the principles that typify the new project leadership.

Classification: Concept AACSB: Application of Knowledge 86) The new leader and the led are: A) Separate but equal.

B) Strange bedfellows.

C) Intimate allies.

D) Separated by a common language.

Answer: C Diff: 1 Section: 4.5 The New Project Leadership LO: 4.6: Recognize the principles that typify the new project leadership.

Classification: Concept AACSB: Application of Knowledge 87) Which of these behaviors is BEST for managing an intercultural project team?

A) Standardize communications based on the preference of the project manager.

B) Classify members of the project team in accordance with popular stereotypes.

C) Minimalize cultural differences.

D) Achieve a detailed understanding of a culture's history.

Answer: D Diff: 1 Section: 4.5 The New Project Leadership LO: 4.6: Recognize the principles that typify the new project leadership.

Classification: Concept AACSB: Application of Knowledge

88) Which of these behaviors is BEST for managing an intercultural project team?

A) Learn alternative means of exchanging information.

B) Classify members of the project team in accordance with popular stereotypes.

C) Foster an atmosphere of inclusivity by ignoring cultural differences.

D) Enter the situation with no knowledge of the local culture and customs to avoid any appearance of bias.

Answer: A Diff: 1 Section: 4.5 The New Project Leadership LO: 4.6: Recognize the principles that typify the new project leadership.

Classification: Concept AACSB: Application of Knowledge 89) The new leader must make a conscious effort to distance himself from the people being led.

Answer: FALSE Diff: 3 Section: 4.5 The New Project Leadership LO: 4.6: Recognize the principles that typify the new project leadership.

Classification: Concept AACSB: Application of Knowledge 90) One of the most important contributions of a project manager is to continually remind the team what is most important.

Answer: TRUE Diff: 2 Section: 4.5 The New Project Leadership LO: 4.6: Recognize the principles that typify the new project leadership.

Classification: Concept AACSB: Application of Knowledge 91) What four competencies determine success as project leaders?

Answer: The four competencies that determine success as project leaders (as developed by Dr. Warren Bennis) are: The new leader understands and practices the power of appreciation. They are connoisseurs of talent, more curators than creators.

The new leader keeps reminding people what's important.

The new leader generates and sustains trust.

The new leader and the led are intimate allies.

Diff: 2 Section: 4.5 The New Project Leadership LO: 4.6: Recognize the principles that typify the new project leadership.

Classification: Application AACSB: Application of Knowledge

92) In the new project management professionalism model: A) Personnel should be in a state of flux with regard to job assignment.

B) Process skills will not be important.

C) Traditional project champion activities will supplant the currently emphasized nontraditional skills.

D) Project management should be a dedicated career path.

Answer: A Diff: 2 Section: 4.6 Project Management Professionalism LO: 4.7: Understand the development of project management professionalism in the discipline.

Classification: Application AACSB: Application of Knowledge 93) Which personality trait is a poor match for project work?

A) Introverted B) Outgoing C) Gregarious D) People-oriented Answer: A Diff: 1 Section: 4.6 Project Management Professionalism LO: 4.7: Understand the development of project management professionalism in the discipline.

Classification: Concept AACSB: Application of Knowledge 94) A good starting point for matching employees to project work would be: A) Finding out who has the most spare time.

B) Conducting basic personality assessment.

C) Making sure that every department in the organization has at least one representative on the project team.

D) Observing what clusters of employees develop during informal situations.

Answer: B Diff: 1 Section: 4.6 Project Management Professionalism LO: 4.7: Understand the development of project management professionalism in the discipline.

Classification: Concept AACSB: Application of Knowledge

95) One practical step that should be taken in order for an organization to begin developing a core of project management professionals is to: A) Fire the unprofessional project managers.

B) Hire professional project managers.

C) Formalize the organization's commitment with training programs.

D) Review instances where projects were poorly managed.

Answer: C Diff: 1 Section: 4.6 Project Management Professionalism LO: 4.7: Understand the development of project management professionalism in the discipline.

Classification: Concept AACSB: Application of Knowledge 96) A reward system for project management should be: A) Greater than rewards for process management.

B) Based on the money saved managing the project.

C) Based on the money generated by the project.

D) Differentiated from normal functional rewards.

Answer: D Diff: 2 Section: 4.6 Project Management Professionalism LO: 4.7: Understand the development of project management professionalism in the discipline.

Classification: Concept AACSB: Application of Knowledge 97) A recent development in many companies is to: A) Reassign functional managers to functions outside their area of expertise in order to build well-rounded employees.

B) Reassign project managers back to functional duties as soon as a project ends; then assign them to the next project within their functional area.

C) Keep skilled project managers in project work; when one project ends they are immediately assigned to another project.

D) Hire talent from outside the organization, effectively outsourcing project management talent to professional project management organizations.

Answer: C Diff: 2 Section: 4.6 Project Management Professionalism LO: 4.7: Understand the development of project management professionalism in the discipline.

Classification: Concept AACSB: Application of Knowledge

98) One way an organization can develop a core of project management professionals is to administer personality tests and match people attuned to project work to projects.

Answer: FALSE Diff: 3 Section: 4.6 Project Management Professionalism LO: 4.7: Understand the development of project management professionalism in the discipline.

Classification: Concept AACSB: Application of Knowledge 99) Outgoing, people-oriented individuals have a better likelihood of performing well on project work than quieter, more introverted people.

Answer: TRUE Diff: 3 Section: 4.6 Project Management Professionalism LO: 4.7: Understand the development of project management professionalism in the discipline.

Classification: Concept AACSB: Application of Knowledge 100) What factors dictate an increased need to develop project management professionalism within an organization?

Answer: The three factors cited in the text are a) for many organizations, project work is becoming the standard, b) there is a critical need to upgrade the skills of those doing project work, and c) there is a need to create a career path for those serving as project managers.

Diff: 1 Section: 4.6 Project Management Professionalism LO: 4.7: Understand the development of project management professionalism in the discipline.

Classification: Application AACSB: Application of Knowledge 101) What are the practical steps that organizations can take to begin developing a core of project management professionals?

Answer: Some of the suggested strategies that organizations can take to begin developing a core of project management professionals include: - Begin to match personalities to project work since certain personality types may be more accepting of project work than others.

- Formalize an organization's commitment to project work with training programs to help personnel develop project management skills.

- Develop a reward system for project management that differentiates it from normal functional reward schedules.

- Identify a distinct career path for project professionals that allows successful project managers the same opportunities to move upwards as other functional managers.

Diff: 2 Section: 4.6 Project Management Professionalism LO: 4.7: Understand the development of project management professionalism in the discipline.

Classification: Application AACSB: Application of Knowledge Project Management: Achieving Competitive Advantage, 6e (Pinto) Chapter 5 Scope Management 1) Which statement about scope management is BEST?

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

B) Project goals don't matter in scope management as long as the budget is not exceeded.

C) Scope management is accomplished in a single step by any one project team member.

D) Scope management can begin once a project hits operational level.

Answer: A Diff: 1 Section: 5.0 Introduction LO: 5.1: Understand the importance of scope management for project success.

Classification: Concept AACSB: Application of Knowledge 2) The Scope Management chapter begins and ends with the quote, "It's a dream until you write it down. Then it's: A) Etched in stone."

B) A scope statement."

C) A documented dream."

D) A goal."

Answer: D Diff: 1 Section: 5.0 Introduction LO: 5.1: Understand the importance of scope management for project success.

Classification: Concept AACSB: Application of Knowledge 3) Which of these is NOT an element of project scope management?

A) Project champion B) Scope statement C) Project closeout D) Control systems Answer: A Diff: 1 Section: 5.0 Introduction LO: 5.1: Understand the importance of scope management for project success.

Classification: Concept AACSB: Application of Knowledge

4) Scope management for a project begins with: A) A work package.

B) An organization breakdown structure.

C) A statement of goals.

D) A configuration statement.

Answer: C Diff: 1 Section: 5.1 Conceptual Development LO: 5.1: Understand the importance of scope management for project success.

Classification: Concept AACSB: Application of Knowledge 5) Restrictions that affect project development are: A) Problems.

B) Constraints.

C) Stop-limits.

D) Limitations.

Answer: B Diff: 1 Section: 5.1 Conceptual Development LO: 5.1: Understand the importance of scope management for project success.

Classification: Concept AACSB: Application of Knowledge 6) The cat-skinning project management team considers the many ways to accomplish their objective before settling on one technique as part of their: A) Information gathering step.

B) Need statement step.

C) Project objectives step.

D) Alternative analysis step.

Answer: D Diff: 2 Section: 5.1 Conceptual Development LO: 5.1: Understand the importance of scope management for project success.

Classification: Application AACSB: Application of Knowledge

7) There were conceivably an infinite number of courses he could take during his final semester, but since he worked 8-5, Jake needed to take night classes. He also needed to ensure that the class was offered at the Edmond campus rather than Midwest City, so he could get home in time for his favorite programs. This whittled down the list of possibilities to Systems Analysis Design and Differential Equations. "Neither of these courses is very attractive. I may have to rethink my priorities," Jake wondered aloud. "The work schedule and wrestling schedule are significant: A) Scope statements."

B) Alternatives."

C) Constraints."

D) Goals."

Answer: C Diff: 2 Section: 5.1 Conceptual Development LO: 5.1: Understand the importance of scope management for project success.

Classification: Concept AACSB: Application of Knowledge 8) Conceptual development for a project concludes with: A) Project objectives.

B) Alternative analysis.

C) Project delivery.

D) Team dissolution.

Answer: A Diff: 2 Section: 5.1 Conceptual Development LO: 5.1: Understand the importance of scope management for project success.

Classification: Concept AACSB: Application of Knowledge 9) One consequence of conceptual development that proceeds with a problem that is poorly understood is: A) Problem restatement.

B) Cost overruns.

C) Problem clarification.

D) Task confusion.

Answer: B Diff: 2 Section: 5.1 Conceptual Development LO: 5.1: Understand the importance of scope management for project success.

Classification: Concept AACSB: Application of Knowledge

10) Which statement about conceptual development is BEST? A) A project goal of "significantly increase computer performance" is better than "improve processing speed 20%" because the team may exceed 20%.

B) It is vital that a best approach to solving a problem be locked in as soon as possible to save analysis time downstream.

C) Conceptual development begins with the process of reducing the project's overall complexity to a more basic level.

D) Project goals should be optimistic to the point of excess.

Answer: C Diff: 2 Section: 5.1 Conceptual Development LO: 5.1: Understand the importance of scope management for project success.

Classification: Application AACSB: Application of Knowledge 11) The statement of work should contain: A) Information on the key objectives for the project.

B) A brief and general description of the work to be performed.

C) Expected project outcomes.

D) All of these are elements of a statement of work.

Answer: D Diff: 2 Section: 5.1 Conceptual Development LO: 5.1: Understand the importance of scope management for project success.

Classification: Concept AACSB: Application of Knowledge 12) A statement of work identifies: A) A need.

B) A project organization.

C) Members of the project team.

D) Alternatives.

Answer: A Diff: 2 Section: 5.1 Conceptual Development LO: 5.1: Understand the importance of scope management for project success.

Classification: Concept AACSB: Application of Knowledge

13) The description and scope section of a statement of work would contain statements regarding: A) Environmental risks.

B) Termination of project information.

C) Expected benefits.

D) Major milestones.

Answer: C Diff: 3 Section: 5.1 Conceptual Development LO: 5.1: Understand the importance of scope management for project success.

Classification: Concept AACSB: Application of Knowledge 14) Expected commitments from other departments in support of the project would most likely be detailed in the: A) Approach section of the SOW. B) Risks and concerns section of the SOW. C) Acceptance criteria section of the SOW. D) Resource requirements section of the SOW. Answer: D Diff: 2 Section: 5.1 Conceptual Development LO: 5.1: Understand the importance of scope management for project success.

Classification: Concept AACSB: Application of Knowledge 15) A testing plan would be outlined in which section of a statement of work?

A) Acceptance criteria B) Risks and concerns C) Description and scope D) Approach Answer: A Diff: 2 Section: 5.1 Conceptual Development LO: 5.1: Understand the importance of scope management for project success.

Classification: Concept AACSB: Application of Knowledge

16) The step that reflects the formal "go ahead" given to the project to commence once the scope definition, planning documents, and other contractual documents have been prepared and approved is the: A) Go ahead.

B) Send off.

C) Work authorization.

D) Work release.

Answer: C Diff: 1 Section: 5.3 Work Authorization LO: 5.1: Understand the importance of scope management for project success.

Classification: Concept AACSB: Application of Knowledge 17) In the case of projects developed for external clients, work authorization typically addresses: A) Budget linkage.

B) Audit trail establishment.

C) Resource requirements.

D) Contractual obligations.

Answer: D Diff: 1 Section: 5.3 Work Authorization LO: 5.1: Understand the importance of scope management for project success.

Classification: Concept AACSB: Application of Knowledge 18) All projects are promised in terms of the specific functionality or performance criteria they will meet. The key feature of the contractual documentation that specifies this functionality or criteria is the: A) Contractual requirements.

B) Valid consideration.

C) Contracted terms.

D) Contractual performance.

Answer: A Diff: 3 Section: 5.3 Work Authorization LO: 5.1: Understand the importance of scope management for project success.

Classification: Concept AACSB: Application of Knowledge

19) The exchange that is specified by the contractual documentation documents is: A) The terms.

B) Valid consideration.

C) Reciprocity.

D) Fair and unencumbered.

Answer: B Diff: 2 Section: 5.3 Work Authorization LO: 5.1: Understand the importance of scope management for project success.

Classification: Concept AACSB: Application of Knowledge 20) The section of the contractual documentation that identifies what are the excusable delays, allowable costs, and criteria for inspection is called the: A) Bylaws.

B) Amendments.

C) Contracted terms.

D) Dissolution factors.

Answer: C Diff: 3 Section: 5.3 Work Authorization LO: 5.1: Understand the importance of scope management for project success.

Classification: Concept AACSB: Application of Knowledge 21) A project management firm that promises to do everything for a major project and hand over a fully functional, ready-to-use deliverable is performing under a(n): A) Umbrella contract.

B) All-inclusive contract.

C) Cost-plus contract.

D) Turnkey contract.

Answer: D Diff: 3 Section: 5.3 Work Authorization LO: 5.1: Understand the importance of scope management for project success.

Classification: Concept AACSB: Application of Knowledge

22) Which pair of statements is BEST? A) Cost-plus contracts are prone to budget overruns while turnkey contracts are typically underbid by the contractor.

B) Cost-plus contracts are prone to a budget surplus while turnkey contracts are typically underbid by the contractor.

C) Cost-plus contracts are prone to a budget surplus while turnkey contracts are typically overbid by the contractor.

D) Cost-plus contracts are prone to budget overruns while turnkey contracts are typically overbid by the contractor.

Answer: D Diff: 3 Section: 5.3 Work Authorization LO: 5.1: Understand the importance of scope management for project success.

Classification: Application AACSB: Application of Knowledge 23) Your professor moonlights to make ends meet during the summer months and has a knack for painting houses. You agree to pay $500 over whatever the materials and equipment rental cost for the job and delight in sipping lemonade in the shade watching your poor professor perform under a(n): A) Cost-plus contract.

B) Lump-sum contract.

C) Time and material contract.

D) Fixed wage contract.

Answer: A Diff: 3 Section: 5.3 Work Authorization LO: 5.1: Understand the importance of scope management for project success.

Classification: Application AACSB: Application of Knowledge 24) The reporting frequency, report recipients, and content required during project execution is laid out by: A) The organizational breakdown structure.

B) Scope reporting.

C) The information system architecture.

D) A need-to-know basis.

Answer: B Diff: 1 Section: 5.4 Scope Reporting LO: 5.1: Understand the importance of scope management for project success.

Classification: Concept AACSB: Application of Knowledge

25) Updates on how the project is performing against milestones can be accomplished by issuing a report containing: A) S-curves.

B) Schedule status.

C) Earned value.

D) Technical performance.

Answer: B Diff: 1 Section: 5.4 Scope Reporting LO: 5.1: Understand the importance of scope management for project success.

Classification: Concept AACSB: Application of Knowledge 26) A graphical display of costs against project schedule is called a(n): A) S-curves.

B) Gantt chart.

C) Radar chart.

D) Budget plot.

Answer: A Diff: 1 Section: 5.4 Scope Reporting LO: 5.1: Understand the importance of scope management for project success.

Classification: Concept AACSB: Application of Knowledge 27) An earned value report shows: A) How much money has actually been spent so far on the project.

B) Slippages in performance measures for the work product.

C) The budgeted value of work performed.

D) Slippages in time against planned measures.

Answer: C Diff: 2 Section: 5.4 Scope Reporting LO: 5.1: Understand the importance of scope management for project success.

Classification: Concept AACSB: Application of Knowledge 28) Scope management is the function controlling a project in terms of its goals and objectives during the execution phase.

Answer: FALSE Diff: 1 Section: 5.0 Introduction LO: 5.1: Understand the importance of scope management for project success.

Classification: Concept AACSB: Application of Knowledge

29) The statement of work is a detailed narrative description of the work required for a project.

Answer: TRUE Diff: 1 Section: 5.1 Conceptual Development LO: 5.1: Understand the importance of scope management for project success.

Classification: Concept AACSB: Application of Knowledge 30) A comprehensive statement of work includes an estimate of time and costs, resource requirements, and the scope of the work to be performed.

Answer: TRUE Diff: 1 Section: 5.1 Conceptual Development LO: 5.1: Understand the importance of scope management for project success.

Classification: Concept AACSB: Application of Knowledge 31) Work authorization functions as the formal "It's OK to begin work," on the project.

Answer: TRUE Diff: 1 Section: 5.3 Work Authorization LO: 5.1: Understand the importance of scope management for project success.

Classification: Concept AACSB: Application of Knowledge 32) The terms lump-sum contract and turnkey contract are interchangeable.

Answer: TRUE Diff: 1 Section: 5.3 Work Authorization LO: 5.1: Understand the importance of scope management for project success.

Classification: Concept AACSB: Application of Knowledge 33) A lump-sum contract requires the customer to pay for the full delivered price of the project before any work is done.

Answer: FALSE Diff: 2 Section: 5.3 Work Authorization LO: 5.1: Understand the importance of scope management for project success.

Classification: Concept AACSB: Application of Knowledge

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

Answer: TRUE Diff: 2 Section: 5.4 Scope Reporting LO: 5.1: Understand the importance of scope management for project success.

Classification: Concept AACSB: Application of Knowledge 35) Rank the key steps in information development from most to least important and justify your rankings.

Answer: Rankings will vary, but the key steps in information development are and always will be: Problem or need statement — why is there a need in search of a solution, what is the underlying problem, and what does the project intend to do?

Information gathering — research to gather all relevant data for the project.

Constraints — time, budget, and client constraints that may affect project development.

Alternative analysis — different solution methods for the problem targeted by the project.

Project objectives — final objectives for the project in terms of outputs, required resources, and timing.

Diff: 2 Section: 5.1 Conceptual Development LO: 5.1: Understand the importance of scope management for project success.

Classification: Application AACSB: Application of Knowledge 36) What is a statement of work and what are the key elements it contains?

Answer: A statement of work (SOW) is a detailed narrative description of the work required for a project, containing objectives for the project, a brief and general description of the work to be performed, expected project outcomes and any funding or schedule constraints. The author indicates that elements in an effective SOW include introduction and background including a problem statement, a technical description of the project, and timeline and milestones.

Diff: 2 Section: 5.1 Conceptual Development LO: 5.1: Understand the importance of scope management for project success.

Classification: Application AACSB: Application of Knowledge

37) Develop a statement of work (SOW) for a spectacular project of your choosing. Include all of the key elements for a SOW as detailed in your book.

Answer: Examples will vary depending on the spectacular project that is selected. The statement of work (SOW) should contain the following elements: objectives for the project, a brief and general description of the work to be performed, expected project outcomes and any funding or schedule constraints. In addition, the author indicates that elements in an effective SOW include introduction and background including a problem statement, a technical description of the project, and timeline and milestones.

Diff: 2 Section: 5.1 Conceptual Development LO: 5.1: Understand the importance of scope management for project success.

Classification: Application AACSB: Application of Knowledge 38) What is work authorization?

Answer: Work authorization is the step that reflects the formal "go ahead" given to the project to commence once the scope definition, planning documents, management plans, and other contractual documents have been prepared and approved. Work authorization consists of a formal sign off and for external clients it typically addresses contractual obligations.

Diff: 2 Section: 5.3 Work Authorization LO: 5.1: Understand the importance of scope management for project success.

Classification: Application AACSB: Application of Knowledge 39) What are three common elements in most work authorization contracts?

Answer: The elements common to most work authorization contracts are the contractual elements, valid consideration, and contracted terms. Contractual elements include the promised specific functionality, or performance criteria, that will be met. Consideration is an element of all valid contracts and covers the items that are voluntarily promised in exchange for a reciprocal commitment by another party. The contracted terms make clear the commitments agreed to by both parties, i.e., what are excusable delays, allowable costs, statements of liquidated damages in the case of nonperformance, the criteria for inspection, and who has responsibility for correction of defects.

Diff: 2 Section: 5.3 Work Authorization LO: 5.1: Understand the importance of scope management for project success.

Classification: Application AACSB: Application of Knowledge

40) What is the difference between a turnkey contract and a cost-plus contract? Include in your discussion the advantages and disadvantages of each.

Answer: A turnkey or lump-sum contract is one where the project organization assumes all responsibility for successful performance. Turnkey contracts work well when the contract is well-understood by all parties so initial cost estimates are reasonable. If project elements are missed or difficulties arise, the contractor is left holding the bag for all unforeseen costs. A costplus arrangement is one where the contractor's fee is fixed in advance and the requesting party pays for all costs plus the fee. The risk is shifted to the requesting party with this arrangement since there is little incentive for the contractor to hold the line on costs.

Diff: 2 Section: 5.3 Work Authorization LO: 5.1: Understand the importance of scope management for project success.

Classification: Application AACSB: Application of Knowledge 41) You have decided to install a naturalistic outdoor pool in your backyard, replete with caves, live plants, boulders and sparkling waterfalls, capable of comfortably accommodating the party guests you occasionally. Which would better suit you, a turnkey contract or a cost-plus contract?

Support your reasoning and enumerate the potential weaknesses of both approaches.

Answer: Answers will vary, likely due to the assumptions students make about their personal financial circumstances. A turnkey or lump-sum contract is one where the project organization assumes all responsibility for successful performance. Turnkey contracts work well when the contract is well-understood by all parties so initial cost estimates are reasonable. If project elements are missed or difficulties arise, the contractor is left holding the bag for all unforeseen costs. A cost-plus arrangement is one where the contractor's fee is fixed in advance and the requesting party pays for all costs plus the fee. The risk is shifted to the requesting party with this arrangement since there is little incentive for the contractor to hold the line on costs.

Diff: 2 Section: 5.3 Work Authorization LO: 5.1: Understand the importance of scope management for project success.

Classification: Application AACSB: Application of Knowledge 42) What is contained in scope reporting and what function does it serve?

Answer: Scope reporting determines the types of information that will regularly be reported, who will receive copies of this information, and how this information will be acquired and disseminated. One type of information collected commonly is cost performance – against budget and schedule and exception reports. Schedule status and technical performance against plans are also regularly included in scope reporting. Project managers and other key stakeholders, such as the members of the project team, clients, top management and other internal and external groups affected by the project, might all be on the reporting list.

Diff: 2 Section: 5.4 Scope Reporting LO: 5.1: Understand the importance of scope management for project success.

Classification: Application AACSB: Application of Knowledge 43) The Project Management Research in Brief for Chapter 5 discusses Information Technology (IT) Project "Death Marches." What are the facts about such projects and what conclusions does the article present?

Answer: The brief does not paint a flattering portrait of IT project success. The average IT

project is likely to be 6 to 12 months behind schedule and 50% to 100% over budget. Of course, the numbers vary with the size of the project, but the results still suggest that companies should expect their IT projects to lead to wasted effort, enormous delays, burnout, and many lost weekends while laboring for success with the cards stacked the other way. The death march project is typically one in which the project is set up for failure through the demands or expectations that the company places on it, leaving the expectation that the project team will pull off a miracle. Death march projects are defined as projects "whose parameters exceed the norm by at least 50%." To avoid setting the stage for future death march projects, we need to start with the end in mind and determine whether the goals and conditions (budget, personnel assigned, and schedule) are conducive to project success.

Diff: 2 Section: 5.4 Scope Reporting LO: 5.1: Understand the importance of scope management for project success.

Classification: Application AACSB: Application of Knowledge 44) Any measurable, tangible, verifiable outcome, result, or item that must be produced to complete a project or part of a project is a: A) Product.

B) Deliverable.

C) Tangible.

D) Work product.

Answer: B Diff: 2 Section: 5.2 The Scope Statement LO: 5.2: Understand the significance of developing a scope statement.

Classification: Concept AACSB: Application of Knowledge 45) The organizational structure for the project team, including policies and procedures, is the: A) Work breakdown structure.

B) Rules statement.

C) Scope statement.

D) Management plan.

Answer: D Diff: 1 Section: 5.2 The Scope Statement LO: 5.2: Understand the significance of developing a scope statement.

Classification: Concept AACSB: Application of Knowledge

46) Which of these scope statement steps creates the all-important bureaucracy for a project?

A) The management plan B) The work breakdown structure C) The scope baseline D) The project goal criteria Answer: A Diff: 2 Section: 5.2 The Scope Statement LO: 5.2: Understand the significance of developing a scope statement.

Classification: Concept AACSB: Application of Knowledge 47) The mountaineers all agreed that their quest to build a bridge between the two peaks of Mount Kilimanjaro was a noble one, but they had no idea how long it would take to complete until they finished their: A) Project goal criteria.

B) Work breakdown structure.

C) Scope baseline.

D) Management plan.

Answer: B Diff: 2 Section: 5.2 The Scope Statement LO: 5.2: Understand the significance of developing a scope statement.

Classification: Concept AACSB: Application of Knowledge 48) The new Magic Pan coming soon to your area usually serves 20,000 customers in the first year of operation. Construction plans include site selection, foundation, framing, finishing, egglaying, and chicken acquisition. The scope statement step that determines relationships among these steps, e.g. does the chicken acquisition come before the egg laying, etc., is the: A) Project goal criteria.

B) Management plan.

C) Work breakdown structure.

D) Scope baseline Answer: C Diff: 2 Section: 5.2 The Scope Statement LO: 5.2: Understand the significance of developing a scope statement.

Classification: Application AACSB: Application of Knowledge

49) Budget and schedule information for each activity in a project is contained in the: A) Project goal criteria.

B) Management plan.

C) Work breakdown structure.

D) Scope baseline.

Answer: D Diff: 2 Section: 5.2 The Scope Statement LO: 5.2: Understand the significance of developing a scope statement.

Classification: Concept AACSB: Application of Knowledge 50) The final step in the process of systematically laying out all pre-work information is the creation of the: A) Scope baseline.

B) Work breakdown structure.

C) Management plan.

D) Project goal criteria.

Answer: A Diff: 2 Section: 5.2 The Scope Statement LO: 5.2: Understand the significance of developing a scope statement.

Classification: Concept AACSB: Application of Knowledge 51) The PMBoK definition stating, "a process that sets a project's scope by breaking down its overall mission into a cohesive set of synchronous, increasingly specific tasks," is for the: A) Project plan.

B) Work breakdown structure.

C) Deliverable statement.

D) Scope expansion.

Answer: B Diff: 2 Section: 5.2 The Scope Statement LO: 5.2: Understand the significance of developing a scope statement.

Classification: Concept AACSB: Application of Knowledge

52) What are work breakdown structure elements that must be completed to conclude the project deliverables?

A) Activities B) Tasks C) Work packages D) Milestones Answer: C Diff: 2 Section: 5.2 The Scope Statement LO: 5.2: Understand the significance of developing a scope statement.

Classification: Concept AACSB: Application of Knowledge 53) The lowest level in work breakdown structure contains the: A) Atoms.

B) Activities.

C) Finite elements.

D) Work packages.

Answer: D Diff: 1 Section: 5.2 The Scope Statement LO: 5.2: Understand the significance of developing a scope statement.

Classification: Concept AACSB: Application of Knowledge 54) The highest level of work breakdown structure is the: A) Project.

B) Deliverable.

C) Subdeliverable.

D) Work package.

Answer: A Diff: 1 Section: 5.2 The Scope Statement LO: 5.2: Understand the significance of developing a scope statement.

Classification: Concept AACSB: Application of Knowledge

55) The second level in work breakdown structure contains the: A) Projects.

B) Deliverables.

C) Subdeliverables.

D) Work packages.

Answer: B Diff: 1 Section: 5.2 The Scope Statement LO: 5.2: Understand the significance of developing a scope statement.

Classification: Concept AACSB: Application of Knowledge 56) Which of these statements about subdeliverables is BEST? A) Subdeliverables have durations of their own.

B) Subdeliverables consume resources.

C) Subdeliverables have direct assignable costs.

D) Subdeliverables summarize the outcomes of work packages.

Answer: D Diff: 2 Section: 5.2 The Scope Statement LO: 5.2: Understand the significance of developing a scope statement.

Classification: Application AACSB: Application of Knowledge 57) The costs attached to subdeliverables: A) Are the summary of the work packages that support it.

B) Are called phantom costs.

C) Should be subtracted directly from deliverable costs.

D) Are not recoverable unless explicitly stated in the work breakdown structure.

Answer: A Diff: 2 Section: 5.2 The Scope Statement LO: 5.2: Understand the significance of developing a scope statement.

Classification: Concept AACSB: Application of Knowledge

58) When a supporting document functions as a project control device throughout the project's development, it is NOT prepared in advance: A) Due to time constraints.

B) As it is a dynamic document.

C) Since micromanaging can occur.

D) Because control devices are left to project completion.

Answer: B Diff: 2 Section: 5.2 The Scope Statement LO: 5.2: Understand the significance of developing a scope statement.

Classification: Concept AACSB: Application of Knowledge 59) When work is organized into cost control accounts: A) The work no longer needs to be tracked by the project manager.

B) The subdeliverables become cost centers instead of profit centers for the project.

C) These are assigned to the units performing project activities.

D) These budgets can then be assigned back to the project manager's department.

Answer: C Diff: 2 Section: 5.2 The Scope Statement LO: 5.2: Understand the significance of developing a scope statement.

Classification: Concept AACSB: Application of Knowledge 60) Project team members can identify who should be notified of task completion status by checking the: A) Control account.

B) Linear responsibility chart.

C) Statement of work.

D) Monthly joint review report.

Answer: B Diff: 1 Section: 5.2 The Scope Statement LO: 5.2: Understand the significance of developing a scope statement.

Classification: Concept AACSB: Application of Knowledge 61) Until a project has gone through work breakdown structure, it is impossible to determine the relationships among the constituent activities.

Answer: TRUE Diff: 2 Section: 5.2 The Scope Statement LO: 5.2: Understand the significance of developing a scope statement.

Classification: Concept AACSB: Application of Knowledge 62) The scope baseline is a document that provides a summary description of each reporting relationship along with a schedule for meetings and reports.

Answer: FALSE Diff: 2

Section: 5.2 The Scope Statement LO: 5.2: Understand the significance of developing a scope statement.

Classification: Concept AACSB: Application of Knowledge 63) A work package may be composed of one or more subdeliverables.

Answer: FALSE Diff: 2 Section: 5.2 The Scope Statement LO: 5.2: Understand the significance of developing a scope statement.

Classification: Concept AACSB: Application of Knowledge 64) A work package may consist of more than one milestone.

Answer: TRUE Diff: 2 Section: 5.2 The Scope Statement LO: 5.2: Understand the significance of developing a scope statement.

Classification: Concept AACSB: Application of Knowledge 65) What is a scope statement and what are the key steps in the scope statement process?

Answer: The scope statement reflects a project team's best efforts at creating the documentation and approval of all important project parameters prior to proceeding to the development phase.

The key steps of the scope statement process identified in the text are: Establishing the project goal criteria.

Developing the management plan for the project.

Establishing a work breakdown structure.

Creating a scope baseline.

Diff: 2 Section: 5.2 The Scope Statement LO: 5.2: Understand the significance of developing a scope statement.

Classification: Application AACSB: Application of Knowledge

66) List any five important points to remember when defining work packages.

Answer: The author lists seven important points to remember about defining a project work package: The work package typically forms the lowest level in the work breakdown structure.

A work package has a deliverable result.

A work package has one owner.

A work package may be considered by its owner as a project in itself.

A work package may include several milestones.

A work package should fit organizational procedures and culture.

The optimal size of a work package may be expressed in terms of labor hours, calendar time, cost, report period, and risks.

Diff: 2 Section: 5.2 The Scope Statement LO: 5.2: Understand the significance of developing a scope statement.

Classification: Application AACSB: Application of Knowledge 67) What is hierarchy among the deliverable, work package, subdeliverable, and project? Create an example starting with the most macro element, cascading through to the lowest element.

Answer: The highest (most macro) level is the project, followed by in increasing order of specificity, the deliverables, subdeliverables, and work packages. Examples will vary.

Diff: 2 Section: 5.2 The Scope Statement LO: 5.2: Understand the significance of developing a scope statement.

Classification: Application AACSB: Application of Knowledge 68) In order to allocate costs more precisely, a company will assign: A) Bar codes to each activity.

B) Activity codes to each subdeliverable.

C) WBS codes to each activity.

D) Level 4 codes to each package element.

Answer: C Diff: 1 Section: 5.2 The Scope Statement LO: 5.3: Construct a Work Breakdown Structure for a project.

Classification: Concept AACSB: Application of Knowledge

69) Organizational breakdown structure (OBS) allows companies to: A) Assign the duties of tracking costs to the customer's accounting function.

B) Circumvent the onerous task of work breakdown structure.

C) Issue a preliminary TPS report.

D) Define the work to be accomplished.

Answer: D Diff: 2 Section: 5.2 The Scope Statement LO: 5.3: Construct a Work Breakdown Structure for a project.

Classification: Concept AACSB: Application of Knowledge 70) Provide an example of work breakdown structure and indicate what purpose WBS serves.

Answer: Work breakdown structure (WBS) divides the project into its component sub-steps in order to begin establishing critical interrelationships among activities. Examples may vary, but if the project is to lead students on a study tour of Mexico, major components might be transportation, housing, business visits, recreation visits, and curriculum. Each of these major headings can be broken down further, for example, transportation can be segmented into air and ground transportation, with timelines established for securing firm reservations, paying deposits, and getting directions.

Diff: 2 Section: 5.2 The Scope Statement LO: 5.3: Construct a Work Breakdown Structure for a project.

Classification: Application AACSB: Application of Knowledge 71) Provide an example of a work package and a WBS code and indicate the information they provide.

Answer: A work package is the lowest (most detailed) level in work breakdown structure (WBS). Some firms use work package and task interchangeably, using the terms to represent an individual activity. A WBS code is a number assigned to each activity so that the accounting function may track costs more precisely. The accounting function may track activities that are over or under budget and otherwise maintain financial control of the development process.

Examples may vary, but a work package for a curriculum redesign might be to design the syllabus for an introductory course and the WBS code would be 2.3.8.

Diff: 2 Section: 5.2 The Scope Statement LO: 5.3: Construct a Work Breakdown Structure for a project.

Classification: Application AACSB: Application of Knowledge

72) What is organization breakdown structure?

Answer: Organization Breakdown Structure (OBS) is the outcome of assigning work to be performed into cost control accounts that are assignable to various units within the company (performing those project activities). The OBS allows companies to define the work to be accomplished and assign it to the owners of the work packages.

Diff: 2 Section: 5.2 The Scope Statement LO: 5.3: Construct a Work Breakdown Structure for a project.

Classification: Application AACSB: Application of Knowledge 73) A project manager can identify personnel who will be directly responsible for each task in the project's development by using a(n): A) Responsibility assignment matrix.

B) Milestone designation chart.

C) Merrill report.

D) Work package report.

Answer: A Diff: 2 Section: 5.2 The Scope Statement LO: 5.4: Develop a Responsibility Assignment Matrix for a project.

Classification: Concept AACSB: Application of Knowledge

74) Create a 4x4 responsibility assignment matrix as an example and indicate the information gleaned from this tool.

Answer: Examples may vary. A responsibility assignment matrix (RAM) also called a linear responsibility chart, is a matrix that lists members of the project team responsible for each activity. The RAM also shows other significant members of the team at each stage as well, organized according to how that activity requires their support. The RAM identifies where a person may go for support, who should be notified when the task is complete, and whose signature is required for sign-off. The tool provides a clear picture to all project team members and keeps all lines of communication open with appropriate communication flowing. An example is shown in Figure 5.10.

Diff: 2 Section: 5.2 The Scope Statement LO: 5.4: Develop a Responsibility Assignment Matrix for a project.

Classification: Application AACSB: Application of Knowledge

75) Develop a responsibility assignment matrix for your semester project. Provide a brief (two or three sentence) description of your project and its current state.

Answer: Examples may vary — if the semester project is a group project, then there will be more to work with than if students have individual semester projects. If the latter is the case, then this question probably shouldn't be assigned. The responsibility assignment matrix should list members of the project team responsible for each activity. The RAM also shows other significant members of the team at each stage as well, organized according to how that activity requires their support. The RAM identifies where a person may go for support, who should be notified when the task is complete, and whose signature is required for sign-off. The tool provides a clear picture to all project team members and keeps all lines of communication open with appropriate communication flowing.

Diff: 2 Section: 5.2 The Scope Statement LO: 5.4: Develop a Responsibility Assignment Matrix for a project.

Classification: Application AACSB: Analytical Thinking 76) Procedures that monitor emerging project scope against the original baseline scope are called: A) Configuration control.

B) Design control.

C) Trend monitoring.

D) Document control.

Answer: A Diff: 2 Section: 5.5 Control Systems LO: 5.5: Describe the roles of changes and configuration management in assessing project scope.

Classification: Concept AACSB: Application of Knowledge 77) A young professor becomes obsessed with the latest release of Halo and completely loses sight of his research commitment to his colleagues, falling hopelessly behind schedule and consuming 80% of the department's computing budget. Addictive behavior notwithstanding, this sad tale would never have happened had: A) Configuration controls been established.

B) Trend monitoring been regularly performed.

C) Design controls been appropriately deployed.

D) Document control been conducted assiduously.

Answer: B Diff: 2 Section: 5.5 Control Systems LO: 5.5: Describe the roles of changes and configuration management in assessing project scope.

Classification: Concept AACSB: Application of Knowledge 78) Systems for monitoring the project's scope, schedule, and costs during the design stage fall under the heading of: A) Configuration control.

B) Acquisition control.

C) Design control.

D) Specification control.

Answer: C Diff: 2 Section: 5.5 Control Systems LO: 5.5: Describe the roles of changes and configuration management in assessing project scope.

Classification: Concept AACSB: Application of Knowledge 79) As the 80th change order floated across his desk, the project manager wished that he had kept the first 79. What money he had saved in scrap paper might well be lost in charges that could never be recouped from the client. "What I need is better: A) Trend monitoring," muttered the manager.

B) Configuration control," sighed the manager.

C) Specification control," fumed the manager.

D) Document control," whimpered the manager.

Answer: D Diff: 2 Section: 5.5 Control Systems LO: 5.5: Describe the roles of changes and configuration management in assessing project scope.

Classification: Concept AACSB: Application of Knowledge 80) The framing crew would never know when it was time to order more $400 hammers without their fancy new: A) Acquisition control system.

B) Specification control system.

C) Configuration control system.

D) Design control system.

Answer: A Diff: 1 Section: 5.5 Control Systems LO: 5.5: Describe the roles of changes and configuration management in assessing project scope.

Classification: Application AACSB: Application of Knowledge

81) The homeowner lusted over a 36,000 BTU oven in his dream kitchen, but his contractor got a deal on a 20,000 BTU oven and installed it without a peep. Thanks to: A) Acquisition controls, the homeowner ended up with the right oven.

B) Specification controls, the homeowner ended up with the right oven.

C) Design controls, the homeowner ended up with the right oven.

D) Oven controls, the homeowner ended up with the right oven.

Answer: B Diff: 2 Section: 5.5 Control Systems LO: 5.5: Describe the roles of changes and configuration management in assessing project scope.

Classification: Concept AACSB: Application of Knowledge 82) The BEST time to establish reasonable controls is: A) After a project is over.

B) At the end of a project.

C) At the start of a project.

D) When they are first needed during the project.

Answer: C Diff: 1 Section: 5.5 Control Systems LO: 5.5: Describe the roles of changes and configuration management in assessing project scope.

Classification: Application AACSB: Application of Knowledge 83) The project's scope fixed at a specific point in time is the: A) Scope.

B) Design.

C) Historical standard.

D) Baseline.

Answer: D Diff: 1 Section: 5.5 Control Systems LO: 5.5: Describe the roles of changes and configuration management in assessing project scope.

Classification: Concept AACSB: Application of Knowledge

84) All pieces of a project must be developed and assembled to produce the final product functionality. Designing, making, and assembling these components is the role of: A) Configuration management.

B) Baseline scope control.

C) Systematic management.

D) Baseline configuration.

Answer: A Diff: 2 Section: 5.5 Control Systems LO: 5.5: Describe the roles of changes and configuration management in assessing project scope.

Classification: Concept AACSB: Application of Knowledge 85) The stage of configuration management where the breakdown of the project to the necessary level of definition is identified as: A) Configuration review.

B) Configuration identification.

C) Status accounting.

D) Configuration control.

Answer: B Diff: 2 Section: 5.5 Control Systems LO: 5.5: Describe the roles of changes and configuration management in assessing project scope.

Classification: Concept AACSB: Application of Knowledge 86) The management of project changes is most effectively accomplished: A) When project change needs arise.

B) When plans and project scope are first articulated.

C) Once closeout is complete.

D) During the configuration identification phase.

Answer: B Diff: 1 Section: 5.5 Control Systems LO: 5.5: Describe the roles of changes and configuration management in assessing project scope.

Classification: Application AACSB: Application of Knowledge

87) The primary action during a configuration review is to: A) Develop a breakdown of the project to the necessary level of definition.

B) Identify the specifications of the components of the breakdown and of the total project.

C) Meet with all the project stakeholders to agree to the current project definition.

D) Change the specifications last obtained by a process change control to match what people think it should be.

Answer: C Diff: 3 Section: 5.5 Control Systems LO: 5.5: Describe the roles of changes and configuration management in assessing project scope.

Classification: Concept AACSB: Application of Knowledge 88) The status accounting step of configuration management functions primarily as: A) A hierarchy.

B) Binding arbitration.

C) Cost control.

D) Memory.

Answer: D Diff: 3 Section: 5.5 Control Systems LO: 5.5: Describe the roles of changes and configuration management in assessing project scope.

Classification: Concept AACSB: Application of Knowledge 89) If viewed from a flow standpoint, the stage of configuration management that has provision for variable routing to the next step, depending on outcome at this stage, is: A) Configuration control.

B) Configuration review.

C) Status accounting.

D) Configuration identification.

Answer: A Diff: 3 Section: 5.5 Control Systems LO: 5.5: Describe the roles of changes and configuration management in assessing project scope.

Classification: Concept AACSB: Application of Knowledge

90) Project closeout documentation that can be used to predict trends, analyze feasibility, and highlight problem areas for similar future projects is: A) Post project analysis.

B) Historical records.

C) Financial closeout.

D) Post-mortem.

Answer: B Diff: 2 Section: 5.6 Project Closeout LO: 5.5: Describe the roles of changes and configuration management in assessing project scope.

Classification: Concept AACSB: Application of Knowledge 91) The ambitious sprinkler system project was finally over and it was hard to believe that it took only two years. The project manager leaned back in his office chair and admired his emerald green lawn and flower garden that was filling in nicely. He was amused by the birds that had gathered to bathe and drink at a persistent puddle just outside his window, a harbinger of the first major repair of his own shoddy workmanship. His review of receipts for the job was less entertaining; between trips to the local home improvement store, consultations with plumbers, city inspectors, and some hired labor, he had sunk a small fortune into his lawn. The manager's: A) Historical records made for interesting reading.

B) Post-project analysis would someday appear in Better Housekeeping.

C) Financial closeout would be forever hidden from his wife.

D) Project plan was a document for the ages.

Answer: C Diff: 2 Section: 5.6 Project Closeout LO: 5.5: Describe the roles of changes and configuration management in assessing project scope.

Classification: Application AACSB: Application of Knowledge 92) Closeout documentation that follows a formal reporting structure, including analysis and documentation of the project's performance in terms of cost, schedule adherence, and technical specification performance, is: A) Historical records.

B) Financial closeout.

C) Hierarchy reporting.

D) Post-project analysis.

Answer: D Diff: 2 Section: 5.6 Project Closeout LO: 5.5: Describe the roles of changes and configuration management in assessing project scope.

Classification: Concept AACSB: Application of Knowledge 93) The windmills of Mykonos were lovely, so Lisa contracted with an architectural firm to build one in the west pasture. Once the windmill had been built and was operational, the project team looked back at how they had managed to stay on schedule and what budget variances existed

along the way. The windmill was pumping as promised, an honest two gallons per minute just as they had design it. Closeout documentation of this type is considered: A) Historical records.

B) Financial closeout.

C) Hierarchy reporting.

D) Post-project analysis.

Answer: D Diff: 2 Section: 5.6 Project Closeout LO: 5.5: Describe the roles of changes and configuration management in assessing project scope.

Classification: Concept AACSB: Application of Knowledge 94) Which step in project management requires project managers to consider the types of records and reports they and their clients will require at the completion of the project?

A) Project closeout B) Completion phase C) Reporting D) Planning Answer: A Diff: 1 Section: 5.6 Project Closeout LO: 5.5: Describe the roles of changes and configuration management in assessing project scope.

Classification: Concept AACSB: Application of Knowledge 95) A priori consideration of information needs is performed: A) Several years after a project is completed.

B) Before a project begins.

C) At the start of a project.

D) During the project.

Answer: B Diff: 2 Section: 5.6 Project Closeout LO: 5.5: Describe the roles of changes and configuration management in assessing project scope.

Classification: Concept AACSB: Application of Knowledge

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

Answer: FALSE Diff: 2 Section: 5.5 Control Systems LO: 5.5: Describe the roles of changes and configuration management in assessing project scope.

Classification: Application AACSB: Application of Knowledge 97) A baseline is the project's scope fixed at a specific point in time.

Answer: TRUE Diff: 1 Section: 5.5 Control Systems LO: 5.5: Describe the roles of changes and configuration management in assessing project scope.

Classification: Concept AACSB: Application of Knowledge 98) The project closeout step requires project managers to consider the types of records and reports they and their clients will require at the completion of a project.

Answer: TRUE Diff: 1 Section: 5.6 Project Closeout LO: 5.5: Describe the roles of changes and configuration management in assessing project scope.

Classification: Concept AACSB: Application of Knowledge

99) What is the purpose of controls? Describe any three types of control systems.

Answer: Control systems are vital to ensure that any changes to the project baseline are conducted in a systematic and thorough manner. The focus of a control system may be on configuration, design, trends, documents, acquisition, or specification.

Configuration control takes procedures that monitor emerging project scope against original baseline scope. Design control relates to systems for monitoring the project's scope, schedule, and costs during the design stage. Trend monitoring is the process of tracking the estimated costs, schedules, and resources needed against those planned. Document control ensures that important documentation is compiled and disseminated in an orderly and timely fashion.

Acquisition control monitors systems used to acquire necessary project equipment, materials, or services needed for project development and implementation. Specification control ensures that project specifications are prepared clearly, communicated to all concerned parties, and changed only with proper authorization.

Diff: 2 Section: 5.5 Control Systems LO: 5.5: Describe the roles of changes and configuration management in assessing project scope.

Classification: Application AACSB: Application of Knowledge 100) What is configuration management and why is it important?

Answer: The Project Management Body of Knowledge defines configuration management as "a system of procedures that monitors emerging project scope against the scope baseline. It requires documentation and management approval on any change to the baseline." The baseline is the project's scope fixed at a point in time and is viewed as the project's configuration. Configuration management is the systematic management of project change. Since complex projects may be composed of many elements that are being created by a large number of different teams or subcontractors, configuration management is a means of keeping all of these pieces fully informed about any changes that occur along the way. These changes may come at the request of the customer or one of the project teams or even from an external stakeholder.

Diff: 2 Section: 5.5 Control Systems LO: 5.5: Describe the roles of changes and configuration management in assessing project scope.

Classification: Application AACSB: Application of Knowledge

101) What are two common reasons that project or specification changes must be made?

Answer: The need to make project changes or specification adjustments can come from one of several reasons. The design team may have made initial planning errors, either technological or human. As the project progresses, additional knowledge of the project or environmental conditions may come to light that affect the performance of the original design. An external entity may issue a mandate that affects original configuration or the client may request a new feature.

Diff: 2 Section: 5.5 Control Systems LO: 5.5: Describe the roles of changes and configuration management in assessing project scope.

Classification: Application AACSB: Application of Knowledge 102) What takes place at the project closeout step?

Answer: All good projects, and even many bad ones, come to an end, and project closeout is the anticipation of this end. The project closeout step requires project managers to consider the types of records and reports that they and their clients will require at the completion of the project.

Closeout documentation may include historical records, post project analysis, and financial closeout and this information may be held in case of contractual disputes, as a training tool, and to facilitate project auditing tasks.

Diff: 2 Section: 5.6 Project Closeout LO: 5.5: Describe the roles of changes and configuration management in assessing project scope.

Classification: Application AACSB: Application of Knowledge 103) How should the project closeout step be planned?

Answer: Project closeout planning is an important component of scope management. The project closeout step requires project managers to consider the types of records and reports they and their clients will require at the completion of the project. The earlier in the scope development process that these decisions are made, the more useful the information collected over the project's development can be. One of the most important lessons for successful project managers is to "start with the end in mind." Clear goals at the beginning of a project make clear what the project's completion will require. Project closeout requires managers to consider a priori the types and amounts of information to continually collect during project development, relying on a sound project tracking and filing system.

Diff: 2 Section: 5.6 Project Closeout LO: 5.5: Describe the roles of changes and configuration management in assessing project scope.

Classification: Application AACSB: Application of Knowledge Project Management: Achieving Competitive Advantage, 6e (Pinto) Chapter 6 Project Team Building, Conflict, and Negotiation 1) Project management people skills include: A) Team building.

B) Scheduling.

C) Budgeting.

D) Project evaluation.

Answer: A Diff: 1 Section: 6.0 Introduction LO: 6.1: Understand the steps in project team building.

Classification: Concept AACSB: Application of Knowledge 2) The first step in assembling a project team is to: A) Talk to potential team members.

B) Identify the required skills.

C) Negotiate with the functional supervisor.

D) Notify top management.

Answer: B Diff: 2 Section: 6.1 Building the Project Team LO: 6.1: Understand the steps in project team building.

Classification: Concept AACSB: Application of Knowledge 3) Which two steps of project team building are out of sequence?

A) You always identify skills before you identify people.

B) You always negotiate with the functional supervisor before you negotiate with top management.

C) You always negotiate with the functional supervisor before you talk to potential team members.

D) You always identify personnel before you talk to potential team members.

Answer: C Diff: 2 Section: 6.1 Building the Project Team LO: 6.1: Understand the steps in project team building.

Classification: Concept AACSB: Application of Knowledge

4) A project manager can identify the skills needed for the project from the: A) Departmental personnel listings.

B) Project budget.

C) Stakeholder meeting.

D) Work breakdown structure.

Answer: D Diff: 1 Section: 6.1 Building the Project Team LO: 6.1: Understand the steps in project team building.

Classification: Concept AACSB: Application of Knowledge 5) Most project resources are negotiated with: A) Project managers.

B) Potential team members.

C) Top management.

D) External stakeholders.

Answer: A Diff: 1 Section: 6.1 Building the Project Team LO: 6.1: Understand the steps in project team building.

Classification: Concept AACSB: Application of Knowledge 6) Stacey noted that the client was a cantankerous old man and that her current project team lacked the requisite skills to work with him. Time was running short, so the BEST approach to making sure the project team had the necessary skills was to: A) Locate a new client for this project.

B) Identify a suitable training program and implement it.

C) Hire a contractor for the life of the project.

D) Modify the skill set to something that her current team possessed.

Answer: C Diff: 2 Section: 6.1 Building the Project Team LO: 6.1: Understand the steps in project team building.

Classification: Application AACSB: Application of Knowledge

7) If a functional manager will NOT release the resources you need as project manager, your best course of action is to: A) Complete the project as best you can and inform management and the client that you predicted this outcome.

B) Use social media to voice your concerns.

C) Notify top management of the consequences.

D) Update your resume.

Answer: C Diff: 2 Section: 6.1 Building the Project Team LO: 6.1: Understand the steps in project team building.

Classification: Application AACSB: Application of Knowledge 8) With a failure to secure personnel releases from functional managers, a project manager should: A) Proceed as originally planned.

B) Abandon the project.

C) Adjust schedules and scope documents.

D) Relinquish project leader status.

Answer: C Diff: 2 Section: 6.1 Building the Project Team LO: 6.1: Understand the steps in project team building.

Classification: Application AACSB: Application of Knowledge 9) Team building and conflict management skills are two of the most important people skills that project managers can cultivate.

Answer: TRUE Diff: 1 Section: 6.0 Introduction LO: 6.1: Understand the steps in project team building.

Classification: Concept AACSB: Diverse and Multicultural Work Environments 10) The first step in assembling a project team is to talk to potential team members.

Answer: FALSE Diff: 2 Section: 6.1 Building the Project Team LO: 6.1: Understand the steps in project team building.

Classification: Concept AACSB: Application of Knowledge

11) If preferred project team members are not available, the project manager should notify top management of the consequences.

Answer: TRUE Diff: 2 Section: 6.1 Building the Project Team LO: 6.1: Understand the steps in project team building.

Classification: Application AACSB: Application of Knowledge 12) What are the steps in assembling a project team? Which is most critical? Why? Answer: The first step in building a project team is to examine the work breakdown structure and identify the skills required to perform the assignments. The second step is to identify the personnel that have these skills and talk to them about the project. The project manager must then negotiate with the functional supervisor about the availability of the skilled personnel. If this is successful, the team can be assembled and the project moves into the next phase of role clarification and responsibility determination. If the desired people are not available, the project manager should renegotiate with top management and if successful, then assembles the team. If negotiations with top management are unsuccessful, then the project manager should turn to a fallback position. Answers will vary as to which step is most critical.

Diff: 2 Section: 6.1 Building the Project Team LO: 6.1: Understand the steps in project team building.

Classification: Concept AACSB: Application of Knowledge 13) You have been tapped as project manager for your dream project and find yourself initially rebuffed by functional managers that are reluctant to release members of your "dream team" to help you work on the project. What are three alternatives you might choose from and which is most attractive?

Answer: The three alternatives that are available to a manager constitute fallback positions in the project life cycle. One alternative is to negotiate for partial assistance; if a full-time assignment is sought, perhaps the manager will relinquish the employee at one-quarter time. The advantage of this approach is that it secures an inroad into the employee's time that may be increased later. Another alternative is to adjust the project schedule and priorities accordingly. If the employee is not available full time, then it must be accepted that the project cannot proceed at the desired pace, or perhaps can be completed within the allotted time frame in some limited scope. The third alternative is to report the situation to top management and ask for their intervention or inform them of the dire consequences of this lack of skilled personnel.

Diff: 2 Section: 6.1 Building the Project Team LO: 6.1: Understand the steps in project team building.

Classification: Application AACSB: Application of Knowledge

14) A key determinant of project success is a: A) Rapidly assembled team.

B) Slowly assembled team.

C) Project leader voted on by the team.

D) Clear project mission.

Answer: D Diff: 2 Section: 6.2 Characteristics of Effective Project Teams LO: 6.2: Know the characteristics of effective project teams and why teams fail.

Classification: Concept AACSB: Application of Knowledge 15) The number one predictor of project success is: A) The absence of conflict among project team members.

B) Documentation that clearly articulates the consequences of failing to achieve the objectives.

C) A mission that is understood and accepted by all team members.

D) A well-prepared fallback position in case the project cannot be executed as imagined.

Answer: D Diff: 2 Section: 6.2 Characteristics of Effective Project Teams LO: 6.2: Know the characteristics of effective project teams and why teams fail.

Classification: Concept AACSB: Application of Knowledge 16) The BEST source of troubleshooting for problems is the: A) Project team.

B) Project manager.

C) Project customer.

D) Project champion.

Answer: A Diff: 2 Section: 6.2 Characteristics of Effective Project Teams LO: 6.2: Know the characteristics of effective project teams and why teams fail.

Classification: Concept AACSB: Application of Knowledge

17) Productive interdependencies hinge upon: A) The project manager's role as the hub of the team with all team members as spokes.

B) The degree of knowledge the team members have and the importance they attach to interrelatedness of efforts.

C) The cohesiveness of the project team's supply chain and the degree of assistance they render the project team.

D) The support the key stakeholders offer to the overall project success.

Answer: B Diff: 1 Section: 6.2 Characteristics of Effective Project Teams LO: 6.2: Know the characteristics of effective project teams and why teams fail.

Classification: Concept AACSB: Application of Knowledge 18) The study group that Philip had formed in his first MBA class had gotten him through his management science course; of that there could be no question. Now as he neared the end of his MBA he reflected on how team members had chosen courses together each semester, keeping the study group intact and keeping themselves one step ahead of their classmates. His MBA project team had: A) Trust coming out of their ears.

B) Cohesiveness in spades.

C) An overabundance of enthusiasm.

D) A plethora of results orientation.

Answer: B Diff: 1 Section: 6.2 Characteristics of Effective Project Teams LO: 6.2: Know the characteristics of effective project teams and why teams fail.

Classification: Concept AACSB: Application of Knowledge 19) Trust based on a person's competence would be summarized by this team member's affectionate statement towards another team member: A) "I trust you to honor your commitments."

B) "Does it feel right to allow you to make this decision?"

C) "I trust you to be able to accomplish this task."

D) "I trust you to do the right thing."

Answer: C Diff: 1 Section: 6.2 Characteristics of Effective Project Teams LO: 6.2: Know the characteristics of effective project teams and why teams fail.

Classification: Concept AACSB: Application of Knowledge

20) The key to creating the energy and spirit that drives effective project efforts is: A) Results orientation.

B) Trust.

C) Cohesiveness.

D) Enthusiasm.

Answer: D Diff: 1 Section: 6.2 Characteristics of Effective Project Teams LO: 6.2: Know the characteristics of effective project teams and why teams fail.

Classification: Concept AACSB: Application of Knowledge 21) The semester project was due at 8:00 a.m. the next day and as the sun rose swiftly in the east, the team of four graduating seniors held their collective breath. If their database project worked (and why wouldn't it, they had begun early yesterday afternoon) they would complete their quest and graduate in a week with their shiny diplomas in MIS. Their drive to finish the project with A quality work was clear testament to their: A) Results orientation.

B) Trust.

C) Cohesiveness.

D) Enthusiasm.

Answer: A Diff: 1 Section: 6.2 Characteristics of Effective Project Teams LO: 6.2: Know the characteristics of effective project teams and why teams fail.

Classification: Application AACSB: Application of Knowledge 22) Cletus thought they were draining the swamp, but Spike was convinced they were better off building a bridge across it. Their project team was doomed to failure owing to their: A) Poorly defined team roles.

B) Unclear goals.

C) Lack of motivation.

D) Poorly defined team interdependencies.

Answer: B Diff: 1 Section: 6.3 Reasons Why Teams Fail LO: 6.2: Know the characteristics of effective project teams and why teams fail.

Classification: Application AACSB: Application of Knowledge

23) All of the members of the ladies' circle were horrified when each of them arrived at the parish hall with 20 gallons of potato salad. It was all quite delicious but wasn't the well-balanced spread they customarily set out. The potato salad disaster of '89 was passed from generation to generation along with a stern warning to: A) Make sure that every team member is motivated.

B) Make sure that project goals are clear.

C) Make sure that project team roles are clear.

D) Make sure that turnover is low.

Answer: C Diff: 2 Section: 6.3 Reasons Why Teams Fail LO: 6.2: Know the characteristics of effective project teams and why teams fail.

Classification: Application AACSB: Application of Knowledge 24) Which of the following phenomena would be most likely to occur if the project team did NOT have clear and commonly understood project goals?

A) The motivation level of team members would increase.

B) Conflict among team members would increase.

C) The level of trust among team members would increase.

D) The interdependency among team members would increase.

Answer: B Diff: 2 Section: 6.3 Reasons Why Teams Fail LO: 6.2: Know the characteristics of effective project teams and why teams fail.

Classification: Application AACSB: Application of Knowledge 25) The department chair had allotted plenty of time for all department (and project) members to prepare sections of their five-year program review. Administration demanded no less than 50 pages be devoted to a thorough and thoughtful review of activities and goals. What happened to the report was anybody's guess; no one had actually seen one or ever heard back from administration once they had submitted it. Most of the project team members thought the report was immediately sent to the steam tunnels running underneath the campus or perhaps it would sit collecting dust as part of a make-work program to justify an assistant VP's job. No wonder that team meetings were poorly attended and that all the sections of the report were filled with trite phrases and wide margins. This team suffers from: A) Tenure.

B) Poorly developed goals.

C) Poorly defined team interdependencies.

D) Lack of motivation.

Answer: D Diff: 2 Section: 6.3 Reasons Why Teams Fail LO: 6.2: Know the characteristics of effective project teams and why teams fail.

Classification: Application AACSB: Application of Knowledge 26) The Dean's laissez faire attitude hit its zenith when he had missed five department chair meetings in a row despite the pressing needs of the MBA Curriculum Revision Team. No one was sure what to do so they did nothing, and the MBA program remained as it had always been

as the revision team slunk back to their offices. If only there had been: A) Better leadership, the project might have succeeded.

B) Less turnover among project members, the project might have succeeded.

C) A clear goal, the project might have succeeded.

D) More motivation among team members, the project might have succeeded.

Answer: A Diff: 2 Section: 6.3 Reasons Why Teams Fail LO: 6.2: Know the characteristics of effective project teams and why teams fail.

Classification: Application AACSB: Application of Knowledge 27) The project team's office needed a revolving door to facilitate the influx and outflow of personnel. Team members needed name tags to keep track of who was who and what their duties were. The project was jeopardized by: A) Poor leadership.

B) High turnover.

C) Lack of team motivation.

D) Poor communication among team members.

Answer: B Diff: 1 Section: 6.3 Reasons Why Teams Fail LO: 6.2: Know the characteristics of effective project teams and why teams fail.

Classification: Application AACSB: Application of Knowledge 28) Disruptive acts of some project team members due to personality issues, hidden agendas, or interpersonal problems are categorized as: A) Poor communication.

B) Lack of motivation.

C) Dysfunctional behavior.

D) Poor leadership.

Answer: C Diff: 1 Section: 6.3 Reasons Why Teams Fail LO: 6.2: Know the characteristics of effective project teams and why teams fail.

Classification: Concept AACSB: Application of Knowledge

29) Project managers are best able to promote a sense of enthusiasm within the project team when they create an environment that is challenging, supportive, and personally rewarding.

Answer: TRUE Diff: 1 Section: 6.2 Characteristics of Effective Project Teams LO: 6.2: Know the characteristics of effective project teams and why teams fail.

Classification: Application AACSB: Application of Knowledge 30) High turnover among project team members is a key element of success since new team members will bring fresh perspectives and ideas to the group.

Answer: FALSE Diff: 1 Section: 6.3 Reasons Why Teams Fail LO: 6.2: Know the characteristics of effective project teams and why teams fail.

Classification: Concept AACSB: Application of Knowledge 31) What are the characteristics of effective project teams?

Answer: Effective project teams have a clear sense of mission, a productive interdependency, cohesiveness, trust, enthusiasm, and results orientation. A clear sense of mission is perhaps the number one predictor of success. Project teams perform well when there is a clear sense of purpose or goal for the project. Interdependency refers to the degree of joint activity among project team members that is required in order to successfully complete a project. Each individual brings special skills to the table and each must be aware of how these skills fit into the overall scheme and what skills that others provide. Cohesiveness refers to the degree of mutual attraction that team members hold for each other and their task. For a project team, trust can best be understood as the team's comfort level with each individual member. Enthusiasm is the key to creating energy and spirit that drives effective project efforts. Finally, result orientation suggests that each member of the project team is committed to achieving the project's goals.

Diff: 2 Section: 6.2 Characteristics of Effective Project Teams LO: 6.2: Know the characteristics of effective project teams and why teams fail.

Classification: Application AACSB: Application of Knowledge

32) You have assembled your project team, and as luck would have it, you added every person to your team that you wanted. Your team has a diverse set of skills, and each member has at least one skill that another doesn't have. This is why you chose each one; otherwise you couldn't hope to deliver the project. What is wrong with segmenting the team in terms of their specific duties?

Answer: The text identifies three issues with assigning each member a small, discrete task but no sense of how that activity contributes to the overall project development effort. First, the project team is the manager's best source for troubleshooting problems, both potential and actual.

If the team is kept in the dark, members who could potentially help with the smooth development of the project through participating in other aspects of the installation are not able to contribute in helpful ways. Second, team members know and resent it when they are being kept in the dark about various features of the project on which they are working. Finally, from a "firefighting" perspective, it simply makes good sense for team leaders to keep their people abreast of the status of the project. The more time spent defining goals and clarifying roles in the initial stages of the team's development, the less time will be needed to resolve problems and adjudicate disputes down the road.

Diff: 3 Section: 6.2 Characteristics of Effective Project Teams LO: 6.2: Know the characteristics of effective project teams and why teams fail.

Classification: Application AACSB: Application of Knowledge 33) The author presents the need for a productive interdependency among project team members.

What are the tradeoffs between differentiation and redundancy and how are these related to a productive interdependency?

Answer: Interdependency refers to the degree of joint activity among team members that is required to complete the project. A team with a diverse skill set must have this interdependency if the project demands this array of abilities. The differentiation will be valuable; each team member brings an idea of their role and importance of their various contributions. If there is no overlap of skills, then underperformance or unavailability of any team member might jeopardize the project. If the team members were highly redundant, then project costs might be high (if their salary were charged to the project) and the duplication of team membership might actually be counterproductive.

Diff: 3 Section: 6.2 Characteristics of Effective Project Teams LO: 6.2: Know the characteristics of effective project teams and why teams fail.

Classification: Application AACSB: Application of Knowledge

34) How can project managers promote a sense of enthusiasm within the project team?

Answer: Project managers are best able to promote a sense of enthusiasm within the project team when they create an environment that is challenging, supportive, and personally rewarding.

It is important that the environment is challenging so that each member of the project perceives his role to offer the opportunity for professional or personal growth, new learning, and the ability to stretch himself. A supportive environment allows project team members to gain a sense of team spirit and group identity that creates feelings of uniqueness with regard to the project.

Finally, project team members become more enthusiastic as they perceive personal benefits from successful completion of the project.

Diff: 2 Section: 6.2 Characteristics of Effective Project Teams LO: 6.2: Know the characteristics of effective project teams and why teams fail.

Classification: Application AACSB: Application of Knowledge 35) What are the main three reasons why project teams fail?

Answer: There are a number of reasons why teams operate at less than optimum performance.

One of the most common causes of project team failure is due to the absence of clear and commonly understood project goals. Project teams also suffer if the team roles and interdependencies are poorly defined. A lack of motivation among team members also has a detrimental effect on project team performance. Poor communication comes about for a variety of reasons, but the net result is that project teams underperform if communication is poor. Lack of, or poor, leadership fails a team since the manager is often the lynchpin holding the team together. High turnover among project team members is disruptive as it prevents a manager from achieving team cohesion. Dysfunctional behavior refers to disruptive acts of some project team members; this behavior is also detrimental to team performance.

Diff: 2 Section: 6.3 Reasons Why Teams Fail LO: 6.2: Know the characteristics of effective project teams and why teams fail.

Classification: Concept AACSB: Application of Knowledge

36) What are three consequences of poorly designed or unclear goals?

Answer: The most common problem with poorly developed goals is that they allow each team member to make separate and often differing interpretations of project objectives. As a result, rather than helping the team to focus on the project at hand, these goals actually serve to increase disagreements as each team member interprets the project's goals in different ways.

When team members are faced with ambiguous goals, it is common for each person to interpret the goals in the most advantageous way. When goals are used to support individuals rather than team objectives, it often leads to situations in which one person's desire to satisfy the project goals as he interprets them actually conflicts with another team member's desire to satisfy her goals.

Project team conflict is heightened by vague goals that allow for multiple, self-centered interpretations. Rather than working on completing the project, team members expend energy and time in conflict with one another sifting through project objectives.

Diff: 2 Section: 6.3 Reasons Why Teams Fail LO: 6.2: Know the characteristics of effective project teams and why teams fail.

Classification: Concept AACSB: Application of Knowledge 37) Team members get to know each other in the: A) Adjourning stage of group development.

B) Storming stage of group development.

C) Performing stage of group development.

D) Forming stage of group development.

Answer: D Diff: 1 Section: 6.4 Stages in Group Development LO: 6.3: Know the stages in the development of groups.

Classification: Concept AACSB: Application of Knowledge 38) Conflict begins as team members begin to resist authority and demonstrate hidden agendas and prejudices in the: A) Storming stage of group development.

B) Performing stage of group development.

C) Forming stage of group development.

D) Norming stage of group development.

Answer: A Diff: 1 Section: 6.4 Stages in Group Development LO: 6.3: Know the stages in the development of groups.

Classification: Concept AACSB: Application of Knowledge

39) Everyone in the Tagi tribe agreed to vote out Gervasse at the next tribal council. Their 39day project to make it to the final four together was two steps away from completion. This project group is in the: A) Storming stage of group development.

B) Performing stage of group development.

C) Forming stage of group development.

D) Norming stage of group development.

Answer: B Diff: 1 Section: 6.4 Stages in Group Development LO: 6.3: Know the stages in the development of groups.

Classification: Application AACSB: Application of Knowledge 40) It appeared that everyone on the project team was finally on board; Jim would bring the doughnuts to all team meetings and Jenny would make the coffee. Fully caffeinated and on a sugar high, the team was coming together and fully committed to the project development process. The team was now planted firmly in the: A) Storming stage of group development.

B) Forming stage of group development.

C) Norming stage of group development.

D) Performing stage of group development.

Answer: C Diff: 1 Section: 6.4 Stages in Group Development LO: 6.3: Know the stages in the development of groups.

Classification: Concept AACSB: Application of Knowledge 41) "Our work here is done," the project leader shouted as he surveyed the scene. "Go home and reflect on what you've accomplished and I'll see you at the world premiere, once we're all immortalized in a feature length movie." This project team is in the: A) Forming stage of group development.

B) Norming stage of group development.

C) Performing stage of group development.

D) Adjourning stage of group development.

Answer: D Diff: 1 Section: 6.4 Stages in Group Development LO: 6.3: Know the stages in the development of groups.

Classification: Application AACSB: Application of Knowledge

42) The role of the team leader is to create structure and set the tone for future cooperation and positive team attitudes in the: A) Forming stage of group development.

B) Norming stage of group development.

C) Performing stage of group development.

D) Adjourning stage of group development.

Answer: A Diff: 1 Section: 6.4 Stages in Group Development LO: 6.3: Know the stages in the development of groups.

Classification: Concept AACSB: Application of Knowledge 43) Gersick's model for team development rejects the standard model in favor of something called: A) Forming-storming-norming-performing-adjourning.

B) Directed chaos.

C) The golden rule.

D) Punctuated equilibrium.

Answer: D Diff: 2 Section: 6.4 Stages in Group Development LO: 6.3: Know the stages in the development of groups.

Classification: Concept AACSB: Application of Knowledge 44) The punctuated equilibrium model of team development says that: A) Cataclysmic events promote growth after long periods of no change.

B) Change occurs as the team leader insists upon it.

C) There can be no equilibrium until suffering has occurred.

D) If team members are punctual, the project can achieve equilibrium.

Answer: A Diff: 2 Section: 6.4 Stages in Group Development LO: 6.3: Know the stages in the development of groups.

Classification: Concept AACSB: Application of Knowledge 45) Project team productivity is at its peak during the norming phase of group development.

Answer: FALSE Diff: 2 Section: 6.4 Stages in Group Development LO: 6.3: Know the stages in the development of groups.

Classification: Concept AACSB: Application of Knowledge

46) The punctuated equilibrium model suggests that groups spend the majority of their time in stasis.

Answer: TRUE Diff: 3 Section: 6.4 Stages in Group Development LO: 6.3: Know the stages in the development of groups.

Classification: Concept AACSB: Application of Knowledge 47) What are the stages in group development and what project management behaviors are exhibited in each stage?

Answer: The stages in group development are forming, storming, norming, performing, and adjourning. In the forming stage, the project team members get to know each other and lay the basis for project and team ground rules. The storming stage features the start of conflict as team members begin to resist authority and demonstrate hidden agendas and prejudices. Members agree on operating procedures and seek to work together in the norming stage, finally committing to the project development process. Group members work to accomplish the project during the performing stage. Once their work is done, groups disband in the adjourning stage.

Diff: 2 Section: 6.4 Stages in Group Development LO: 6.3: Know the stages in the development of groups.

Classification: Concept AACSB: Application of Knowledge 48) You have undoubtedly been in many student project groups, teams, or perhaps project groups at work. Write a brief description of a memorable group you have been a member of and describe your favorite phase in the group development process. What specific behaviors and incidents identify the phase in question?

Answer: The stages in group development are forming, storming, norming, performing, and adjourning. Examples will vary, but should include anecdotes along the lines of the classic behaviors describes in the following five sentences. In the forming stage, the project team members get to know each other and lay the basis for project and team ground rules. The storming stage features the start of conflict as team members begin to resist authority and demonstrate hidden agendas and prejudices. Members agree on operating procedures and seek to work together in the norming stage, finally committing to the project development process.

Group members work to accomplish the project during the performing stage. Once their work is done, groups disband in the adjourning stage.

Diff: 2 Section: 6.4 Stages in Group Development LO: 6.3: Know the stages in the development of groups.

Classification: Concept AACSB: Application of Knowledge

49) Explain Gersick's model of punctuated equilibrium.

Answer: Punctuated equilibrium proposes that rather than evolution occurring as a steady state of gradual change, real natural change comes about through long periods of stasis, interrupted by some cataclysmic event that propels upward, evolutionary adjustment. Gersick's work indicates that teams develop operating norms rather quickly and will operate under these norms until a trigger event, occurring halfway between the initial meeting and the project's due date, causes a change in norms and better task performance.

Diff: 3 Section: 6.4 Stages in Group Development LO: 6.3: Know the stages in the development of groups.

Classification: Application AACSB: Application of Knowledge 50) Choose an example project from the current or very recent business literature. Sketch a graphical version of Gersick's model of punctuated equilibrium and label the curve and both axes.

Answer: Punctuated equilibrium proposes that rather than evolution occurring as a steady state of gradual change, real natural change comes about through long periods of stasis, interrupted by some cataclysmic event that propels upward, evolutionary adjustment. Gersick's work indicates that teams develop operating norms rather quickly and will operate under these norms until a trigger event, occurring halfway between the initial meeting and the project's due date, causes a change in norms and better task performance. Examples will vary.

Diff: 3 Section: 6.4 Stages in Group Development LO: 6.3: Know the stages in the development of groups.

Classification: Application AACSB: Application of Knowledge

51) The two sets of factors that contribute to cross-functional cooperation influence: A) Criticality and accessibility.

B) Functionality and outcomes.

C) Cooperation and outcomes.

D) Cooperation and criticality.

Answer: C Diff: 2 Section: 6.5 Achieving Cross-Functional Cooperation LO: 6.4: Describe how to achieve cross-functional cooperation in teams.

Classification: Concept AACSB: Application of Knowledge 52) What are psychosocial outcomes as contained in the cross-functional cooperation model?

A) The emotional and psychological effects that strong performance will have on the project team B) The psychopathic behaviors exhibited by members of the project team in a social setting C) The psychomotor skills needed to complete many of the tasks by members of the project team D) The psychological profile of introversion/extroversion and intuitive/sensing that determine how team members interact with each other Answer: A Diff: 2 Section: 6.5 Achieving Cross-Functional Cooperation LO: 6.4: Describe how to achieve cross-functional cooperation in teams.

Classification: Concept AACSB: Application of Knowledge 53) An overall goal or purpose that is important to all functional groups involved, but whose attainment requires the resources and efforts of more than one group, is a(n): A) Superordinate goal.

B) Means goal.

C) End goal.

D) Field goal.

Answer: A Diff: 2 Section: 6.5 Achieving Cross-Functional Cooperation LO: 6.4: Describe how to achieve cross-functional cooperation in teams.

Classification: Concept AACSB: Application of Knowledge

54) Cross-functional cooperation directly affects both: A) Superordinate goals and psychosocial outcomes.

B) Psychosocial outcomes and task outcomes.

C) Task outcomes and self-actualization.

D) Self-actualization and superordinate goals.

Answer: B Diff: 2 Section: 6.5 Achieving Cross-Functional Cooperation LO: 6.4: Describe how to achieve cross-functional cooperation in teams.

Classification: Concept AACSB: Application of Knowledge 55) "Loose Cannon" Buchanan said and did whatever he wanted, which was usually at odds with the behavior of the rest of the business faculty. An appropriate mechanism for bringing him into alignment with the rest of the team is: A) Issuing superordinate goals.

B) Creating a formalized set of rules.

C) Making sure he was in close proximity to the rest of the faculty.

D) Have the team adopt his aberrant behavioral patterns.

Answer: C Diff: 2 Section: 6.5 Achieving Cross-Functional Cooperation LO: 6.4: Describe how to achieve cross-functional cooperation in teams.

Classification: Concept AACSB: Application of Knowledge 56) The design team's location in one centralized cube farm made it convenient for them to interact with each other and overhear conversations that they had something to contribute to, proving once again the value of: A) Accessibility.

B) Rules and procedures.

C) Superordinate goals.

D) Physical proximity.

Answer: D Diff: 3 Section: 6.5 Achieving Cross-Functional Cooperation LO: 6.4: Describe how to achieve cross-functional cooperation in teams.

Classification: Concept AACSB: Application of Knowledge

57) Even though he was the facilities director with the county, Keith loosened his tie and waded into the raw, untreated sewage with the rest of the project team. As they stood there together in the quagmire of mud and feces, the team members found Keith less intimidating and his: A) Accessibility was at an all-time high. Surely the cross-functional cooperation of the team would soon peak.

B) Proximity was at an all-time high. Surely the cross-functional cooperation of the team would soon peak.

C) Equanimity was at an all-time high. Surely the cross-functional cooperation of the team would soon peak.

D) Task orientation was at an all-time high. Surely the cross-functional cooperation of the team would soon peak.

Answer: A Diff: 2 Section: 6.5 Achieving Cross-Functional Cooperation LO: 6.4: Describe how to achieve cross-functional cooperation in teams.

Classification: Concept AACSB: Application of Knowledge 58) Which of these terms is most likely associated with task outcomes?

A) Satisfying endeavor B) Worthwhile experience C) Project schedule D) Productive use of time Answer: C Diff: 1 Section: 6.5 Achieving Cross-Functional Cooperation LO: 6.4: Describe how to achieve cross-functional cooperation in teams.

Classification: Concept AACSB: Application of Knowledge 59) Cross-functional cooperation directly influences both the actual implementation of the project and the team members' assessment that the project experience was worthwhile.

Answer: TRUE Diff: 3 Section: 6.5 Achieving Cross-Functional Cooperation LO: 6.4: Describe how to achieve cross-functional cooperation in teams.

Classification: Application AACSB: Application of Knowledge 60) In general, a superordinate goal is a replacement goal for the goals of all functional groups involved in the project.

Answer: FALSE Diff: 2 Section: 6.5 Achieving Cross-Functional Cooperation LO: 6.4: Describe how to achieve cross-functional cooperation in teams.

Classification: Application AACSB: Application of Knowledge 61) Accessibility is the perception of the project team members that they are physically located in such a way that it is easy for them to interact.

Answer: FALSE

Diff: 2 Section: 6.5 Achieving Cross-Functional Cooperation LO: 6.4: Describe how to achieve cross-functional cooperation in teams.

Classification: Application AACSB: Application of Knowledge 62) Sketch the two-stage model of cross-functional cooperation and describe all of the elements.

Answer: The two-stage cross-functional cooperation model is pictured below:

Superordinate goals are a purpose that is important to all functional groups involved, but whose attainment requires the resources and efforts of more than one group.

Rules and procedures are central to any discussion of cross-functional cooperation because they offer a means for coordinating or integrating activities that involve several functional units.

Physical proximity refers to project team members' perceptions that they are located within physical or spatial distances that make it convenient for them to interact with each other.

Accessibility is the perception by others that a person is approachable for communicating and interacting with on problems or concerns which are related to project success.

Task outcomes refer to the factors involved in the actual implementation of the project.

Psychosocial outcomes represent the team member's assessment that the project experience was worthwhile, satisfying, and productive.

Diff: 3 Section: 6.5 Achieving Cross-Functional Cooperation LO: 6.4: Describe how to achieve cross-functional cooperation in teams.

Classification: Application AACSB: Application of Knowledge

63) What are three practical steps that project managers can take so that teamwork can emerge?

Answer: Based on previous research, there are three practical steps project managers can take to set the stage for teamwork to emerge. The project team manager should: Make the project team as tangible as possible — Effective teams develop their own identity and the manager can foster this by publicizing the project and team members, promoting interaction, and emphasizing the importance of project outcomes.

Reward good behavior — Non-monetary rewards for good performance is crucial. The project manager should recognize that everyone views rewards differently, provide alternative means to get the message across, and recognize what can be rewarded.

Develop a personal touch — the manager should build one-on-one relationships with project team members.

Diff: 2 Section: 6.5 Achieving Cross-Functional Cooperation LO: 6.4: Describe how to achieve cross-functional cooperation in teams.

Classification: Concept AACSB: Application of Knowledge 64) Virtual teams are often slowed down by difficulty with: A) Superordinate goals.

B) Task reliance.

C) Punctuated equilibrium.

D) Communication.

Answer: D Diff: 2 Section: 6.6 Virtual Project Teams LO: 6.5: See the advantages of virtual project teams.

Classification: Concept AACSB: Information Technology 65) Virtual teams are often slowed down by difficulty establishing: A) Superordinate goals.

B) Task outcomes.

C) Trust.

D) Psychosocial outcomes.

Answer: C Diff: 2 Section: 6.6 Virtual Project Teams LO: 6.5: See the advantages of virtual project teams.

Classification: Concept AACSB: Information Technology

66) A splendid way to improve the efficiency and effectiveness of virtual teams is to: A) Have them meet face-to-face occasionally.

B) Restrict team members to audio communication only.

C) Mandate audio and video in all electronic communication.

D) Use e-mail most of the time since the printed word is rarely misinterpreted.

Answer: A Diff: 2 Section: 6.6 Virtual Project Teams LO: 6.5: See the advantages of virtual project teams.

Classification: Application AACSB: Information Technology 67) Regular meetings and ad hoc get-togethers prevent a virtual team member from: A) Accomplishing too much.

B) Disappearing.

C) Forgetting deadlines.

D) Missing meetings.

Answer: B Diff: 2 Section: 6.6 Virtual Project Teams LO: 6.5: See the advantages of virtual project teams.

Classification: Application AACSB: Information Technology 68) Everyone on the virtual project team agreed to respond to e-mail within 24 hours of receipt, and this: A) Conflict resolution process assured the project team of success.

B) Augmented communication assured the project team of success.

C) Code of conduct assured the project team of success.

D) Heuristic assured the project team of success.

Answer: C Diff: 2 Section: 6.6 Virtual Project Teams LO: 6.5: See the advantages of virtual project teams.

Classification: Concept AACSB: Information Technology

69) During the two hours before their 7:30 p.m. appointments on Wednesday evenings, the operations team had a weekly gripe session during which everyone gleefully unloaded on the powers that controlled their miserable lives. This session was valuable since it: A) Allowed them to feel like real men, if only for a little while.

B) Rewarded good behavior.

C) Established a sense of security and consistency.

D) Created a clear process for addressing conflict and group norms.

Answer: D Diff: 1 Section: 6.6 Virtual Project Teams LO: 6.5: See the advantages of virtual project teams.

Classification: Concept AACSB: Information Technology 70) The two main challenges that virtual project teams face are building trust and establishing the best modes of communication.

Answer: TRUE Diff: 3 Section: 6.6 Virtual Project Teams LO: 6.5: See the advantages of virtual project teams.

Classification: Application AACSB: Application of Knowledge 71) What are virtual teams and what are two potential problems with using them? How can these problems be avoided?

Answer: Virtual teams involve the use of electronic media, including e-mail, internet, and teleconferencing to link together members of a geographically dispersed project team. Virtual teams can have great difficulty building trust and establishing the best modes of communication.

In order to combat these difficulties, project managers should try to augment virtual communication with face-to-face opportunities and try to establish a code of conduct among team members.

Diff: 1 Section: 6.6 Virtual Project Teams LO: 6.5: See the advantages of virtual project teams.

Classification: Concept AACSB: Information Technology

72) Conflict is not a state, but a: A) Way of life.

B) Condition.

C) Process.

D) Certainty.

Answer: C Diff: 2 Section: 6.7 Conflict Management LO: 6.6: Understand the nature of conflict and evaluate response methods.

Classification: Concept AACSB: Application of Knowledge 73) Because conflict is perceptual in nature: A) It is a state.

B) It is essentially static.

C) It often cannot be solved by any conventional means but must be refereed.

D) It doesn't really matter if one party has truly wronged another party.

Answer: D Diff: 2 Section: 6.7 Conflict Management LO: 6.6: Understand the nature of conflict and evaluate response methods.

Classification: Concept AACSB: Application of Knowledge 74) Conflict associated with disagreement in project scope, priorities, or objectives is: A) Goal-oriented.

B) Administrative.

C) Interpersonal.

D) Traditional.

Answer: A Diff: 1 Section: 6.7 Conflict Management LO: 6.6: Understand the nature of conflict and evaluate response methods.

Classification: Concept AACSB: Application of Knowledge

75) Your first project team meeting got off to a bad start when the functional manager for your team's physician refused to allow her to attend the meeting. This: A) Goal-oriented conflict threatened the project's success.

B) Administrative conflict posed a serious threat to the project's success.

C) Interpersonal conflict was devastating to the project's chance for success.

D) Interactionist conflict meant there would be no project completion party in your future.

Answer: B Diff: 1 Section: 6.7 Conflict Management LO: 6.6: Understand the nature of conflict and evaluate response methods.

Classification: Concept AACSB: Application of Knowledge 76) Robert didn't mince words. If a person's ideas were ill-considered, he was likely to tell them that their ideas were bad. If there was a disagreement, he plainly stated that the person with the opposing viewpoint was wrong. To some, his manner was abrasive and un-collegial and this was a source of: A) Goal-oriented conflict.

B) Administrative conflict.

C) Interpersonal conflict.

D) Interactionist conflict.

Answer: C Diff: 1 Section: 6.7 Conflict Management LO: 6.6: Understand the nature of conflict and evaluate response methods.

Classification: Concept AACSB: Application of Knowledge 77) The husband in the marriage project meekly apologized and hid in the garage while the other project team member rampaged through the house. The husband holds the: A) Behavioral view of conflict.

B) Interactionist view of conflict.

C) Traditional view of conflict.

D) Attributional view of conflict.

Answer: C Diff: 1 Section: 6.7 Conflict Management LO: 6.6: Understand the nature of conflict and evaluate response methods.

Classification: Concept, Application AACSB: Application of Knowledge

78) Some of the team members took great delight in stirring the pot at team meetings. They knew just how to get each team member agitated and then sat back and enjoyed the show. These troublemakers defended their actions by claiming that they took the: A) Traditional view of conflict.

B) Behavioral view of conflict.

C) High reliability view of conflict.

D) Interactionist view of conflict.

Answer: D Diff: 2 Section: 6.7 Conflict Management LO: 6.6: Understand the nature of conflict and evaluate response methods.

Classification: Concept AACSB: Application of Knowledge 79) The Liberal Arts faculty failed to see the reason that every professor on campus would not make exactly the same amount of money, arguing that every person is of equal value. The business faculty relied on the laws of supply and demand and market forces to guide their wages and couldn't fathom why their counterparts could be such dunderheads. The source of conflict between these two groups is: A) Differentiation.

B) Uncertainty.

C) Reward systems.

D) Structural.

Answer: A Diff: 2 Section: 6.7 Conflict Management LO: 6.6: Understand the nature of conflict and evaluate response methods.

Classification: Concept AACSB: Application of Knowledge 80) The globalization committee was halfway through their first meeting before the team leader realized that his boss had granted him authority that wasn't going to be agreed to by the functional managers of his team. After the meeting, his team members reported back to their units and the team leader's phone began to ring. The source of the conflict he is about to experience is: A) Differentiation.

B) Uncertainty.

C) Scarce resources.

D) Reward systems.

Answer: B Diff: 2 Section: 6.7 Conflict Management LO: 6.6: Understand the nature of conflict and evaluate response methods.

Classification: Application AACSB: Application of Knowledge

81) The misconception of the reason behind another person's behavior is: A) Faulty communication.

B) A personal grudge.

C) Faulty attribution.

D) Prejudice.

Answer: C Diff: 2 Section: 6.7 Conflict Management LO: 6.6: Understand the nature of conflict and evaluate response methods.

Classification: Concept AACSB: Application of Knowledge 82) Andy Ambiguous concluded the project meeting and the puzzled team compared notes as they walked down the hall from the meeting room. Each team member had a different spin on what their assignment was before the next meeting and this was sure to create some problems, thanks to the: A) Prejudice.

B) Faulty attribution.

C) Personal grudges.

D) Faulty communication.

Answer: D Diff: 1 Section: 6.7 Conflict Management LO: 6.6: Understand the nature of conflict and evaluate response methods.

Classification: Concept AACSB: Application of Knowledge 83) Two research studies conducted over a decade apart discovered that the major sources of conflict within project teams are: A) Schedules and project priorities.

B) Personalities and cost.

C) Human resources and technical opinions.

D) Administrative procedures and budget.

Answer: A Diff: 3 Section: 6.7 Conflict Management LO: 6.6: Understand the nature of conflict and evaluate response methods.

Classification: Concept AACSB: Application of Knowledge

84) A manager engaged in conflict mediation may choose to: A) Evade.

B) Defuse.

C) Excuse.

D) Peruse.

Answer: B Diff: 1 Section: 6.7 Conflict Management LO: 6.6: Understand the nature of conflict and evaluate response methods.

Classification: Concept AACSB: Application of Knowledge 85) When a project manager imposes a judgment on warring parties, he is involved in: A) Mediation.

B) Elimination.

C) Arbitration.

D) Acceptance.

Answer: C Diff: 1 Section: 6.7 Conflict Management LO: 6.6: Understand the nature of conflict and evaluate response methods.

Classification: Concept AACSB: Application of Knowledge 86) Administrative conflict arises through management hierarchy, organizational structure, or company philosophy.

Answer: FALSE Diff: 2 Section: 6.7 Conflict Management LO: 6.6: Understand the nature of conflict and evaluate response methods.

Classification: Concept AACSB: Application of Knowledge 87) The behavioral view of conflict is that conflict has a negative effect on organizations.

Answer: FALSE Diff: 2 Section: 6.7 Conflict Management LO: 6.6: Understand the nature of conflict and evaluate response methods.

Classification: Concept AACSB: Application of Knowledge

88) What is conflict and what three forms does it take?

Answer: Conflict is a process that begins when you perceive that someone has frustrated or is about to frustrate a major concern of yours. Goal-oriented conflict is associated with disagreements regarding end results, project scope outcomes, performance specifications and criteria, project priorities and objectives. Administrative conflict arises through management hierarchy, organizational structure, or company philosophy. These conflicts are centered on disagreements about reporting relationships and who has administrative control and authority for functions, project tasks, and decisions. Interpersonal conflict occurs with personality differences between project team members and important project stakeholders.

Diff: 2 Section: 6.7 Conflict Management LO: 6.6: Understand the nature of conflict and evaluate response methods.

Classification: Concept AACSB: Application of Knowledge 89) What are the primary ways of resolving conflict? Which is most effective?

Answer: Project managers must learn to develop flexibility in dealing with conflict, knowing when to intervene versus when to remain neutral. Conflict can be managed in terms of five alternatives: Mediate the conflict — The manager can employ defusion or confrontation tactics to try and find a solution.

Arbitrate the conflict — The project manager may decide to impose a judgment on the parties and declare a winner.

Control the conflict — The parties can be allowed to cool down for a while or the combatants can be physically separated.

Accept the conflict — Not all conflicts are manageable so the project manager may decide the team can accept the conflict and still accomplish the mission.

Eliminate the conflict — In some situations, the conflict may be so disruptive that it threatens the project, so one team member must be eliminated by any means necessary.

Diff: 2 Section: 6.7 Conflict Management LO: 6.6: Understand the nature of conflict and evaluate response methods.

Classification: Concept AACSB: Application of Knowledge 90) Principled negotiation is the art of: A) Getting agreement with the other party while maintaining a win-win attitude.

B) Refusing to compromise your principles for the sake of a business deal.

C) Creating conflict to test for an adversary's weakness and reducing conflict once the weakness has been exposed.

D) Dividing your resources in the face of superior numbers.

Answer: A Diff: 1 Section: 6.8 Negotiation LO: 6.7: Understand the importance of negotiation skills in project management.

Classification: Concept AACSB: Application of Knowledge 91) Which of these questions is important to consider as you enter a negotiation?

A) What if I lose?

B) How much power do I have?

C) How much money do I have?

D) Am I smarter than my opponent?

Answer: B Diff: 1 Section: 6.8 Negotiation LO: 6.7: Understand the importance of negotiation skills in project management.

Classification: Concept AACSB: Application of Knowledge 92) An excellent starting point in negotiations is to: A) Deduce their intentions from your fears.

B) Identify the person that is the source of the problem.

C) Deduce their fears from your intentions.

D) Put yourself in their shoes.

Answer: D Diff: 2 Section: 6.8 Negotiation LO: 6.7: Understand the importance of negotiation skills in project management.

Classification: Application AACSB: Application of Knowledge 93) When negotiating, it is important to: A) Focus on interests, not positions.

B) Focus on positions, not interests.

C) Focus on positions and interests.

D) Focus on neither interests nor positions.

Answer: A Diff: 2 Section: 6.8 Negotiation LO: 6.7: Understand the importance of negotiation skills in project management.

Classification: Concept AACSB: Application of Knowledge

94) Managers involved in negotiation should: A) Search for the absolute best answer.

B) Verify whether there is only a fixed set of alternatives.

C) Realize that solving the other party's problem is actually the other party's problem.

D) Exercise premature judgment.

Answer: B Diff: 2 Section: 6.8 Negotiation LO: 6.7: Understand the importance of negotiation skills in project management.

Classification: Concept AACSB: Application of Knowledge 95) Once a negotiation process begins, during its earliest phase we should include the other party in a problem-solving session to identify alternative outcomes. This technique is called: A) Broadening options.

B) Identifying shared interests.

C) Inclusive brainstorming.

D) Objective criteria.

Answer: C Diff: 1 Section: 6.8 Negotiation LO: 6.7: Understand the importance of negotiation skills in project management.

Classification: Application AACSB: Application of Knowledge 96) One of the BEST methods for ensuring that a negotiation proceeds along substantive lines is to frame the discussion around: A) Subjective criteria.

B) Broadening options.

C) Negative brainstorming.

D) Objective criteria.

Answer: D Diff: 2 Section: 6.8 Negotiation LO: 6.7: Understand the importance of negotiation skills in project management.

Classification: Application AACSB: Application of Knowledge 97) When negotiating, it is important to remember that for every position, there are usually several alternatives that can satisfy it.

Answer: FALSE Diff: 2 Section: 6.8 Negotiation LO: 6.7: Understand the importance of negotiation skills in project management.

Classification: Concept AACSB: Application of Knowledge 98) One of the best methods for ensuring that a negotiation proceeds along substantive lines is to frame the discussion around objective criteria.

Answer: TRUE Diff: 2

Section: 6.8 Negotiation LO: 6.7: Understand the importance of negotiation skills in project management.

Classification: Concept AACSB: Application of Knowledge 99) What is negotiation? Why is it important in project management?

Answer: Negotiation is a process that is predicated on a manager's ability to use his influence productively. Negotiation skills are important because much of a project manager's life is taken up in bargaining sessions of one type or another. From stakeholder management to arranging for project team members to have more time away from their regular duties, a project manager must be able to negotiate with a wide variety of parties from positions of power and little power.

Diff: 1 Section: 6.8 Negotiation LO: 6.7: Understand the importance of negotiation skills in project management.

Classification: Concept AACSB: Application of Knowledge 100) What are the main elements of principled negotiation?

Answer: Principled negotiation is the art of getting agreement with the other party while maintaining a principled, win-win attitude. The main elements of principled negotiation are separating people from the problem, focusing on interests, not positions, inventing options for mutual gain, and insisting on using objective criteria.

Diff: 1 Section: 6.8 Negotiation LO: 6.7: Understand the importance of negotiation skills in project management.

Classification: Concept AACSB: Application of Knowledge

101) On the first day of class your professor distributed a syllabus that promised to base your course grade on a series of unannounced exams and a massive group project. As you scanned the room that day, you noted that many of your classmates did not share your enthusiasm for the subject and many were C students at best. You felt that your perfect 4.0 GPA was at stake if the professor's almost diabolical grading scheme were to be implemented. You decided right away that it was up to you to negotiate a grading scheme of equal parts class attendance, open book quizzes, and trivial homework assignments. How should you prepare for the negotiation and how should you proceed?

Answer: The three beginning questions are how much power you have, what are the time pressures, and can the opponent be trusted. A student's power may be a function of the importance placed on end of term professor evaluations and the tenure status of the professor.

The time pressure here is extreme — the syllabus would have to change early in the semester or the first exam might be distributed. Obviously, professors are the most trustworthy people in the world. The elements of principled negotiation might be referenced in the answer — the student negotiator should put himself in the professor's shoes, avoid deducing the professor's intentions from his fears, avoid blaming the professor for the class makeup, listen actively, build a working relationship, and recognize and understand emotions. As far as actual negotiating points are concerned, the student might point out that the material could be best learned using his proposed assessments than the professor's. The student might also point out that there would be far less burden on the professor using the attendance-quiz-assignment scheme than grading a massive project and several exams. These options for mutual gain might influence the grading scheme articulated in the original syllabus.

Diff: 2 Section: 6.8 Negotiation LO: 6.7: Understand the importance of negotiation skills in project management.

Classification: Critical Thinking AACSB: Application of Knowledge 102) What are three options to consider when searching for win-win alternatives in negotiation?

How does each option work?

Answer: The three options for mutual gain that are used in principled negotiation are positive and inclusive brainstorming, broadening options, and identifying shared interests. Positive and inclusive brainstorming implies that once a negotiation process begins, during its earliest phase we seek to include the other party in a problem-solving session to identify alternative outcomes.

This demonstrates that we are not interested in beating the other side, but in solving the problem.

The idea of broadening options is a direct offshoot of the notion of brainstorming. Broadening our options requires us to be open to alternative positions and can be a natural result of focusing on interests rather than positions. The third technique, identification of shared interests, requires putting aside larger issues to a later point in the discussion, after smaller issues that can be more readily agreed upon are discussed. Once the two parties begin to work together, the larger issues may be more easily resolved.

Diff: 2 Section: 6.8 Negotiation LO: 6.7: Understand the importance of negotiation skills in project management.

Classification: Concept AACSB: Application of Knowledge Project Management: Achieving Competitive Advantage, 6e (Pinto) Chapter 7 Risk Management 1) The difference between projects that fail and those that are ultimately successful has to do

with: A) The plans that have been made to deal with problems as they arise.

B) The fact that a successful project doesn't encounter problems.

C) Whether the project is for an internal or external customer.

D) Whether the problem is time- or budget-related.

Answer: A Diff: 1 Section: 7.0 Introduction LO: 7.1: Define project risk.

Classification: Concept AACSB: Application of Knowledge 2) Project risk is highest during the: A) Termination stage of the project life cycle.

B) Concept stage of the project life cycle.

C) Implementation stage of the project life cycle.

D) Development stage of the project life cycle.

Answer: B Diff: 1 Section: 7.0 Introduction LO: 7.1: Define project risk.

Classification: Concept AACSB: Application of Knowledge 3) Project risk is lowest during the: A) Concept stage of the project life cycle.

B) Implementation stage of the project life cycle.

C) Termination stage of the project life cycle.

D) Development stage of the project life cycle.

Answer: C Diff: 1 Section: 7.0 Introduction LO: 7.1: Define project risk.

Classification: Concept AACSB: Application of Knowledge

4) The period of highest risk impact for a project risk exists primarily in the: A) Development stage of the project life cycle.

B) Concept stage of the project life cycle.

C) Implementation stage of the project life cycle.

D) Termination stage of the project life cycle.

Answer: D Diff: 1 Section: 7.0 Introduction LO: 7.1: Define project risk.

Classification: Concept AACSB: Application of Knowledge 5) The greatest project risk occurs when: A) The probability of the event is high and the consequences of the event are high.

B) The probability of the event is high and the consequences of the event are low.

C) The probability of the event is low and the consequences of the event are high.

D) The probability of the event is low and the consequences of the event are low.

Answer: A Diff: 1 Section: 7.0 Introduction LO: 7.1: Define project risk.

Classification: Application AACSB: Analytical Thinking 6) The greatest project opportunity occurs when: A) The project is in the concept phase.

B) The project is in the development phase.

C) The project is in the implementation phase.

D) The project is in the termination phase.

Answer: A Diff: 1 Section: 7.0 Introduction LO: 7.1: Define project risk.

Classification: Concept AACSB: Application of Knowledge

7) The amount a company has at stake in a project rises above the dollar value of opportunity in the: A) Implementation phase.

B) Development phase.

C) Concept phase.

D) Termination phase.

Answer: D Diff: 2 Section: 7.0 Introduction LO: 7.1: Define project risk.

Classification: Concept AACSB: Application of Knowledge 8) Risk and opportunity: A) Both increase throughout the project life cycle.

B) Vary inversely throughout the project life cycle.

C) Both decrease throughout the project life cycle.

D) Do not vary throughout the project life cycle.

Answer: C Diff: 1 Section: 7.0 Introduction LO: 7.1: Define project risk.

Classification: Concept AACSB: Application of Knowledge 9) To protect his poultry from meteorites, the gentleman farmer made hard hats for each bird and installed a meteor detection system that opened umbrellas throughout the yard if a meteor were detected. The safety of his flock thus assured, the farmer was surprised when he read his latest issue of Risk Management Magazine and discovered that this event was: A) High in consequence and high in probability.

B) Low in consequence and low in probability.

C) Low in probability and high in consequence.

D) High in probability and low in consequence.

Answer: C Diff: 2 Section: 7.0 Introduction LO: 7.1: Define project risk.

Classification: Application AACSB: Application of Knowledge

10) Jim knew instinctively that his professor wouldn't appreciate it if he brought his single scoop of vanilla ice cream into the lecture hall with him. He could almost hear the inevitable question, "Did you bring enough for everyone?" To avert such an embarrassment, he practically inhaled his frozen confection as he raced down the hall. He had eaten ice cream in this fashion before and knew he would soon have an ice cream headache, which could be described as: A) High in consequence and high in probability.

B) Low in consequence and low in probability.

C) Low in probability and high in consequence.

D) High in probability and low in consequence.

Answer: D Diff: 1 Section: 7.0 Introduction LO: 7.1: Define project risk.

Classification: Concept AACSB: Application of Knowledge 11) While thrilling, there is a chance that you would have an accident if you elected to drive on the wrong side of a divided highway in Woodward, an outcome that could be described as: A) High in consequence and high in probability.

B) Low in consequence and low in probability.

C) Low in probability and high in consequence.

D) High in probability and low in consequence.

Answer: A Diff: 1 Section: 7.0 Introduction LO: 7.1: Define project risk.

Classification: Concept AACSB: Application of Knowledge 12) The risk is highest in the earliest phase of the project life cycle.

Answer: TRUE Diff: 1 Section: 7.0 Introduction LO: 7.1: Define project risk.

Classification: Concept AACSB: Application of Knowledge 13) Opportunity emerges from favorable project circumstances and risk from unfavorable events.

Answer: TRUE Diff: 1 Section: 7.0 Introduction LO: 7.1: Define project risk.

Classification: Concept AACSB: Application of Knowledge

14) As risk decreases in the project life cycle, opportunity increases.

Answer: FALSE Diff: 1 Section: 7.0 Introduction LO: 7.1: Define project risk.

Classification: Concept AACSB: Application of Knowledge 15) Risks can be quantified by multiplying the likelihood a failure will occur by the severity of the failure.

Answer: TRUE Diff: 2 Section: 7.0 Introduction LO: 7.1: Define project risk.

Classification: Application AACSB: Analytical Thinking 16) How does risk level vary with project life cycle stages? Where is the period of highest risk impact? Why? Answer: Risk is at its highest during a project's concept phase, falling off gradually during development phase and reduces dramatically during implementation and termination phases. At project completion, risk is at its nadir. Risk is highest at the start of a project because uncertainty is high; what may be a clear vision in the customer's and project leader's minds is far from realization. Questions are answered and uncertainties resolved as the project progresses, but the amount at stake, as measured in man hours of labor, materials, and other expenses, rises. The period of highest risk impact is late in a project's life; while risk itself is lower, the amount at stake is much higher, and until the project is finished and accepted there is potential for a poor finish. Since one important criterion of project success is customer acceptance, the risk impact remains high to the end.

Diff: 2 Section: 7.0 Introduction LO: 7.1: Define project risk.

Classification: Application AACSB: Application of Knowledge

17) Sketch the risk level and opportunity curves as a function of the project life cycle stage.

Provide an example of a project from the recent business literature or your personal experience that exhibits these characteristics. Cite specific instances where the levels of opportunity, risk, and stake fluctuated.

Answer: Examples will vary; the graph from figure 7.2 appears below.

Diff: 2 Section: 7.0 Introduction LO: 7.1: Define project risk.

Classification: Application AACSB: Application of Knowledge 18) Risk management is a: A) Three-stage process.

B) Four-stage process.

C) Five-stage process.

D) Six-stage process.

Answer: B Diff: 2 Section: 7.1 Risk Management: A Four-Stage Process LO: 7.2: Recognize four key stages in project risk management and the steps necessary to manage risk.

Classification: Concept AACSB: Application of Knowledge

19) The construction foreman posted a large sign requiring all work site visitors to don a hard hat and safety glasses. He also purchased copious quantities of both items and made them readily available at the entrance. The foreman is engaged in: A) Risk identification.

B) Risk mitigation.

C) Analysis of probability and consequences.

D) Control and documentation.

Answer: B Diff: 2 Section: 7.1 Risk Management: A Four-Stage Process LO: 7.2: Recognize four key stages in project risk management and the steps necessary to manage risk.

Classification: Application AACSB: Application of Knowledge 20) The residents of Enumclaw, Washington, live in the shadow of majestic Mount Rainier and its 26 glaciers. The Cascades form a ring of fire around the Pacific Northwest and erupt with surprising regularity, although Mount Rainier hasn't erupted on a major scale since about a thousand years ago. When it does erupt, the pyroclastic flow (a massive cloud of superheated ash and rock up to 1500 degrees Fahrenheit that can travel at speeds up to 300 miles per hour) will make Enumclaw a less pleasant place to live. City leaders have completed the: A) Control and documentation phase of risk management.

B) Risk identification phase of risk management.

C) Analysis of probability and consequences phase of risk management.

D) Risk mitigation strategies phase of risk management.

Answer: C Diff: 2 Section: 7.1 Risk Management: A Four-Stage Process LO: 7.2: Recognize four key stages in project risk management and the steps necessary to manage risk.

Classification: Application AACSB: Application of Knowledge

21) The marketing team would develop the advertising campaign to promote the newest product but the engineers wanted to keep all product details a secret during development. The service and operations branches of the company were also in the dark, so product rollout was going to be their initiation as well. This project has a very high: A) Political risk.

B) Operating risk.

C) Organizational risk.

D) Integration risk.

Answer: D Diff: 1 Section: 7.1 Risk Management: A Four-Stage Process LO: 7.2: Recognize four key stages in project risk management and the steps necessary to manage risk.

Classification: Application AACSB: Application of Knowledge 22) The house had almost been framed when an F-5 tornado ripped across the plains and turned the house back into a lumber pile, albeit not stacked as neatly as it was originally. The homeowner's fears of: A) Technical risks had come true.

B) Operating risks had come true.

C) Acts of God had come true.

D) Environmental risks had come true.

Answer: C Diff: 1 Section: 7.1 Risk Management: A Four-Stage Process LO: 7.2: Recognize four key stages in project risk management and the steps necessary to manage risk.

Classification: Application AACSB: Application of Knowledge 23) A serious risk factor probably has: A) A high consequence and a medium likelihood.

B) A high consequence and a low likelihood.

C) A medium consequence and a low likelihood.

D) A low consequence and a medium likelihood.

Answer: A Diff: 2 Section: 7.1 Risk Management: A Four-Stage Process LO: 7.2: Recognize four key stages in project risk management and the steps necessary to manage risk.

Classification: Application AACSB: Application of Knowledge

24) What are the four distinct stages of systematic risk management and what takes place at each?

Answer: The four distinct steps of systematic risk management are: Risk identification — the process of determining the specific risk factors that can reasonably be expected to affect the project.

Analysis of probability and consequences — the potential impact of these risk factors is determined by how likely they are to occur and the effect they would have on the project if they did occur.

Risk mitigation strategies — steps taken to minimize the potential impact of these risk factors deemed sufficiently threatening to the project.

Control and documentation — creating a knowledge base for future projects based on lessons learned.

Diff: 2 Section: 7.1 Risk Management: A Four-Stage Process LO: 7.2: Recognize four key stages in project risk management and the steps necessary to manage risk.

Classification: Application AACSB: Application of Knowledge 25) The mouse executive board meeting was drawing to a conclusion; the only way they would be able to detect the presence of the cat was to tie a bell around its tail. Under their risk management identification scheme, this would fall under: A) Commercial risk.

B) Execution risk.

C) Financial risk.

D) Technical risk.

Answer: D Diff: 2 Section: 7.1 Risk Management: A Four-Stage Process LO: 7.3: Understand five primary causes of project risk and four major approaches to risk identification.

Classification: Application AACSB: Application of Knowledge 26) A method for conducting risk factor identification that consolidates the judgments of isolated anonymous respondents is: A) A brainstorming meeting.

B) The Delphi method.

C) Past history.

D) Multiple assessments.

Answer: B Diff: 2 Section: 7.1 Risk Management: A Four-Stage Process LO: 7.3: Understand five primary causes of project risk and four major approaches to risk identification.

Classification: Concept AACSB: Application of Knowledge 27) A method for conducting risk factor identification that generates ideas but doesn't focus on decision making is: A) A brainstorming meeting.

B) The Delphi method.

C) Past history.

D) Multiple assessments.

Answer: A Diff: 2 Section: 7.1 Risk Management: A Four-Stage Process LO: 7.3: Understand five primary causes of project risk and four major approaches to risk identification.

Classification: Concept AACSB: Application of Knowledge 28) One source of information on future risks and the leading indicators that accompany risks is: A) A brainstorming meeting.

B) The Delphi method.

C) Past history.

D) Multiple assessments.

Answer: C Diff: 2 Section: 7.1 Risk Management: A Four-Stage Process LO: 7.3: Understand five primary causes of project risk and four major approaches to risk identification.

Classification: Concept AACSB: Application of Knowledge 29) The terpsichorean was familiar with the risks associated with various moves, the accountant knew financial risks forwards and backwards, while the civil engineer could quantify the risks associated with distributed loads on the temporary stage. Their input was used as part of: A) A brainstorming meeting approach to risk factor identification.

B) The Delphi method approach to risk factor identification.

C) A past history approach to risk factor identification.

D) A multiple assessments approach to risk factor identification.

Answer: D Diff: 2 Section: 7.1 Risk Management: A Four-Stage Process LO: 7.3: Understand five primary causes of project risk and four major approaches to risk identification.

Classification: Application AACSB: Application of Knowledge

30) The probability that project revenues will NOT be sufficient to repay the debts is: A) Financial risk B) Cost estimate risk.

C) Market risk.

D) Promotion risk.

Answer: A Diff: 2 Section: 7.1 Risk Management: A Four-Stage Process LO: 7.3: Understand five primary causes of project risk and four major approaches to risk identification.

Classification: Concept AACSB: Application of Knowledge 31) The probability that funds allocated to the project will be insufficient to complete it is: A) Technical risk.

B) Cost estimate risk.

C) Financing risk.

D) Operating risk.

Answer: B Diff: 3 Section: 7.1 Risk Management: A Four-Stage Process LO: 7.3: Understand five primary causes of project risk and four major approaches to risk identification.

Classification: Concept AACSB: Application of Knowledge 32) The probability that investments made to fund the front-end activities will be lost due to project abandonment is: A) Promotion risk.

B) Political risk.

C) Organizational risk.

D) Financial risk.

Answer: A Diff: 3 Section: 7.1 Risk Management: A Four-Stage Process LO: 7.3: Understand five primary causes of project risk and four major approaches to risk identification.

Classification: Concept AACSB: Application of Knowledge

33) There is always a chance that the music loving public cannot be convinced of the need to return to the 8-track format for new releases. The probability that we don't sell one million units before the holiday season is: A) Promotion risk.

B) Market risk.

C) Organizational risk.

D) Financial risk.

Answer: B Diff: 1 Section: 7.1 Risk Management: A Four-Stage Process LO: 7.3: Understand five primary causes of project risk and four major approaches to risk identification.

Classification: Application AACSB: Application of Knowledge 34) Based on the projected selling price of $20 per unit, the manufacturer invested a substantial portion of its available cash in a machine that could produce twenty-thousand gumballs in an hour. If consumers weren't willing to pay this much for gum, then the manufacturer faced significant: A) Financial risk.

B) Promotion risk.

C) Cost estimate risk.

D) Market risk.

Answer: D Diff: 1 Section: 7.1 Risk Management: A Four-Stage Process LO: 7.3: Understand five primary causes of project risk and four major approaches to risk identification.

Classification: Application AACSB: Application of Knowledge 35) The probability that legal and managerial structures put together to develop and operate the project will NOT perform well is: A) Operating risk.

B) Political risk.

C) Organizational risk.

D) Integration risk.

Answer: C Diff: 3 Section: 7.1 Risk Management: A Four-Stage Process LO: 7.3: Understand five primary causes of project risk and four major approaches to risk identification.

Classification: Concept AACSB: Application of Knowledge

36) The probability that a project to establish infrastructure in a third-world country teetering on the brink of civil war is fraught with: A) Political risk.

B) Operating risk.

C) Organizational risk.

D) Integration risk.

Answer: A Diff: 1 Section: 7.1 Risk Management: A Four-Stage Process LO: 7.3: Understand five primary causes of project risk and four major approaches to risk identification.

Classification: Concept AACSB: Application of Knowledge 37) The probability that a project will overrun its allocated duration is: A) Volume market risk.

B) Price market risk.

C) Integration risk.

D) Schedule risk.

Answer: D Diff: 2 Section: 7.1 Risk Management: A Four-Stage Process LO: 7.3: Understand five primary causes of project risk and four major approaches to risk identification.

Classification: Concept AACSB: Application of Knowledge 38) A project team assesses their primary risk factor's probability of failure with a maturity risk of 0.3, a complexity risk of 0.7, and a dependency risk of 0.8. The probability of failure is: A) Less than or equal to 0.3.

B) Greater than 0.3 but less than or equal to 0.55.

C) Greater than 0.56 but less than or equal to 0.89.

D) Greater than or equal to 0.9.

Answer: C Diff: 2 Section: 7.1 Risk Management: A Four-Stage Process LO: 7.3: Understand five primary causes of project risk and four major approaches to risk identification.

Classification: Application AACSB: Analytical Thinking

39) With a maturity risk of 0.3, a complexity risk of 0.4, and a dependency risk of 0.5, the probability of failure is: A) About 0.3.

B) About 0.4.

C) About 0.5.

D) About 0.6.

Answer: B Diff: 2 Section: 7.1 Risk Management: A Four-Stage Process LO: 7.3: Understand five primary causes of project risk and four major approaches to risk identification.

Classification: Application AACSB: Analytical Thinking 40) A project team assigns probabilities of 0.1, 0.2, and 0.4 respectively to the maturity, complexity, and dependency categories. The probability of failure can be calculated as: A) 0.23.

B) 0.33.

C) 0.65.

D) 0.70.

Answer: A Diff: 2 Section: 7.1 Risk Management: A Four-Stage Process LO: 7.3: Understand five primary causes of project risk and four major approaches to risk identification.

Classification: Application AACSB: Analytical Thinking 41) The consequences of failure categories of cost, schedule, reliability, and performance were believed to be 0.25, 0.35, 0.45, and 0.55. What is the overall consequence of failure?

A) 0.2 B) 0.3 C) 0.4 D) 0.5 Answer: C Diff: 2 Section: 7.1 Risk Management: A Four-Stage Process LO: 7.3: Understand five primary causes of project risk and four major approaches to risk identification.

Classification: Application AACSB: Analytical Thinking

42) With a cost factor of 0.8, a schedule rating of 0.6, a reliability rating of 0.5, and a performance rating of 0.6, the overall consequence of failure was: A) 0.565 for the squidproofing project.

B) 0.500 for the squidproofing project.

C) 0.750 for the squidproofing project.

D) 0.625 for the squidproofing project.

Answer: D Diff: 2 Section: 7.1 Risk Management: A Four-Stage Process LO: 7.3: Understand five primary causes of project risk and four major approaches to risk identification.

Classification: Application AACSB: Analytical Thinking 43) The overall consequence of failure was 0.4 and curiously enough, the consequence of performance is twice that of reliability; the consequence of reliability is twice that of schedule; and the consequence of schedule is twice that of cost. What is the consequence of failure cost?

A) 0.091 B) 0.107 C) 0.123 D) 0.136 Answer: B Diff: 2 Section: 7.1 Risk Management: A Four-Stage Process LO: 7.3: Understand five primary causes of project risk and four major approaches to risk identification.

Classification: Application AACSB: Analytical Thinking 44) The project team toiled long into the night to develop consequence of failure scores and probability of failure scores as indicated below. What is the overall risk factor for the project?

Maturity Complexity Dependency

0.7 0.6 0.8

Cost Schedule Reliability Performance

0.4 0.6 0.8 0.9

A) Less than or equal to 0.7 B) Greater than 0.7 but less than or equal to 0.8 C) Greater than 0.8 but less than or equal to 0.9 D) Greater than 0.9 Answer: D Diff: 2 Section: 7.1 Risk Management: A Four-Stage Process LO: 7.3: Understand five primary causes of project risk and four major approaches to risk identification.

Classification: Application AACSB: Analytical Thinking 45) The overall risk factor for the project is known to be 0.5. The individual failure probability and consequence scores are not known with certainty, only that all of the failure probability

scores are identical and all of the consequence scores are identical. What are the individual failure probability scores?

Maturity Complexity Dependency

X X X

Cost Schedule Reliability Performance

Y Y Y Y

A) 0.316 B) 0.267 C) 0.236 D) 0.347 Answer: C Diff: 3 Section: 7.1 Risk Management: A Four-Stage Process LO: 7.3: Understand five primary causes of project risk and four major approaches to risk identification.

Classification: Application AACSB: Analytical Thinking 46) The overall project risk factor is known to be 0.5. The probability of dependency failure is twice the probability of complexity failure and four times the probability of maturity failure. The consequence of performance failure is twice the consequence of reliability failure, four times the consequence of schedule failure and eight times the consequence of cost failure. What is the difference between the probability of maturity failure and the consequence of cost failure?

Maturity Complexity Dependency

X 2X 4X

Cost Schedule Reliability Performance

Y 2Y 4Y 8Y

A) 0.026 B) 0.033 C) 0.041 D) 0.048 Answer: A Diff: 3 Section: 7.1 Risk Management: A Four-Stage Process LO: 7.3: Understand five primary causes of project risk and four major approaches to risk identification.

Classification: Application AACSB: Analytical Thinking

47) The overall project risk factor is known to be 0.6. The probability of dependency failure is twice the probability of complexity failure and four times the probability of maturity failure. The consequence of performance failure is twice the consequence of reliability failure, four times the consequence of schedule failure and eight times the consequence of cost failure. What is the probability of maturity failure?

Maturity Complexity Dependency

X 2X 4X

Cost Schedule Reliability Performance

Y 2Y 4Y 8Y

A) 0.213 B) 0.197 C) 0.104 D) 0.148 Answer: D Diff: 3 Section: 7.1 Risk Management: A Four-Stage Process LO: 7.3: Understand five primary causes of project risk and four major approaches to risk identification.

Classification: Application AACSB: Analytical Thinking 48) Use the failure probability and consequence scores shown in the table to determine the consequence of failure for the project.

Maturity Complexity Dependency

0.6 0.8 0.6

Cost Schedule Reliability Performance

0.2 0.3 0.2 0.5

A) Greater than 0.7 B) Less than or equal to 0.7 but greater than 0.5 C) Less than or equal to 0.5 but greater than 0.3 D) Less than 0.2 Answer: A Diff: 2 Section: 7.1 Risk Management: A Four-Stage Process LO: 7.3: Understand five primary causes of project risk and four major approaches to risk identification.

Classification: Application AACSB: Analytical Thinking

49) Technical risk is the probability that the project will not perform to the required standards or produce substandard products or have excessive operating cost consumption.

Answer: TRUE Diff: 2 Section: 7.1 Risk Management: A Four-Stage Process LO: 7.3: Understand five primary causes of project risk and four major approaches to risk identification.

Classification: Concept AACSB: Application of Knowledge 50) The probability that the investments made to fund the front-end activities will be lost due to project abandonment is financing risk.

Answer: FALSE Diff: 2 Section: 7.1 Risk Management: A Four-Stage Process LO: 7.3: Understand five primary causes of project risk and four major approaches to risk identification.

Classification: Concept AACSB: Application of Knowledge 51) What are any four common categories of risk? What is an element of each category?

Answer: Risks commonly fall into one or more of the following classification clusters: Financial risk refers to the financial exposure a firm opens itself up to when developing a project.

— Up-front capital expenditures are at risk in any project.

Technical risk emerges when a project contains unique technical elements or new and unproven technology.

Commercial risk must be handled when a project is being developed for definite commercial intent since success in the marketplace is never guaranteed.

Execution risk is a broad category relating to the unknowns associated with the project plan being carried out.

Contractual or legal risk is consistent with projects in which strict terms and conditions, such as liquidated damages or cost-plus, have been drawn up in advance.

Staffing risks include events such as absenteeism, resignation, failure to secure needed skills, and ineffective training.

Diff: 2 Section: 7.1 Risk Management: A Four-Stage Process LO: 7.3: Understand five primary causes of project risk and four major approaches to risk identification.

Classification: Application AACSB: Application of Knowledge

52) What are the basic qualitative methods for identifying risk factors? What are the advantages and disadvantages of each method?

Answer: A number of qualitative methods are available for conducting risk factor identification for industry specific risks. A brainstorming meeting is valuable for bringing a team together and generating many ideas quickly. If one member dominates a brainstorming meeting or members pass judgment on ideas as they are generated, such a meeting may be less valuable. The Delphi method collects expert opinions anonymously in two or more rounds of questions posed by an expert. There is no "in-the-moment" synergy among experts unless a real-time decision support system is being used, but there is also little chance of a single member dominating the proceedings. The Delphi method would also suffer if the experts were unable to articulate their methods or if the moderator screened out an idea that might have triggered additional thoughts.

The "experience counts" approach looks for individuals in the organization that have had similar project experiences and seeks their input with regards to "lessons learned" and risks anticipated.

This method is less formal and the lack of structure may result in less knowledge transfer, but it permits great richness of observations. Past history examines patterns that have emerged prior to problems in previous projects. This technique is appropriate if the same underlying causal structure is assumed to exist, but there is no guarantee that history is a reliable predictor of the future. Multiple (or team-based) assessments bring together a diverse group of team members that specialize in different aspects of the project and therefore have a different perspective on potential risks. This approach encourages identification of a comprehensive set of risks but carries with it the pitfalls that accompany any group discussion exercise.

Diff: 2 Section: 7.1 Risk Management: A Four-Stage Process LO: 7.3: Understand five primary causes of project risk and four major approaches to risk identification.

Classification: Application AACSB: Application of Knowledge

53) Sketch a 2 × 2 risk management assessment matrix and discuss the impact of each quadrant.

Answer: A risk management assessment matrix, as shown below, classifies identified risks into one of four quadrants on two scales, the likelihood that the risk occurs and the consequences of the occurrence.

A risk designated as low in likelihood and low in consequence may be of little consequence to the project; even if it occurs, it has little impact. A risk low in likelihood but high in consequence is one that must be accommodated; if it does occur it will wreak havoc on budget, schedule, satisfaction, or quality (or all four). A risk that is high in likelihood but low in consequence should be managed as if it will occur and should receive significant contingency planning. A risk that is high in likelihood and consequence is very serious, and merits serious consideration in the form of contingency planning and mitigation efforts.

Diff: 2 Section: 7.1 Risk Management: A Four-Stage Process LO: 7.3: Understand five primary causes of project risk and four major approaches to risk identification.

Classification: Application AACSB: Application of Knowledge

54) Garman yawned as he sat at his kitchen table. His plans to corner the world's supply of peanut valves required detailed planning and an honest assessment of the risks involved in this highly speculative venture. He first identified the primary factors that might contribute to the project's failure. These factors were employee-related; market maturity-related; and healthrelated. The best estimates he could come up with for these probabilities were 0.6, 0.2 and 0.3, respectively. The consequences of failure were less certain, but he finally decided that the cost consequences rated a 0.2, the schedule consequences rated a 0.4, the reliability consequences rated 0.1, and the company goodwill consequences were a robust 0.6. What is the overall project risk factor for this undertaking?

Answer: The overall project risk factor is 0.5725, perhaps too risky for Garman and his henchman.

PF = (PE + PM + PH)/3 = (0.6 + 0.2 + 0.3)/3 = 0.3 CF = (CC + CS + CR + CG)/4 = (0.2 + 0.4 + 0.1 + 0.6)/4 = 0.325 RF = PF + CF - PFCF RF = 0.3 + 0.325 - 0.3 × 0.325 RF = 0.5725 Diff: 1 Section: 7.1 Risk Management: A Four-Stage Process LO: 7.3: Understand five primary causes of project risk and four major approaches to risk identification.

Classification: Critical Thinking AACSB: Analytical Thinking

55) The programming division at ABC decides to resurrect the classic Battle of the Network Stars and is understandable concerned about the risk to their own stars, the shows they star on, and their reputation as a purveyor of fine family-oriented entertainment. After a thoughtful assessment of the probabilities and consequences of failure, the team discover that the three probabilities of failure are all equal and the four consequences of failure are all equal. Further, the overall consequence of failure is half the overall probability of failure. The overall risk factor is 0.6; what are the values for the three probabilities and the four consequences?

Answer: The overall project risk factor is 0.5725, perhaps too risky for Garman and his henchman.

Pf = Pe = Pm = Ph Cf = Cc = Cs = Cf = Cp 2Cf = Pf Rf = Pf + Cf - Pf Cf 0.6 = Pf +

- Pf

0.6 = Pf +

-

Pf =

Pf =

±

Pf = (0.475, 2.52) Since probabilities cannot exceed 1, the Pf = 0.475 and the Pe, Pm and Ph must also equal that value. The Cc, Cs, Cr and Cp must be half that amount, 0.237.

Diff: 1 Section: 7.1 Risk Management: A Four-Stage Process LO: 7.3: Understand five primary causes of project risk and four major approaches to risk identification.

Classification: Critical Thinking AACSB: Analytical Thinking 56) Your project team is interested in determining an overall risk factor for your project to develop a personal submarine constructed entirely of Popsicle sticks and wood glue. Describe

how you would develop reasonable estimates for each of the probability of failure categories and each of the consequence of failure categories.

Answer: The probability of failure categories are maturity, complexity and dependency. The consequence of failure categories are cost, schedule, reliability, and performance. One approach to organizing this type of information is a risk impact matrix. As far as probability of failure categories are concerned, the maturity of the design — whether it is based on an existing submarine configuration or a new design, how complex the craft will be, and whether the submarine is a departure from the project team's area of expertise would influence probability assessments. Consequence impacts are shaped by the nature of the failure — an underwater vessel would likely have extremely high consequences of failure.

Diff: 3 Section: 7.1 Risk Management: A Four-Stage Process LO: 7.3: Understand five primary causes of project risk and four major approaches to risk identification.

Classification: Critical Thinking AACSB: Reflective Thinking

57) The pointy-haired dean gently suggested that study tour offerings be doubled in the coming three years so Dilbert dutifully explored the possibility of offering a week-long study tour to Elbonia. The globalization committee's consensus was that the probability of failure was high; after some discussion they agreed that the figure was perhaps 0.6. The consequences of failure were another matter. The cost of failure was 0.2, the schedule element was 0.1, and the reliability score was 0.1. The team was divided on what to do with the performance score. Two members were adamant that it was possibly as high as 0.7, but the other two members felt the performance score was closer to the others, in the neighborhood of 0.15. Estimate the overall project risk factor for this undertaking and offer commentary as to the efficacy of the study tour to Elbonia.

Answer: Using the high estimate for the performance score, the overall project risk factor is 0.71. Using the low estimate for the performance score, the overall risk factor is 0.655. The difference between the two values is minimal, although the rule of thumb cutoff of 0.7 puts the high estimate risk category as high and the low estimate at the upper end of the medium risk.

Dilbert might be well-served to avoid a study tour to Elbonia.

High Estimate Cf = (Cc + Cs + Cr + Cp)/4 Cf = (0.2 + 0.1 + 0.1 + 0.7)/4 Cf = 1.1/4 = 0.275 Low Estimate Cf = (Cc + Cs + Cr + Cp)/4 Cf = (0.2 + 0.1 + 0.1 + 0.15)/4 Cf = 0.55/4 = 0.1375 Overall High RF = Pf + Cf - PfCf RF = 0.6 + 0.275 - 0.6 × 0.275 RF = 0.71 Overall Low RF = Pf + Cf - PfCf RF = 0.6 + 0.275 - 0.6 × 0.275 RF = 0.655 Diff: 1 Section: 7.1 Risk Management: A Four-Stage Process LO: 7.3: Understand five primary causes of project risk and four major approaches to risk identification.

Classification: Critical Thinking AACSB: Analytical Thinking

58) The PostHoc Company specializes in justifying decisions that have already been made. One day they fielded a request to perform a project risk analysis and compute the risk factor for buying an investment property on St. Charles Street in the Big Easy. There was no time (and no need to be perfectly honest) to gather any data regarding the situation; all they had to do was provide an equation and a number that showed the project wasn't too risky for the investor that had already made a decision to proceed. The investor wanted the overall project risk factor to come in at an even 0.5 and also wanted all of the scores for the seven factors that make up this score to have identical values. What is the probability of failure for complexity if these two criteria are met?

Answer: The risk factor for complexity (as well as the other six components) should be 0.2928932.

Cf = (Cc + Cs + Cr + Cp)/4 Pf = (Pm + Pc + Pd)/3 Cc = Cs = Cr = Cp = Pm = Pc = Pd let x = Cc = Cs = Cr = Cp = Pm = Pc = Pd RF = Pf + Cf - PfCf RF = x + x - x2 = 0.5 x2 - 2x + .5 = 0 x= x = (1.707, 0.2928) Since the probabilities must range between 0 and 1, the only possible answer is 0.2928.

Diff: 1 Section: 7.1 Risk Management: A Four-Stage Process LO: 7.3: Understand five primary causes of project risk and four major approaches to risk identification.

Classification: Critical Thinking AACSB: Analytical Thinking 59) If the risk of a negative outcome is slight, the BEST course of action might be to: A) Minimize it.

B) Share it.

C) Transfer it.

D) Accept it.

Answer: D Diff: 2 Section: 7.1 Risk Management: A Four-Stage Process LO: 7.4: Recognize four primary risk mitigation strategies.

Classification: Application AACSB: Application of Knowledge

60) The professor wore both a belt and suspenders during lecture each day because he chose to: A) Accept risk.

B) Minimize risk.

C) Share risk.

D) Transfer risk.

Answer: B Diff: 2 Section: 7.1 Risk Management: A Four-Stage Process LO: 7.4: Recognize four primary risk mitigation strategies.

Classification: Application AACSB: Application of Knowledge 61) Fred Knievel took out a substantial life insurance policy before he began his trek across North America in his Volvo. Doing so enabled him to: A) Accept risk.

B) Minimize risk.

C) Transfer risk.

D) Share risk.

Answer: C Diff: 2 Section: 7.1 Risk Management: A Four-Stage Process LO: 7.4: Recognize four primary risk mitigation strategies.

Classification: Application AACSB: Application of Knowledge 62) The Farm Fresh Egg project was too great for one person to pull off. The construction costs for the coop and chicken run were enormous and the sinister threat of avian flu hung over the area like a black cloud. It was only through the combined efforts of Matsushita Chickenworks and the City of Edmond that the project would be undertaken, since they would be able to: A) Accept the risk.

B) Minimize the risk.

C) Transfer the risk.

D) Share the risk.

Answer: A Diff: 2 Section: 7.1 Risk Management: A Four-Stage Process LO: 7.4: Recognize four primary risk mitigation strategies.

Classification: Application AACSB: Application of Knowledge

63) Project penalty clauses that initiate at mutually agreed-on points in the project's development and implementation are: A) Liquidated damages.

B) Milestone adjustments.

C) Contingency clauses.

D) Penalty points.

Answer: A Diff: 2 Section: 7.1 Risk Management: A Four-Stage Process LO: 7.4: Recognize four primary risk mitigation strategies.

Classification: Concept AACSB: Application of Knowledge 64) The firm set aside a little extra money just in case an unforeseen element of cost pushed the project beyond what they had budgeted. This extra money is called: A) A rainy day fund.

B) A contingency reserve.

C) An escalation clause.

D) A sinking fund.

Answer: B Diff: 2 Section: 7.1 Risk Management: A Four-Stage Process LO: 7.4: Recognize four primary risk mitigation strategies.

Classification: Concept AACSB: Application of Knowledge 65) You have agreed to paint your neighbor's house a lovely shade of chartreuse for $1500 and discover much to your dismay that the house has a second floor. Now you're faced with the prospect of buying a ladder or scaffolding or a really long handled brush, not to mention the 15 more gallons of paint that will be needed to cover. You won't get another penny for what will surely be increased efforts since your neighbor transferred risk with a(n): A) Cost-plus contract.

B) Contingency reserve.

C) Fixed price contract.

D) Inflation clause.

Answer: C Diff: 2 Section: 7.1 Risk Management: A Four-Stage Process LO: 7.4: Recognize four primary risk mitigation strategies.

Classification: Application AACSB: Application of Knowledge

66) The expected cost of an item that is estimated at $5,000 with a task contingency multiplier of 1.2 is: A) $4,167.

B) $5,000.

C) $5,200.

D) $6,000.

Answer: D Diff: 2 Section: 7.1 Risk Management: A Four-Stage Process LO: 7.4: Recognize four primary risk mitigation strategies.

Classification: Application AACSB: Analytical Thinking 67) Twenty-thousand dollars was budgeted for the office renovation that had a task contingency multiplier of 1.3. The estimated cost of the task must be: A) About $15,400.

B) About $26,000.

C) About $22,800.

D) About $18,600.

Answer: A Diff: 2 Section: 7.1 Risk Management: A Four-Stage Process LO: 7.4: Recognize four primary risk mitigation strategies.

Classification: Application AACSB: Analytical Thinking 68) What is the relationship between a project's progress and the level of budget reserves?

A) As the project nears completion, the budgeted reserves tend to increase.

B) As the project nears completion, the budgeted reserves tend to decrease.

C) As the budgeted reserves increase, the project tends to near completion.

D) As the budgeted reserves decrease, the project tends to near completion.

Answer: B Diff: 2 Section: 7.1 Risk Management: A Four-Stage Process LO: 7.4: Recognize four primary risk mitigation strategies.

Classification: Concept AACSB: Application of Knowledge

69) The budget safety measures that address higher risks than task contingency are known as: A) CYA factors.

B) Buffer stocks.

C) Managerial contingency.

D) Task offsets.

Answer: C Diff: 2 Section: 7.1 Risk Management: A Four-Stage Process LO: 7.4: Recognize four primary risk mitigation strategies.

Classification: Concept AACSB: Application of Knowledge 70) A common use of managerial contingency funds would be for: A) Office supplies.

B) Management consulting fees.

C) A sudden increase in the price of unleaded gasoline.

D) An "act of God." Answer: D Diff: 2 Section: 7.1 Risk Management: A Four-Stage Process LO: 7.4: Recognize four primary risk mitigation strategies.

Classification: Concept AACSB: Application of Knowledge 71) The act of pairing a junior project team member with a senior manager in order to help the junior team member to learn best practices is known as: A) Mentoring.

B) Cross-training.

C) Supervising.

D) Interning.

Answer: A Diff: 1 Section: 7.1 Risk Management: A Four-Stage Process LO: 7.4: Recognize four primary risk mitigation strategies.

Classification: Concept AACSB: Application of Knowledge

72) Each project team member had a backup that could fill in at a moment's notice should another team member fall by the wayside. The project was able to mitigate risks in this fashion thanks to an aggressive: A) Mentoring program.

B) Cross-training program.

C) Duplication program.

D) Featherbedding program.

Answer: B Diff: 1 Section: 7.1 Risk Management: A Four-Stage Process LO: 7.4: Recognize four primary risk mitigation strategies.

Classification: Application AACSB: Application of Knowledge 73) One approach to risk mitigation is simply to accept it.

Answer: TRUE Diff: 2 Section: 7.1 Risk Management: A Four-Stage Process LO: 7.4: Recognize four primary risk mitigation strategies.

Classification: Concept AACSB: Application of Knowledge 74) Risk cannot be transferred because ultimately your own project will suffer the consequences if the event occurs.

Answer: FALSE Diff: 2 Section: 7.1 Risk Management: A Four-Stage Process LO: 7.4: Recognize four primary risk mitigation strategies.

Classification: Concept AACSB: Application of Knowledge 75) Contingency reserves require a construction company to hold back some funds in an account just in case something happens that increases the overall project cost.

Answer: TRUE Diff: 2 Section: 7.1 Risk Management: A Four-Stage Process LO: 7.4: Recognize four primary risk mitigation strategies.

Classification: Concept AACSB: Application of Knowledge 76) The highest dollar value of reserves is typically task contingency.

Answer: FALSE Diff: 2 Section: 7.1 Risk Management: A Four-Stage Process LO: 7.4: Recognize four primary risk mitigation strategies.

Classification: Concept AACSB: Application of Knowledge 77) What are the four alternatives a project organization can adopt in deciding how to address their risks? What are the advantages and disadvantages of each? Which is best and why?

Answer: The four possible alternatives a project organization can adopt in deciding how to

address their risks are: Accept risk — Risks of a minor nature are probably present in a matter of course, but because their likelihood and or consequence are so small, they are deemed acceptable and are worth little to no attention because the expense outweighs the benefit.

Minimize risk — Strategies to minimize risk seek ways to prevent risks from occurring or to minimize impact if they do occur.

Share risk — Risk can be allocated among project members, either subcontractors, or different departments, or between customer and project organization. The risk that is evenly distributed will lessen the burden on any one player, but contracts are best signed up front to minimize the amount of finger-pointing that occurs once the risk is realized.

Transfer risk — Transfer of risk is done contractually; the benefit to the transferring party is that the risk is no longer theirs, although this lightened burden comes at some expense.

The best approach depends on the risk involved and the mindset of the project organization.

Minimal risk should be handled with acceptance; more serious risk can be handled with acceptance or some other means depending on the resources the company can bring to bear.

Diff: 2 Section: 7.1 Risk Management: A Four-Stage Process LO: 7.4: Recognize four primary risk mitigation strategies.

Classification: Critical Thinking AACSB: Reflective Thinking

78) There are four alternatives a project organization can adopt in deciding how to address their risks. Develop four different scenarios, one each for which each of the alternatives would be appropriate. Justify your selections.

Answer: The four possible alternatives a project organization can adopt in deciding how to address their risks are to accept risk, minimize risk, share risk, and transfer risk. Scenarios are limited only by the bounds of your students' imaginations, but as a general rule, the motivation for each strategy are outlined below.

Accept risk — Risks of a minor nature are probably present in a matter of course, but because their likelihood and or consequence are so small, they are deemed acceptable and are worth little to no attention because the expense outweighs the benefit.

Minimize risk — Strategies to minimize risk seek ways to prevent risks from occurring or to minimize impact if they do occur.

Share risk — Risk can be allocated among project members, either subcontractors, or different departments, or between customer and project organization. The risk that is evenly distributed will lessen the burden on any one player, but contracts are best signed up front to minimize the amount of finger-pointing that occurs once the risk is realized.

Transfer risk — Transfer of risk is done contractually; the benefit to the transferring party is that the risk is no longer theirs, although this lightened burden comes at some expense.

The best approach depends on the risk involved and the mindset of the project organization.

Minimal risk should be handled with acceptance; more serious risk can be handled with acceptance or some other means depending on the resources the company can bring to bear.

Diff: 2 Section: 7.1 Risk Management: A Four-Stage Process LO: 7.4: Recognize four primary risk mitigation strategies.

Classification: Critical Thinking AACSB: Reflective Thinking 79) What are fixed-price contracts and liquidated damages? Which party to the contract bears the burden?

Answer: Both are financial incentives, although the latter functions more as a stick than the (somewhat limited) carrot of the former. Fixed price contracts establish a price for the project before work begins. If the project encounters difficulty, the costs of completion are borne by the project organization. Liquidated damages are penalty clauses that are automatically activated at milestones in the project's development and implementation. The project organization is again on the hook for these penalties.

Diff: 2 Section: 7.1 Risk Management: A Four-Stage Process LO: 7.4: Recognize four primary risk mitigation strategies.

Classification: Application AACSB: Application of Knowledge

80) The European Association for Project Management has developed an integrated program of risk management based on efforts to extend risk management to cover a project's entire life cycle. This program is known as: A) EAPM-RM. B) RMEAPM. C) ERM. D) PRAM. Answer: D Diff: 3 Section: 7.2 Project Risk Management: An Integrated Approach LO: 7.5: Explain the Project Risk Analysis and Management (PRAM) process.

Classification: Concept AACSB: Application of Knowledge 81) Which of these statements about the project risk analysis and management program is BEST? A) Risk management is integrated throughout the project's life cycle.

B) The risk management strategy should be unwavering throughout the entire project life cycle.

C) The project manager should choose a small subset of all risk management tools.

D) Risk management is best handled using an ad hoc approach.

Answer: A Diff: 3 Section: 7.2 Project Risk Management: An Integrated Approach LO: 7.5: Explain the Project Risk Analysis and Management (PRAM) process.

Classification: Concept AACSB: Application of Knowledge 82) Which of these statements about the project risk analysis and management program is BEST? A) Risk management follows a life cycle much as a project follows a life cycle.

B) The risk management strategy should be unwavering throughout the entire project life cycle.

C) If a choice between accepting and transferring risk presents itself, risk should be transferred.

D) Risk management is best handled using an ad hoc approach.

Answer: A Diff: 3 Section: 7.2 Project Risk Management: An Integrated Approach LO: 7.5: Explain the Project Risk Analysis and Management (PRAM) process.

Classification: Concept AACSB: Application of Knowledge

83) Which of these statements about the project risk analysis and management program is BEST? A) If a choice between accepting and transferring risk presents itself, risk should be transferred.

B) Different risk management strategies should be deployed at various points in the project life cycle.

C) The project manager should choose a small subset of all risk management tools.

D) Risk management is best handled using an ad hoc approach.

Answer: B Diff: 3 Section: 7.2 Project Risk Management: An Integrated Approach LO: 7.5: Explain the Project Risk Analysis and Management (PRAM) process.

Classification: Concept AACSB: Application of Knowledge 84) Which of these statements about the project risk analysis and management program is BEST? A) Risk management is best handled using an ad hoc approach.

B) If a choice between accepting and transferring risk presents itself, risk should be transferred.

C) The project manager should choose a small subset of all risk management tools.

D) Multiple approaches to risk management should be integrated into a coherent, synthesized approach.

Answer: C Diff: 3 Section: 7.2 Project Risk Management: An Integrated Approach LO: 7.5: Explain the Project Risk Analysis and Management (PRAM) process.

Classification: Concept AACSB: Application of Knowledge 85) At each phase, the project risk analysis and management program should produce: A) Alternatives.

B) A budget.

C) Deliverables.

D) Meetings.

Answer: C Diff: 3 Section: 7.2 Project Risk Management: An Integrated Approach LO: 7.5: Explain the Project Risk Analysis and Management (PRAM) process.

Classification: Concept AACSB: Application of Knowledge

86) One phase of the project risk analysis and management program is concerned more with the project than the management of risk. The latter is facilitated by successful completion of this step, but not the focal point. This phase in the project risk analysis and management program is: A) Estimate.

B) Define.

C) Focus.

D) Manage.

Answer: B Diff: 3 Section: 7.2 Project Risk Management: An Integrated Approach LO: 7.5: Explain the Project Risk Analysis and Management (PRAM) process.

Classification: Concept AACSB: Application of Knowledge 87) The first phase of a comprehensive project risk assessment should be: A) To assess the specific sources of risk at the outset of the project, including the need to fashion appropriate responses.

B) To make sure the project is well defined, including all deliverables, statement of work, and project scope.

C) To develop reasonable estimates of the impacts on the project of both the identified risks and the proposed solutions.

D) To produce a project risk management plan that proactively offers risk mitigation strategies for the project as needed.

Answer: B Diff: 3 Section: 7.2 Project Risk Management: An Integrated Approach LO: 7.5: Explain the Project Risk Analysis and Management (PRAM) process.

Classification: Concept AACSB: Application of Knowledge 88) The PRAM methodology contains an embedded feedback loop after which step?

A) Focus B) Plan C) Evaluate D) Identify Answer: C Diff: 3 Section: 7.2 Project Risk Management: An Integrated Approach LO: 7.5: Explain the Project Risk Analysis and Management (PRAM) process.

Classification: Concept AACSB: Application of Knowledge

89) The PRAM step that occurs while the project work is being carried out is: A) Ownership.

B) Identify.

C) Focus.

D) Manage.

Answer: D Diff: 3 Section: 7.2 Project Risk Management: An Integrated Approach LO: 7.5: Explain the Project Risk Analysis and Management (PRAM) process.

Classification: Concept AACSB: Application of Knowledge 90) The tasks of reviewing and refining the manner in which we have classified risks for the project, determining if there are commonalities across the various risks we have uncovered are performed in the ________ of the project risk analysis and management model.

A) structure step B) ownership step C) define step D) plan step Answer: A Diff: 3 Section: 7.2 Project Risk Management: An Integrated Approach LO: 7.5: Explain the Project Risk Analysis and Management (PRAM) process.

Classification: Concept AACSB: Application of Knowledge 91) The deliverable from the focus step of the project risk analysis and management model is: A) A clear, unambiguous, shared understanding of all key aspects of the project documented, verified, and reported.

B) A clear, unambiguous, shared understanding of all relevant key aspects of the RMP documented, verified, and reported.

C) A clear understanding of the implications of any important simplifying assumptions about relationships between risks, responses and base plan activities.

D) Clear ownership and management allocations, effectively and efficiently defined, legally enforceable in practice where appropriate.

Answer: B Diff: 3 Section: 7.2 Project Risk Management: An Integrated Approach LO: 7.5: Explain the Project Risk Analysis and Management (PRAM) process.

Classification: Concept AACSB: Application of Knowledge

92) The PRAM model for risk management proposes that risk management follow a life cycle much as projects follow a life cycle.

Answer: TRUE Diff: 2 Section: 7.2 Project Risk Management: An Integrated Approach LO: 7.5: Explain the Project Risk Analysis and Management (PRAM) process.

Classification: Concept AACSB: Application of Knowledge 93) The PRAM model for risk management proposes different risk management strategies be deployed at various points in the project life cycle.

Answer: TRUE Diff: 2 Section: 7.2 Project Risk Management: An Integrated Approach LO: 7.5: Explain the Project Risk Analysis and Management (PRAM) process.

Classification: Concept AACSB: Application of Knowledge 94) The PRAM model for risk management proposes a "pick and choose" approach to risk management.

Answer: FALSE Diff: 2 Section: 7.2 Project Risk Management: An Integrated Approach LO: 7.5: Explain the Project Risk Analysis and Management (PRAM) process.

Classification: Concept AACSB: Application of Knowledge 95) PRAM (project risk analysis and management) should be conducted as a "one-shot" activity during the project planning phase.

Answer: FALSE Diff: 2 Section: 7.2 Project Risk Management: An Integrated Approach LO: 7.5: Explain the Project Risk Analysis and Management (PRAM) process.

Classification: Concept AACSB: Application of Knowledge 96) Every one of the nine phases of the PRAM methodology has a deliverable.

Answer: TRUE Diff: 2 Section: 7.2 Project Risk Management: An Integrated Approach LO: 7.5: Explain the Project Risk Analysis and Management (PRAM) process.

Classification: Concept AACSB: Application of Knowledge

97) What are the two types of contingency reserves and how are they handled?

Answer: Contingency reserves in financial and managerial forms are among the most common methods used to mitigate project risks. Task contingency, perhaps the most common form of contingency reserve, is used to offset budget cutbacks, schedule overruns, or other unforeseen circumstances accruing to individual tasks or project work packages. These budget reserves are used if work packages cannot be estimated with certainty or if required contractually. An offset of 20% means that a project will be built to a cost of 20% less than called for in the contract, with the 20% held in case a contingency arises. Managerial contingency means having budget safety measures that address higher level risks, such as a client requesting a dramatically altered scope.

Diff: 2 Section: 7.2 Project Risk Management: An Integrated Approach LO: 7.5: Explain the Project Risk Analysis and Management (PRAM) process.

Classification: Application AACSB: Application of Knowledge 98) How do mentoring and cross-training mitigate risk?

Answer: Mentoring and cross-training are two approaches to risk minimization that train project team members. A mentoring program pairs junior or inexperienced project managers with senior managers in order to help them learn best practices. This approach mitigates risk by easing the junior members into new duties with a senior member that can answer questions and clarify problems as they get their feet wet in the project organization. Cross-training requires that members of the project team learn not only their own duties but also the roles that other team members are expected to perform. Cross-training addresses more immediate needs; if a member is pulled away for some time, the cross-trained member can fill in as needed.

Diff: 2 Section: 7.2 Project Risk Management: An Integrated Approach LO: 7.5: Explain the Project Risk Analysis and Management (PRAM) process.

Classification: Application AACSB: Application of Knowledge 99) What does change management accomplish and what are the components of an effective change management program?

Answer: Change management is a part of a risk mitigation strategy. As the project organization responds to risks that are realized, the risk management plan is enacted and changes become necessary responses to deliver the project. The change management plan contains provisions for documentation of the changes including a description of the risk, its assessment, and the reduction plan. The change management plan addresses the who, what, when, why, and how of the changes to the baseline project plan.

Diff: 2 Section: 7.2 Project Risk Management: An Integrated Approach LO: 7.5: Explain the Project Risk Analysis and Management (PRAM) process.

Classification: Concept AACSB: Application of Knowledge

100) Sketch a flow chart for the PRAM methodology for risk management and briefly describe each step.

Answer: Define — Make sure the project is well-defined, including all deliverables, statement of work, and scope.

Focus — Begin to plan the risk management process as a project in its own right, as well as determining the best methods for addressing project risk.

Identify — Assess the specific sources of risk including the need to fashion appropriate responses.

Structure — Review and refine the manner in which risks have been classified, determine if commonalities exist among risks.

Clarify ownership — Distinguish between risks the project organization is willing to handle and those the clients are expected to.

Estimate — Develop reasonable estimates of the impacts on the project of the risks and proposed solutions.

Evaluate — Critically evaluate the results of the estimate phase; prioritize risks.

Plan — Produce a risk management plan that proactively offers risk mitigation strategies for the project as needed.

Manage — Monitor actual progress with the project and associated risk management plans.

Diff: 2

Section: 7.2 Project Risk Management: An Integrated Approach LO: 7.5: Explain the Project Risk Analysis and Management (PRAM) process.

Classification: Concept AACSB: Application of Knowledge 101) What is the PRAM methodology and what are its salient features?

Answer: The PRAM (Project Risk Analysis and Management) program is a creation of the European Association for Project Management. PRAM is an integrated program of risk management, based on efforts to extend risk management to cover a project's entire life cycle.

The PRAM model offers a systematic approach to creating a comprehensive and logically sequenced method for analyzing and addressing project risk. The key features of the PRAM methodology are: — recognition that risk management follows its own life cycle and must be integrated throughout the project's entire life cycle, — application of different risk management strategies at various points in the life cycle, — integration of multiple approaches to risk management into a coherent, synthesized approach.

Diff: 2 Section: 7.2 Project Risk Management: An Integrated Approach LO: 7.5: Explain the Project Risk Analysis and Management (PRAM) process.

Classification: Concept AACSB: Application of Knowledge

102) Pick any three steps in the PRAM methodology and explain the deliverables generated by that step.

Answer: The PRAM (Project Risk Analysis and Management) methodology has nine steps. The deliverables for each of these steps are as follows: Define — a clear unambiguous, shared understanding of all key aspects of the project documented, verified, and reported.

Focus — a clear, unambiguous, shared understanding of all relevant key aspects of the RMP, documented, verified, and reported.

Identify — all key risks and responses identified; both threats and opportunities classified, characterized, documented, verified, and reported.

Structure — a clear understanding of the implications of any important simplifying assumptions about relationships among risks, responses, and base plan activities.

Ownership — clear ownership and management allocations effectively and efficiently defined, legally enforceable in practice where appropriate.

Estimate — 1) a basis for understanding which risks and responses are important; and 2) estimates of likelihood and impact on scenario or in numeric terms.

Evaluate — diagnosis of all important difficulties and comparative analysis of the implications of responses to these difficulties, with specific deliverables like a prioritized list of risks.

Plan — 1) base plans in activity terms at the detailed level of implementation; 2) risk assessment in terms of threats and opportunities prioritized, assessed in terms of impact; and 3) recommended proactive and reactive contingency plans in activity terms.

Manage — 1) diagnosis of a need to revisit earlier plans and initiation of replanning as appropriate, and 2) exception reporting after significant events and associated replanning.

Diff: 3 Section: 7.2 Project Risk Management: An Integrated Approach LO: 7.5: Explain the Project Risk Analysis and Management (PRAM) process.

Classification: Concept AACSB: Application of Knowledge Project Management: Achieving Competitive Advantage, 6e (Pinto) Chapter 8 Cost Estimation and Budgeting 1) Which of the following is a direct cost?

A) Labor B) Rent C) Depreciation on equipment D) Health benefits Answer: A Diff: 1 Section: 8.1 Cost Management LO: 8.1: Understand the various types of common project costs.

Classification: Concept AACSB: Application of Knowledge 2) Which worker's wages would constitute a direct cost for a construction project?

A) The project's cost accountant B) The brick mason C) The architect's assistant D) The foreman Answer: B Diff: 1

Section: 8.1 Cost Management LO: 8.1: Understand the various types of common project costs.

Classification: Application AACSB: Application of Knowledge 3) Direct costs are those clearly assigned to the aspect of the project that generated the cost.

Answer: TRUE Diff: 1 Section: 8.1 Cost Management LO: 8.1: Understand the various types of common project costs.

Classification: Concept AACSB: Application of Knowledge

4) What are four major categories of costs? Provide descriptions for each category.

Answer: Some of the more common project costs include labor, materials, subcontractors, equipment and facilities, and travel. Labor costs are those associated with hiring and paying the various personnel involved in developing the project. Material costs apply to the specific equipment and supplies the project team will require in order to complete the project tasks.

Subcontractors may provide resources (and in the case of consultants, expertise) for the project, their costs must be factored into the preliminary cost estimate and be reflected in the budget.

Firms commonly include rental of equipment and facilities as a charge against the cost of the project when the project is developed away from the firm's home office. If necessary, expenses that are related to business travel can be applied to the project as an up-front charge.

Diff: 2 Section: 8.1 Cost Management LO: 8.1: Understand the various types of common project costs.

Classification: Application AACSB: Application of Knowledge 5) The gentleman farmer and surrealist aficionado commissioned a mural on barn that was an homage to Salvador Dalí's Persistence of Memory with a few farm animals included. The project would require the services of a senior muralist, a junior muralist, and a gofer. The senior muralist has an annual salary of $120,000, the junior muralist draws an annual salary of $75,000, and the gofer makes $30,000 per year. It is anticipated that the project will require 25 hours of senior muralist time, 40 hours of junior muralist time, and 60 hours of gofer time. Overhead charges vary by position; the gofer has a lower overhead rate (30%) than the two muralist positions (50%). Use 2080 hours as an estimate for the number of hours in a year and a 15% factor for personal time. What is the total direct labor cost for the project?

Answer: The table displays the sequence of calculations; the total direct labor cost is $6,269.71 Annual Hourly Salary Rate $120,000.00 $57.69 $75,000.00 $36.06 $30,000.00 $14.42

Hours Needed 25 40 60

Direct Overhead Personal Labor 1.5 1.15 $2,487.98 1.5 1.15 $2,487.98 1.3 1.15 $1,293.75 Total $6,269.71

Diff: 2 Section: 8.1 Cost Management LO: 8.1: Understand the various types of common project costs.

Classification: Application AACSB: Application of Knowledge

6) Three workers complete a full 8-hour day finishing concrete for a terrace. All three workers are paid $12 an hour and the job bills to the customer for $450. What are the total direct labor costs?

A) $450 B) $12 C) $288 D) $96 Answer: C Diff: 1 Section: 8.1 Cost Management LO: 8.2: Recognize the difference between various forms of project costs.

Classification: Application AACSB: Analytical Thinking 7) Which of these indirect costs is typically classified as an overhead cost?

A) Advertising B) Shipping C) Sales commissions D) Taxes Answer: D Diff: 2 Section: 8.1 Cost Management LO: 8.2: Recognize the difference between various forms of project costs.

Classification: Application AACSB: Application of Knowledge 8) Which of these indirect costs is typically classified as a selling or administrative cost?

A) Secretarial support B) Utilities C) Insurance D) Depreciation Answer: A Diff: 2 Section: 8.1 Cost Management LO: 8.2: Recognize the difference between various forms of project costs.

Classification: Application AACSB: Application of Knowledge

9) A systems analyst is paid at the rate of $50/hour and will be needed for 40 hours. Her employer uses an overhead multiplier of 60% and does not factor in personal time. Her total direct labor cost should be billed at: A) $2,000.

B) $3,200.

C) $1,250.

D) $4,500.

Answer: B Diff: 2 Section: 8.1 Cost Management LO: 8.2: Recognize the difference between various forms of project costs.

Classification: Application AACSB: Analytical Thinking 10) Workers paid $15.00 per hour with an overhead charge of 1.45 and a personal time allowance of 1.15, have what total direct labor cost for an 8-hour work day?

A) $151.30 B) $174.00 C) $200.10 D) $236.80 Answer: C Diff: 2 Section: 8.1 Cost Management LO: 8.2: Recognize the difference between various forms of project costs.

Classification: Application AACSB: Analytical Thinking 11) Which of these is typically a recurring cost?

A) Preliminary market analysis B) Personnel training C) Outplacement services D) Logistics Answer: D Diff: 2 Section: 8.1 Cost Management LO: 8.2: Recognize the difference between various forms of project costs.

Classification: Application AACSB: Application of Knowledge

12) Which of these is typically a nonrecurring cost?

A) Site study B) Labor C) Material D) Sales Answer: A Diff: 2 Section: 8.1 Cost Management LO: 8.2: Recognize the difference between various forms of project costs.

Classification: Application AACSB: Application of Knowledge 13) The charge that is most likely a fixed cost is for: A) Materials.

B) Equipment rental.

C) Direct labor.

D) Utilities.

Answer: B Diff: 2 Section: 8.1 Cost Management LO: 8.2: Recognize the difference between various forms of project costs.

Classification: Application AACSB: Application of Knowledge 14) You are probably looking at a bill for a variable cost when you are paying for: A) Leased capital equipment.

B) Salaries.

C) Materials.

D) Health insurance.

Answer: C Diff: 2 Section: 8.1 Cost Management LO: 8.2: Recognize the difference between various forms of project costs.

Classification: Application AACSB: Application of Knowledge 15) A normal cost is incurred when: A) Overtime is used more than originally planned.

B) Shipments are expedited.

C) Additional temporary workers are brought on site.

D) The aggressive baseline plan is adhered to.

Answer: D Diff: 2 Section: 8.1 Cost Management LO: 8.2: Recognize the difference between various forms of project costs.

Classification: Concept AACSB: Application of Knowledge 16) Unplanned costs incurred when steps are taken to speed up a project's completion are called: A) Expedited costs.

B) Accelerated costs.

C) Pass-through costs.

D) Normal costs.

Answer: A Diff: 2 Section: 8.1 Cost Management LO: 8.2: Recognize the difference between various forms of project costs.

Classification: Concept AACSB: Application of Knowledge 17) Material is an example of a cost that is recurring, variable and direct.

Answer: TRUE Diff: 2 Section: 8.1 Cost Management LO: 8.2: Recognize the difference between various forms of project costs.

Classification: Concept AACSB: Application of Knowledge 18) An expedited cost is one that does not vary with respect to their usage.

Answer: FALSE Diff: 2 Section: 8.1 Cost Management LO: 8.2: Recognize the difference between various forms of project costs.

Classification: Concept AACSB: Application of Knowledge 19) The term expedited cost has the same meaning as crashing cost in the project management milieu.

Answer: TRUE Diff: 2 Section: 8.1 Cost Management LO: 8.2: Recognize the difference between various forms of project costs.

Classification: Concept AACSB: Application of Knowledge

20) Provide examples and discuss the differences between direct and indirect costs.

Answer: Direct costs are those clearly assigned to the aspect of the project that generated the cost. Examples include labor that is hands-on in the production of the project and materials that are used and sold or consumed in the creation of the project. Indirect costs are generally linked to two features: overhead and selling and general administration. Health benefits for the labor force, taxes, insurance, depreciation and repairs are all indirect costs. Direct costs of materials and labor are generally easier to calculate than indirect costs, which are often calculated as a multiplier of some of the direct costs.

Diff: 2 Section: 8.1 Cost Management LO: 8.2: Recognize the difference between various forms of project costs.

Classification: Application AACSB: Application of Knowledge 21) Explain the difference between normal and expedited costs, fixed and variable costs, and recurring or nonrecurring costs. Create a 2 × 2 × 2 matrix and provide one example each (8 total examples) of each combination of these costs.

Answer: Examples may vary.

Nonrecurring costs might be those charges applied once at the beginning or end of the project while recurring costs are those that typically continue to operate over the project's life cycle.

Fixed costs do not vary with their usage but variable costs accelerate through usage. Normal costs are those incurred through the routine process of working to complete the project according to the original schedule but expedited costs are unplanned costs incurred when steps are taken to speed up the project's completion.

Diff: 3 Section: 8.1 Cost Management LO: 8.2: Recognize the difference between various forms of project costs.

Classification: Application AACSB: Application of Knowledge 22) A key for developing project cost estimates is to: A) Cost the project while considering the total package.

B) Cost the project on a work package and task basis.

C) Cost the project on a major module basis.

D) Cost the project and add 33% for contingency.

Answer: B Diff: 2 Section: 8.2 Cost Estimation LO: 8.3: Apply common forms of cost estimation for project work, including ballpark estimates and definitive estimates.

Classification: Concept AACSB: Application of Knowledge

23) The order of magnitude cost estimate is used when: A) Ballpark estimates are not considered accurate enough.

B) Historical data are readily available.

C) Information or time is scarce.

D) Parametric estimation has already been performed.

Answer: C Diff: 2 Section: 8.2 Cost Estimation LO: 8.3: Apply common forms of cost estimation for project work, including ballpark estimates and definitive estimates.

Classification: Concept AACSB: Application of Knowledge 24) When asked to provide an estimate of an irrigation system, Pete looked from one end of the field to the other, licked a finger and held it in the air, squinted into the sun and said $25,000, give or take 30%. The technique employed for cost estimation is: A) Parametric.

B) Comparative.

C) Definitive.

D) Ballpark.

Answer: D Diff: 2 Section: 8.2 Cost Estimation LO: 8.3: Apply common forms of cost estimation for project work, including ballpark estimates and definitive estimates.

Classification: Concept AACSB: Application of Knowledge 25) Estimates based on the assumption that historical data can be used as a frame of reference for current estimates are: A) Comparative estimates.

B) Ballpark estimates.

C) Definitive estimates.

D) Feasibility estimates.

Answer: A Diff: 2 Section: 8.2 Cost Estimation LO: 8.3: Apply common forms of cost estimation for project work, including ballpark estimates and definitive estimates.

Classification: Concept AACSB: Application of Knowledge

26) An order of magnitude estimate is usually more accurate than a ballpark estimate.

Answer: FALSE Diff: 1 Section: 8.2 Cost Estimation LO: 8.3: Apply common forms of cost estimation for project work, including ballpark estimates and definitive estimates.

Classification: Concept AACSB: Application of Knowledge 27) Comparative estimates are more accurate than definitive estimates when applied to the same project.

Answer: TRUE Diff: 2 Section: 8.2 Cost Estimation LO: 8.3: Apply common forms of cost estimation for project work, including ballpark estimates and definitive estimates.

Classification: Concept AACSB: Application of Knowledge 28) Rank the four different types of cost estimates from most to least accurate and explain what the inputs are to each type.

Answer: The cost estimates as ranked from most accurate to least accurate are definitive estimates, feasibility estimates, comparative estimates, and ballpark, or order of magnitude estimates. Definitive estimates are expected to have an accuracy of plus or minus 5% and can be completed only after the completion of most design work, at a point when the scope and capabilities of the project are quite well understood. Feasibility estimates are within plus or minus 10% and are made after completion of the preliminary design work following initial scope development upon receiving quotes from suppliers and subcontractors. Comparative estimates approach plus or minus 15% accuracy and are based on the assumption that historical data can be used as a frame of reference for current estimates on similar projects. Ballpark estimates are created when information or time (or both) are scarce and are targeted at plus or minus 30%.

Diff: 3 Section: 8.2 Cost Estimation LO: 8.3: Apply common forms of cost estimation for project work, including ballpark estimates and definitive estimates.

Classification: Application AACSB: Application of Knowledge

29) When their baby was ready to head off to college, the beleaguered parents pulled out the college folder from their file cabinet and added up the cost of putting their first child through college from 1995-2000. The mother whimpered as she factored in the rising cost of tuition, fees, books, and inflation by multiplying the total by 2.5. The father felt a searing pain go through his chest as he saw the total, knowing full well that their cost estimation approach, called: A) An order of magnitude estimate, was highly accurate.

B) Parametric estimation, was highly accurate.

C) Feasibility estimation, was highly accurate.

D) Definitive estimation, was highly accurate.

Answer: B Diff: 2 Section: 8.2 Cost Estimation LO: 8.4: Understand the advantages of parametric cost estimation and the application of learning curve models in cost estimation.

Classification: Concept AACSB: Application of Knowledge 30) Effective comparative estimates rely most heavily on: A) An accurate inflation factor.

B) The correct number of years elapsed between the old project and the current one.

C) True comparability between the current project and previous project work.

D) The correct number of employees on the new project compared with the previous one.

Answer: C Diff: 2 Section: 8.2 Cost Estimation LO: 8.4: Understand the advantages of parametric cost estimation and the application of learning curve models in cost estimation.

Classification: Concept AACSB: Application of Knowledge 31) Cost estimates that are based as a guideline on real numbers, or figures derived after the completion of preliminary design work, are: A) Definitive estimates.

B) Order of magnitude estimates.

C) Parametric estimates.

D) Feasibility estimates.

Answer: D Diff: 2 Section: 8.2 Cost Estimation LO: 8.4: Understand the advantages of parametric cost estimation and the application of learning curve models in cost estimation.

Classification: Concept AACSB: Application of Knowledge

32) Once most of the design work is complete, at a point when the scope and capabilities of the project are quite well understood, a ________ may be developed.

A) definitive estimate B) comparative estimate C) parametric estimate D) non-parametric estimate Answer: A Diff: 2 Section: 8.2 Cost Estimation LO: 8.4: Understand the advantages of parametric cost estimation and the application of learning curve models in cost estimation.

Classification: Application AACSB: Application of Knowledge 33) Which of these estimates should be the most accurate?

A) Parametric B) Definitive C) Comparative D) Order of magnitude Answer: B Diff: 2 Section: 8.2 Cost Estimation LO: 8.4: Understand the advantages of parametric cost estimation and the application of learning curve models in cost estimation.

Classification: Concept AACSB: Application of Knowledge 34) An activity with a learning rate of 0.85 takes 25 hours for the first iteration. How long will it take to complete this task for the 15th time?

A) 12.55 hours B) 12.85 hours C) 13.15 hours D) 13.25 hours Answer: D Diff: 2 Section: 8.2 Cost Estimation LO: 8.4: Understand the advantages of parametric cost estimation and the application of learning curve models in cost estimation.

Classification: Application AACSB: Analytical Thinking

35) If it takes 40 hours to complete the first unit and the company knows from experience that the learning rate should be 0.80, how fast can they be expected to finish all twelve units?

A) 18 hours B) 289 hours C) 264 hours D) 316 hours Answer: B Diff: 3 Section: 8.2 Cost Estimation LO: 8.4: Understand the advantages of parametric cost estimation and the application of learning curve models in cost estimation.

Classification: Application AACSB: Analytical Thinking 36) It took 44 hours of analysis to complete the first phase, but the second phase was done in 42 hours. If this learning rate continues, then the 8th analysis should take a mere: A) 36 hours and 26 minutes, give or take.

B) 37 hours and 36 minutes, give or take.

C) 38 hours and 16 minutes, give or take.

D) 39 hours and 6 minutes, give or take.

Answer: C Diff: 3 Section: 8.2 Cost Estimation LO: 8.4: Understand the advantages of parametric cost estimation and the application of learning curve models in cost estimation.

Classification: Application AACSB: Analytical Thinking 37) What learning rate is being demonstrated if the first unit takes 25 hours and the third unit takes 24 hours to complete?

A) Greater than or equal to 97 percent B) Less than 97 percent but greater than or equal to 95 percent C) Less than 95 percent but greater than or equal to 93 percent D) Less than 93 percent Answer: A Diff: 3 Section: 8.2 Cost Estimation LO: 8.4: Understand the advantages of parametric cost estimation and the application of learning curve models in cost estimation.

Classification: Application AACSB: Analytical Thinking

38) An activity with a learning rate of 0.8 takes 30 hours for the first six units. How long will it take to complete this task for the 12th time?

A) 2.985 hours B) 3.055 hours C) 3.135 hours D) 3.325 hours Answer: C Diff: 3 Section: 8.2 Cost Estimation LO: 8.4: Understand the advantages of parametric cost estimation and the application of learning curve models in cost estimation.

Classification: Application AACSB: Analytical Thinking 39) If it takes 40 hours to complete the first unit and the company knows from experience that the learning rate should be 0.75, how fast can they be expected to finish all ten units?

A) 208.48 hours B) 213.52 hours C) 218.46 hours D) 223.54 hours Answer: C Diff: 3 Section: 8.2 Cost Estimation LO: 8.4: Understand the advantages of parametric cost estimation and the application of learning curve models in cost estimation.

Classification: Application AACSB: Analytical Thinking 40) It took 66 hours of analysis to complete the first phase, but the second phase was done in 61 hours. If this learning rate continues, then the 8th analysis should take a mere: A) 52 hours and 11 minutes, give or take.

B) 53 hours and 22 minutes, give or take.

C) 54 hours and 33 minutes, give or take.

D) 55 hours and 44 minutes, give or take.

Answer: C Diff: 3 Section: 8.2 Cost Estimation LO: 8.4: Understand the advantages of parametric cost estimation and the application of learning curve models in cost estimation.

Classification: Application AACSB: Analytical Thinking

41) What learning rate is being demonstrated if the first unit takes 25 hours and the seventh unit takes 22 hours to complete?

A) Greater than or equal to 97 percent B) Less than 97 percent but greater than or equal to 96 percent C) Less than 96 percent but greater than or equal to 95 percent D) Less than 95 percent Answer: C Diff: 3 Section: 8.2 Cost Estimation LO: 8.4: Understand the advantages of parametric cost estimation and the application of learning curve models in cost estimation.

Classification: Application AACSB: Analytical Thinking 42) Which statement about the use of learning curves is BEST? A) Learning curve effects stay constant across projects.

B) A job that is substantially re-engineered will have no disruption of its learning curve.

C) It may be more likely to see learning curve effects in construction than in research and development.

D) Every worker performing an identical task will exhibit the same learning effect.

Answer: B Diff: 1 Section: 8.2 Cost Estimation LO: 8.4: Understand the advantages of parametric cost estimation and the application of learning curve models in cost estimation.

Classification: Concept AACSB: Application of Knowledge 43) A learning rate of 90% means that for every doubling of output, the time required by the activity falls by 10%.

Answer: TRUE Diff: 2 Section: 8.2 Cost Estimation LO: 8.4: Understand the advantages of parametric cost estimation and the application of learning curve models in cost estimation.

Classification: Concept AACSB: Application of Knowledge 44) Function point analysis is a system for estimating the size of software projects based on the number of lines of code a typical programmer can write in a day.

Answer: FALSE Diff: 1 Section: 8.2 Cost Estimation LO: 8.4: Understand the advantages of parametric cost estimation and the application of learning curve models in cost estimation.

Classification: Concept AACSB: Application of Knowledge 45) What are parametric cost estimates and how are they developed?

Answer: Parametric estimates are a form of comparative estimates, which are based on the assumption that historical data can be used as a frame of reference for current estimates on

similar projects. Parametric estimation takes older work and uses a multiplier to account for the impact of inflation, labor and materials increases, and other reasonable costs.

Diff: 2 Section: 8.1 Cost Management LO: 8.4: Understand the advantages of parametric cost estimation and the application of learning curve models in cost estimation.

Classification: Application AACSB: Application of Knowledge 46) Define learning curve theory and describe how learning curves are used in project management.

Answer: Learning curve theory says that a task can be performed more quickly as repetitions increase, specifically a doubling of output results in a fixed percentage reduction in time required to complete the last unit produced. Learning curve rates can be used in a project if there is an activity that remains fairly constant and is performed repeatedly. Rather than using a direct multiplier of the number of repetitions times the time required to complete the first iteration, the project manager can use the learning curve equation Yx = aXb to calculate the time required for successive units as long as the learning curve rate can be estimated. The result will be a time estimate lower than by direct multiplication, which might permit the project manager to more accurately gauge the amount of labor and time required and prepare a more competitive bid.

Diff: 2 Section: 8.2 Cost Estimation LO: 8.4: Understand the advantages of parametric cost estimation and the application of learning curve models in cost estimation.

Classification: Concept AACSB: Analytical Thinking

47) Big Mike has to prepare a bid for the swimming pools to be placed in every backyard in a new housing addition. Each swimming pool represents only a slight variation on the other, so there is a good opportunity to leverage learning effects in the bid process. A swimming pool installation can be broken down into four major steps: excavation, concrete, plumbing, and finish work. Mike has found the best contractors and asks each of them how long it will take to complete work on the first pool and what their learning rates are. Amazingly, each contractor is intimately familiar with learning curve theory and knows what his learning rate is for this type of work. This information is summarized in the table.

Function Excavation Concrete Plumbing Finishing

First Pool 22 hours 32 hours 10 hours 30 hours

Learning Rate .95 .90 .85 .85

How long will it take to complete the 25th pool for the subdivision?

How long will it take to complete all 25 pools for the subdivision?

Answer: The twenty-fifth unit for each function is calculated as follows: Excavation: Y25 = 22 × 25 ln(.95)/ln(2) = 20.9 Concrete: Y25 = 32 × 25 ln(.90)/ln(2) = 28.8 Plumbing: Y25 = 10 × 25 ln(.85)/ln(2) = 8.5 Finishing: Y25 = 30 × 25 ln(.85)/ln(2) = 25.5

A full table for units one through twenty-five is below:

The total time for all twenty-five pools is: Total Time = 464.1 + 566.8 + 148 + 444 = 1623 hours Diff: 2 Section: 8.2 Cost Estimation LO: 8.4: Understand the advantages of parametric cost estimation and the application of learning curve models in cost estimation.

Classification: Application AACSB: Analytical Thinking

48) Juan Valdez trades in his old donkeys for two new llamas in order to transport his mountain grown coffee to the marketplace. Llamas make excellent pack animals and are surefooted, so I should be able to spend more time harvesting and less time wrangling animals, Juan thought to himself as he led the two back to his mountain farm. Much to his dismay, the first time he tried to strap the bags of coffee beans to his new llamas they resisted by running away and when he got close, they spit copiously. However, he was persistent and methodical, and he noticed that things went a little better each day. The time it took to get the llamas loaded up is summarized in the table.

Day 1 2 3 4

Time (min) 140 116 100 93

Day 5 6 7 8

Time (min) 84 79 79 76

What learning rate is evident from the data?

How long will it take to load up the llamas next month (on the 30th attempt) if the same learning pattern continues?

Answer: The data were generated using an 80% learning curve plus an error term, which was generated by the function RAND()∗5, resulting in a mean of 2.5 and a standard deviation of 1.4.

To determine the learning effect on display, the student might choose some output-doubling observations to make the comparison: Days 1 & 2 yields an estimate of 116/140= .825; days 2 & 4 an estimate of 93/116=.801; and days 4 & 8 an estimate of 76/93=.817. Moving forward with a learning effect of 81% T30 = 140 × 30 T30 = 140 × 30-.3041 T30 = 140 × .3555875 T30 = 49.78 minutes Juan is still trying to determine whether he or the llamas contribute more to the learning effect, but that's another question for another test bank.

Diff: 2 Section: 8.2 Cost Estimation LO: 8.4: Understand the advantages of parametric cost estimation and the application of learning curve models in cost estimation.

Classification: Critical Thinking AACSB: Analytical Thinking

49) Acme is exploring two locations for a new plant to supply product for a government contract.

They dispatch a team of industrial engineers and cost estimators to the Minneapolis-St.Paul area of Minnesota and to Kennewick-Pasco-Richland area in Washington. After conducting some tests, the teams return with some unusual findings, the Minneapolis-St. Paul workers seem to obey classic learning effect rules; their learning rate is 80% and is based on a doubling of output.

They are much slower than their counterparts at the other site; it is estimated that the first batch units they assemble will take them 700 hours. The workforce in the Kennewick-Pasco-Richland area is much faster; their first batch will take only 470 hours. Strangely, these workers also exhibit learning effects, but their learning is based on a tripling of output rather than the traditional doubling and their rate is 78%. How many batches must be made before MinneapolisSt. Paul's time falls below Kennewick-Pasco-Richland's?

Answer: The crossover point is just above the 64th unit; at the 64th unit the Kennewick-PascoRichland workers are faster by one hundredth of an hour and at the 65th unit the Minneapolis-St. Paul workers are faster by a quarter of an hour.

Yx =

Minneapolis-St. Paul

Yx =

Kennewick-Pasco-Richland

Yx =

=

= 700X-.32193 = 470X-.22616 = 1.489362 = X-.095769 1n(1.489362) = 1n(X-.095769) 0.398349 = 0.095769 1n(X) = 1n(X)

exp

=X

X = 64.03765 Diff: 3 Section: 8.2 Cost Estimation LO: 8.4: Understand the advantages of parametric cost estimation and the application of learning curve models in cost estimation.

Classification: Critical Thinking AACSB: Analytical Thinking 50) What are function points and how do they work?

Answer: Function points are a standard unit of measure that represents the functional size of a software application. In one sense, they are an ABC approach to cost estimation based on the functional complexity of different program features. Total system cost is estimated based on the

number and complexity of different elements needed for the software package.

Diff: 2 Section: 8.2 Cost Estimation LO: 8.4: Understand the advantages of parametric cost estimation and the application of learning curve models in cost estimation.

Classification: Application AACSB: Information Technology 51) What are the major issues with cost estimation of software projects?

Answer: The software project industry has a very poor record when it comes to project performance. Research has shown that for large companies, less than 9% of IT projects are completed on schedule and budget and over half of the software projects will cost almost 200% of their original budget. A recent book by Steven McConnell offers some insights why software projects suffer. Among these findings are the common failure to budget adequate time and funding for project activities. Small IT projects spend the majority of their time in detailed design, coding and debugging, and unit testing. As the complexity of the projects rises, the focus of activity shifts to three other activities – architecture, integration, and system testing. The implications suggest that IT project budgets must consider the size of the project as they calculate cost components so that the separate functions can be allocated an appropriate budget.

Diff: 2 Section: 8.2 Cost Estimation LO: 8.4: Understand the advantages of parametric cost estimation and the application of learning curve models in cost estimation.

Classification: Application AACSB: Information Technology 52) There was no way that the study tour to Italy could cost only $1500 for 14 days and 13 nights and include all transportation, meals and hotels, but the smarmy professor knew that students would balk at a higher advertised price. Once they were thousands of miles away from home in a country where none of them spoke the language it would be easier to tell them about unanticipated charges and approach the more realistic price of $3500 per person. This type of: A) Specification change is a common reason for a cost overrun.

B) Lack of definition is a common reason for a cost overrun.

C) Low initial estimate is a common reason for a cost overrun.

D) Unexpected technical difficulty is a common reason for a cost overrun.

Answer: C Diff: 1 Section: 8.2 Cost Estimation LO: 8.5: Discern the various reasons why project cost estimation is often done poorly..

Classification: Application AACSB: Application of Knowledge

53) Whether it is the Boeing V-22 Osprey or a simple storm door installation for a do-ityourselfer, nothing is ever completed as quickly or as cheaply as initial estimates due to: A) Lack of definition.

B) Low initial estimates.

C) Specification changes.

D) Unexpected technical difficulties.

Answer: D Diff: 2 Section: 8.2 Cost Estimation LO: 8.5: Discern the various reasons why project cost estimation is often done poorly..

Classification: Application AACSB: Application of Knowledge 54) Poor initial scope development and work breakdown structure often creates cost overruns that are attributable to: A) Lack of definition.

B) Deliberate low initial estimates.

C) Unexpected technical difficulties.

D) External factors.

Answer: A Diff: 2 Section: 8.2 Cost Estimation LO: 8.5: Discern the various reasons why project cost estimation is often done poorly..

Classification: Application AACSB: Application of Knowledge 55) It began as a simple macro that would extract grades and post them on a web site, but once the web programmer began the work, he became obsessed with various charting features, grade summaries, and reports that could be added to make this the grandest web site in the tri-county area. As 2 hours of programming work grew to 20 and then 80, he knew that the client wouldn't be happy with the cost overrun. The only comment he mumbled as he finished his work was: A) "I had some technical difficulties, sorry."

B) "There were some specification changes, sorry."

C) "This project lacked definition from the outset, sorry."

D) "I thought I'd never get the wizard's hat! Oh, by the way, your grades work."

Answer: B Diff: 2 Section: 8.2 Cost Estimation LO: 8.5: Discern the various reasons why project cost estimation is often done poorly..

Classification: Application AACSB: Application of Knowledge

56) The 1974 model Eldorado is a three-ton behemoth with a 500-cubic-inch engine that is long on style but short on gas mileage. During its five-year development process no one could possibly have anticipated that gas prices would go through the roof in 1973, making it far more expensive to operate and subsequently less attractive to a gas-price-conscious public. Design engineers scrambled to change the car in the last few months leading up to its debut, adding a slimmed down version with a smaller engine. All of the design overtime meant that the project budget took a big hit though, thanks to: A) The initial low estimate.

B) The unexpected technical difficulties.

C) This external factor.

D) The lack of definition.

Answer: C Diff: 2 Section: 8.2 Cost Estimation LO: 8.5: Discern the various reasons why project cost estimation is often done poorly..

Classification: Application AACSB: Application of Knowledge 57) A common reason for cost overruns in a project is a low initial estimate of project cost.

Answer: TRUE Diff: 2 Section: 8.2 Cost Estimation LO: 8.5: Discern the various reasons why project cost estimation is often done poorly..

Classification: Concept AACSB: Application of Knowledge 58) Describe any three reasons that cost overruns occur in project work.

Answer: The most common reasons for cost overruns are low initial estimates, unexpected technical difficulties, lack of definition, specification changes, and external factors. Low initial estimates may be created deliberately, perhaps as an effort to gain approval, or accidentally, through carelessness, but will almost always result in a cost overrun. Unexpected technical difficulties often occur in high-tech projects that require bleeding-edge technology. Lack of definition as a result of poor initial scope development creates projects with poorly defined features or goals, which spills over into poor cost estimates. Specification changes resulting in scope creep from the initial baseline project inevitably require more time and money to bring the project into alignment with the new, larger scope. External factors beyond the control of the project organization require a response, one that calls unanticipated resource requirements into the fray, resulting in cost overruns.

Diff: 2 Section: 8.2 Cost Estimation LO: 8.5: Discern the various reasons why project cost estimation is often done poorly..

Classification: Application AACSB: Application of Knowledge

59) The project management research in brief titled "Delusion and Deception Taking Place in Large Infrastructure Projects," describes three reasons that cost overruns occur in large infrastructure project work. Briefly describe these three reasons Answer: In most cases, the causes of runaway costs come from one of three sources – overoptimism bias, deliberate deception, or simple bad luck.

Optimism bias — Executives commonly fall victim to delusions called the "planning fallacy" when it comes to projects. Under the planning fallacy, managers routinely minimize problems and make their decisions on the basis of delusional optimism — underestimating costs and obstacles, involuntarily spinning scenarios for success, and assuming best case options and outcomes.

Deliberate deception — Large capital investment projects often require complex layers of decision making in order to get them approved. Some opportunities to inappropriately bias the project (deception) occur when a project's stakeholders all hold different incentives for the project. If the project is grossly underestimated, the project contracts signed; once the project is "on the books," it tends to stay there.

Bad luck — A final reason for escalating project costs is simple bad luck. Bad luck implies that in spite of sound estimates, due diligence from all parties involved in the project, and the best intentions of both the contractors and project clients, there are always going to be cases where circumstances, environmental impacts, and sheer misfortune can conspire to derail a project or severely cripple its delivery.

Diff: 2 Section: 8.2 Cost Estimation LO: 8.5: Discern the various reasons why project cost estimation is often done poorly..

Classification: Application AACSB: Application of Knowledge 60) A plan that identifies the allocated resources, the project's goals, and the schedule that allows an organization to achieve those goals is: A) The work breakdown structure.

B) The risk management plan.

C) The statement of work.

D) The project budget.

Answer: D Diff: 2 Section: 8.3 Creating a Project Budget LO: 8.6: Apply both top-down and bottom-up budgeting procedures for cost management.

Classification: Concept AACSB: Application of Knowledge

61) The project plan is supported by: A) The work breakdown structure, the budget, and the schedule.

B) The work breakdown structure, the budget, and the work packages.

C) The work breakdown structure, the work packages, and the schedule.

D) The work breakdown structure, the schedule, and the contingency plan.

Answer: A Diff: 2 Section: 8.3 Creating a Project Budget LO: 8.6: Apply both top-down and bottom-up budgeting procedures for cost management.

Classification: Concept AACSB: Application of Knowledge 62) Input is received from an organization's management to create a project budget in: A) Zero-based budgeting.

B) Top-down budgeting.

C) Bottom-up budgeting.

D) Activity-based budgeting.

Answer: B Diff: 1 Section: 8.3 Creating a Project Budget LO: 8.6: Apply both top-down and bottom-up budgeting procedures for cost management.

Classification: Concept AACSB: Application of Knowledge 63) An advantage of top-down budgeting is: A) That top management estimates of project costs are often quite accurate, at least in aggregate.

B) An elimination of the friction between top and lower levels in the competition for budget money.

C) That projects are no longer a zero-sum game among lower level managers.

D) That top management budgets, by definition, cannot experience overruns.

Answer: A Diff: 2 Section: 8.3 Creating a Project Budget LO: 8.6: Apply both top-down and bottom-up budgeting procedures for cost management.

Classification: Concept AACSB: Application of Knowledge

64) A budget that is created by starting with the work breakdown structure, determining costs for each work package, and then adding these costs together is: A) Zero-based budgeting.

B) Top-down budgeting.

C) Bottom-up budgeting.

D) Activity-based budgeting.

Answer: C Diff: 1 Section: 8.3 Creating a Project Budget LO: 8.6: Apply both top-down and bottom-up budgeting procedures for cost management.

Classification: Concept AACSB: Application of Knowledge 65) When properly performed, bottom-up budgeting has the disadvantage of: A) A lack of detail needed in project plans.

B) A lack of coordination among project managers and functional department heads.

C) Being a hindrance to top managers when prioritizing projects that are competing for the same scarce resources.

D) A reduction of top management's control of the budget process to one of oversight.

Answer: D Diff: 3 Section: 8.3 Creating a Project Budget LO: 8.6: Apply both top-down and bottom-up budgeting procedures for cost management.

Classification: Application AACSB: Application of Knowledge 66) A budgeting method that assigns costs first to activities and then to projects based on each project's use of resources is: A) Activity-based budgeting.

B) Zero-based budgeting.

C) Top-down budgeting.

D) Bottom-up budgeting.

Answer: A Diff: 1 Section: 8.3 Creating a Project Budget LO: 8.6: Apply both top-down and bottom-up budgeting procedures for cost management.

Classification: Concept AACSB: Application of Knowledge

67) Activity-based costing and bottom-up budgeting share the step of: A) Identifying cost drivers associated with each activity.

B) Identifying activities that consumer resources and assigning costs to them.

C) Assigning costs to projects by multiplying the cost driver rate times the volume of units.

D) Tending to overestimate project costs due to the lack of involvement by top management.

Answer: B Diff: 2 Section: 8.3 Creating a Project Budget LO: 8.6: Apply both top-down and bottom-up budgeting procedures for cost management.

Classification: Concept AACSB: Application of Knowledge 68) There is a tendency for different departments or functions to compete for scarce resources in a zero-sum game when bottom-up budgeting is used to develop a project budget.

Answer: FALSE Diff: 2 Section: 8.3 Creating a Project Budget LO: 8.6: Apply both top-down and bottom-up budgeting procedures for cost management.

Classification: Concept AACSB: Application of Knowledge 69) Top-down budgeting, where input is gathered directly from the organization's top management, is often quite accurate.

Answer: TRUE Diff: 2 Section: 8.3 Creating a Project Budget LO: 8.6: Apply both top-down and bottom-up budgeting procedures for cost management.

Classification: Concept AACSB: Application of Knowledge 70) What's the relationship between WBS, scheduling, and budgeting?

Answer: The central goal of a budget is the need to support, rather than conflict with the project's and organization's goals. The project budget is a plan that identifies the allocated resources, the project's goals, and the schedule that allows an organization to achieve those goals.

The project budget must be coordinated with the project activities defined in the work breakdown structure, as the WBS sets the stage for creating the project schedule and the budget assigns the necessary resources to support the schedule.

Diff: 1 Section: 8.3 Creating a Project Budget LO: 8.6: Apply both top-down and bottom-up budgeting procedures for cost management.

Classification: Application AACSB: Application of Knowledge

71) How are top-down and bottom-up budgets created? What advantages does each approach hold over the other?

Answer: Top-down budgeting requires direct input from the organization's top management; in essence, this approach seeks to first ascertain the opinions and experiences of top management regarding estimated project costs. Bottom-up budgeting begins inductively from the work breakdown structure to apply direct costs to project activities that are then aggregated, first at the work package level, then at the deliverable level, at which point all task budgets are combined, and then higher up the chain to create an overall project budget. Top-down budgeting has the benefit of experienced senior personnel getting directly involved in project estimation, but can create friction between departments, functions, and managers at lower levels in the organization as they scramble for the largest share of the budget that they can grab. Bottom-up budgeting emphasizes the need to create detailed plans and facilitates coordination between project managers and functional department heads. Unfortunately, bottom-up budgeting reduces top management's control of the budget process to one of oversight and may result in a disconnect between their strategic plans and the direction the project is taking.

Diff: 2 Section: 8.3 Creating a Project Budget LO: 8.6: Apply both top-down and bottom-up budgeting procedures for cost management.

Classification: Application AACSB: Analytical Thinking 72) The new bridge would require 14 piers to support it and it was known that each time a pier is sunk into the harbor it would take 30 man hours of labor at $50 per hour. An activity-based costing of the entire pier system results in a total labor cost of: A) $19,500.

B) $21,000.

C) $22,500.

D) $24,000.

Answer: B Diff: 2 Section: 8.3 Creating a Project Budget LO: 8.7: Understand the uses of activity-based budgeting and time-phased budgets for cost estimation and control.

Classification: Application AACSB: Analytical Thinking

73) The new artisanal greenhouse would require 700 empty wine bottles be embedded in a frame made of clay and straw. The builder, a man with too much time on his hands, had determined that each time a bottle was added to the structure it would take 30 minutes of labor at $7.50 per hour in the blazing sun. An activity-based costing of the entire artisanal greenhouse revealed that the total labor cost would be: A) $2,525.

B) $2,850.

C) $2,625.

D) $2,450.

Answer: C Diff: 1 Section: 8.3 Creating a Project Budget LO: 8.7: Understand the uses of activity-based budgeting and time-phased budgets for cost estimation and control.

Classification: Application AACSB: Analytical Thinking 74) A budget containing disaggregated figures across the schedule when work is planned is a: A) Time-phased budget.

B) Chronic budget.

C) Temporal budget.

D) Calendar budget.

Answer: A Diff: 2 Section: 8.3 Creating a Project Budget LO: 8.7: Understand the uses of activity-based budgeting and time-phased budgets for cost estimation and control.

Classification: Concept AACSB: Application of Knowledge 75) Which of the following is NOT contained in a typical time-phased budget?

A) Total expenses for each activity B) Total expenses for each time unit C) Cumulative expenses for each time unit D) Cumulative time for each expense Answer: D Diff: 2 Section: 8.3 Creating a Project Budget LO: 8.7: Understand the uses of activity-based budgeting and time-phased budgets for cost estimation and control.

Classification: Application AACSB: Analytical Thinking

76) What is the cumulative cost in February in this time-phased budget?

Activity January February March April Survey 8,000 Design 5,250 4,500 Dirt 6,700 Foundation 12,550 Framing 37,250 Plumb 7,800 Wire 5,500 A) $23,750 B) $37,000 C) $45,050 D) $50,550 Answer: B Diff: 2 Section: 8.3 Creating a Project Budget LO: 8.7: Understand the uses of activity-based budgeting and time-phased budgets for cost estimation and control.

Classification: Application AACSB: Analytical Thinking 77) What is the total amount budgeted for design costs in this time-phased budget?

Activity January February March April Survey 8,000 Design 5,250 4,500 Dirt 6,700 Foundation 12,550 Framing 37,250 Plumb 7,800 Wire 5,500 A) $5,250 B) $4,500 C) $9,750 D) $12,550 Answer: C Diff: 1 Section: 8.3 Creating a Project Budget LO: 8.7: Understand the uses of activity-based budgeting and time-phased budgets for cost estimation and control.

Classification: Application AACSB: Analytical Thinking

78) What is the total amount budgeted for March in this time-phased budget?

Activity January February March April Survey 8,000 Design 5,250 4,500 Dirt 6,700 Foundation 12,550 Framing 37,250 Plumb 7,800 Wire 5,500 A) $37,250 B) $82,050 C) $41,000 D) $45,050 Answer: D Diff: 2 Section: 8.3 Creating a Project Budget LO: 8.7: Understand the uses of activity-based budgeting and time-phased budgets for cost estimation and control.

Classification: Application AACSB: Analytical Thinking 79) What is the total project budget in this time-phased budget?

Activity January February March April Survey 8,000 Design 5,250 4,500 Dirt 6,700 Foundation 12,550 Framing 37,250 Plumb 7,800 Wire 5,500 A) $85,450 B) $87,550 C) $82,050 D) $86,550 Answer: B Diff: 1 Section: 8.3 Creating a Project Budget LO: 8.7: Understand the uses of activity-based budgeting and time-phased budgets for cost estimation and control.

Classification: Application AACSB: Analytical Thinking

80) What is the total project budget in this time-phased budget?

Activity July August September October November RFP 34,721 Analysis 11,049 33,655 34,388 Design 33,718 34,474 26,759 36,328 Coding 7,713 34,905 40,244 Testing 40,916 896 Training 20,958 9,327 Roll-Out 8,186 A) $251,382 B) $389,828 C) $408,237 D) $478,300 Answer: C Diff: 1 Section: 8.3 Creating a Project Budget LO: 8.7: Understand the uses of activity-based budgeting and time-phased budgets for cost estimation and control.

Classification: Application AACSB: Analytical Thinking 81) What is the cumulative project budget for September in this time-phased budget?

Activity July August September October November RFP 34,721 Analysis 11,049 33,655 34,388 Design 33,718 34,474 26,759 36,328 Coding 7,713 34,905 40,244 Testing 40,916 896 Training 20,958 9,327 Roll-Out 8,186 A) $96,052 B) $155,330 C) $152,927 D) $251,382 Answer: D Diff: 2 Section: 8.3 Creating a Project Budget LO: 8.7: Understand the uses of activity-based budgeting and time-phased budgets for cost estimation and control.

Classification: Application AACSB: Analytical Thinking

82) What is the total project budget for design in this time-phased budget?

Activity July August September October November RFP 34,721 Analysis 11,049 33,655 34,388 Design 33,718 34,474 26,759 36,328 Coding 7,713 34,905 40,244 Testing 40,916 896 Training 20,958 9,327 Roll-Out 8,186 A) $131,279 B) $155,330 C) $124,688 D) $146,983 Answer: A Diff: 1 Section: 8.3 Creating a Project Budget LO: 8.7: Understand the uses of activity-based budgeting and time-phased budgets for cost estimation and control.

Classification: Application AACSB: Analytical Thinking 83) What is the project budget for November in this time-phased budget?

Activity July August September October November RFP 34,721 Analysis 11,049 33,655 34,388 Design 33,718 34,474 26,759 36,328 Coding 7,713 34,905 40,244 Testing 40,916 896 Training 20,958 9,327 Roll-Out 8,186 A) $8,186 B) $18,409 C) $389,828 D) $408,237 Answer: B Diff: 2 Section: 8.3 Creating a Project Budget LO: 8.7: Understand the uses of activity-based budgeting and time-phased budgets for cost estimation and control.

Classification: Application AACSB: Analytical Thinking

84) Activity-based costing is based on the notion that projects consume activities and activities consume resources.

Answer: TRUE Diff: 2 Section: 8.3 Creating a Project Budget LO: 8.7: Understand the uses of activity-based budgeting and time-phased budgets for cost estimation and control.

Classification: Concept AACSB: Application of Knowledge 85) A time-phased budget allocates costs across both project activities and the anticipated time in which the budget is to be expended.

Answer: TRUE Diff: 2 Section: 8.3 Creating a Project Budget LO: 8.7: Understand the uses of activity-based budgeting and time-phased budgets for cost estimation and control.

Classification: Concept AACSB: Application of Knowledge 86) Normal conditions, by definition, occur the vast majority of the time in project management.

Answer: FALSE Diff: 1 Section: 8.4 Developing Budget Contingencies LO: 8.7: Understand the uses of activity-based budgeting and time-phased budgets for cost estimation and control.

Classification: Concept AACSB: Analytical Thinking 87) What is activity-based costing and how is it performed?

Answer: Activity-based costing (ABC) is a budgeting method that assigns costs first to activities and then to the projects based on each project's use of resources. It is based on the notion that projects consume activities and activities consume resources. Activity-based costing consists of four steps: Identify the activities that consume resource and assign costs to them as is done in a bottom-up budgeting process.

Identify the cost drivers associated with the activity.

Compute a cost rate per cost driver unit or transaction.

Assign costs to projects by multiplying the cost driver rate times the volume of cost driver units consumed by the project.

Diff: 1 Section: 8.3 Creating a Project Budget LO: 8.7: Understand the uses of activity-based budgeting and time-phased budgets for cost estimation and control.

Classification: Application AACSB: Application of Knowledge 88) What is a time-phased budget and how does it help a project manager control costs?

Answer: A time-phased budget allocates costs across both project activities and the anticipated time in which the budget is to be expended. The budget can be displayed as a table with one dimension representing time and the other dimension representing the major cost categories or

the budget can be summarized by a time plot of dollars. A time-phased budget allows the project manager to match the project schedule with a budget baseline, identifying milestones for both schedule performance and project expense.

Diff: 1 Section: 8.3 Creating a Project Budget LO: 8.7: Understand the uses of activity-based budgeting and time-phased budgets for cost estimation and control.

Classification: Application AACSB: Application of Knowledge 89) An allocation of extra funds to cover uncertainties and improve chances that the project can be completed within the timeframe originally specified is a: A) Setback.

B) Budget contingency.

C) Reallocation budget.

D) Reserve line budget.

Answer: B Diff: 2 Section: 8.4 Developing Budget Contingencies LO: 8.8: Recognize the appropriateness of applying contingency funds for cost estimation.

Classification: Concept AACSB: Application of Knowledge 90) Contingency money is: A) The money that must be received before any project work can begin.

B) Money that is spent first to lock-in all contract guarantees.

C) Not usually a part of the activity-based costing process.

D) Valued at a higher rate than non-contingency money when determining project costs.

Answer: C Diff: 2 Section: 8.4 Developing Budget Contingencies LO: 8.8: Recognize the appropriateness of applying contingency funds for cost estimation.

Classification: Concept AACSB: Application of Knowledge

91) Contingency money is: A) Not formally in the project budget, but held in a separate company account for all projects.

B) Added to the project's budget following the identification of all project costs.

C) The first line item in any project budget at an amount dictated by company policy.

D) Not in the project's budget, but calculated and set aside once the project budget is completed.

Answer: B Diff: 2 Section: 8.4 Developing Budget Contingencies LO: 8.8: Recognize the appropriateness of applying contingency funds for cost estimation.

Classification: Concept AACSB: Application of Knowledge 92) It was fortunate that the project budget included contingency funding; the top manager had not foreseen that the project would need the services of their elite slide rule squad in more than one area at the same time. Design couldn't complete their work without their services, nor could marketing, or production. Contingency funds came in handy to meet the unanticipated: A) Change in project scope.

B) Abnormal project conditions.

C) Consequences of Murphy's Law. D) Interaction costs.

Answer: D Diff: 2 Section: 8.4 Developing Budget Contingencies LO: 8.8: Recognize the appropriateness of applying contingency funds for cost estimation.

Classification: Application AACSB: Application of Knowledge 93) After years of tinkering and reverse engineering initiatives, Kimray had finally unlocked the secrets of the Beta tape format. A quick trip to the rental store was an epiphany for company leadership when they realized that only a handful of Beta tapes were available; the rest of the world had adopted the VHS format seemingly overnight. Now they would have to buy a few of those newfangled VHS machines to see how they ticked. The contingency funds that management had set aside would be put to good use on this: A) Change in project scope.

B) Abnormal condition.

C) Unanticipated interaction cost.

D) Latest evidence of Murphy's Law. Answer: A Diff: 2 Section: 8.4 Developing Budget Contingencies LO: 8.8: Recognize the appropriateness of applying contingency funds for cost estimation.

Classification: Application AACSB: Application of Knowledge

94) "If anything can go wrong it often will" is an articulation of: A) Taylor's Theorem.

B) Pinto's Postulate.

C) Murphy's Law. D) The Pareto Principle.

Answer: C Diff: 1 Section: 8.4 Developing Budget Contingencies LO: 8.8: Recognize the appropriateness of applying contingency funds for cost estimation.

Classification: Concept AACSB: Application of Knowledge 95) Project cost estimates usually anticipate that resources will be available, that the weather will not be extreme, and that funding will materialize, creating what are called: A) Hyperactivity.

B) Standard operating procedures.

C) Standard duress.

D) Normal conditions.

Answer: D Diff: 1 Section: 8.4 Developing Budget Contingencies LO: 8.8: Recognize the appropriateness of applying contingency funds for cost estimation.

Classification: Application AACSB: Application of Knowledge 96) "If the weather holds and the utility service has correctly marked the location of the gas, telephone, and electric lines zigzagging across my property, I should be able to install the accent lighting in my back yard in an afternoon's time," the do-it-yourselfer commented to his jealous (and skeptical) neighbor. The only reply he received was his neighbor's, "Good luck with all that, I remember reading somewhere that: A) Project scope is fixed once the planning period is completed."

B) Normal conditions are rarely encountered."

C) There are no truly external factors in project execution."

D) Activity based costing shouldn't be used in a project of this scale."

Answer: B Diff: 1 Section: 8.4 Developing Budget Contingencies LO: 8.8: Recognize the appropriateness of applying contingency funds for cost estimation.

Classification: Application AACSB: Application of Knowledge

97) A disadvantage of contingency funds is: A) A recognition that the future contains both knowns and unknowns and the problems that might arise will impact the budget.

B) It is difficult to ascertain across what project activities contingency funds should be applied.

C) That application to the contingency fund gives an early warning signal of a potential overdrawn budget.

D) That provision is made in the company plans for an increase in project cost.

Answer: B Diff: 2 Section: 8.4 Developing Budget Contingencies LO: 8.8: Recognize the appropriateness of applying contingency funds for cost estimation.

Classification: Application AACSB: Application of Knowledge 98) A contingency rate of 10% on a building project budgeted at $20 million means the project organization is hoping to bring the project in for around: A) $22 million.

B) $2 million.

C) $18 million.

D) $200 million.

Answer: C Diff: 2 Section: 8.4 Developing Budget Contingencies LO: 8.8: Recognize the appropriateness of applying contingency funds for cost estimation.

Classification: Application AACSB: Analytical Thinking 99) An early warning signal for the potential of an overdrawn budget is created when: A) Activity-based costing cannot identify drivers.

B) A bottom-up budget never makes it up the chain of command.

C) Contingency funds are applied for.

D) A top-down process moves too quickly down to the functional managers.

Answer: C Diff: 2 Section: 8.4 Developing Budget Contingencies LO: 8.8: Recognize the appropriateness of applying contingency funds for cost estimation.

Classification: Application AACSB: Application of Knowledge

100) A budget contingency of $1 million on a $10 million project means that the project will be planned for a cost of $10 million, but the project organization receives an extra $1 million to guard against unforeseen cost overruns.

Answer: FALSE Diff: 1 Section: 8.4 Developing Budget Contingencies LO: 8.8: Recognize the appropriateness of applying contingency funds for cost estimation.

Classification: Concept AACSB: Analytical Thinking 101) What is a budget contingency and what are three reasons it might be useful?

Answer: A budget contingency is the allocation of extra funds to cover uncertainties and improve the chances that the project can be completed within the timeframe originally specified.

Contingency money is added to the project's budget following the identification of all project costs. The author identifies four reasons why it might make sense to include contingency funding in project cost estimates: Project scope is subject to change — as the project moves through its development cycle, external events or internal forces can require or call for a change in scope beyond what was initially planned for.

Murphy's Law is always present — if something can go wrong, it will, and this unfortunate circumstance necessitates additional funds to fix the problem.

Cost estimation may not have anticipated interaction costs — one event or work package interacts with another that requires more work from the first. This iteration can be accommodated with contingency funds.

Normal conditions are rarely encountered — projects are planned for a "normal" set of operating conditions and quite often, the abnormal occurs.

Diff: 2 Section: 8.4 Developing Budget Contingencies LO: 8.8: Recognize the appropriateness of applying contingency funds for cost estimation.

Classification: Application AACSB: Application of Knowledge 102) What are three benefits to the use of contingency funds?

Answer: Use of contingency funds is at first glance not a cause for celebration; however the author identifies three benefits derived from the use of these funds. The first benefit is that their use recognizes that the future contains unknowns and the problems that arise are likely to have a direct effect on the project budget. The project has a cushion of contingency to combat the time and money variance. The second benefit is that the company has already made provision for extra expense and as these funds are used, it opens management's eyes to the possibility of a significant budget increase on the horizon. Finally, application to the contingency funds gives an early warning signal of potential overdrawn budget so management can take a close look at the project and begin formulating additional plans in case the negative trend continues.

Diff: 2 Section: 8.4 Developing Budget Contingencies LO: 8.8: Recognize the appropriateness of applying contingency funds for cost estimation.

Classification: Application AACSB: Application of Knowledge Project Management: Achieving Competitive Advantage, 6e (Pinto) Chapter 9 Project Scheduling: Networks, Duration Estimation, and Critical Path

1) The term ordered activity means: A) Tasks must either precede or follow other tasks in project planning and management.

B) Tasks cannot be performed unless the project manager issues a specific command to perform the work.

C) Prior project planning removes the need for any rush so that tasks can be performed in a methodical fashion.

D) Tasks are not performed unless the customer issues a specific request to perform the work.

Answer: A Diff: 1 Section: 9.1 Project Scheduling LO: 9.1: Understand and apply key scheduling terminology.

Classification: Concept AACSB: Application of Knowledge 2) A sequence of activities defined by the project network logic is a(n): A) Event.

B) Path.

C) Node.

D) Route.

Answer: B Diff: 1 Section: 9.2 Key Scheduling Terminology LO: 9.1: Understand and apply key scheduling terminology.

Classification: Concept AACSB: Application of Knowledge 3) One of the defining points of a network, a junction point joined to some or all of the others by dependency lines, is called a(n): A) Event.

B) Path.

C) Node.

D) Burst.

Answer: C Diff: 1 Section: 9.2 Key Scheduling Terminology LO: 9.1: Understand and apply key scheduling terminology.

Classification: Concept AACSB: Application of Knowledge

4) These can be located by doing a backward pass through a network.

A) Critical paths B) Merge activities C) Successors D) Burst activities Answer: D Diff: 2 Section: 9.2 Key Scheduling Terminology LO: 9.1: Understand and apply key scheduling terminology.

Classification: Concept AACSB: Application of Knowledge 5) An activity has an expected duration and an expected cost. Another name for an activity is a(n): A) Work package.

B) Node.

C) Critical path.

D) Event.

Answer: A Diff: 2 Section: 9.2 Key Scheduling Terminology LO: 9.1: Understand and apply key scheduling terminology.

Classification: Concept AACSB: Application of Knowledge 6) Serial activities are those that: A) Flow from one to the next in sequence.

B) Have sequential numbers.

C) Have the same numbers.

D) Should be performed simultaneously.

Answer: A Diff: 1 Section: 9.3 Developing a Network LO: 9.1: Understand and apply key scheduling terminology.

Classification: Concept AACSB: Application of Knowledge

7) Concurrent activities are: A) Activities that must be done one after the other.

B) Activities that can be performed at the same time.

C) Activities that use labor from the same group of workers.

D) Activities that use resources from the same resource pool.

Answer: B Diff: 1 Section: 9.3 Developing a Network LO: 9.1: Understand and apply key scheduling terminology.

Classification: Concept AACSB: Application of Knowledge

8) Which of these statements about this network is BEST? A) Activities A and B are serial activities.

B) Activities B and C are serial activities.

C) Activities A and C are serial activities.

D) Activity D is a merge activity.

Answer: D Diff: 1 Section: 9.3 Developing a Network LO: 9.1: Understand and apply key scheduling terminology.

Classification: Application AACSB: Application of Knowledge 9) A backward pass is performed when it is necessary to undo some work that has been performed in order to complete it properly.

Answer: FALSE Diff: 1 Section: 9.2 Key Scheduling Terminology LO: 9.1: Understand and apply key scheduling terminology.

Classification: Concept AACSB: Application of Knowledge

10) Draw a network of any size that has at least one of each of the following features: merge activity, burst activity, hammock activity, ladder activity, critical path, serial activities, concurrent activities, and float. Mark these features on your network.

Answer: Answers will vary, but here's an example. Activity C is a merge because it has two predecessors and a burst activity because it has two successors. Activities A and B are concurrent activities and activities D and F are serial activities. Activities E and G have been laddered and activities H and I are represented by a hammock activity. The critical path consists of activities ACDFHIJ. Activities B, E, and G have float.

Diff: 2 Section: 9.2 Key Scheduling Terminology LO: 9.1: Understand and apply key scheduling terminology.

Classification: Application AACSB: Application of Knowledge

11) What is the background of CPM and PERT? What are the differences between the two techniques?

Answer: PERT and CPM are the two primary methods for developing activity networks. PERT, which stands for Program Evaluation and Review Technique, was developed in the late 1950s in collaboration between the U.S. Navy, Booz-Allen Hamilton, and Lockheed Corporation for the creation of the Polaris missile program. PERT originally was used in research and development (R&D), a field in which activity duration estimates can be difficult to make, and resulted from probability analysis. CPM, or Critical Path Method, was developed independently at the same time as PERT by DuPont, Inc. CPM, used commonly in the construction industry, differs from PERT primarily in the assumptions it makes about estimating activity durations. CPM assumes that durations are more deterministic; that is, they are easier to ascertain and can be assigned to activities with greater confidence. Further, CPM was designed to better link (and therefore control) project activity time and costs, particularly the time/cost trade-offs that lead to crashing decisions (speeding up the project). In practice, however, over the years the differences between PERT and CPM have blurred to the point where it is now common to simply refer to these networking techniques as PERT/CPM. Diff: 2 Section: 9.3 Developing a Network LO: 9.1: Understand and apply key scheduling terminology.

Classification: Application AACSB: Application of Knowledge

12) Network logic suggests that: A) Activity D can start any time.

B) Activity A must be complete before Activity B can be done.

C) Activities A, B and C must be complete before Activity D can be done.

D) Activity C must begin before Activity B begins.

Answer: C Diff: 1 Section: 9.3 Developing a Network LO: 9.2: Apply the logic used to create activity networks, including predecessor and successor tasks.

Classification: Application AACSB: Application of Knowledge

13) Based on the activity network pictured, what is the BEST statement?

A) Before starting Activity C, Activity A and Activity B must be completed.

B) Before starting Activity D, Activity A and Activity B need to be completed.

C) Before starting Activity E, Activity A and Activity B need to be completed.

D) Before starting Activity C, Activity A and Activity D must be completed.

Answer: A Diff: 1 Section: 9.3 Developing a Network LO: 9.2: Apply the logic used to create activity networks, including predecessor and successor tasks.

Classification: Critical Thinking AACSB: Analytical Thinking 14) Based on the activity network pictured, what is the BEST statement?

A) Activity C is a burst activity.

B) Activity E has one predecessor, Activity B. C) Activity A and Activity C are merge activities.

D) There are no serial activities in this network.

Answer: B Diff: 1 Section: 9.3 Developing a Network LO: 9.2: Apply the logic used to create activity networks, including predecessor and successor tasks.

Classification: Concept AACSB: Application of Knowledge

15) There's an old saying, "The job is not finished until the paperwork is done." From an activity network standpoint, this does not necessarily mean that the paperwork can't begin until the last non-paperwork activity is completed. It might be possible to work on some paperwork as early activities are completed. In order to depict this in an activity network: A) Hammock activities could be drawn.

B) Subroutines could be added.

C) Shortcuts can be added to the network.

D) Laddering could be used to redraw the network.

Answer: D Diff: 2 Section: 9.5 Constructing the Critical Path LO: 9.2: Apply the logic used to create activity networks, including predecessor and successor tasks.

Classification: Application AACSB: Application of Knowledge 16) The overall effect of laddering activities is to: A) Streamline the linkage and sequencing between activities and keep project resources fully employed.

B) Summarize some subsets of the activities identified in the overall project network.

C) Allow the project team to disaggregate the overall project network into logical summaries.

D) Allow the project manager to more fully deploy resources and complete the project with zero slack.

Answer: A Diff: 2 Section: 9.5 Constructing the Critical Path LO: 9.2: Apply the logic used to create activity networks, including predecessor and successor tasks.

Classification: Application AACSB: Application of Knowledge 17) Summaries for some subsets of the activities identified in the overall project network are called: A) Ladder activities.

B) Hammock activities.

C) Negative float activities.

D) Compressed activities.

Answer: B Diff: 2 Section: 9.5 Constructing the Critical Path LO: 9.2: Apply the logic used to create activity networks, including predecessor and successor tasks.

Classification: Concept AACSB: Application of Knowledge

18) Hammock activities allow: A) Project managers to streamline the linkage and sequencing between activities.

B) Project workers to effectively skip nonessential activities without compromising project quality.

C) The project team to better disaggregate the overall project network into subsets.

D) The project manager to identify float more quickly and leverage it more successfully for the overall success of the project.

Answer: C Diff: 2 Section: 9.5 Constructing the Critical Path LO: 9.2: Apply the logic used to create activity networks, including predecessor and successor tasks.

Classification: Concept AACSB: Application of Knowledge

19) Activities C, D, and E in the project represented by the network are to be hammocked. What is the activity length of the hammock activity?

A) 20 B) 16 C) 13 D) 11 Answer: A Diff: 1 Section: 9.5 Constructing the Critical Path LO: 9.2: Apply the logic used to create activity networks, including predecessor and successor tasks.

Classification: Critical Thinking AACSB: Analytical Thinking

20) Activities C, D, and E in the project represented by the network are to be hammocked. What are the early start and late finish times of the hammock activity?

A) 6, 20 B) 6, 26 C) 9, 20 D) 9, 26 Answer: B Diff: 2 Section: 9.5 Constructing the Critical Path LO: 9.2: Apply the logic used to create activity networks, including predecessor and successor tasks.

Classification: Critical Thinking AACSB: Analytical Thinking 21) Preceding activities are those that must occur before others can be done.

Answer: TRUE Diff: 1 Section: 9.1 Project Scheduling LO: 9.2: Apply the logic used to create activity networks, including predecessor and successor tasks.

Classification: Concept AACSB: Application of Knowledge 22) A merge activity has two or more immediate predecessors.

Answer: TRUE Diff: 1 Section: 9.2 Key Scheduling Terminology LO: 9.2: Apply the logic used to create activity networks, including predecessor and successor tasks.

Classification: Concept AACSB: Application of Knowledge 23) Burst activities are those with two or more successor activities.

Answer: FALSE Diff: 1 Section: 9.3 Developing a Network LO: 9.2: Apply the logic used to create activity networks, including predecessor and successor tasks.

Classification: Concept AACSB: Application of Knowledge

24) At a merge point in a forward pass, the largest preceding early finish becomes the early start for that node.

Answer: TRUE Diff: 2 Section: 9.5 Constructing the Critical Path LO: 9.2: Apply the logic used to create activity networks, including predecessor and successor tasks.

Classification: Concept AACSB: Application of Knowledge 25) At a burst point in a backward pass, the largest succeeding late start becomes the late finish for that node.

Answer: FALSE Diff: 2 Section: 9.5 Constructing the Critical Path LO: 9.2: Apply the logic used to create activity networks, including predecessor and successor tasks.

Classification: Concept AACSB: Application of Knowledge 26) What does a network diagram illustrate and why are they important in project management?

Answer: A network diagram is a schematic display of the project's work packages and the logical relationships and interdependencies among them. For this reason, the network diagram facilitates communication flows and helps with the master scheduling of organizational resources because it shows times when personnel must be fully committed to project activities. The network diagram also identifies the critical activities and distinguishes them from the less critical and when each must start and end in order to keep the project on schedule and complete it on time.

Diff: 2 Section: 9.1 Project Scheduling LO: 9.2: Apply the logic used to create activity networks, including predecessor and successor tasks.

Classification: Application AACSB: Application of Knowledge

27) Consider a project composed of activities X and Y having equal length and performed in that order. Both activities can be laddered such that the first half of each activity is the predecessor for its own second half, so X1 precedes X2 and Y1 precedes Y2. The first half of X1 is also the predecessor for Y1. If the laddering procedure were performed again activities X and Y would be divided in four parts each, with precedence working as it did in the first split. Derive an expression for the minimum length of the project as laddering increases.

Answer: The original length of the project is X+Y. When laddering is performed the first time, the project length becomes X1+Y1+Y2; this is because X2 can be performed concurrently with Y1. If the activities are divided again, the project length will be X1+Y1+Y2+Y3+Y4; because X2 can be performed concurrently with Y1, X3 can be performed concurrently with Y2, and X4 can be performed concurrently with Y3.

In general, the project can be viewed as the length of Y plus the waiting time while completing the length of sub-activity X1. As the number of iterations of laddering these activities becomes large, the length of sub-activity X1 becomes small, reducing project length to the length of activity Y. Expressed mathematically where P is the project length: Without laddering 1st ladder

P=x+y P= +y

2nd ladder

P=

Subsequent

P=

+y =y

Diff: 3 Section: 9.5 Constructing the Critical Path LO: 9.2: Apply the logic used to create activity networks, including predecessor and successor tasks.

Classification: Critical Thinking AACSB: Analytical Thinking 28) What are hammock activities and when should they be used?

Answer: Hammock activities can be used as summaries for some subsets of the activities identified in the overall project network. The hammock is named so because it hangs below the network path for tasks it is summarizing and serves as an aggregation for the activities it rolls up.

Hammocks allow the project team to better disaggregate the overall project network into logical summaries. The process is helpful when the project network is extremely complex or consists of a large number of individual activities. It is also useful when the project budget if actually shared among a number of cost centers or departments. Hammocking the activities that are assignable to each cost center makes the job of cost accounting for the project easier.

Diff: 1 Section: 9.5 Constructing the Critical Path LO: 9.2: Apply the logic used to create activity networks, including predecessor and successor tasks.

Classification: Concept AACSB: Application of Knowledge 29) Prior to creating a network, it is important to: A) Identify all loops through activities.

B) Identify the party responsible for each activity.

C) Calculate the float for each activity.

D) Understand the activity precedence.

Answer: D Diff: 2 Section: 9.3 Developing a Network LO: 9.3: Develop a network using Activity-on-Node (AON) techniques.

Classification: Application AACSB: Application of Knowledge 30) The length of time expected to complete an activity assuming that its development proceeds normally is called the: A) Optimistic duration.

B) Pessimistic duration.

C) Most likely duration.

D) Normal duration.

Answer: C Diff: 1 Section: 9.4 Duration Estimation LO: 9.4: Perform activity duration estimation based on the use of probabilistic estimating techniques.

Classification: Concept AACSB: Application of Knowledge 31) Ray's shipment of materials hit every red light and traffic jam on the way to the site. Upon arrival, half of the material was judged defective, necessitating a trip back to the supplier, and then the same arduous journey back to the site once the new materials were loaded. Traffic was a little better on the second round but the flat tire and subsequent repair caused as much if not more delay than the first trip. In the final analysis: A) The project activity of Material Delivery was pretty close to the optimistic estimate.

B) The project activity of Material Delivery was pretty close to the most likely estimate.

C) The project activity of Material Delivery had a much higher variance than anticipated.

D) The project activity of Material Delivery was pretty close to the pessimistic estimate.

Answer: D Diff: 1 Section: 9.4 Duration Estimation LO: 9.4: Perform activity duration estimation based on the use of probabilistic estimating techniques.

Classification: Concept AACSB: Application of Knowledge

32) The variance of an activity is given by: A) [1/6(b-a)]2.

B) 1/6[b-a].

C) [1/36(b-a)]2.

D) 1/36[b-a].

Answer: A Diff: 2 Section: 9.4 Duration Estimation LO: 9.4: Perform activity duration estimation based on the use of probabilistic estimating techniques.

Classification: Concept AACSB: Analytical Thinking 33) An activity has an optimistic time estimate of 25 days, a most likely estimate of 29 days, and a pessimistic estimate of 34 days. What is the expected duration of the activity?

A) Less than 31 days but greater than or equal to 29 days B) Less than 29 days but greater than or equal to 27 days C) Less than 27 days but greater than or equal to 25 days D) Less than 25 days Answer: A Diff: 2 Section: 9.4 Duration Estimation LO: 9.4: Perform activity duration estimation based on the use of probabilistic estimating techniques.

Classification: Critical Thinking AACSB: Analytical Thinking 34) An activity has an optimistic time estimate of 17 days, a most likely estimate of 23 days, and a pessimistic estimate of 37 days. What is the variance of the activity?

A) 3.33 B) 6.66 C) 9.99 D) 11.11 Answer: D Diff: 2 Section: 9.4 Duration Estimation LO: 9.4: Perform activity duration estimation based on the use of probabilistic estimating techniques.

Classification: Critical Thinking AACSB: Analytical Thinking

35) An activity has an optimistic time estimate of 17 days, a most likely estimate of 22 days, and a pessimistic estimate of 32 days. What is the expected duration of the activity?

A) 22.83 days B) 23.67 days C) 24.33 days D) 25.17 days Answer: A Diff: 2 Section: 9.4 Duration Estimation LO: 9.4: Perform activity duration estimation based on the use of probabilistic estimating techniques.

Classification: Critical Thinking AACSB: Analytical Thinking 36) An activity has an optimistic time estimate of 12 days, a most likely estimate of 16 days, and a pessimistic estimate of 22 days. What is the expected standard deviation of the activity?

A) Between 1 and 2 days B) Between 2 and 3 days C) Between 3 and 4 days D) Between 4 and 5 days Answer: A Diff: 2 Section: 9.4 Duration Estimation LO: 9.4: Perform activity duration estimation based on the use of probabilistic estimating techniques.

Classification: Critical Thinking AACSB: Analytical Thinking 37) An activity has a pessimistic time that is four times as long as its most likely time and six times as long as its optimistic time. If the activity variance is 12, what is the expected time?

A) About 8 days B) About 9 days C) About 10 days D) About 11 days Answer: A Diff: 2 Section: 9.4 Duration Estimation LO: 9.4: Perform activity duration estimation based on the use of probabilistic estimating techniques.

Classification: Critical Thinking AACSB: Analytical Thinking

38) Activity Z has estimates a = 5, b = 12, m = 7; activity X has estimates a = 5, b = 11, m = 6; and activity Y has estimates a = 3, b = 11, m = 8. Which of the following statements is BEST? A) Activity X is longer than Activity Y. B) Activity X has a higher standard deviation than Activity Z. C) Activity Z is shorter than Activity Y. D) Activity Y has a smaller variance than Activity Z. Answer: C Diff: 2 Section: 9.4 Duration Estimation LO: 9.4: Perform activity duration estimation based on the use of probabilistic estimating techniques.

Classification: Critical Thinking AACSB: Analytical Thinking 39) Project Test Bank is composed of activities we will refer to as A, B, C, and D for convenience (and lack of creativity). Durations and precedence requirements are shown in the table. Each of these activities can be conveniently laddered into two sub-activities of equal duration. The first half of each activity serves as the predecessor to its second half and the first half of the original following activity. What is the expected completion time of the laddered project?

Activity Length Predecessor A 10 -B 18 A C 14 A D 20 B, C A) 34 B) 38 C) 42 D) 48 Answer: A Diff: 3 Section: 9.5 Constructing the Critical Path LO: 9.4: Perform activity duration estimation based on the use of probabilistic estimating techniques.

Classification: Critical Thinking AACSB: Analytical Thinking

40) Project Test Bank is composed of activities we will refer to as A, B, C, and D for convenience (and lack of creativity). Durations and precedence requirements are shown in the table. Each of these activities can be conveniently laddered into two sub-activities of equal duration. The first half of each activity serves as the predecessor to its second half and the first half of the original following activity. What is the expected completion time of the laddered project?

Activity Length Predecessor A 10 -B 18 A C 14 A D 20 B, C A) 34 B) 38 C) 42 D) 48 Answer: B Diff: 3 Section: 9.5 Constructing the Critical Path LO: 9.4: Perform activity duration estimation based on the use of probabilistic estimating techniques.

Classification: Critical Thinking AACSB: Analytical Thinking

41) A gentleman farmer maniacally works on academic projects to raise funds for his true passion, farming. He has identified seven tasks and developed three time estimates (all in days) of the next big project on the farm, replacing the fence at the comedy pasture. Tasks, precedence requirements, and time estimates are shown in the table. What is the expected completion time of the project?

Activity Corner Posts String Line Dig Holes Plant Posts Weld Top Bar

Optimistic Most Likely Pessimistic time time time Predecessor 4 5 6 -7 8 9 -10 12 14 Corner Posts 11 14 17 String Line 8 11 14 String Line Dig Holes, Plant 9 11 13 Posts 9 12 16 Weld Top Bar

Paint Tack Wire A) 32 days B) 33 days C) 34 days D) 35 days Answer: B Diff: 1 Section: 9.5 Constructing the Critical Path LO: 9.4: Perform activity duration estimation based on the use of probabilistic estimating techniques.

Classification: Critical Thinking AACSB: Analytical Thinking

42) A gentleman farmer maniacally works on academic projects to raise funds for his true passion, farming. He has identified seven tasks and developed three time estimates (all in days) of the next big project on the farm, replacing the fence at the comedy pasture. Tasks, precedence requirements, and time estimates are shown in the table. What is the standard deviation of the project's critical path?

Activity Corner Posts String Line Dig Holes Plant Posts Weld Top Bar

Optimistic Most Likely Pessimistic time time time Predecessor 4 5 6 -7 8 9 -10 12 14 Corner Posts 11 14 17 String Line 8 11 14 String Line Dig Holes, Plant 9 11 13 Posts 9 12 16 Weld Top Bar

Paint Tack Wire A) 1.33 days B) 1.56 days C) 1.25 days D) 1.75 days Answer: B Diff: 1 Section: 9.5 Constructing the Critical Path LO: 9.4: Perform activity duration estimation based on the use of probabilistic estimating techniques.

Classification: Critical Thinking AACSB: Analytical Thinking 43) You must know the mean of an activity in order to determine its standard deviation.

Answer: FALSE Diff: 2 Section: 9.4 Duration Estimation LO: 9.4: Perform activity duration estimation based on the use of probabilistic estimating techniques.

Classification: Concept AACSB: Application of Knowledge 44) In assigning a value for the most pessimistic (b) duration, the project manager should estimate the duration of the activity to have a 99% likelihood that it will take b or less amount of time.

Answer: TRUE Diff: 2 Section: 9.4 Duration Estimation LO: 9.4: Perform activity duration estimation based on the use of probabilistic estimating techniques.

Classification: Concept AACSB: Application of Knowledge 45) The late start time should be calculated using a forward pass through the network.

Answer: FALSE

Diff: 2 Section: 9.4 Duration Estimation LO: 9.4: Perform activity duration estimation based on the use of probabilistic estimating techniques.

Classification: Concept AACSB: Application of Knowledge 46) Laddering is a technique that allows the project manager to redraw the network to more closely sequence project subtasks to make the overall network sequence more efficient.

Answer: TRUE Diff: 2 Section: 9.4 Duration Estimation LO: 9.4: Perform activity duration estimation based on the use of probabilistic estimating techniques.

Classification: Concept AACSB: Application of Knowledge 47) Hammock activities break a task into greater levels of detail so that each task is represented as two or more subtasks that each have their own duration and precedence requirements.

Answer: FALSE Diff: 2 Section: 9.4 Duration Estimation LO: 9.4: Perform activity duration estimation based on the use of probabilistic estimating techniques.

Classification: Concept AACSB: Application of Knowledge 48) What are three methods of duration estimation for project activities and what are the advantages and disadvantages of each method?

Answer: The text presents three alternative ways to estimate times, including past experience, expert opinion, and mathematical derivation. Past experience is easily leveraged but it assumes that the circumstances are the same and that what worked in the past will work tomorrow. Expert opinion calls upon past project managers or subject matter experts to get accurate information on activity estimates. Experts should have knowledge about how to perform an activity and how long it should take, but if they are not used to performing the work, their estimates may be too low. Mathematical derivation offers an objective alternative to activity estimation by calling for optimistic, most likely, and pessimistic estimates of each activity. The gain in objectivity may be offset by the pain of developing three time estimates for each activity instead of just one.

Diff: 2 Section: 9.4 Duration Estimation LO: 9.4: Perform activity duration estimation based on the use of probabilistic estimating techniques.

Classification: Application AACSB: Application of Knowledge 49) Use the values in the table to calculate activity durations and variances for the project. Which path is critical? How closely should the other path be watched and why?

Activity A B

Predecessor -A

Optimistic 4 2

Likely 6 5

Pessimistic 10 8

C A 6 7 9 D B 3 9 20 E C 7 9 11 F D,E 7 11 19 Answer: The critical path is ACEF at 34.17 days and path ABDF has duration of 32.83 days.

The path variances are ACEF=5.69 and ABDF=14.02, resulting in standard deviations of 2.39 and 3.75 days, respectively. The higher variability associated with the non-critical path is cause for concern; it will take a movement of only one standard deviation above the mean for the noncritical path to become critical.

Diff: 3 Section: 9.4 Duration Estimation LO: 9.4: Perform activity duration estimation based on the use of probabilistic estimating techniques.

Classification: Critical Thinking AACSB: Analytical Thinking

50) Use the values in the table to calculate activity durations and variances for the project. Which path is critical? How closely should the other path be watched and why?

Activity Predecessor Optimistic Likely Pessimistic A -5 7 10 B A 4 6 9 C A 10 13 18 D B 8 11 15 E C, D 2 3 5 Answer: The estimated activity lengths and variances appear in the table below.

A B C D E

Most Optimistic Likely time time 5 7 4 6 10 13 8 11 2 3

Pessimistic Activity Standard time time Deviation Variance 10 7.17 0.83 0.69 9 6.17 0.83 0.69 18 13.33 1.33 1.78 15 11.17 1.17 1.36 5 3.17 0.5 0.25

The critical path is ABDE at 27.67 days and path ACE has duration of 23.67 days. The path variances are ABDE=3 and ACE=2.72, resulting in standard deviations of 1.732 and 1.65 days, respectively. The critical path is more highly variable and the only activity that is non-critical, activity C, has a pessimistic time that if achieved, would make its path just slightly longer than the critical path if all of its activities hit their expected time.

Diff: 2 Section: 9.4 Duration Estimation LO: 9.4: Perform activity duration estimation based on the use of probabilistic estimating techniques.

Classification: Critical Thinking AACSB: Analytical Thinking

51) What is the underlying theory to the three time estimates approach? What data distribution should be applied in this case and what confidence should a project manager place in the calculations associated with this technique?

Answer: Probability suggests that the amount of time that an activity is likely to take is rarely deterministic; rather it is stochastic and found as the result of sampling a range of likelihoods of the event occurring. These likelihoods range from zero to one. In order to derive a reasonable estimate for the activity's duration, we identify the activity's most likely, pessimistic, and optimistic durations. From these time estimates we can use a symmetrical or asymmetrical probability distribution to develop a mean and standard deviation for each activity. A normal distribution might be used if the optimistic and pessimistic estimates are symmetrical to the mean and a beta distribution can be employed if the estimates are asymmetrical. The goal is to achieve a high level of confidence for the probability estimates; the higher the better in order to achieve a better estimate for the project duration.

Diff: 1 Section: 9.4 Duration Estimation LO: 9.4: Perform activity duration estimation based on the use of probabilistic estimating techniques.

Classification: Application AACSB: Application of Knowledge

52) What is the earliest that Activity D can begin if Activity A takes 3 days, Activity B takes 5 days, and Activity C takes 7 days?

A) Day 15 B) Day 7 C) Day 5 D) Day 3 Answer: B Diff: 1 Section: 9.3 Developing a Network LO: 9.5: Construct the critical path for a project schedule network using forward and backward passes.

Classification: Critical Thinking AACSB: Analytical Thinking

53) What is the early start time for Activity D given the activity times and precedence requirements shown in the table?

Activity Time Predecessor A 5 -B 6 A C 4 A D 5 B, C A) 7 B) 9 C) 11 D) 13 Answer: C Diff: 2 Section: 9.5 Constructing the Critical Path LO: 9.5: Construct the critical path for a project schedule network using forward and backward passes.

Classification: Critical Thinking AACSB: Analytical Thinking 54) What is the late start time for Activity B given the activity times and precedence requirements shown in the table?

Activity Time Predecessor A 5 -B 6 A C 4 A D 5 B, C A) 11 B) 9 C) 7 D) 5 Answer: D Diff: 2 Section: 9.5 Constructing the Critical Path LO: 9.5: Construct the critical path for a project schedule network using forward and backward passes.

Classification: Critical Thinking AACSB: Analytical Thinking

55) What is the late start time for Activity E given the activity times and precedence requirements shown in the table?

Activity Time Predecessor A 5 -B 7 -C 8 A D 7 A E 4 B F 8 C, D G 9 E, F H 7 G A) 14 B) 15 C) 16 D) 17 Answer: D Diff: 3 Section: 9.5 Constructing the Critical Path LO: 9.5: Construct the critical path for a project schedule network using forward and backward passes.

Classification: Critical Thinking AACSB: Analytical Thinking

56) What is the late finish time for Activity D given the activity times and precedence requirements shown in the table?

Activity Time Predecessor A 5 -B 7 -C 8 A D 7 A E 4 B F 8 C, D G 9 E, F H 7 G A) 14 B) 13 C) 12 D) 11 Answer: B Diff: 3 Section: 9.5 Constructing the Critical Path LO: 9.5: Construct the critical path for a project schedule network using forward and backward passes.

Classification: Critical Thinking AACSB: Analytical Thinking 57) What is the early start time for Activity G given the activity times and precedence requirements shown in the table?

Activity Time Predecessor A 5 -B 7 -C 8 A D 7 A E 4 B F 8 C, D G 9 E, F H 7 G A) 22 B) 21 C) 20 D) 19 Answer: B Diff: 3 Section: 9.5 Constructing the Critical Path LO: 9.5: Construct the critical path for a project schedule network using forward and backward passes.

Classification: Critical Thinking AACSB: Analytical Thinking 58) What is the early finish time for Activity F given the activity times and precedence requirements shown in the table?

Activity Time Predecessor A 5 -B 7 -C 8 A D 7 A E 4 B F 8 C, D G 9 E, F H 7 G A) 15 B) 17 C) 19 D) 21 Answer: D Diff: 3 Section: 9.5 Constructing the Critical Path LO: 9.5: Construct the critical path for a project schedule network using forward and backward passes.

Classification: Critical Thinking AACSB: Analytical Thinking 59) Use the information in the table to determine the late start time for Activity E. Early Duration Start 8

Early Finish

Late Start

Late Finish

Task Predecessor A -B A 14 C A 23 8 D C, B 6 23 26 E C 32 F D, E 32 38 A) Day 23 B) Day 26 C) Day 32 D) Day 17 Answer: A Diff: 3 Section: 9.5 Constructing the Critical Path LO: 9.5: Construct the critical path for a project schedule network using forward and backward passes.

Classification: Critical Thinking AACSB: Analytical Thinking 60) Use the information in the table to determine the early start time for Activity B.

Task A B

Early Predecessor Duration Start -8 A

Early Finish

Late Start 14

Late Finish

C A 23 8 D C, B 6 23 26 E C 32 F D, E 32 38 A) Day 10 B) Day 8 C) Day 9 D) Day 11 Answer: B Diff: 1 Section: 9.5 Constructing the Critical Path LO: 9.5: Construct the critical path for a project schedule network using forward and backward passes.

Classification: Critical Thinking AACSB: Analytical Thinking 61) Use the information in the table to determine the early finish time for Activity D. Early Early Late Late Task Predecessor Duration Start Finish Start Finish A -8 B A 14 C A 23 8 D C, B 6 23 26 E C 32 F D, E 32 38 A) Day 23 B) Day 26 C) Day 29 D) Day 32 Answer: C Diff: 3 Section: 9.5 Constructing the Critical Path LO: 9.5: Construct the critical path for a project schedule network using forward and backward passes.

Classification: Critical Thinking AACSB: Analytical Thinking

62) Use the information in the table to determine the late finish time for Activity B. Early Predecessor Duration Start -8 A A C, B 6 23 C D, E 32

Early Finish

Late Start

Late Finish

Task A B 14 C 23 8 D 26 E 32 F 38 A) Day 17 B) Day 20 C) Day 23 D) Day 26 Answer: D Diff: 3 Section: 9.5 Constructing the Critical Path LO: 9.5: Construct the critical path for a project schedule network using forward and backward passes.

Classification: Critical Thinking AACSB: Analytical Thinking

63) Use the network diagram and activity lengths in the nodes to determine the early start time for activity D. A) 8 B) 13 C) 14 D) 21 Answer: C Diff: 1 Section: 9.5 Constructing the Critical Path LO: 9.5: Construct the critical path for a project schedule network using forward and backward passes.

Classification: Critical Thinking AACSB: Analytical Thinking 64) Use the network diagram and activity lengths in the nodes to determine the late start time for activity F.

A) 21 B) 24 C) 26 D) 23 Answer: D Diff: 2 Section: 9.5 Constructing the Critical Path LO: 9.5: Construct the critical path for a project schedule network using forward and backward passes.

Classification: Critical Thinking AACSB: Analytical Thinking 65) Use the network diagram and activity lengths in the nodes to determine the early finish time for activity G. A) 26 B) 25 C) 24 D) 23 Answer: A Diff: 1 Section: 9.5 Constructing the Critical Path LO: 9.5: Construct the critical path for a project schedule network using forward and backward passes.

Classification: Critical Thinking AACSB: Analytical Thinking 66) Use the network diagram and activity lengths in the nodes to determine the late finish time for activity C. A) 12 B) 13 C) 14 D) 15 Answer: C Diff: 2 Section: 9.5 Constructing the Critical Path LO: 9.5: Construct the critical path for a project schedule network using forward and backward passes.

Classification: Critical Thinking AACSB: Analytical Thinking

67) Use the network diagram and activity lengths in the nodes to determine the early start time for activity D. A) 8 B) 13 C) 14 D) 21 Answer: C Diff: 1 Section: 9.5 Constructing the Critical Path LO: 9.5: Construct the critical path for a project schedule network using forward and backward passes.

Classification: Critical Thinking AACSB: Analytical Thinking 68) Project Test Bank is composed of activities we will refer to as A, B, C, and D for convenience (and lack of creativity). Durations and precedence requirements are shown in the table. Each of these activities can be conveniently laddered into two sub-activities of equal duration, so activity C in the original project becomes two activities, C1 and C2, each of which lasts 7 days. The first half of each activity serves as the predecessor to its second half and the first half of the original following activity. What is the difference in the late start time for activity C in the original project and activity C1 in the laddered project?

Activity Length Predecessor A 10 -B 18 A C 14 A D 20 B, C A) 3 B) 5 C) 7 D) 9 Answer: C Diff: 3 Section: 9.5 Constructing the Critical Path LO: 9.5: Construct the critical path for a project schedule network using forward and backward passes.

Classification: Critical Thinking AACSB: Analytical Thinking

69) A gentleman farmer maniacally works on academic projects to raise funds for his true passion, farming. He has identified seven tasks and developed three time estimates (all in days) of the next big project on the farm, replacing the fence at the comedy pasture. Tasks, precedence requirements, and time estimates are shown in the table. What is the late finish for the Plant Posts activity?

Activity Corner Posts String Line Dig Holes Plant Posts Weld Top Bar

Optimistic Most Likely Pessimistic time time time Predecessor 4 5 6 -7 8 9 -10 12 14 Corner Posts 11 14 17 String Line 8 11 14 String Line Dig Holes, Plant 9 11 13 Posts 9 12 16 Weld Top Bar

Paint Tack Wire A) 13.3 days B) 8 days C) 20.83 days D) 22 days Answer: D Diff: 1 Section: 9.5 Constructing the Critical Path LO: 9.5: Construct the critical path for a project schedule network using forward and backward passes.

Classification: Critical Thinking AACSB: Analytical Thinking

70) A project has the precedence requirements and activity durations shown in the table. After he draws the network, the project manager decides that activities B, C, and D can be represented by a hammock activity. What are the early start and late finish times associated with this hammock activity?

Time Predecessor A 7 B 8 A C 13 B D 8 C E 7 A F 6 E G 6 A H 11 G I 12 H J 14 D, F, I A) 11, 30 B) 7, 24 C) 11, 24 D) 7, 36 Answer: D Diff: 2 Section: 9.5 Constructing the Critical Path LO: 9.5: Construct the critical path for a project schedule network using forward and backward passes.

Classification: Critical Thinking AACSB: Analytical Thinking

71) A project has the precedence requirements and activity durations shown in the table. After he draws the network, the project manager decides that activities H and I can be represented by a hammock activity. What are the early start and late finish times associated with this hammock activity?

Time Predecessor A 7 B 8 A C 13 B D 8 C E 7 A F 6 E G 6 A H 11 G I 12 H J 14 D, F, I A) 13, 36 B) 13, 24 C) 24, 36 D) 7, 36 Answer: A Diff: 2 Section: 9.5 Constructing the Critical Path LO: 9.5: Construct the critical path for a project schedule network using forward and backward passes.

Classification: Critical Thinking AACSB: Analytical Thinking

72) Construct a network using the information in the table and identify the critical path.

Activity Time Predecessor A 4 B 6 A C 9 A D 11 B E 16 B, C F 4 D G 8 E, F H 7 G Answer: The network appears below; critical path is ACEGH. Early and late start and finish times are in the table below the network.

Early Early Start Finish 0 4 4 10 4 13 10 21 13 29 21 25 29 37 37 44

Late Late Start Finish 0 4 7 13 4 13 14 25 13 29 25 29 29 37 37 44

Task A B C D E F G H Diff: 2 Section: 9.5 Constructing the Critical Path LO: 9.5: Construct the critical path for a project schedule network using forward and backward passes.

Classification: Critical Thinking AACSB: Analytical Thinking

73) Compute early and late start and finish times for the network shown.

Answer: Early and late start and finish times are given in the table.

Early Early Start Finish 0 6 6 11 18 27 6 10 18 30 6 18 30 38

Late Late Start Finish 0 6 16 21 21 30 14 18 18 30 6 18 30 38

Task A B C D E F G Diff: 2 Section: 9.5 Constructing the Critical Path LO: 9.5: Construct the critical path for a project schedule network using forward and backward passes.

Classification: Critical Thinking AACSB: Analytical Thinking

74) Use the information in the table to sketch the network and compute early and late start times.

Activity Time Predecessor A 8 B 4 A C 5 B, F D 12 A E 8 D F 4 D G 9 E, F H 12 G I 6 C, G J 5 I K 9 H L 12 J, K Answer: The early and late start times are shown in the table and the network is below: Task A B C D E F G H I J K L

Early Start 0 8 24 8 20 20 28 37 37 43 49 58

Early Finish Late Start 8 0 12 38 29 42 20 8 28 20 24 24 37 28 49 37 43 47 48 53 58 49 70 58

Late Finish 8 42 47 20 28 28 37 49 53 58 58 70

Diff: 2 Section: 9.5 Constructing the Critical Path LO: 9.5: Construct the critical path for a project schedule network using forward and backward passes.

Classification: Critical Thinking AACSB: Analytical Thinking

75) Use the information in the table to sketch the network and compute early and late start times.

Activity Time Predecessor A 8 B 4 A C 5 B, F D 12 A E 8 D F 4 D G 9 E, F Answer: The early and late start times are shown in the table and the network is below: Activity Activity time A 5 B 7 C 8 D 4 E 11 F 8 G 14

Early Start 0 5 5 12 13 24 32

Early Finish 5 12 13 16 24 32 46

Late Start 0 21 5 28 13 24 32

Late Finish 5 28 13 32 24 32 46

Slack 0 16 0 16 0 0 0

Diff: 2 Section: 9.5 Constructing the Critical Path LO: 9.5: Construct the critical path for a project schedule network using forward and backward passes.

Classification: Critical Thinking AACSB: Analytical Thinking

76) Phoebe B. Beebee is constructing a canal for the annual canoe races and has identified eleven activities that are required to complete this important project. She calculated early and late start times and early and late finish times but spilled coffee all over her printout. Use the remaining information to reconstruct the table for Phoebe B. Beebee and her new canoe canal.

Early Activity Predecessor Length Early Start Late Start Finish A -12 B A 20 C A D B, E 42 E C 28 F E 42 50 G D 53 53 H G 70 I G 72 J F 4 K H, I, J 81 Answer: The completed table appears below:

Late Finish

Early Predecessor Length Early Start Late Start Finish -12 0 0 12 A 20 12 22 32 A 16 12 12 28 B, E 11 42 42 53 C 14 28 28 42 E 8 42 69 50 D 17 53 53 70 G 11 70 72 81 G 9 70 72 79 F 4 50 77 54 H, I, J 10 81 81 91

Late Finish 12 42 28 53 42 77 70 81 81 81 91

42

91

Task A B C D E F G H I J K Diff: 3 Section: 9.5 Constructing the Critical Path LO: 9.5: Construct the critical path for a project schedule network using forward and backward passes.

Classification: Critical Thinking AACSB: Analytical Thinking

77) The amount of time an activity may be delayed from its early start without delaying the finish of the project is the: A) Delay.

B) Float.

C) Late start.

D) Late finish.

Answer: B Diff: 2 Section: 9.2 Key Scheduling Terminology LO: 9.6: Identify activity float and the manner in which it is determined.

Classification: Concept AACSB: Application of Knowledge 78) The least amount of float is found: A) In a resource-limited schedule.

B) After a burst activity.

C) On the critical path.

D) After a merge activity.

Answer: C Diff: 1 Section: 9.2 Key Scheduling Terminology LO: 9.6: Identify activity float and the manner in which it is determined.

Classification: Concept AACSB: Application of Knowledge 79) What is the slack time for Activity B given the activity times and precedence requirements shown in the table?

Activity Time Predecessor A 5 -B 7 -C 8 A D 7 A E 4 B F 8 C, D G 9 E, F H 7 G A) 10 B) 9 C) 8 D) 7 Answer: A Diff: 3 Section: 9.5 Constructing the Critical Path LO: 9.6: Identify activity float and the manner in which it is determined.

Classification: Critical Thinking AACSB: Analytical Thinking 80) What is the slack time for Activity D given the activity times and precedence requirements shown in the table?

Activity Time Predecessor A 5 -B 7 -C 8 A D 7 A E 4 B F 8 C, D G 9 E, F H 7 G A) 2 B) 1 C) 0 D) 3 Answer: B Diff: 3 Section: 9.5 Constructing the Critical Path LO: 9.6: Identify activity float and the manner in which it is determined.

Classification: Critical Thinking AACSB: Analytical Thinking 81) What is the float start time for Activity C given the activity times and precedence requirements shown in the table?

Activity Time Predecessor A 5 -B 7 A C 5 A D 7 B, C A) 1 B) 2 C) 3 D) 4 Answer: B Diff: 2 Section: 9.5 Constructing the Critical Path LO: 9.6: Identify activity float and the manner in which it is determined.

Classification: Critical Thinking AACSB: Analytical Thinking

82) Use the information in the table to determine the slack time for Activity B. Early Predecessor Duration Start -8 A A C, B 6 23 C D, E 32

Early Finish

Late Start

Late Finish

Task A B 14 C 23 8 D 26 E 32 F 38 A) 6 days B) 4 days C) 2 days D) 0 days Answer: A Diff: 3 Section: 9.5 Constructing the Critical Path LO: 9.6: Identify activity float and the manner in which it is determined.

Classification: Critical Thinking AACSB: Analytical Thinking 83) What is the slack time for activity E? Early Early Late Late Task Predecessor Duration Start Finish Start Finish A -8 B A 14 C A 23 8 D C, B 6 23 26 E C 32 F D, E 32 38 A) 0 days B) 1 day C) 2 days D) 4 days Answer: A Diff: 3 Section: 9.5 Constructing the Critical Path LO: 9.6: Identify activity float and the manner in which it is determined.

Classification: Critical Thinking AACSB: Analytical Thinking

84) Use the network diagram and activity lengths in the nodes to determine the slack time for activity D. A) 3 B) 2 C) 1 D) 0 Answer: D Diff: 1 Section: 9.5 Constructing the Critical Path LO: 9.6: Identify activity float and the manner in which it is determined.

Classification: Critical Thinking AACSB: Analytical Thinking 85) Float is always measured in exactly the same way as slack.

Answer: TRUE Diff: 2 Section: 9.2 Key Scheduling Terminology LO: 9.6: Identify activity float and the manner in which it is determined.

Classification: Concept AACSB: Application of Knowledge 86) Negative float exists when a project's critical path has been completed more quickly than anticipated.

Answer: TRUE Diff: 2 Section: 9.4 Duration Estimation LO: 9.6: Identify activity float and the manner in which it is determined.

Classification: Concept AACSB: Application of Knowledge

87) Activity float is the difference between the late finish and early finish for the activity in question.

Answer: TRUE Diff: 1 Section: 9.5 Constructing the Critical Path LO: 9.6: Identify activity float and the manner in which it is determined.

Classification: Concept AACSB: Application of Knowledge 88) An MBA student laboriously calculated the early and late start times and early and late finish times for all of the activities contained in this simple six activity project. Unfortunately, some of the information was washed away by lachrymal fluid. Kindly restore the table to its former glory by filling in the missing information.

Task A B C D E F

Early Predecessor Duration Start -8 A A C, B 6 23 C D, E 32

Early Finish

Late Start

23

14 8 26

Late Finish

32 38

Answer: Early Early Late Late Task Predecessor Duration Start Finish Start Finish A -8 0 8 0 8 B A 12 8 20 14 26 C A 15 8 23 8 23 D C, B 6 23 29 26 32 E C 9 23 32 23 32 F D, E 6 32 38 32 38 Diff: 3 Section: 9.5 Constructing the Critical Path LO: 9.6: Identify activity float and the manner in which it is determined.

Classification: Critical Thinking AACSB: Analytical Thinking

89) A gentleman farmer maniacally works on academic projects to raise funds for his true passion, farming. He has identified seven tasks and developed three time estimates (all in days) of the next big project on the farm, replacing the fence at the comedy pasture. Tasks, precedence requirements, and time estimates are shown in the table. What is the probability that the project is completed in 31 days?

Activity Corner Posts String Line Dig Holes Plant Posts Weld Top Bar

Optimistic Most Likely Pessimistic time time time Predecessor 4 5 6 -7 8 9 -10 12 14 Corner Posts 11 14 17 String Line 8 11 14 String Line Dig Holes, Plant 9 11 13 Posts 9 12 16 Weld Top Bar

Paint Tack Wire A) 0.055 B) 0.092 C) 0.125 D) 0.187 Answer: A Diff: 2 Section: 9.5 Constructing the Critical Path LO: 9.7: Calculate the probability of a project finishing on time under PERT estimates.

Classification: Critical Thinking AACSB: Analytical Thinking

90) A gentleman farmer maniacally works on academic projects to raise funds for his true passion, farming. He has identified seven tasks and developed three time estimates (all in days) of the next big project on the farm, replacing the fence at the comedy pasture. Tasks, precedence requirements, and time estimates are shown in the table. What is the probability that the project takes more than 34 days?

Activity Corner Posts String Line Dig Holes Plant Posts Weld Top Bar

Optimistic Most Likely Pessimistic time time time Predecessor 4 5 6 -7 8 9 -10 12 14 Corner Posts 11 14 17 String Line 8 11 14 String Line Dig Holes, Plant 9 11 13 Posts 9 12 16 Weld Top Bar

Paint Tack Wire A) 0.788 B) 0.212 C) 0.945 D) 0.055 Answer: B Diff: 2 Section: 9.5 Constructing the Critical Path LO: 9.7: Calculate the probability of a project finishing on time under PERT estimates.

Classification: Critical Thinking AACSB: Analytical Thinking 91) The PERT technique assumes that durations are more deterministic.

Answer: FALSE Diff: 2 Section: 9.3 Developing a Network LO: 9.7: Calculate the probability of a project finishing on time under PERT estimates.

Classification: Concept AACSB: Application of Knowledge

92) Use the values in the table to calculate activity durations and variances for the project. What is the likelihood of finishing this project within 47 days?

Activity Predecessor Optimistic Likely Pessimistic A -5 8 11 B A 15 20 25 C A 7 9 12 D A 12 16 20 E B, D 8 11 15 F C 13 17 22 G CE, F 8 9 10 Answer: The estimated activity lengths and variances appear in the table below.

Activity Early Activity time Start A 8 0 B 20 8 C 9.17 8 D 16 8 E 11.17 28 F 17.17 17.17 G 9 39.17 Project 48.17

Early Finish 8 28 17.17 24 39.17 34.33 48.17

Late Start 0 8 12.83 12 28 22 39.17

Late Finish 8 28 22 28 39.17 39.17 48.17

Standard Slack Deviation 0 1 0 1.67 4.83 0.83 4 1.33 0 1.17 4.83 1.5 0 0.33 2.29

Using only the critical path values of 48.17 for the mean and 2.29 for the standard deviation, the likelihood of finishing with 47 days is 0.304.

Diff: 2 Section: 9.5 Constructing the Critical Path LO: 9.7: Calculate the probability of a project finishing on time under PERT estimates.

Classification: Critical Thinking AACSB: Analytical Thinking

93) Use the values in the table to calculate activity durations and variances for the project. What is the likelihood that the project takes between 60 and 55 days to complete?

Standard Activity Activity time deviation Predecessor A 12 3 B 8 2 A C 9 1 A D 5 1 B E 12 0 B F 10 0 C G 7 2 C H 9 3 E, G I 15 2 D, G J 8 2 H K 11 3 I L 7 2 J, K Answer: The critical path is ACGIKL and has an expected duration of 61 days with a standard deviation of 5.57 days. The likelihood of finishing within 55 days is 0.1406 and the likelihood of finishing within 60 days is 0.4287. The difference between the two is 0.2881.

Diff: 2 Section: 9.5 Constructing the Critical Path LO: 9.7: Calculate the probability of a project finishing on time under PERT estimates.

Classification: Critical Thinking AACSB: Analytical Thinking

94) Use the values in the table to calculate activity durations and variances for the project. What is the project deadline such that there is a 75% chance it is completed on time?

Standard Activity Activity time deviation Predecessor A 12 3 B 8 2 A C 9 1 A D 5 1 B E 12 0 B F 10 0 C G 7 2 C H 9 3 E, G I 15 2 D, G J 8 2 H K 11 3 I L 7 2 J, K Answer: The critical path is ACGIKL and has an expected duration of 61 days with a standard deviation of 5.57 days. A 75% likelihood of completion is achieved at 0.67448975 standard deviations above the mean. Multiplying this value times the standard deviation of 5.57 days results in a value 3.75 days above the mean, which would be a goal of 64.7549 days.

Diff: 2 Section: 9.5 Constructing the Critical Path LO: 9.7: Calculate the probability of a project finishing on time under PERT estimates.

Classification: Critical Thinking AACSB: Analytical Thinking

95) Activities C, D, and E in the project represented by the network are to be hammocked. What are the late start and early finish times of the hammock activity?

A) 6, 24 B) 6, 26 C) 8, 24 D) 8, 26 Answer: C Diff: 2 Section: 9.5 Constructing the Critical Path LO: 9.8: Understand the steps that can be employed to reduce the critical path.

Classification: Critical Thinking AACSB: Analytical Thinking

96) A project has the precedence requirements and activity durations shown in the table. After he draws the network, the project manager decides to represent a few activities by a hammock activity. Which is a legitimate hammock activity for this project?

Time Predecessor A 7 B 8 A C 13 A D 8 A E 7 B F 6 C G 6 D H 11 E I 12 G J 14 H, F, I A) Combine activities A, B, C B) Combine activities B, E, H C) Combine activities E, F D) Combine activities G, H, I Answer: B Diff: 1 Section: 9.5 Constructing the Critical Path LO: 9.8: Understand the steps that can be employed to reduce the critical path.

Classification: Critical Thinking AACSB: Analytical Thinking

97) A project has the precedence requirements and activity durations shown in the table. After he draws the network, the project manager decides that activities E and F can be represented by a hammock activity. What are the duration and the early start time associated with this hammock activity?

Time Predecessor A 7 B 8 A C 13 B D 8 C E 7 A F 6 E G 6 A H 11 G I 12 H J 14 D, F, I A) 13, 36 B) 7, 0 C) 13, 7 D) 7, 14 Answer: C Diff: 1 Section: 9.5 Constructing the Critical Path LO: 9.8: Understand the steps that can be employed to reduce the critical path.

Classification: Critical Thinking AACSB: Analytical Thinking 98) One approach to reducing project length would be to: A) Convert parallel paths to be serial.

B) Convert merge activities to burst activities.

C) Use hammock activities in place of multiple activities.

D) Eliminate tasks on the critical path.

Answer: D Diff: 2 Section: 9.5 Constructing the Critical Path LO: 9.8: Understand the steps that can be employed to reduce the critical path.

Classification: Application AACSB: Application of Knowledge

99) A project's duration can be reduced by: A) Shortening the duration of critical path tasks.

B) Adding tasks to the critical path.

C) Adding shorter routes around the critical path.

D) Completing the backward pass first.

Answer: A Diff: 1 Section: 9.5 Constructing the Critical Path LO: 9.8: Understand the steps that can be employed to reduce the critical path.

Classification: Application AACSB: Application of Knowledge 100) The BEST candidate activities for shortening the overall project are: A) The shortest tasks.

B) The longest tasks.

C) The merge tasks.

D) The burst tasks.

Answer: B Diff: 1 Section: 9.5 Constructing the Critical Path LO: 9.8: Understand the steps that can be employed to reduce the critical path.

Classification: Application AACSB: Application of Knowledge 101) Which technique would accelerate the completion of a project?

A) Hammocking B) Bursting C) Laddering D) Passing Answer: C Diff: 1 Section: 9.5 Constructing the Critical Path LO: 9.8: Understand the steps that can be employed to reduce the critical path.

Classification: Concept AACSB: Application of Knowledge 102) In order to reduce the length of a project, it would be wise to shorten: A) The project activity that costs the least to speed up.

B) The project activity that can be speeded up by the greatest amount.

C) The critical path activity that can be speeded up by the greatest amount.

D) The critical path activity that costs the least to speed up.

Answer: D Diff: 1 Section: 9.5 Constructing the Critical Path LO: 9.8: Understand the steps that can be employed to reduce the critical path.

Classification: Application AACSB: Application of Knowledge 103) In general, the better candidates for shortening are: A) Early tasks opposed to later tasks.

B) Later tasks opposed to early tasks.

C) Merge tasks opposed to burst tasks.

D) Burst tasks opposed to merge tasks.

Answer: A Diff: 1 Section: 9.5 Constructing the Critical Path LO: 9.8: Understand the steps that can be employed to reduce the critical path.

Classification: Application AACSB: Application of Knowledge 104) What is laddering and what advantages can be gained from its use in project management?

Answer: Laddering is a technique that allows us to redraw the activity network to more closely sequence the project subtasks to make the overall network sequence more efficient. Complicated activities are broken down into smaller activities by virtue of identifying milestones within them.

If a successor activity can begin after the attainment of one of these milestones, then project resources can be more fully employed, project duration can be reduced and the linkage and sequencing between activities can be streamlined.

Diff: 1 Section: 9.5 Constructing the Critical Path LO: 9.8: Understand the steps that can be employed to reduce the critical path.

Classification: Concept AACSB: Application of Knowledge

105) Discuss any five approaches to reducing the critical path. Which is the most effective and which is the most difficult to achieve? Why? Answer: The text presents eight ways to reduce the critical path; answers will vary as to the most effective and most difficult to achieve depending on circumstances and students' intellectual capital. The alternatives presented are: Eliminate tasks on the critical path — tasks can be dropped or moved to non-critical paths, thereby shortening the critical path.

Re-plan serial paths to be in parallel — if serial activities are converted to concurrent activities, project length can be reduced.

Overlap sequential tasks — laddering is a good method for overlapping sequential activities.

Shorten the duration on critical path tasks — if these tasks were improperly estimated, then the project length can be reduced.

Shorten early tasks — the logic here is that these tasks are more certain, being in the near future and such certainty can be taken advantage of by time reduction.

Shorten longest tasks — the longest tasks may have the same percentage padding and, as a result, the greatest amount of time that can be cut.

Shorten easiest tasks — duration estimates for the easiest tasks can be deflated without an adverse impact on the project team's work.

Shorten tasks that cost the least to speed up — crashing critical path activities by throwing money at them should be performed with a budget and conscience.

Diff: 1 Section: 9.5 Constructing the Critical Path LO: 9.8: Understand the steps that can be employed to reduce the critical path.

Classification: Application AACSB: Application of Knowledge Project Management: Achieving Competitive Advantage, 6e (Pinto) Chapter 10 Project Scheduling: Lagging, Crashing, and Activity Networks 1) The most common type of logical sequencing between tasks is referred to as the: A) Finish to start relationship.

B) Finish to finish relationship.

C) Start to start relationship.

D) Start to finish relationship.

Answer: A Diff: 1 Section: 10.1 Lags in Precedence Relationships LO: 10.1: Apply lag relationships to project activities.

Classification: Concept AACSB: Application of Knowledge 2) A finish to start lag delay is usually shown: A) As an added value in the predecessor's activity time.

B) On the line adjoining the two activity nodes.

C) As an added value in the predecessors early start time.

D) As a subtracted value in the follower's early finish time.

Answer: B Diff: 2 Section: 10.1 Lags in Precedence Relationships LO: 10.1: Apply lag relationships to project activities.

Classification: Concept

AACSB: Application of Knowledge

3) Activities A and B have a finish to finish relationship and early start and finish times as shown. What is the result of incorporating a 4-day lag between activities C and B?

A) The early finish for A increases to 31.

B) The early start time for A increases to 24.

C) The early finish time for B increases to 31.

D) The early start time for D falls to 23.

Answer: C Diff: 2 Section: 10.1 Lags in Precedence Relationships LO: 10.1: Apply lag relationships to project activities.

Classification: Critical Thinking AACSB: Analytical Thinking 4) What is the early start time for activity C if it has the start to start relationship shown?

A) Day 20 B) Day 25 C) Day 27 D) Day 29 Answer: D Diff: 2 Section: 10.1 Lags in Precedence Relationships LO: 10.1: Apply lag relationships to project activities.

Classification: Critical Thinking AACSB: Analytical Thinking 5) Activity X has the start to finish relationship shown with activity Y and both have early start and finish times as shown. Which statement is BEST?

A) a < d B) a < c C) b < c D) d < a Answer: A Diff: 2 Section: 10.1 Lags in Precedence Relationships LO: 10.1: Apply lag relationships to project activities.

Classification: Critical Thinking AACSB: Analytical Thinking 6) Finish to start lags are the same as additional activity slack.

Answer: FALSE Diff: 2 Section: 10.1 Lags in Precedence Relationships LO: 10.1: Apply lag relationships to project activities.

Classification: Concept AACSB: Application of Knowledge 7) The least common type of lag relationship occurs when a successor's finish is dependent upon a predecessor's start.

Answer: TRUE Diff: 2 Section: 10.1 Lags in Precedence Relationships LO: 10.1: Apply lag relationships to project activities.

Classification: Concept AACSB: Application of Knowledge

8) Sketch a network and use it as an example as you discuss the four different logical relationships between activities.

Answer: The four types of logical relationships between tasks are 1) finish to start, 2) finish to finish, 3) start to start, and 4) start to finish. The most common type of logical sequencing between tasks is referred to as the finish to start relationship. A finish to start relationship is shown by Activity A and Activity B can begin. Finish to finish relationships require that two linked activities share a similar completion point. A finish to finish relationship is exhibited by the relationship between Activity C and Activity B. Often, two or more activities can start simultaneously or a lag takes place between the start of one activity after an earlier activity has commenced. Activity E and Activity D have a start to start network relationship. Perhaps the least common type of lag relationship occurs when a successor's finish is dependent upon a predecessor's start. Activity D and Activity F have such a relationship.

Diff: 2 Section: 10.1 Lags in Precedence Relationships LO: 10.1: Apply lag relationships to project activities.

Classification: Application AACSB: Application of Knowledge

9) Which statement about this Gantt chart is BEST?

A) Activity a has a duration that could be as short as 1 day and as long as 10.

B) Activity b probably has activity a as a predecessor.

C) No progress has been made on activity c.

D) Activity d is the longest activity.

Answer: B Diff: 2 Section: 10.2 Gantt Charts LO: 10.2: Construct and comprehend Gantt charts.

Classification: Critical Thinking AACSB: Analytical Thinking 10) Consider the Gantt chart shown below where the time scale is in minutes and all activities are performed on an early start basis. How much slack is available in The Great Hair Washing project?

A) 10 minutes B) 15 minutes C) 0 minutes D) 5 minutes Answer: C Diff: 1 Section: 10.2 Gantt Charts LO: 10.2: Construct and comprehend Gantt charts.

Classification: Concept AACSB: Application of Knowledge

11) Use the Gantt chart and the activity list to determine when resource 5 is free.

Activity Resources Activity Resources A 1 F 1 B 5 G 2 C 4 H 5 D 3 J 3 E 2 K 4 A) Between 0 and 15 B) Between 15 and 30 C) Between 30 and 45 D) Between 45 and 60 Answer: D Diff: 2 Section: 10.2 Gantt Charts LO: 10.2: Construct and comprehend Gantt charts.

Classification: Critical Thinking AACSB: Analytical Thinking

12) Use the Gantt chart and the activity list to determine when resource 2 is free.

Activity Resources Activity Resources A 1 F 1 B 5 G 2 C 4 H 5 D 3 J 3 E 2 K 2 A) Between 0 and 15 B) Between 15 and 30 C) Between 30 and 45 D) Between 45 and 60 Answer: A Diff: 2 Section: 10.2 Gantt Charts LO: 10.2: Construct and comprehend Gantt charts.

Classification: Concept AACSB: Analytical Thinking 13) Use the Gantt chart and the activity list to determine which resource is used the least.

Activity Resources Activity Resources A 1 F 2 B 1 G 3 C 4 H 4 D 2 J 3 E 2 K 5 A) Resource 1 B) Resource 3 C) Resource 4 D) Resource 2 Answer: B Diff: 2 Section: 10.2 Gantt Charts LO: 10.2: Construct and comprehend Gantt charts.

Classification: Concept AACSB: Analytical Thinking

14) Use the Gantt chart and the activity list to determine which resource is used the most.

Activity Resources Activity Resources A 1 F 2 B 3 G 3 C 4 H 4 D 2 J 5 E 2 K 1 A) Resource 4 B) Resource 3 C) Resource 1 D) Resource 2 Answer: C Diff: 2 Section: 10.2 Gantt Charts LO: 10.2: Construct and comprehend Gantt charts.

Classification: Concept AACSB: Analytical Thinking 15) Use the Gantt chart and the activity list to determine which resource is free for use in another project before the others.

Activity Resources Activity Resources A 1 F 2 B 3 G 3 C 4 H 4 D 2 J 5 E 2 K 1 A) Resource 4 B) Resource 3 C) Resource 1 D) Resource 2 Answer: D Diff: 2 Section: 10.2 Gantt Charts LO: 10.2: Construct and comprehend Gantt charts.

Classification: Concept AACSB: Analytical Thinking

16) Use the Gantt chart and the activity list to determine which resource is needed earliest in this project.

Activity Resources Activity Resources A 5 F 2 B 6 G 3 C 7 H 4 D 1 J 5 E 2 K 1 A) Resource 2 B) Resource 3 C) Resource 1 D) Resource 4 Answer: A Diff: 2 Section: 10.2 Gantt Charts LO: 10.2: Construct and comprehend Gantt charts.

Classification: Concept AACSB: Analytical Thinking

17) Use the Gantt chart and activity list to determine when resource 3 is free.

Activity Resources Activity Resources R 3 M 1 H 1 K 5 G 4 J 3 F 2 P 1 B 2 S 2 T 4 W 3 A) Between 0 and 10 B) Between 10 and 20 C) Between 20 and 30 D) Between 30 and 40 Answer: B Diff: 1 Section: 10.2 Gantt Charts LO: 10.2: Construct and comprehend Gantt charts.

Classification: Concept AACSB: Analytical Thinking

18) Use the Gantt chart and activity list to determine which resource has the greatest continual use.

Activity Resources Activity Resources R 3 M 1 H 1 K 5 G 4 J 3 F 2 P 1 B 2 S 2 T 4 W 3 A) Resource 3 B) Resource 1 C) Resource 2 D) Resource 4 Answer: C Diff: 1 Section: 10.2 Gantt Charts LO: 10.2: Construct and comprehend Gantt charts.

Classification: Concept AACSB: Analytical Thinking 19) Use the Gantt chart and activity list to determine which resource has the greatest continual use.

Activity Resources Activity Resources R 5 M 1 H 1 K 5 G 5 J 3 F 2 P 1 B 2 S 2 T 4 W 3 A) Resource 4 B) Resource 2 C) Resource 3 D) Resource 5 Answer: D Diff: 1 Section: 10.2 Gantt Charts LO: 10.2: Construct and comprehend Gantt charts.

Classification: Concept AACSB: Analytical Thinking

20) Use the Gantt chart and activity list to determine which resource is used the least.

Activity Resources Activity Resources R 5 M 1 H 1 K 4 G 5 J 3 F 2 P 1 B 2 S 2 T 4 W 3 A) Resource 1 B) Resource 2 C) Resource 4 D) Resource 5 Answer: A Diff: 2 Section: 10.2 Gantt Charts LO: 10.2: Construct and comprehend Gantt charts.

Classification: Concept AACSB: Analytical Thinking 21) Use the Gantt chart and activity list to determine which resource is used the most.

Activity Resources Activity Resources R 5 M 1 H 1 K 4 G 5 J 3 F 2 P 1 B 2 S 2 T 4 W 3 A) Resource 1 B) Resource 2 C) Resource 4 D) Resource 5 Answer: B Diff: 1 Section: 10.2 Gantt Charts LO: 10.2: Construct and comprehend Gantt charts.

Classification: Concept AACSB: Analytical Thinking

22) Use the Gantt chart and activity list to determine which resource is used the most.

Activity Resources Activity Resources R 3, 5 M 1, 2 H 1 K 4 G 2,5 J 3 F 4, 1 P 1 B 2 S 3, 4 T 4 W 3 A) Resource 4 B) Resource 2 C) Resource 1 D) Resource 5 Answer: C Diff: 2 Section: 10.2 Gantt Charts LO: 10.2: Construct and comprehend Gantt charts.

Classification: Concept AACSB: Analytical Thinking 23) Use the Gantt chart and activity list to determine which resource is used the least.

Activity Resources Activity Resources R 3, 5 M 1, 2 H 1 K 4 G 2, 5 J 3 F 4, 1 P 1 B 2 S 3, 4 T 4 W 3 A) Resource 4 B) Resource 2 C) Resource 1 D) Resource 3 Answer: D Diff: 2 Section: 10.2 Gantt Charts LO: 10.2: Construct and comprehend Gantt charts.

Classification: Concept AACSB: Analytical Thinking

24) Use the Gantt chart and activity list to determine which resource is released from this project for use in another project the earliest.

Activity Resources Activity Resources R 3, 5 M 1, 2 H 1 K 4 G 2, 5 J 3 F 4, 1 P 1 B 2 S 3, 4 T 4 W 3 A) Resource 2 B) Resource 4 C) Resource 1 D) Resource 3 Answer: A Diff: 1 Section: 10.2 Gantt Charts LO: 10.2: Construct and comprehend Gantt charts.

Classification: Concept AACSB: Analytical Thinking 25) A basic Gantt chart: A) Clearly displays early and late start and finish times for all activities.

B) Cannot be used to track the project's progress.

C) Permits scheduling resources well before they are needed.

D) Shows dummy activities to preserve network logic.

Answer: C Diff: 2 Section: 10.2 Gantt Charts LO: 10.2: Construct and comprehend Gantt charts.

Classification: Concept AACSB: Application of Knowledge 26) Gantt charts cannot depict float.

Answer: FALSE Diff: 1 Section: 10.2 Gantt Charts LO: 10.2: Construct and comprehend Gantt charts.

Classification: Concept AACSB: Application of Knowledge

27) Gantt charts can display early start or late start logic.

Answer: TRUE Diff: 1 Section: 10.2 Gantt Charts LO: 10.2: Construct and comprehend Gantt charts.

Classification: Concept AACSB: Application of Knowledge 28) What is a Gantt chart, what information does one provide, and what are the benefits of using one?

Answer: A Gantt chart is a useful tool for creating a project network. Gantt charts establish a time-phased network, which links project activities to a project schedule baseline. Gantt charts also can be used as a project tracking tool to assess the difference between planned and actual performance. Some benefits of Gantt charts are: 1) they are very easy to read and comprehend, 2) they identify the project network coupled with its schedule baseline, 3) they allow for updating and project control, 4) they are useful for identifying resource needs and assigning resources to tasks, and 5) they are easy to create.

Diff: 1 Section: 10.2 Gantt Charts LO: 10.2: Construct and comprehend Gantt charts.

Classification: Concept AACSB: Application of Knowledge

29) Use the information in the table to create a baseline Gantt chart for the project where activity lengths are given in days.

Activity A B C D E F G H J K Answer:

Duration 6 3 7 5 10 8 6 4 10 5

Predecessor -A A B C D, E F G G H, J

Diff: 2 Section: 10.2 Gantt Charts LO: 10.2: Construct and comprehend Gantt charts.

Classification: Critical Thinking AACSB: Analytical Thinking

30) A project manager ascertained that five different resources are needed to complete a project that has been estimated to last 37 days. Just to be on the safe side, the project manager told the client that the project would definitely be delivered in 40 days and 40 nights and arranged to rent the resources for that period of time. The project manager goes to the local rental center at the start of day 1 of the project, signs a 40-day lease agreement for all five resources, and brings them to the site to begin the project. Analyze the Gantt chart and resource list (activity durations are in parenthesis) and determine how much money is being wasted with this rental plan. If each resource could be rented for just the time it takes to complete each activity, what would the charge to the project be?

Resource Number 1 2 3 4 5

Daily Rate $1,000 $1,200 $500 $750 $800

Activity H M P B R F

Length 3 9 6 7 9 5

Activity S J W T G K

Length 3 1 4 4 4 10

Answer: The project manager has paid for 40 days of capacity for each resource and the sum of the resources costs is $4,250. The total rental cost is 40 × $4,250 = $170,000.

The actual use of the resources is as follows: Resource 1 = 18 × $1,000 = $18,000 Resource 2 = 15 × $1,200 = $18,000 Resource 3 = 5 × $500 = $2,500 Resource 4 = 14 × $750 = $10,500 Resource 5 = 13 × $800 = $10,400 The total cost for actual use is $59,400, so there is $170,000 - $59,400 = $110,600 wasted.

Diff: 3 Section: 10.2 Gantt Charts LO: 10.2: Construct and comprehend Gantt charts.

Classification: Critical Thinking AACSB: Analytical Thinking 31) The process of accelerating a project is referred to as: A) Streamlining.

B) Expediting.

C) Rushing.

D) Crashing.

Answer: D Diff: 1 Section: 10.3 Crashing Projects LO: 10.3: Recognize alternative means to accelerate projects, including their benefits and drawbacks.

Classification: Concept AACSB: Application of Knowledge 32) One reason for crashing a project is: A) The project has slipped behind schedule.

B) That the initial schedule may be too pessimistic.

C) Market needs change and the project is not in demand any more.

D) There are no repercussions for delivering the project late.

Answer: A Diff: 1 Section: 10.3 Crashing Projects LO: 10.3: Recognize alternative means to accelerate projects, including their benefits and drawbacks.

Classification: Concept AACSB: Application of Knowledge

33) Which of these approaches will NOT accelerate the completion of a project?

A) Improve the productivity of existing project resources.

B) Increase the bureaucratic oversight.

C) Improve the working method.

D) Increase the quantity of personnel and equipment.

Answer: B Diff: 1 Section: 10.3 Crashing Projects LO: 10.3: Recognize alternative means to accelerate projects, including their benefits and drawbacks.

Classification: Concept AACSB: Application of Knowledge 34) In order to accelerate completion of a project, the manager must crash critical path activities.

Answer: TRUE Diff: 1 Section: 10.3 Crashing Projects LO: 10.3: Recognize alternative means to accelerate projects, including their benefits and drawbacks.

Classification: Concept AACSB: Application of Knowledge 35) In an actual project, one means of crashing critical path activities would be to perform at a lower level of quality.

Answer: TRUE Diff: 1 Section: 10.3 Crashing Projects LO: 10.3: Recognize alternative means to accelerate projects, including their benefits and drawbacks.

Classification: Concept AACSB: Application of Knowledge 36) The critical path may not contain a dummy activity.

Answer: FALSE Diff: 1 Section: 10.3 Crashing Projects LO: 10.3: Recognize alternative means to accelerate projects, including their benefits and drawbacks.

Classification: Concept AACSB: Application of Knowledge

37) Brook's Law states that the typical crashing decision to add more resources to an activity only delays the activity further.

Answer: TRUE Diff: 1 Section: 10.3 Crashing Projects LO: 10.3: Recognize alternative means to accelerate projects, including their benefits and drawbacks.

Classification: Concept AACSB: Application of Knowledge 38) If an activity's cost is plotted against its duration on axes with zeros at the origin: A) The slope of the line is positive because it costs more to finish an activity more quickly.

B) The slope of the line is negative because a shorter activity costs less than a longer one.

C) The slope of the line is negative because it costs more to finish an activity more quickly.

D) The slope of the line is positive because a longer activity costs more than a shorter one.

Answer: C Diff: 2 Section: 10.3 Crashing Projects LO: 10.4: Understand the trade-offs required in the decision to crash project activities.

Classification: Concept AACSB: Application of Knowledge 39) The most common method for shortening activity durations involves the decision to: A) Eliminate bureaucracy.

B) Alter the technology used in the activity.

C) Assign more senior personnel to the activity.

D) Increase project resources.

Answer: D Diff: 2 Section: 10.3 Crashing Projects LO: 10.4: Understand the trade-offs required in the decision to crash project activities.

Classification: Concept AACSB: Application of Knowledge

40) An activity performed by a subcontractor is scheduled for 20 weeks at an anticipated cost of $100,000. Due to slippage on the critical path you need to reduce this activity by three weeks. If the subcontractor informs you that the activity can be completed in 16 weeks for $200,000, what is the slope for the activity?

A) $5,000 per week B) $33,333 per week C) $25,000 per week D) $12,500 per week Answer: C Diff: 2 Section: 10.3 Crashing Projects LO: 10.4: Understand the trade-offs required in the decision to crash project activities.

Classification: Critical Thinking AACSB: Analytical Thinking 41) Given the cost information in the table, what is the cheapest activity to crash on a per week basis?

Activity Normal Time Normal Cost Crash Time Crash Cost A 8 $1,000 5 $6,000 B 6 2,000 4 6,000 C 9 2,500 6 8,000 D 12 4,000 8 10,000 A) Activity A B) Activity B C) Activity C D) Activity D Answer: A Diff: 2 Section: 10.3 Crashing Projects LO: 10.4: Understand the trade-offs required in the decision to crash project activities.

Classification: Critical Thinking AACSB: Analytical Thinking

42) Use the information in the table (all times are in days) to determine the lowest cost minimum completion time if the base cost for each activity finished in normal time is $1,000.

Normal Minimum Crash Cost Activity Time Time ($/day) Predecessor A 10 6 $70 -B 6 3 $40 -C 2 2 -B D 4 2 $60 C E 6 4 $80 A F 8 5 $90 D, E A) $7,120 B) $6,910 C) $6,790 D) $6,830 Answer: C Diff: 2 Section: 10.3 Crashing Projects LO: 10.4: Understand the trade-offs required in the decision to crash project activities.

Classification: Critical Thinking AACSB: Analytical Thinking 43) Use the information in the table (all times are in days) to determine the lowest total cost for a 20-day project if the base cost for each activity finished in normal time is $1,000.

Normal Minimum Crash Cost Activity Time Time ($/day) Predecessor A 10 6 $70 -B 6 3 $40 -C 2 2 -B D 4 2 $60 C E 6 4 $80 A F 8 5 $90 D, E A) $6,280 B) $6,390 C) $6,530 D) $6,740 Answer: A Diff: 2 Section: 10.3 Crashing Projects LO: 10.4: Understand the trade-offs required in the decision to crash project activities.

Classification: Critical Thinking AACSB: Analytical Thinking

44) Use the information in the table (all times are in days) to determine the lowest extra cost for an 18-day project if the base cost for each activity finished in normal time is $1,000.

Normal Minimum Crash Cost Activity Time Time ($/day) Predecessor A 10 6 $70 -B 6 3 $40 -C 2 2 -B D 4 2 $60 C E 6 4 $80 A F 8 5 $90 D, E A) $400 B) $420 C) $440 D) $460 Answer: D Diff: 1 Section: 10.3 Crashing Projects LO: 10.4: Understand the trade-offs required in the decision to crash project activities.

Classification: Critical Thinking AACSB: Analytical Thinking 45) It costs $75 per day for each day that a construction crew is on site. The project manager determines that most activities can be crashed and has listed the crashing costs next to the minimum time for each activity. Use this information to determine the lowest cost for this project. All times given are in days.

Normal Minimum Crash Cost Activity Time Time ($/day) Predecessor A 10 6 $70 -B 6 3 $40 -C 2 2 -B D 4 2 $60 C E 6 4 $80 A F 8 5 $90 D, E A) $1,720 B) $1,750 C) $1,780 D) $1,810 Answer: C Diff: 2 Section: 10.3 Crashing Projects LO: 10.4: Understand the trade-offs required in the decision to crash project activities.

Classification: Critical Thinking AACSB: Analytical Thinking

46) A project has the activity duration and cost information indicated in the table where all times are in weeks. What is the total cost for completing this project in 40 days?

Normal Normal Activity Predecessor Time Cost Crash Time Crash Cost A -8 $12,000 5 $22,000 B A 12 $18,000 9 $32,000 C A 15 $22,000 9 $62,000 D B 3 $9,000 2 $18,000 E C 9 $15,000 5 $35,000 F E 7 $5,000 5 $8,000 G D 8 $13,000 6 $23,000 H A 12 $20,000 8 $32,000 J H 6 $45,000 4 $56,000 A) $172,000 B) $218,000 C) $192,000 D) $159,000 Answer: A Diff: 2 Section: 10.3 Crashing Projects LO: 10.4: Understand the trade-offs required in the decision to crash project activities.

Classification: Critical Thinking AACSB: Analytical Thinking

47) A project has the activity duration and cost information indicated in the table where all times are in weeks. What is the lowest total cost for completing this project in 35 days?

Normal Normal Activity Predecessor Time Cost Crash Time Crash Cost A -8 $12,000 5 $22,000 B A 12 $18,000 9 $32,000 C A 15 $22,000 9 $62,000 D B 3 $9,000 2 $18,000 E C 9 $15,000 5 $35,000 F E 7 $5,000 5 $8,000 G D 8 $13,000 6 $23,000 H A 12 $20,000 8 $32,000 J H 6 $45,000 4 $56,000 A) $211,500 B) $197,500 C) $203,500 D) $194,500 Answer: B Diff: 2 Section: 10.3 Crashing Projects LO: 10.4: Understand the trade-offs required in the decision to crash project activities.

Classification: Critical Thinking AACSB: Analytical Thinking

48) A project has the activity duration and cost information indicated in the table where all times are in weeks. There is a penalty of $4,000 per week for every week the project exceeds 37 weeks. What is the lowest total cost for completing this project?

Normal Normal Activity Predecessor Time Cost Crash Time Crash Cost A -8 $12,000 5 $22,000 B A 12 $18,000 9 $32,000 C A 15 $22,000 9 $62,000 D B 3 $9,000 2 $18,000 E C 9 $15,000 5 $35,000 F E 7 $5,000 5 $8,000 G D 8 $13,000 6 $23,000 H A 12 $20,000 8 $32,000 J H 6 $45,000 4 $56,000 A) $172,000 B) $184,000 C) $187,000 D) $192,500 Answer: B Diff: 3 Section: 10.3 Crashing Projects LO: 10.4: Understand the trade-offs required in the decision to crash project activities.

Classification: Critical Thinking AACSB: Analytical Thinking

49) A project has the activity duration and cost information indicated in the table where all times are in weeks. There is a penalty of $6,000 per week for every week the project extends beyond 25 weeks. What is the lowest total cost duration for completing this project?

Normal Normal Activity Predecessor Time Cost Crash Time Crash Cost A -8 $12,000 5 $22,000 B A 12 $18,000 9 $32,000 C A 15 $22,000 9 $62,000 D B 3 $9,000 2 $18,000 E C 9 $15,000 5 $35,000 F E 7 $5,000 5 $8,000 G D 8 $13,000 6 $23,000 H A 12 $20,000 8 $32,000 J H 6 $45,000 4 $56,000 A) 34 weeks B) 36 weeks C) 40 weeks D) 43 weeks Answer: A Diff: 3 Section: 10.3 Crashing Projects LO: 10.4: Understand the trade-offs required in the decision to crash project activities.

Classification: Critical Thinking AACSB: Analytical Thinking

50) A project has the activity duration and cost information indicated in the table where all times are in weeks. What is the total cost for completing this project as quickly as possible?

Normal Normal Activity Predecessor Time Cost Crash Time Crash Cost A -8 $12,000 5 $22,000 B A 12 $18,000 9 $32,000 C A 15 $22,000 9 $62,000 D B 3 $9,000 2 $18,000 E C 9 $15,000 5 $35,000 F E 7 $5,000 5 $8,000 G D 8 $13,000 6 $23,000 H A 12 $20,000 8 $32,000 J H 6 $45,000 4 $56,000 A) $244,000 B) $255,600 C) $258,333 D) $262,000 Answer: D Diff: 3 Section: 10.3 Crashing Projects LO: 10.4: Understand the trade-offs required in the decision to crash project activities.

Classification: Critical Thinking AACSB: Analytical Thinking

51) A project has the activity duration and cost information indicated in the table where all times are in weeks. There is a penalty of $250 per week for every week the project extends beyond 32 weeks. What is the duration of the least expensive project possible?

Normal time 8 6 8 12 14 9 7

Crash time 5 4 5 9 11 7 5

Normal Cost $1,000 1,500 1,800 1,000 950 1,500 2,300

Crash Cost 2,000 2,000 2,300 1,800 1,450 1,900 2,800

Activity Predecessor A B A C A D B E B F C, D G E, F A) 38 weeks B) 37 weeks C) 36 weeks D) 35 weeks Answer: B Diff: 3 Section: 10.3 Crashing Projects LO: 10.4: Understand the trade-offs required in the decision to crash project activities.

Classification: Critical Thinking AACSB: Analytical Thinking 52) A project has the activity duration and cost information indicated in the table where all times are in weeks. There is a penalty of $250 per week for every week the project extends beyond 32 weeks. What is the cost of the least expensive project possible?

Normal Crash Normal Crash Activity time time Cost Cost Predecessor A 8 5 $1,000 2,000 B 6 4 1,500 2,000 A C 8 5 1,800 2,300 A D 12 9 1,000 1,800 B E 14 11 950 1,450 B F 9 7 1,500 1,900 C, D G 7 5 2,300 2,800 E, F A) $11,450 B) $12,450 C) $13,450.

D) $14,450 Answer: B Diff: 3 Section: 10.3 Crashing Projects LO: 10.4: Understand the trade-offs required in the decision to crash project activities.

Classification: Critical Thinking AACSB: Analytical Thinking 53) A project has the activity duration and cost information indicated in the table where all times are in weeks. What is the lowest total cost for completing this project in 33 weeks?

Normal Crash Normal Crash Activity time time Cost Cost Predecessor A 8 5 $1,000 2,000 B 6 4 1,500 2,000 A C 8 5 1,800 2,300 A D 12 9 1,000 1,800 B E 14 11 950 1,450 B F 9 7 1,500 1,900 C, D G 7 5 2,300 2,800 E, F A) $11,250 B) $11,500 C) $12,250 D) $12,500 Answer: C Diff: 3 Section: 10.3 Crashing Projects LO: 10.4: Understand the trade-offs required in the decision to crash project activities.

Classification: Critical Thinking AACSB: Analytical Thinking 54) A project has the activity duration and cost information indicated in the table where all times are in weeks. For every week longer than 30 weeks, there is a penalty of $300. What is the highest total cost for completing this project?

Normal Crash Normal Crash Activity time time Cost Cost Predecessor A 8 5 $1,000 2,000 B 6 4 1,500 2,000 A C 8 5 1,800 2,300 A D 12 9 1,000 1,800 B E 14 11 950 1,450 B F 9 7 1,500 1,900 C, D G 7 5 2,300 2,800 E, F A) $14,250 B) $13,950 C) $13,550 D) $13,150 Answer: A Diff: 3 Section: 10.3 Crashing Projects LO: 10.4: Understand the trade-offs required in the decision to crash project activities.

Classification: Critical Thinking AACSB: Analytical Thinking 55) Quite often the marginal gains in employee productivity decrease dramatically with the increased use of overtime.

Answer: TRUE Diff: 2 Section: 10.3 Crashing Projects

LO: 10.4: Understand the trade-offs required in the decision to crash project activities.

Classification: Concept AACSB: Application of Knowledge 56) What is project crashing and what are three reasons why it might be important to do so?

Answer: The process of accelerating a project is referred to as crashing. Crashing a project directly relates to resource commitment. The more resources we are willing to expend, the faster we can push the project to its finish. There can be good reasons to crash a project, among them are: The initial schedule may be too optimistic.

Market needs change and the project is in demand earlier than anticipated.

The project has slipped considerably behind schedule.

The contractual situation provides even more incentive to avoid schedule slippage.

Diff: 1 Section: 10.3 Crashing Projects LO: 10.4: Understand the trade-offs required in the decision to crash project activities.

Classification: Application AACSB: Application of Knowledge

57) What are the three principal methods for accelerating a project and under what circumstances might these methods yield little gain?

Answer: There are three principal methods for crashing project activities: Improving the productivity of existing project resources; Changing the working method employed for the activity, usually by altering the technology and types of resources employed; Increasing the quantity of project resources, including personnel, plant and equipment.

In order to improve the productivity of existing project resources, the project manager must find more efficient ways to work with the people, equipment, and materials. More efficiency means less waste and there are few that would argue that waste is beneficial. The project manager may change the working method by altering technology or resources types. Increased automation, more powerful equipment, and more senior personnel might all be deployed to accelerate the project. The author indicates that the most common method for shortening activity durations involves the decision to increase project resources, either by working the current resources for longer hours or by adding to the number of resources in the pool. A feature common to all of these approaches is that at some point the resources will stretch to their limit and the marginal gain will be prohibitively expensive, even to the point that any efforts to squeeze another fraction from them will yield negative results. Changes in the middle of a project might disrupt project team harmony, throwing them off of a learning curve and adversely affect team morale.

Diff: 2 Section: 10.3 Crashing Projects LO: 10.4: Understand the trade-offs required in the decision to crash project activities.

Classification: Application AACSB: Application of Knowledge

58) Crashing costs for a project are governed by the function: 50t2 + 100t where t represents the number of days crashed (see graph). The project manager wants to crash the project, and is willing to pay up to $1,000 per day saved. How many days can be saved before the per-day cost is too high?

Answer: We can crash the project to the point where the per day cost of crashing equals $1,000, so the manager needs to find the value of t where the slope of the crash cost function equals that amount. The slope is given by the first derivative of the crash cost function: Cost = 50t2 + 100t = 2 × 50t2-1 + 100t1-1 = 100t + 100 1000 = 100t + 100 t = 9 days Diff: 3 Section: 10.3 Crashing Projects LO: 10.4: Understand the trade-offs required in the decision to crash project activities.

Classification: Critical Thinking AACSB: Analytical Thinking

59) What is the cost to finish this project (all activity durations are in weeks and costs in US dollars) as quickly as possible?

Normal Minimum Normal Activity Predecessor Time Time Cost Crash Cost A 12 10 1000 1500 B A 5 3 1200 1950 C A 9 7 1500 2100 D B, C 14 10 1800 2100 E B 4 3 1400 1875 F D 9 8 1000 1450 G E 7 5 700 1200 H F, G 11 8 2000 3000 I H 8 6 1100 1700 Answer: The initial project duration is 63 weeks thanks to the valuable contributions of path ACDFHI. Path ABEGHI is 47 weeks and path ABDFHI is 59 weeks long. The base project cost is $11,700.

Purchases from least expensive to most expensive are as follows: Activity D reduced 4 days for $300 Activity A reduced 2 days for $500 Activity C reduced 2 days for $600 Activity I reduced 2 days for $600 Activity H reduced 3 days for $1,000 Activity F reduced 1 day for $450 The new project length is 49 days with path lengths of ACDFHI=49; ABEGHI=40; and ABDFHI=45. The total project cost is now $15,150.

Diff: 2 Section: 10.3 Crashing Projects LO: 10.4: Understand the trade-offs required in the decision to crash project activities.

Classification: Critical Thinking AACSB: Analytical Thinking

60) A project has the activity duration and cost information indicated in the table where all times are in weeks. What is the lowest total cost for completing this project in 33 weeks?

Normal Crash Normal Crash Activity time time Cost Cost Predecessor A 8 5 $1,000 2,000 B 6 4 1,500 2,000 A C 8 5 1,800 2,300 A D 12 9 1,000 1,800 B E 14 11 950 1,450 B F 9 7 1,500 1,900 C, D G 7 5 2,300 2,800 E, F Answer: $12,250 is the least expensive 33 week project. The uncrashed duration is 42 weeks at a cost of $10,050 for activities. The least expensive activities on a per week basis are F ($200), B ($250), G ($250), and D ($266.67). It is possible to reduce the project by 2 weeks each by crashing F, B, and G, which would make a 36 week project. Activity D can be reduced by three weeks at the aforementioned cost. Take the Crash cost prices for activities FBGD and the normal cost prices for ACE for a total of $12,250.

Diff: 3 Section: 10.3 Crashing Projects LO: 10.4: Understand the trade-offs required in the decision to crash project activities.

Classification: Critical Thinking AACSB: Analytical Thinking

61) What is the minimum completion cost of this project if there is a penalty of $1,000 for each day the project lasts longer than 27 days? Activity durations in days and crash costs in dollars are given in the table.

Reg Crash Reg Activity Length Length Cost A 7 6 400 C 1 1 450 D 9 6 550 E 9 7 500 J 2 1 600

Crash Cost 1,200 450 2,350 1,650 1,800

Reg Crash Reg Activity Length Length Cost L 7 5 800 N 6 5 500 R 4 4 600 S 10 8 450 Y 8 6 675

Crash Cost 1,500 1,250 600 1,350 1,750

Answer: The initial project duration is 34 days. Path analysis and purchases made in order of least expensive to most expensive are given in the table.

Step

1

2

3

4

5

Starting Path Activity Lengths Crashed JALSY=34 JANDCY=33 JAERY=30 L JALSY=33 JANDCY=33 JAERY=29 A JALSY=31 JANDCY=31 JAERY=27 Y JALSY=30 JANDCY=30 L JAERY=27 D JALSY=29 JANDCY=29 JAERY=27

# Days Cost per Total Crashed Day Cost

1

$350

$350

1

$800

$800

2

$537.50 $1,075

1 1

$350 $600

$950

Subsequent purchases will exceed the $1,000 penalty, so the project manager is better served by paying two penalty days at $1,000 each. The total cost of the project including the penalties is $10,700.

Diff: 2 Section: 10.3 Crashing Projects LO: 10.4: Understand the trade-offs required in the decision to crash project activities.

Classification: Critical Thinking AACSB: Analytical Thinking

62) Consider the project described by the table where all durations are in days and the costs in dollars. What is the minimum cost of completing this project in 150 days?

Normal Minimum Normal Activity Predecessor Time Time Cost Crash Cost A 15 12 800 1,100 B A 30 22 2,500 4,100 C A 45 37 21,000 33,000 D C 20 17 15,000 22,000 E D 5 4 3,000 3,300 F B 10 7 13,000 15,500 G F 30 25 41,000 46,000 H J, E 50 45 30,000 37,500 J F 25 20 20,000 25,000 K G 35 33 6,500 7,200 L K 40 33 16,500 19,400 M L 15 13 14,400 18,600 N K 30 26 23,500 27,500 P H 20 15 15,250 23,500 Q N, P 5 5 5,000 5,000 Answer: The crash cost per day has been added to the table. Possible routes through the network are: ABFGKLM=175 ABFGKNQ=55 ABFJHPQ=155 ACDEHPQ=160 and the initial project cost is $227,450.

Normal Minimum Normal Activity Predecessor Time Time Cost A 15 12 800 B A 30 22 2,500 C A 45 37 21,000 D C 20 17 15,000 E D 5 4 3,000 F B 10 7 13,000 G F 30 25 41,000 H J, E 50 45 30,000 J F 25 20 20,000 K G 35 33 6,500 L K 40 33 16,500 M L 15 13 14,400 N K 30 26 23,500 P H 20 15 15,250 Q N, P 5 5 5,000

Crash cost 1,100 4,100 31,000 22,000 3,300 15,500 46,000 37,500 25,000 7,200 19,400 18,600 27,500 23,500 5,000

$/day 100 200 1500 2333 300 833 1000 1500 1000 350 414 2100 1000 1650

Purchasing critical activities from least expensive to most expensive without switching critical paths proceeds as follows:

Purchase Activity

# Days

1

A

3

2

B

8

3

K

2

4

L L

5 1

5

E L

1 1

6

C F

1 3

7

C G

3 3

8

C

3

Path Lengths ABFGKLM=172 ABFGKNQ=152 ABFJHPQ=152 ACDEHPQ=157 ABFGKLM=164 ABFGKNQ=144 ABFJHPQ=144 ACDEHPQ=157 ABFGKLM=162 ABFGKNQ=142 ABFJHPQ=144 ACDEHPQ=157 ABFGKLM=157 ABFGKNQ=142 ABFJHPQ=144 ACDEHPQ=157 ABFGKLM=157 ABFGKNQ=142 ABFJHPQ=144 ACDEHPQ=157 ABFGKLM=156 ABFGKNQ=142 ABFJHPQ=144 ACDEHPQ=156 ABFGKLM=153 ABFGKNQ=139 ABFJHPQ=141 ACDEHPQ=153 ABFGKLM=150 ABFGKNQ=136 ABFJHPQ=144 ACDEHPQ=150

Extra Cost

300

1,600

700

2,071 414.30

300 414.30

1,250 2,500

3,750 3,000

3,750

Total reduction is 25 days at an additional cost of $20,050, for a total project cost of $247,500.

3A's = 300 8B's = 1600 7C's = 8750 1E = 300 3F's = 2500 3G's = 3000 2K's = 700 7L's = 2900 Diff: 2 Section: 10.3 Crashing Projects LO: 10.4: Understand the trade-offs required in the decision to crash project activities.

Classification: Critical Thinking AACSB: Analytical Thinking

63) What is the minimum cost completion time for this project if the activities have normal and crash costs as indicated and there is a $1,000 fixed cost for each day on site plus a $500 penalty for each activity that is crashed? The crash costs represent the cost of a fully expedited activity.

For example, reducing activity Y from 13 days to 12 days costs an extra $100 on top of the $500 expediting cost for a total cost of $2,600. Reducing Y from 13 days to 10 days costs an extra $300 on top of the $500 expediting cost, for a total activity cost of $2,800.

Normal Normal Crash Activity Predecessor Time Cost Time Crash Cost Z 2 $2,000 2 $2,000 Y 13 $2,000 10 $2,300 X 19 $2,000 15 $3,000 W Z 18 $2,000 15 $3,000 V X 10 $2,000 9 $3,000 U Y 13 $2,000 11 $3,000 T W 18 $2,000 14 $4,000 S V 4 $2,000 3 $3,000 R U 6 $2,000 5 $3,000 Q R, S 15 $2,000 13 $3,000 P T 13 $2,000 12 $3,000 N P, Q 4 $2,000 4 $2,000 Answer: The project before any expediting takes 55 days thanks to path ZWTPN. Path XVSQN has a 52-day duration and path YURQN has a 51-day duration. The initial cost of the project is $24,000 for the uncrashed activities plus $55,000 for the fixed cost for a total cost of $79,000.

Crashing should take place in this sequence: 1st: Reduce activity W by 3 days. This costs $1,000 plus the $500 expediting charge but trims three days off the fixed cost saving $3,000 for a net savings of $1,500.

The project is now 52 days thanks to path ZWTPN and XVSQN at a cost of $77,500. Any further action may reduce the project length but will increase the project's cost. Crashing activity T by one day and activity X by one day adds $1,750 to the cost column and saves only $1,000 for a net cost of $750.

Diff: 2 Section: 10.3 Crashing Projects LO: 10.4: Understand the trade-offs required in the decision to crash project activities.

Classification: Critical Thinking AACSB: Analytical Thinking

64) The heir to the throne was due 56 days from now and the first-time father had a serious construction project on his hands converting his man cave into a nursery. The seven activities, their normal and expedited times (in days) and costs appear in the table. What is the minimum cost to ensure that this project is completed in 56 days? Which activities should be reduced and by how many days?

Normal Crash Normal Crash Activity time time Cost Cost Predecessor A 5 3 500 1100 B 18 15 900 2300 A C 12 9 2500 3000 A D 9 7 500 650 B E 15 12 3000 5000 B F 12 10 4000 5000 C, D G 20 15 3600 4800 E, F Answer: The project before any expediting takes 64 days. The activities that should be expedited are D, for 2 days at $75/day; G for 5 days at $240/days; and A for 1 day at $300/day. The total cost to expedite is $1,650 in addition to the normal cost of $15,000.

Diff: 2 Section: 10.3 Crashing Projects LO: 10.4: Understand the trade-offs required in the decision to crash project activities.

Classification: Critical Thinking AACSB: Analytical Thinking

65) The heir to the throne was due 60 days from now and the first-time father had a serious construction project on his hands converting his man cave into a nursery. The seven activities, their normal and expedited times (in days) and costs appear in the table. Just to be on the safe side, he decided to bring the project in at 53 days in case the delivery was a week early. Tell him what the least expensive 53-day project is; which activities should be reduced in duration, by how many days, and at the total cost, so he can roll up the sleeves on his "World's Greatest Dad" sweatshirt, and get to work.

Normal Crash Normal Crash Activity time time Cost Cost Predecessor A 5 3 500 1100 B 18 15 900 2300 A C 12 9 2500 3000 A D 9 7 500 650 B E 15 12 3000 5000 B F 12 10 4000 5000 C, D G 20 15 3600 4800 E, F Answer: The project before any expediting takes 64 days. The activities that should be expedited are D, for 2 days at $75/day; G for 5 days at $240/days; and A for 2 days at $300/day, and B for 2 days at $466.67/day. The total cost to expedite is $2,883.33 in addition to the normal cost of $15,000, for a total tab of $17,883.33 plus a lifetime of disappointment and shame.

Diff: 2 Section: 10.3 Crashing Projects LO: 10.4: Understand the trade-offs required in the decision to crash project activities.

Classification: Critical Thinking AACSB: Analytical Thinking 66) An activity on an arrow network: A) Cannot have more arrows than nodes.

B) Cannot have more nodes than arrows.

C) Has one more node than arrows.

D) Has one more arrow than nodes.

Answer: A Diff: 3 Section: 10.3 Crashing Projects LO: 10.5: Develop activity networks using Activity-on-Arrow techniques.

Classification: Critical Thinking AACSB: Application of Knowledge

67) The AOA network described by this table needs: Activity Predecessor A -B -C A, B D B E C, D A) Zero dummy activities.

B) One dummy activity.

C) Two dummy activities.

D) Three dummy activities.

Answer: B Diff: 2 Section: 10.4 Activity-on-Arrow Networks LO: 10.5: Develop activity networks using Activity-on-Arrow techniques.

Classification: Critical Thinking AACSB: Analytical Thinking 68) The AOA network described by this table needs: Activity Predecessor A -B -C A D A, B E C F C, D A) Zero dummy activities.

B) One dummy activity.

C) Two dummy activities.

D) Three dummy activities.

Answer: C Diff: 2 Section: 10.4 Activity-on-Arrow Networks LO: 10.5: Develop activity networks using Activity-on-Arrow techniques.

Classification: Critical Thinking AACSB: Analytical Thinking

69) What information is NOT included in the nodes for an AOA network?

A) Label B) Early start time C) Late finish time D) Early finish time Answer: D Diff: 2 Section: 10.4 Activity-on-Arrow Networks LO: 10.5: Develop activity networks using Activity-on-Arrow techniques.

Classification: Concept AACSB: Application of Knowledge 70) Dummy activities have a duration equal to the: A) Slack on the critical path.

B) Length of the predecessor.

C) Length of the successor.

D) Lag needed to preserve network logic.

Answer: A Diff: 2 Section: 10.4 Activity-on-Arrow Networks LO: 10.5: Develop activity networks using Activity-on-Arrow techniques.

Classification: Critical Thinking AACSB: Analytical Thinking 71) The critical path of this network is:

A) 14.

B) 15.

C) 12.

D) 13.

Answer: B Diff: 2 Section: 10.4 Activity-on-Arrow Networks LO: 10.5: Develop activity networks using Activity-on-Arrow techniques.

Classification: Critical Thinking AACSB: Analytical Thinking

72) The fastest completion time for this project is:

A) 14.

B) 15.

C) 16.

D) 17.

Answer: C Diff: 2 Section: 10.4 Activity-on-Arrow Networks LO: 10.5: Develop activity networks using Activity-on-Arrow techniques.

Classification: Critical Thinking AACSB: Analytical Thinking

73) What is the late finish for activity D in the network shown in the diagram?

A) 15 B) 16 C) 17 D) 18 Answer: D Diff: 2 Section: 10.4 Activity-on-Arrow Networks LO: 10.5: Develop activity networks using Activity-on-Arrow techniques.

Classification: Critical Thinking AACSB: Analytical Thinking

74) Which of the activities in the diagram have slack?

A) C and D B) B and D C) C and E D) B and E Answer: B Diff: 1 Section: 10.4 Activity-on-Arrow Networks LO: 10.5: Develop activity networks using Activity-on-Arrow techniques.

Classification: Critical Thinking AACSB: Analytical Thinking 75) What is the duration of the project shown in the network?

A) 36 B) 37 C) 38 D) 39 Answer: C Diff: 1 Section: 10.4 Activity-on-Arrow Networks LO: 10.5: Develop activity networks using Activity-on-Arrow techniques.

Classification: Critical Thinking AACSB: Analytical Thinking 76) An AOA network: A) Cannot show a merge activity.

B) Cannot show a burst activity.

C) Cannot have consecutive merge and burst activities.

D) Can have all of the features described in A-C above.

Answer: D Diff: 2 Section: 10.4 Activity-on-Arrow Networks LO: 10.5: Develop activity networks using Activity-on-Arrow techniques.

Classification: Application AACSB: Application of Knowledge 77) AOA networks have an advantage over AON networks: A) If the project is complex.

B) Because they are easier to read for novices.

C) When it comes to software packages for project management.

D) When the task of network labeling is considered.

Answer: A Diff: 2 Section: 10.4 Activity-on-Arrow Networks LO: 10.5: Develop activity networks using Activity-on-Arrow techniques.

Classification: Application AACSB: Application of Knowledge 78) AON networks have an advantage over AOA networks: A) If the project under study is complex.

B) Because they don't need dummy activities.

C) In the construction industry because they are the norm.

D) When it is critical to highlight milestones.

Answer: B Diff: 2 Section: 10.4 Activity-on-Arrow Networks LO: 10.5: Develop activity networks using Activity-on-Arrow techniques.

Classification: Application AACSB: Application of Knowledge 79) Most project management software employs AOA diagramming.

Answer: FALSE Diff: 2 Section: 10.4 Activity-on-Arrow Networks LO: 10.5: Develop activity networks using Activity-on-Arrow techniques.

Classification: Concept AACSB: Application of Knowledge 80) AOA is a more useful technique than AON if the project is complex and has many significant milestones.

Answer: TRUE Diff: 2 Section: 10.4 Activity-on-Arrow Networks LO: 10.5: Develop activity networks using Activity-on-Arrow techniques.

Classification: Concept AACSB: Application of Knowledge 81) Dummy activities are used in AOA networks to indicate the existence of precedent relationships between activities and their event nodes.

Answer: TRUE Diff: 2 Section: 10.4 Activity-on-Arrow Networks LO: 10.5: Develop activity networks using Activity-on-Arrow techniques.

Classification: Concept AACSB: Application of Knowledge

82) Sketch the network described in the table in AOA format.

Activity A B C D E F G H K L Answer:

Predecessor -A A B B, C D D F, G G H, K

Diff: 1 Section: 10.4 Activity-on-Arrow Networks LO: 10.5: Develop activity networks using Activity-on-Arrow techniques.

Classification: Application AACSB: Application of Knowledge

83) Determine early start and early finish times for all activities in this network. Activity duration in days appears under each arrow.

Answer: Early start and early finish times for all activities appear in the table.

Task Early Start Early Finish A 0 1 B 1 8 C 1 6 D 8 9 E 8 16 F 9 18 G 9 23 H 23 31 K 23 26 L 31 37 Diff: 2 Section: 10.4 Activity-on-Arrow Networks LO: 10.5: Develop activity networks using Activity-on-Arrow techniques.

Classification: Critical Thinking AACSB: Analytical Thinking

84) Mick has a project consisting of eight activities (listed in the table with durations and precedence requirements) to complete. He assigned his intern Guinness to sketch a network diagram in AOA and Guinness produced the sketch shown below. Discuss any issues with the apprentice's diagram.

Activity A B C D E F G

Activity time Predecessor 6 8 5 A 9 A, B 12 A 11 D, E 6 C, F

Answer: There is a need for only one dummy activity, in order to distinguish between tasks requiring A and the only task requiring both A and B.

Diff: 2 Section: 10.4 Activity-on-Arrow Networks LO: 10.5: Develop activity networks using Activity-on-Arrow techniques.

Classification: Critical Thinking AACSB: Analytical Thinking

85) Mick has a project consisting of eight activities as listed in the table (with durations in days).

He assigned his intern Guinness to sketch a network diagram in AOA and Guinness produced the sketch shown below. Determine the early and late start and finish times for all of these activities.

Activity A B C D E F G H

Activity time 6 8 5 9 12 11 6 3

Answer: The table shows the requested information.

Activity Early Early Late Activity time Start Finish Late Start Finish A 6 0 6 0 6 B 8 0 8 1 9 C 5 6 11 24 29 D 9 8 17 9 18 E 12 6 18 6 18 F 11 18 29 18 29 G 6 29 35 29 35 H 3 35 38 35 38 Diff: 2 Section: 10.4 Activity-on-Arrow Networks LO: 10.5: Develop activity networks using Activity-on-Arrow techniques.

Classification: Critical Thinking AACSB: Analytical Thinking

86) The BEST approach to network representation of a large and hugely complex project is to: A) Represent all activities and relationships.

B) Simplify network logic and reduce it to the most meaningful relationships.

C) Use AOA. D) Use AON. Answer: B Diff: 2 Section: 10.5 Controversies in the Use of Networks LO: 10.6: Understand the differences in AON and AOA and recognize the advantages and disadvantages of each technique.

Classification: Application AACSB: Application of Knowledge 87) A complex project that is managed using a top-down, bottom-up approach to network diagrams means that: A) Management's top-down portion of the network contains the greatest detail.

B) Top management does not have a basis for understanding the actual development of the project.

C) The top tier summary network does not give top management the basis for understanding the actual development of the project.

D) The bottom level information cannot be understood by those performing the actual work.

Answer: C Diff: 2 Section: 10.5 Controversies in the Use of Networks LO: 10.6: Understand the differences in AON and AOA and recognize the advantages and disadvantages of each technique.

Classification: Concept AACSB: Application of Knowledge 88) Networks would NOT be well suited for: A) Planning a construction project.

B) Planning a wedding.

C) Planning a software upgrade.

D) Planning monthly production.

Answer: D Diff: 1 Section: 10.5 Controversies in the Use of Networks LO: 10.6: Understand the differences in AON and AOA and recognize the advantages and disadvantages of each technique.

Classification: Concept AACSB: Application of Knowledge

89) When involved in a project involving many subcontractors: A) It is imperative that the network is a mutually accessible document.

B) One subcontractor's network diagram should never be shown to another for ethical reasons.

C) PERT/CPM should not be used.

D) It is illegal to reveal one subcontractor's plan to another.

Answer: A Diff: 2 Section: 10.5 Controversies in the Use of Networks LO: 10.6: Understand the differences in AON and AOA and recognize the advantages and disadvantages of each technique.

Classification: Concept AACSB: Application of Knowledge 90) Research has shown that, in general: A) There is a tendency to underestimate activity lengths.

B) There is a tendency to overestimate activity lengths.

C) The activity lengths are estimated correctly.

D) The activity lengths are estimated correctly but the networks are drawn incorrectly.

Answer: B Diff: 2 Section: 10.5 Controversies in the Use of Networks LO: 10.6: Understand the differences in AON and AOA and recognize the advantages and disadvantages of each technique.

Classification: Concept AACSB: Application of Knowledge 91) Networks are adaptable and useful for all scheduling challenges that an organization faces.

Answer: FALSE Diff: 2 Section: 10.5 Controversies in the Use of Networks LO: 10.6: Understand the differences in AON and AOA and recognize the advantages and disadvantages of each technique.

Classification: Concept AACSB: Application of Knowledge 92) Most activity estimations using PERT methods lead to overly optimistic activity duration estimates.

Answer: TRUE Diff: 2 Section: 10.5 Controversies in the Use of Networks LO: 10.6: Understand the differences in AON and AOA and recognize the advantages and disadvantages of each technique.

Classification: Concept AACSB: Application of Knowledge

93) For large projects, network diagrams are more useful if they are completely detailed.

Answer: FALSE Diff: 2 Section: 10.5 Controversies in the Use of Networks LO: 10.6: Understand the differences in AON and AOA and recognize the advantages and disadvantages of each technique.

Classification: Concept AACSB: Application of Knowledge 94) What are the strengths and weaknesses of AOA and AON techniques?

Answer: Both activity on arc (AOA) and activity on node (AON) create a sequential logic for all activities within a project. AON techniques are easier to learn and are the format of choice for project management software. AON mode allows for ease of labeling and interpretation as long as the number of activities is not too large. AOA is widely used in the construction industry and can be easier on the eyes if the project has a large number of activities. Another advantage is that the use of arrows can provide some indication of activity length, which may be difficult to visualize in AON format. Milestones at the start or end of an activity are easy to locate in AOA format. AOA suffers from the difficulty of dummy activities and data dispersion (instead of having all duration and early and late start and finish times in a node, these tidbits may be spread along the length of the arrow).

Diff: 1 Section: 10.4 Activity-on-Arrow Networks LO: 10.6: Understand the differences in AON and AOA and recognize the advantages and disadvantages of each technique.

Classification: Application AACSB: Application of Knowledge 95) How might a project manager alter a straightforward PERT network to accommodate an inordinately large and complex project?

Answer: A large project may require a network with thousands of activities, relegating the classic 8.5×11 sheet of paper to the same drawer as a the buttonhook and the 8-track tape. The project manager and his network artist should try to simplify the network logic and reduce it to the most obvious or meaningful relationships. Rather than showing every possible path through the network and every activity sequence, a meta-network that shows only the key subroutines or network paths can be created. These subroutines can be further broken down by the project manager or administrator responsible for their completion, but the overall project network is streamlined to include only the most general or relevant project activities.

Diff: 2 Section: 10.5 Controversies in the Use of Networks LO: 10.6: Understand the differences in AON and AOA and recognize the advantages and disadvantages of each technique.

Classification: Concept AACSB: Application of Knowledge

96) What are four criticisms and caveats to bear in mind as you develop a project activity network?

Answer: There are several criticisms and caveats that must be considered as we develop project activity networks, the first of which is that networks can become too large and complex to be meaningful. For a project that is hugely complex, the number of discrete activities can run into the thousands and the project duration can extend for years. The complex interrelationships of all these activities and the difficulty of forecasting activity lengths some time into the future makes a fully detailed activity network difficult to realize. Second, faulty reasoning in network construction can sometimes lead to oversimplification or incorrect representations. A multiple tiered approach sometimes compromises the information sharing aspect that is vital to project management. Third, networks are sometimes used for tasks for which they are not well suited.

As the adage goes, "If it doesn't fit, get a bigger hammer," applies with the use of this valuable project management tool. In addition, networks used to control the behavior of subcontractors have special dangers. Subcontractors must be privy to the overall network and all subs must use consistent timeframe scaling and network techniques. Finally, there is a strong potential for positive bias in PERT estimation used in network construction. Most activity estimations using PERT methods lead to overly optimistic activity duration estimates.

Diff: 2 Section: 10.5 Controversies in the Use of Networks LO: 10.6: Understand the differences in AON and AOA and recognize the advantages and disadvantages of each technique.

Classification: Concept AACSB: Application of Knowledge Project Management: Achieving Competitive Advantage, 6e (Pinto) Chapter 11 Advanced Topics in Planning and Scheduling: Agile and Critical Chain 1) Traditional, highly structured approaches to planning and managing projects are recognized as being less effective for ________ than Agile Project Management.

A) construction projects B) software development C) wedding planning D) university baccalaureate degrees Answer: B Diff: 1 Section: 11.1 Agile Project Management LO: 11.1: Understand why Agile Project Management was developed and its advantages in planning for certain types of projects.

Classification: Concept AACSB: Application of Knowledge 2) Which adjective is most appropriate for Agile Project Management?

A) Iterative B) Sequential C) Linear D) Hirsute Answer: A Diff: 1 Section: 11.1 Agile Project Management LO: 11.1: Understand why Agile Project Management was developed and its advantages in planning for certain types of projects.

Classification: Concept AACSB: Application of Knowledge 3) Agile Project Management is well-suited for instances where A) Customer needs are well-defined.

B) Time constraints exist.

C) Customer needs change quickly.

D) Budget constraints exist.

Answer: A Diff: 1 Section: 11.1 Agile Project Management LO: 11.1: Understand why Agile Project Management was developed and its advantages in planning for certain types of projects.

Classification: Concept AACSB: Application of Knowledge

4) The waterfall project development process is well-suited for instances where: A) Requirements are allowed to float throughout the duration of the project.

B) Customer needs change quickly.

C) Time constraints exist.

D) Budget constraints exist.

Answer: C Diff: 1 Section: 11.1 Agile Project Management LO: 11.1: Understand why Agile Project Management was developed and its advantages in planning for certain types of projects.

Classification: Concept AACSB: Application of Knowledge 5) The sprint portion of the Agile Project Management process is targeted to last: A) 10 plus or minus 2 weeks.

B) 7 plus or minus 1.5 weeks.

C) 5 plus or minus 1.5 weeks.

D) 2.5 plus or minus 1.5 weeks.

Answer: D Diff: 2 Section: 11.1 Agile Project Management LO: 11.1: Understand why Agile Project Management was developed and its advantages in planning for certain types of projects.

Classification: Concept AACSB: Application of Knowledge 6) The customers articulate the necessary features of a software project through: A) Stories.

B) Tasks.

C) Requests for proposal.

D) Bid rigging.

Answer: A Diff: 2 Section: 11.1 Agile Project Management LO: 11.1: Understand why Agile Project Management was developed and its advantages in planning for certain types of projects.

Classification: Concept AACSB: Application of Knowledge

7) In Agile Project Management, the term "scrum" refers to: A) A period of enforced chaos.

B) A meeting.

C) The time when code is actually being written.

D) Disagreements between the customer and the project team.

Answer: B Diff: 2 Section: 11.1 Agile Project Management LO: 11.1: Understand why Agile Project Management was developed and its advantages in planning for certain types of projects.

Classification: Concept AACSB: Application of Knowledge 8) In Agile Project Management, a sprint backlog is essentially a: A) Period of time.

B) Punch list.

C) Forecast.

D) Meeting.

Answer: B Diff: 2 Section: 11.1 Agile Project Management LO: 11.1: Understand why Agile Project Management was developed and its advantages in planning for certain types of projects.

Classification: Concept AACSB: Application of Knowledge 9) Which of these numerical (quantity) comparisons is CORRECT? A) Scrum meeting > Sprint B) Scrum master > Development team C) Sprint time box > Project duration D) Daily scrum duration < Development work duration Answer: C Diff: 2 Section: 11.1 Agile Project Management LO: 11.1: Understand why Agile Project Management was developed and its advantages in planning for certain types of projects.

Classification: Concept AACSB: Application of Knowledge

10) Agile project management features a logical series of steps that occur sequentially, each one is begun only when its predecessor is complete.

Answer: FALSE Diff: 2 Section: 11.1 Agile Project Management LO: 11.1: Understand why Agile Project Management was developed and its advantages in planning for certain types of projects.

Classification: Concept AACSB: Application of Knowledge 11) Agile project management is well-suited for the case where requirements change in the middle of project development.

Answer: TRUE Diff: 2 Section: 11.1 Agile Project Management LO: 11.1: Understand why Agile Project Management was developed and its advantages in planning for certain types of projects.

Classification: Concept AACSB: Application of Knowledge 12) What is the waterfall planning process and when is the ideal approach to project development?

Answer: The waterfall process is the traditional process used for the software development process; it emphasizes completion of each step in the cycle, investing significant effort in planning the entire project before moving out of the planning stage into system design, system implementation, and the following steps. This process was to a great extent dictated by the nature of the programming languages available (procedural) and the ease with which programs could be modified once the coding had been done.

The steps of the waterfall model are: Gather requirements, Design system, Implement system, Test system, Full deployment, and Maintenance. The waterfall paradigm works like an actual waterfall in that just as water doesn't flow uphill, once a level is complete, the developers can't go back and re-do something that was poorly implemented.

The waterfall development process works well when the customer requirements are very well understood and fixed, the product definition is stable and not subject to changes, the technology is understood, there are ample resources with required expertise, and the project is relatively short.

Diff: 2 Section: 11.1 Agile Project Management LO: 11.1: Understand why Agile Project Management was developed and its advantages in planning for certain types of projects.

Classification: Concept AACSB: Application of Knowledge

13) What is Agile PM and what makes it ideal for many software development projects?

Answer: Agile project management reflects a new era in project planning that places a premium on flexibility and evolving customer requirements throughout the development process. Agile PM recognizes the importance of these evolving customer needs and allows for an incremental, iterative planning process — one that stays connected to clients across the project life cycle.

Agile PM is usually referred to as Scrum, which recognizes it is a mistake that once the initial conceptualization and planning have been completed, the project can simply be executed.

Agile PM turns development into a series of short development cycles known as the sprint that fit with a predetermined time box of one to four weeks in duration. This process is well-suited for deployment during software development projects, which are prone to constant change.

Diff: 2 Section: 11.1 Agile Project Management LO: 11.1: Understand why Agile Project Management was developed and its advantages in planning for certain types of projects.

Classification: Concept AACSB: Application of Knowledge 14) What takes place in the Scrum process?

Answer: In Agile PM, Scrum refers to the development strategy agreed to by all key members of the project. Scrum meetings involve assessing the current status of the project, evaluating the results of the previous Sprint, and setting the goals and time-box for the next iteration.

The Scrum process involves a set of meetings that manage the project development process through 1) Sprint Planning, 2) Daily Scrums, 3) the Development Work, 4) Sprint Review, and 5) Sprint Retrospective. During the Sprint three guidelines shape the process: a) no changes are made that would endanger or modify the sprint goal, b)quality goals to not decrease, and c) scope may be clarified and renegotiated between the project owner and the development team as more is learned.

The work to be performed in the Sprint is identified during the Sprint Planning session. This plan is created by the collaborative work of the entire Scrum team.

The Daily Scrum is a short (15 minutes) event that allows the development team an opportunity to synchronize their activities and create a plan for the next 24-hour time window. During the meeting, members of the development team explain what they accomplished in the past 24 hours to meet the Sprint goal, what they intend to work on during the current day, and identify any problems that might prevent the development team from completing the next Sprint goal.

Diff: 2 Section: 11.1 Agile Project Management LO: 11.1: Understand why Agile Project Management was developed and its advantages in planning for certain types of projects.

Classification: Concept AACSB: Application of Knowledge

15) Compose a haiku using three or more of the key terms in Agile PM. Answer: Answers will vary, but should conform to the 5-7-5 syllable pattern. One example using only terms is: Development team.

Product backlog, burndown chart, Product owner, scrum.

Another example with a few connecting words for a poetic flourish is: I am Scrum Master.

Where is the product owner?

Time box is closing.

An homage to Steve Jobs: Development team.

Listen to user stories, Then make something great.

Diff: 2 Section: 11.1 Agile Project Management LO: 11.1: Understand why Agile Project Management was developed and its advantages in planning for certain types of projects.

Classification: Concept AACSB: Application of Knowledge 16) What are the key elements of extreme programming?

Answer: Extreme Programming (XP) is a more aggressive form of Scrum and is a software development methodology intended to improve software quality and responsiveness to changing customer requirements. XP emphasizes keeping the programming code simple, reviewing it frequently, testing it early and often, and working normal business hours.

Two of the guiding features of XP are the process of refactoring and pair programming. In order to speed software development, functional testing of all requirements is done before coding begins and automated testing of the code is performed continuously throughout the project.

Refactoring is the continuous process of streamlining the design and improving code, not waiting until final testing to edit and fix code. Pair programming demands that all code is written by teams of two programmers that literally work side by side on the same machine doing the coding.

Diff: 2 Section: 11.1 Agile Project Management LO: 11.1: Understand why Agile Project Management was developed and its advantages in planning for certain types of projects.

Classification: Concept AACSB: Application of Knowledge

17) What is the motivation for programming in pairs using one terminal? How can this approach be more productive than having each of the two programmers at his own terminal?

Answer: Pair programming demands that all code is written by teams of two programmers that literally work side by side on the same machine doing the coding. Pair programming can help programmers resolve issues and clarify interpretations of user stories that drive the requirements.

While engaged in pair programming, the writer of the code, called the driver, receives assistance from the navigator (sometimes called the observer or pointer) who reviews the line of code and considers the strategic direction of the work. While pairs tend to spend 15% more time writing code, the resulting code has 15% fewer defects. In addition, coders learn from each other and surface more possibilities for solving problems than if just one person coded in isolation.

Diff: 3 Section: 11.1 Agile Project Management LO: 11.1: Understand why Agile Project Management was developed and its advantages in planning for certain types of projects.

Classification: Concept AACSB: Application of Knowledge 18) What are some arguments against the XP technique of pair programming?

Answer: Pair programming demands that all code is written by teams of two programmers that literally work side by side on the same machine doing the coding. Just as in any team environment, disengagement, such as when one coder is not hands on with the keyboard decides to use his tablet or smartphone to check email or update his Facebook page, negates any advantage pair programming might offer. Some pairings of programmers are less successful than others — if one coder is far more skilled, then a "watch and learn" approach may relegate the other coder to literally watching without offering any opinions. Also, if the coders do not fit together well for reasons of personality or approach to the task at hand, then the clash of personalities or work ethic may make them significantly less productive.

Diff: 3 Section: 11.1 Agile Project Management LO: 11.1: Understand why Agile Project Management was developed and its advantages in planning for certain types of projects.

Classification: Concept AACSB: Application of Knowledge 19) All of these happen during the sprint phase EXCEPT: A) Technical issues are forwarded to the product owner.

B) Scope clarification.

C) Sprint goal modification.

D) Scope renegotiation.

Answer: C Diff: 2 Section: 11.1 Agile Project Management LO: 11.2: Recognize the critical steps in the Agile process as well as its drawbacks.

Classification: Concept AACSB: Application of Knowledge

20) A product backlog: A) Shows remaining work in the sprint backlog.

B) Is controlled by the customer.

C) Shows what has been ordered to complete the project but not yet received from suppliers.

D) Is a constantly evolving list.

Answer: D Diff: 2 Section: 11.1 Agile Project Management LO: 11.2: Recognize the critical steps in the Agile process as well as its drawbacks.

Classification: Concept AACSB: Application of Knowledge 21) Which of these is a drawback for Agile Project Management?

A) Final outcomes are well-defined since Agile requirements are clearly articulated at the start of the design phase.

B) The users of the project deliverable tend to be uninformed as to project status until the delivery phase once the initial bid process has ended.

C) The project team will be unsure the deliverable works since testing is delayed to the very end of the project.

D) The frequent rescoping of a predictable project becomes wasted expense as it won't deliver added benefits.

Answer: D Diff: 2 Section: 11.1 Agile Project Management LO: 11.2: Recognize the critical steps in the Agile process as well as its drawbacks.

Classification: Concept AACSB: Application of Knowledge 22) Which of these is a drawback for Agile Project Management?

A) Final outcomes are well-defined since Agile requirements are clearly articulated at the start of the design phase.

B) The users of the project deliverable tend to be uninformed as to project status until the delivery phase once the initial bid process has ended.

C) The project team will be unsure the deliverable works since testing is delayed to the very end of the project.

D) The frequent rescoping of a predictable project becomes wasted expense as it won't deliver added benefits.

Answer: D Diff: 2 Section: 11.1 Agile Project Management LO: 11.2: Recognize the critical steps in the Agile process as well as its drawbacks.

Classification: Concept AACSB: Application of Knowledge

23) Which of these is difficult when Agile Project Management is used?

A) Fixed-price contracts between customers and the project organization B) Altering or updating the project requirements C) Knowing for certain that the software is working as you progress through the project D) The frequent rescoping of a predictable project becomes wasted expense as it won't deliver added benefits.

Answer: A Diff: 2 Section: 11.1 Agile Project Management LO: 11.2: Recognize the critical steps in the Agile process as well as its drawbacks.

Classification: Concept AACSB: Application of Knowledge 24) Wayne and Garth are engaged in XP and are constantly streamlining the design and improving the code. In XP terminology, they are engaged in: A) Scrumming.

B) Refactoring.

C) Sprinting.

D) Time boxing.

Answer: B Diff: 2 Section: 11.1 Agile Project Management LO: 11.2: Recognize the critical steps in the Agile process as well as its drawbacks.

Classification: Concept AACSB: Application of Knowledge 25) Wayne and Garth are engaged in XP and are writing code while sitting at one terminal. In XP terminology, they are engaged in: A) Scrumming.

B) Refactoring.

C) Pair programming.

D) Time boxing.

Answer: C Diff: 2 Section: 11.1 Agile Project Management LO: 11.2: Recognize the critical steps in the Agile process as well as its drawbacks.

Classification: Concept AACSB: Application of Knowledge

26) A key element of extreme programming is: A) Frequent communication among programmers, but infrequent communication with the customer.

B) Understanding the problem completely before coding begins.

C) A hierarchical management structure.

D) Avoidance of programming features until they are actually needed.

Answer: C Diff: 2 Section: 11.1 Agile Project Management LO: 11.2: Recognize the critical steps in the Agile process as well as its drawbacks.

Classification: Concept AACSB: Application of Knowledge 27) A scrum is one iteration of the Agile planning and executing cycle, that is, the actual "work" being done.

Answer: FALSE Diff: 2 Section: 11.1 Agile Project Management LO: 11.2: Recognize the critical steps in the Agile process as well as its drawbacks.

Classification: Concept AACSB: Application of Knowledge 28) A product backlog is the final list of what is needed to complete the project.

Answer: FALSE Diff: 2 Section: 11.1 Agile Project Management LO: 11.2: Recognize the critical steps in the Agile process as well as its drawbacks.

Classification: Concept AACSB: Application of Knowledge 29) The one element that Agile shares with traditional project management in a software development environment is that all testing is done at the very end of the project.

Answer: FALSE Diff: 1 Section: 11.1 Agile Project Management LO: 11.2: Recognize the critical steps in the Agile process as well as its drawbacks.

Classification: Concept AACSB: Application of Knowledge

30) The one element that Agile shares with traditional project management in a software development environment is that all testing is done at the very end of the project.

Answer: FALSE Diff: 1 Section: 11.2 Extreme Programming (XP) LO: 11.3: Understand the key features of the Extreme Programming (XP) planning process for software projects.

Classification: Concept AACSB: Application of Knowledge 31) Refactoring is the continuous process of streamlining the design and improving code; not waiting until final testing to edit and fix code for a software project.

Answer: TRUE Diff: 1 Section: 11.2 Extreme Programming (XP) LO: 11.3: Understand the key features of the Extreme Programming (XP) planning process for software projects.

Classification: Concept AACSB: Application of Knowledge 32) Extreme programming advocates a large development staff, several times the number of programmers than would appear in a traditional software project, since the objective is to deliver the project quickly.

Answer: FALSE Diff: 1 Section: 11.2 Extreme Programming (XP) LO: 11.3: Understand the key features of the Extreme Programming (XP) planning process for software projects.

Classification: Concept AACSB: Application of Knowledge 33) The first step in TOC methodology is to: A) Identify the constraint.

B) Exploit the constraint.

C) Subordinate the system to the constraint.

D) Elevate the constraint.

Answer: A Diff: 1 Section: 11.3 The Theory of Constraints and Critical Chain Project Scheduling LO: 11.4: Distinguish between critical path and critical chain project scheduling techniques.

Classification: Concept AACSB: Application of Knowledge

34) ABC project organization has one workstation that is capable of generating the drawings that their clients study before accepting ABC's bid. ABC is currently in the midst of three proposal projects and knows which proposed project will be most profitable and which will be least profitable. The workstation is scheduled so that the most profitable project's work is done first and the least profitable project work is done last. This is an example of: A) Identifying a constraint.

B) Exploiting a constraint.

C) Elevating a constraint.

D) Subordinating a system.

Answer: B Diff: 1 Section: 11.3 The Theory of Constraints and Critical Chain Project Scheduling LO: 11.4: Distinguish between critical path and critical chain project scheduling techniques.

Classification: Concept AACSB: Application of Knowledge 35) XYZ project organization has one workstation that is capable of generating the drawings that their clients study before accepting XYZ's bid. XYZ is currently in the midst of three proposal projects and knows exactly when it will need to use the workstation. All other work to be done, both before and after the workstation is used, is scheduled such that it flows to the workstation and keeps it busy. Resources used after this step are less critical; so while the subsequent work and resources are important, they aren't viewed with the same reverence as the workstation. This is an example of: A) Identifying a constraint.

B) Elevating a constraint.

C) Subordinating a system.

D) Exploiting a constraint.

Answer: C Diff: 2 Section: 11.3 The Theory of Constraints and Critical Chain Project Scheduling LO: 11.4: Distinguish between critical path and critical chain project scheduling techniques.

Classification: Concept AACSB: Application of Knowledge

36) Keith welds a one-fourth-inch diameter ball bearing and a three-eighths-inch diameter ball bearing on each end of an eighth-inch diameter cylinder. Sure, the work is tedious, but he knows he's doing his part keeping this country running and lining his employer's pockets with sweet cash. His employer hopes to speed up this activity by hiring another skilled worker, and in doing so will: A) Subordinate the rest of the system.

B) Identify the constraint.

C) Exploit the constraint.

D) Elevate the system constraint.

Answer: D Diff: 2 Section: 11.3 The Theory of Constraints and Critical Chain Project Scheduling LO: 11.4: Distinguish between critical path and critical chain project scheduling techniques.

Classification: Concept AACSB: Application of Knowledge 37) The Central Limit Theorem says that if a number of probability distributions are summed: A) The standard deviation of the sum equals the sum of the standard deviations.

B) The variance of the sum equals the sum of the variances.

C) The standard deviation of the sum is greater than the sum of the standard deviations.

D) The variance of the sum is less than the sum of the variances.

Answer: B Diff: 2 Section: 11.4 The Critical Chain Solution to Project Scheduling LO: 11.4: Distinguish between critical path and critical chain project scheduling techniques.

Classification: Critical Thinking AACSB: Analytical Thinking 38) A project consists of four activities with information as shown in the table. What is the overall variance of the project?

Activity Predecessor Length Variance A -10 4 B A 12 3 C B 16 5 D C 14 6 A) 4.24 B) 8.41 C) 18 D) 24 Answer: C Diff: 2 Section: 11.4 The Critical Chain Solution to Project Scheduling LO: 11.4: Distinguish between critical path and critical chain project scheduling techniques.

Classification: Critical Thinking AACSB: Analytical Thinking 39) A project consists of four activities with information as shown in the table. What is the overall standard deviation of the project?

Activity Predecessor Length Variance A -10 4 B A 12 3 C B 16 5 D C 14 6 A) 24 B) 18 C) 8.41 D) 4.24 Answer: D Diff: 2 Section: 11.4 The Critical Chain Solution to Project Scheduling LO: 11.4: Distinguish between critical path and critical chain project scheduling techniques.

Classification: Critical Thinking AACSB: Analytical Thinking 40) A project consists of four activities with information as shown in the table. What is the overall variance of the project?

Standard Activity Predecessor Length Deviation A -10 2 B A 12 1 C B 16 2 D C 14 3 A) 18 B) 8 C) 2.82 D) 5.56 Answer: A Diff: 2 Section: 11.4 The Critical Chain Solution to Project Scheduling LO: 11.4: Distinguish between critical path and critical chain project scheduling techniques.

Classification: Critical Thinking AACSB: Analytical Thinking

41) A project consists of four activities with information as shown in the table. What is the overall standard deviation of the project?

Standard Activity Predecessor Length Deviation A -10 2 B A 12 1 C B 16 2 D C 14 3 A) 8.00 B) 4.24 C) 2.82 D) 5.56 Answer: B Diff: 2 Section: 11.4 The Critical Chain Solution to Project Scheduling LO: 11.4: Distinguish between critical path and critical chain project scheduling techniques.

Classification: Critical Thinking AACSB: Analytical Thinking 42) A project consists of four activities with information as shown in the table. What is the overall variance of the project's duration?

Standard Activity Predecessor Length Deviation A -10 2 B A 12 3 C A 16 2 D B, C 14 3 A) 13 B) 17 C) 26 D) 35 Answer: B Diff: 3 Section: 11.4 The Critical Chain Solution to Project Scheduling LO: 11.4: Distinguish between critical path and critical chain project scheduling techniques.

Classification: Critical Thinking AACSB: Analytical Thinking

43) A project consists of four activities with information as shown in the table. What is the overall standard deviation of the project's duration?

Standard Activity Predecessor Length Deviation A -10 2 B A 12 3 C A 16 2 D B, C 14 3 A) 6.2 B) 4.1 C) 2.8 D) 5.1 Answer: B Diff: 2 Section: 11.4 The Critical Chain Solution to Project Scheduling LO: 11.4: Distinguish between critical path and critical chain project scheduling techniques.

Classification: Critical Thinking AACSB: Analytical Thinking 44) Which statement about critical chain methodology is BEST? A) Activity durations estimated at a 50% level of successful completion are shorter than those estimated at a 90% level of successful completion.

B) Aggregated activity durations at a 90% level of successful completion are shorter than aggregated activity durations at a 50% level of successful completion.

C) The total safety buffer for aggregated activity durations is smaller than the sum of safety buffers for individual activity durations at any likely level estimate.

D) None of these statements is correct.

Answer: C Diff: 2 Section: 11.4 The Critical Chain Solution to Project Scheduling LO: 11.4: Distinguish between critical path and critical chain project scheduling techniques.

Classification: Critical Thinking AACSB: Analytical Thinking 45) Which of the following statements about CCPM activity networks is CORRECT? A) Project workers are more likely to meet a deadline for their activity than miss it.

B) There are no milestones in the CCPM activity network.

C) Project workers are more likely to miss a deadline for their activity than meet it.

D) There is no project delivery deadline in the CCPM activity network.

Answer: B Diff: 2 Section: 11.4 The Critical Chain Solution to Project Scheduling LO: 11.4: Distinguish between critical path and critical chain project scheduling techniques.

Classification: Application AACSB: Application of Knowledge 46) An important departure from traditional project management is that critical chain project management logic: A) Changes from a late finish to an early start approach.

B) Factors in the effects of resource contention.

C) Adjusts expected activity durations to reflect a 95% probability of completion on time.

D) Creates a separate safety margin for each activity in the project.

Answer: B Diff: 1 Section: 11.4 The Critical Chain Solution to Project Scheduling LO: 11.4: Distinguish between critical path and critical chain project scheduling techniques.

Classification: Concept AACSB: Application of Knowledge 47) Which statement about critical chain project management is BEST? A) CCPM is a complete solution to current project management scheduling needs.

B) In a multi-project environment where resources are shared, it is impossible to avoid multitasking.

C) There is substantial large-scale empirical research that confirms the efficacy of CCPM. D) Lack of milestones within CCPM make coordination with external suppliers and subcontractors much easier.

Answer: B Diff: 2 Section: 11.7 Critiques of CCPM LO: 11.4: Distinguish between critical path and critical chain project scheduling techniques.

Classification: Concept AACSB: Application of Knowledge 48) Successful implementation of CCPM depends on first: A) Identifying the critical chain that meanders through the project organization's portfolio of projects.

B) Identifying the constraint that holds hostage the project organization's other resources.

C) Examining and changing the culture of the project organization.

D) Exploiting the drum by using it to subordinate the existing PERT network.

Answer: C Diff: 2 Section: 11.7 Critiques of CCPM LO: 11.4: Distinguish between critical path and critical chain project scheduling techniques.

Classification: Concept AACSB: Application of Knowledge 49) Once the organization elevates its constraint, its system has no constraint.

Answer: FALSE Diff: 2 Section: 11.3 The Theory of Constraints and Critical Chain Project Scheduling LO: 11.4: Distinguish between critical path and critical chain project scheduling techniques.

Classification: Concept AACSB: Application of Knowledge 50) The Central Limit Theorem states that if a number of probability distributions are summed, the variance of the sum equals the sum of the variances of individual distributions.

Answer: TRUE Diff: 2 Section: 11.4 The Critical Chain Solution to Project Scheduling LO: 11.4: Distinguish between critical path and critical chain project scheduling techniques.

Classification: Critical Thinking AACSB: Analytical Thinking 51) The critical chain is usually the same as the critical path.

Answer: FALSE Diff: 2 Section: 11.4 The Critical Chain Solution to Project Scheduling LO: 11.4: Distinguish between critical path and critical chain project scheduling techniques.

Classification: Concept AACSB: Application of Knowledge 52) What are the five steps behind the Theory of Constraints methodology and what takes place in each?

Answer: The five steps in TOC methodology are to: identify the system constraint; exploit the system constraint; subordinate everything else to the system constraint; elevate the system constraint; and determine if a new constraint has been uncovered; then repeat the process. In order to identify the constraint, an intensive search must be made to uncover the root cause that limits the output of the system. To exploit the constraint, a strategy of focusing and viewing all activities in terms of this constraint is necessary; the firm must put the constraint to its best use before any other resource is considered. Subordination of the system requires resource commitment or scheduling decisions after handling the needs of the root constraint. The fourth step, elevating the constraint, seeks to improve the system by mitigating the effect of this bottleneck. If in fact, the constraint has been broken, then a new one has emerged. This new constraint throws the organization into the next cycle of identification, exploitation, subordination, and elevation.

Diff: 2 Section: 11.3 The Theory of Constraints and Critical Chain Project Scheduling LO: 11.4: Distinguish between critical path and critical chain project scheduling techniques.

Classification: Application AACSB: Application of Knowledge

53) Your boss catches you at the water cooler one morning and assigns you an important task— to remove all the constraints from your project using the Theory of Constraints (TOC) five step process. What should your response be to your boss??

Answer: The five steps in TOC methodology are to: identify the system constraint; exploit the system constraint; subordinate everything else to the system constraint; elevate the system constraint; and determine if a new constraint has been uncovered; then repeat the process. Just as every chain must have a weakest link, a system must always have a slowest step (one with the lowest capacity) that limits our ability to meet our objective. It is not possible to eliminate all constraints from a system. If one is solved, then there will be a new slowest step; it may well be faster than the previous slowest step, but nonetheless, it will be the slowest step in this new and improved system and this be the new system constraint.

Diff: 2 Section: 11.3 The Theory of Constraints and Critical Chain Project Scheduling LO: 11.4: Distinguish between critical path and critical chain project scheduling techniques.

Classification: Critical Thinking AACSB: Application of Knowledge 54) What is the difference between the critical path and the key system constraint?

Answer: The critical path is defined as the earliest possible time on the activity network it can take to complete a project. The key system constraint is the one root cause from which all other scheduling problems evolve. All scheduling and resource problems associated with projects typically occur due to problems with trying to maintain the critical path, and hence its oft-made identification as the chief system constraint.

Diff: 2 Section: 11.3 The Theory of Constraints and Critical Chain Project Scheduling LO: 11.4: Distinguish between critical path and critical chain project scheduling techniques.

Classification: Application AACSB: Application of Knowledge

55) Alexander Demetrius Dickson, ADD to his friends, has three big projects he is working on, and he can't seem to organize his time effectively. Each of the three projects, we'll call them A, B, and C, should take ten days to complete. He is currently contemplating two different approaches. Approach one is to work each project to completion before starting on the next. The problem with this approach is that he tends to burn out if he works on one task for an extended period of time. For every two days he works on one single task, he finds he must take a half day off. ADD's alternative is to multitask, that is, work on project A for a day, then switch to project B for a day, before switching to project C for a day. The problem with this approach is that there is a small setup time equaling one-quarter of a day associated with each transition. Use a Gantt chart to show the effect of each approach and determine which method is the best (has the overall fastest completion time) for performing this work.

Answer: The actual task time and idle time are identical, the projects require 10 days each and there is a total of 7.5 days of setup (or burnout) time in each schedule. The top Gantt chart shows the effect of working straight through each project until completion. The total project time is ten days and the inserted idle time due to burnout is two days (shaded bars denote this rest period).

The span of project A is twelve days. This would be followed by a rest period of a half day and then a similar pattern for project B. The final burnout day need not be considered (unless more projects follow) so the total time would be 37 days.

Multitasking appears as follows: times indicated on the timeline mark the end of the setup, so the 1.25 is one day of work on Project A followed by a one-quarter day setup, the 2.5 is the completion of the setup after the first day on Project B, and so on. It will take five iterations of the Gantt chart shown to complete all segments of projects A, B, and C, so the total time is 5×7.5=37.5, less the final quarter-day setup for a total time of 37.25 days; virtually the same as the above Gantt chart in terms of completion. The big difference is in the span of the jobs.

The big difference is in the span of the projects from their beginning to completion. The first schedule shows that Project A ends twelve days after it was begun. The same would hold true for projects B and C. For the second approach, project A ends 34.75 days after it was started, as do projects B and C. Diff: 2 Section: 11.3 The Theory of Constraints and Critical Chain Project Scheduling LO: 11.4: Distinguish between critical path and critical chain project scheduling techniques.

Classification: Application AACSB: Application of Knowledge 56) What is aggregated buffer and how can the appropriate amount be determined?

Answer: Aggregated, or project, buffer is a consequence of the critical chain approach to project scheduling. Critical chain project management cuts activity length estimates in half and creates an overall aggregate buffer for the project manager to apply to the entire project as needed.

Determination of the project buffer can be accomplished two different ways — the quick-anddirty Goldratt technique that calls for retention of 50% of the total project buffer or a mathematically derived method suggested by Newbold, given by the equation: Buffer = σ = Diff: 2 Section: 11.4 The Critical Chain Solution to Project Scheduling LO: 11.4: Distinguish between critical path and critical chain project scheduling techniques.

Classification: Critical Thinking AACSB: Analytical Thinking 57) List any three criticisms of critical chain project management and rank them in order from the greatest to smallest threat to universal adoption of CCPM. Answer: Answers will vary with respect to rankings. The perceived weaknesses mentioned in the text are: Lack of project milestones make coordinated scheduling with external suppliers problematic.

The lack of suitability for all types of projects and blatant repackaging of existing techniques is a concern.

The technique's usefulness at the program level has not been proven.

Concrete evidence of its success is almost exclusively anecdotal.

CCPM has not been shown to be a complete solution to current project management needs.

The CCPM stance on activity duration estimation padding is undocumented and excessive.

The shift required in corporate culture to eliminate buffers from activity estimates and create an environment of zero blame may be insurmountable.

Diff: 2 Section: 11.7 Critiques of CCPM LO: 11.4: Distinguish between critical path and critical chain project scheduling techniques.

Classification: Critical Thinking AACSB: Analytical Thinking

58) Your next project consists of 5 consecutive 10-day activities, each estimated by a different worker in your organization. You have all secretly added your own safety margin of 4 days into your estimates and you watch in horror as the project manager whips out his copy of Critical Chain and slams it on the table midway through their first project meeting. "I'm taking your buffers and making them my own," he bellows. You recoil from this news and do some quick mental arithmetic. Now that you know the project manager is a Goldratt disciple, you know that the new project buffer will be: A) 25 days B) 20 days C) 15 days D) 10 days Answer: D Diff: 2 Section: 11.4 The Critical Chain Solution to Project Scheduling LO: 11.5: Understand how critical chain methodology resolves project resource conflicts.

Classification: Critical Thinking AACSB: Analytical Thinking 59) Your next project consists of 8 consecutive 8-day activities, each estimated by a different worker in your organization. Your organizational culture dictates that you add your own safety margin of 3 days into your estimates. Unbeknownst to you, the project manager has recently converted to a critical chain project management view. The project manager knows perfectly well what sorts of games are played with activity estimates and she knows exactly how much activity padding takes place. What will the overall project safety margin be once the project manager reviews your estimates and makes the project schedule?

A) 12 days B) 6 days C) 18 days D) 9 days Answer: A Diff: 2 Section: 11.4 The Critical Chain Solution to Project Scheduling LO: 11.5: Understand how critical chain methodology resolves project resource conflicts.

Classification: Critical Thinking AACSB: Analytical Thinking

60) Your next project consists of 10 consecutive 8-day activities, each estimated by a different worker in your organization. Note that the estimators have not yet added any buffer to the 8-day figure. Your organizational culture dictates that you add your own safety margin of 30% into your estimates. The new project manager has just completed an excellent course in project management offered at the local university. When the first project meeting begins, he dazzles you with his wit and sophistication. You are considerably less charmed when he reveals that he has an exciting new technique for managing projects. He adheres to critical chain project management ideas and plans to create an overall project safety buffer after trimming the safety buffers from each of the 10 activities. How much closer has the project deadline moved?

A) 12 days B) 6 days C) 18 days D) 9 days Answer: A Diff: 3 Section: 11.4 The Critical Chain Solution to Project Scheduling LO: 11.5: Understand how critical chain methodology resolves project resource conflicts.

Classification: Critical Thinking AACSB: Analytical Thinking 61) A project consists of four consecutive tasks that have average duration and worst-case duration estimates (in days) as shown in the table. Use Newbold's model to determine the aggregated one sigma buffer for this project.

Activity Average Worst-Case A 10 20 B 15 25 C 20 30 D 25 35 A) 20 days B) 10 days C) 15 days D) 5 days Answer: B Diff: 2 Section: 11.4 The Critical Chain Solution to Project Scheduling LO: 11.5: Understand how critical chain methodology resolves project resource conflicts.

Classification: Critical Thinking AACSB: Analytical Thinking

62) A project consists of four consecutive tasks that have average duration and worst-case duration estimates (in days) as shown in the table. Use Newbold's model to determine the aggregated buffer of one standard deviation for this project.

Activity Average Worst-Case X 12 20 Y 20 25 Z 14 24 W 18 26 A) 31 days B) 16 days C) 8 days D) 5 days Answer: C Diff: 3 Section: 11.4 The Critical Chain Solution to Project Scheduling LO: 11.5: Understand how critical chain methodology resolves project resource conflicts.

Classification: Critical Thinking AACSB: Analytical Thinking 63) A project consists of four consecutive tasks that have average duration and worst-case duration estimates (in days) as shown in the table. Use Goldratt's model to determine the aggregated buffer for this project.

Activity Average Worst-Case A 10 20 B 15 25 C 20 30 D 25 35 A) 20 days B) 10 days C) 15 days D) 5 days Answer: A Diff: 2 Section: 11.4 The Critical Chain Solution to Project Scheduling LO: 11.5: Understand how critical chain methodology resolves project resource conflicts.

Classification: Critical Thinking AACSB: Analytical Thinking

64) A project consists of four consecutive tasks that have average duration and worst-case duration estimates (in days) as shown in the table. Use Goldratt's model to determine the aggregated buffer for this project.

Activity Average Worst-Case X 12 20 Y 20 25 Z 14 24 W 18 26 A) 8.5 days B) 15.9 days C) 7.9 days D) 15.5 days Answer: D Diff: 3 Section: 11.4 The Critical Chain Solution to Project Scheduling LO: 11.5: Understand how critical chain methodology resolves project resource conflicts.

Classification: Critical Thinking AACSB: Analytical Thinking 65) A project consists of six consecutive tasks that have average duration and worst-case duration estimates (in days) as shown in the table. Use Newbold's method to determine the aggregated two sigma buffer for this project.

Activity Average Worst-Case A 14 21 B 20 28 C 16 22 D 8 15 E 9 18 F 11 18 A) 44 days B) 6 days C) 17 days D) 9 days Answer: D Diff: 3 Section: 11.4 The Critical Chain Solution to Project Scheduling LO: 11.5: Understand how critical chain methodology resolves project resource conflicts.

Classification: Critical Thinking AACSB: Analytical Thinking

66) A project consists of six consecutive tasks that have average duration and worst-case duration estimates (in weeks) as shown in the table. Use Newbold's method to determine the aggregated two sigma buffer for this project.

Activity Average Worst-Case A 10 14 B 2 4 C 6 12 D 8 13.5 E 9 12 F 5 7.5 A) 5 days B) 6 days C) 7 days D) 9 days Answer: A Diff: 3 Section: 11.4 The Critical Chain Solution to Project Scheduling LO: 11.5: Understand how critical chain methodology resolves project resource conflicts.

Classification: Critical Thinking AACSB: Analytical Thinking 67) Subcontractor deliveries are difficult to schedule with the critical chain project methodology because: A) The project manager cannot force subcontractors to use this project management approach.

B) The feeder buffers for a subcontractor are as much as 50% shorter than for an employee or internal team.

C) Subcontractors routinely operate according to calendar delivery dates.

D) The corporate culture of "no blame" does not naturally extend to subcontractors.

Answer: C Diff: 2 Section: 11.4 The Critical Chain Solution to Project Scheduling LO: 11.5: Understand how critical chain methodology resolves project resource conflicts.

Classification: Application AACSB: Application of Knowledge 68) The buffers supplied to non-critical paths in critical chain project management are called: A) Slack buffers.

B) Drum buffers.

C) Rope buffers.

D) Feeder buffers.

Answer: D Diff: 2 Section: 11.4 The Critical Chain Solution to Project Scheduling LO: 11.5: Understand how critical chain methodology resolves project resource conflicts.

Classification: Critical Thinking AACSB: Analytical Thinking 69) CCPM advocates performing all non-critical activities: A) As late as possible.

B) As early as possible.

C) Before starting the critical path.

D) After completing the critical path.

Answer: A Diff: 2 Section: 11.4 The Critical Chain Solution to Project Scheduling LO: 11.5: Understand how critical chain methodology resolves project resource conflicts.

Classification: Critical Thinking AACSB: Analytical Thinking 70) A project is represented by the activity durations (estimated at 90% likelihood of completion) and precedence requirements shown in the table. What is the length of the feeder buffer if this project is managed using critical chain methodology?

Activity Predecessor Length Activity Predecessor Length A -20 D B 16 B A 20 E C 8 C A 10 F D, E 8 A) 9.0 B) 7.5 C) 4.5 D) 6.0 Answer: C Diff: 2 Section: 11.4 The Critical Chain Solution to Project Scheduling LO: 11.5: Understand how critical chain methodology resolves project resource conflicts.

Classification: Critical Thinking AACSB: Analytical Thinking

71) A project is represented by the activity durations (estimated at 90% likelihood of completion) and precedence requirements shown in the table. What is the length of the project buffer if this project is managed using critical chain methodology?

Activity Predecessor Length Activity Predecessor Length A -20 D B 16 B A 20 E C 8 C A 10 F D, E 8 A) 4.5 B) 11.5 C) 20.5 D) 16 Answer: D Diff: 2 Section: 11.4 The Critical Chain Solution to Project Scheduling LO: 11.5: Understand how critical chain methodology resolves project resource conflicts.

Classification: Critical Thinking AACSB: Analytical Thinking 72) A project is represented by the activity durations (estimated at 90% likelihood of completion) and precedence requirements shown in the table. What is the overall duration of this project if it is managed using critical chain methodology?

Activity Predecessor Length Activity Predecessor Length A -20 D B 16 B A 20 E C 8 C A 10 F D, E 8 A) 48 B) 32 C) 64 D) 43.5 Answer: A Diff: 2 Section: 11.4 The Critical Chain Solution to Project Scheduling LO: 11.5: Understand how critical chain methodology resolves project resource conflicts.

Classification: Critical Thinking AACSB: Analytical Thinking

73) A project is represented by the activity durations (estimated at 90% likelihood of completion) and precedence requirements shown in the table. What is the length of the feeder buffer for path NQT if this project is managed using critical chain methodology?

Activity Predecessor Length Activity Predecessor Length M -8 R -12 N -8 S P 14 P M 12 T R, Q 7 Q N 10 V S, T 11 A) 9.0 B) 2.25 C) 4.5 D) 6.75 Answer: B Diff: 2 Section: 11.4 The Critical Chain Solution to Project Scheduling LO: 11.5: Understand how critical chain methodology resolves project resource conflicts.

Classification: Critical Thinking AACSB: Analytical Thinking 74) A project is represented by the activity durations (estimated at 90% likelihood of completion) and precedence requirements shown in the table. What is the length of the project buffer if this project is managed using critical chain methodology?

Activity Predecessor Length Activity Predecessor Length M -8 R -12 N -8 S P 14 P M 12 T R, Q 7 Q N 10 V S, T 11 A) 13.5 B) 22.5 C) 11.25 D) 9.0 Answer: C Diff: 2 Section: 11.4 The Critical Chain Solution to Project Scheduling LO: 11.5: Understand how critical chain methodology resolves project resource conflicts.

Classification: Critical Thinking AACSB: Analytical Thinking

75) A project is represented by the activity durations (estimated at 90% likelihood of completion) and precedence requirements shown in the table. What is the overall duration of this project if it is managed using critical chain methodology?

Activity Predecessor Length Activity Predecessor Length M -8 R -12 N -8 S P 14 P M 12 T R, Q 7 Q N 10 V S, T 11 A) 22.5 B) 24.75 C) 27.0 D) 33.75 Answer: D Diff: 2 Section: 11.4 The Critical Chain Solution to Project Scheduling LO: 11.5: Understand how critical chain methodology resolves project resource conflicts.

Classification: Critical Thinking AACSB: Analytical Thinking 76) A project is represented by the activity durations (in days, estimated at 90% likelihood of completion) and precedence requirements shown in the table. What is the length of a feeder buffer if this project is managed using critical chain methodology?

Activity Predecessor Length Activity Predecessor Length A -18 E C, D 13 B -16 F C 9 C A 22 G E, F 15 D B 14 A) 3.5 days B) 2.5 days C) 1.5 days D) 0.5 days Answer: B Diff: 2 Section: 11.4 The Critical Chain Solution to Project Scheduling LO: 11.5: Understand how critical chain methodology resolves project resource conflicts.

Classification: Critical Thinking AACSB: Analytical Thinking

77) A project is represented by the activity durations (in days, estimated at 90% likelihood of completion) and precedence requirements shown in the table. What is the length of a feeder buffer if this project is managed using critical chain methodology?

Activity Predecessor Length Activity Predecessor Length A -18 E C, D 13 B -16 F C 9 C A 22 G E, F 15 D B 14 A) 4 days B) 3 days C) 2 days D) 1 days Answer: D Diff: 2 Section: 11.4 The Critical Chain Solution to Project Scheduling LO: 11.5: Understand how critical chain methodology resolves project resource conflicts.

Classification: Critical Thinking AACSB: Analytical Thinking 78) A project is represented by the activity durations (in days, estimated at 90% likelihood of completion) and precedence requirements shown in the table. How many feeder buffers are needed if this project is managed using critical chain methodology?

Activity Predecessor Length Activity Predecessor Length A -18 E C, D 13 B -16 F C 9 C A 22 G E, F 15 D B 14 A) 0 B) 1 C) 2 D) 3 Answer: C Diff: 2 Section: 11.4 The Critical Chain Solution to Project Scheduling LO: 11.5: Understand how critical chain methodology resolves project resource conflicts.

Classification: Critical Thinking AACSB: Analytical Thinking

79) A project is represented by the activity durations (in days, estimated at 90% likelihood of completion) and precedence requirements shown in the table. How many project buffers are needed if this project is managed using critical chain methodology?

Activity Predecessor Length Activity Predecessor Length A -18 E C, D 13 B -16 F C 9 C A 22 G E, F 15 D B 14 A) 0 B) 1 C) 2 D) 3 Answer: B Diff: 1 Section: 11.4 The Critical Chain Solution to Project Scheduling LO: 11.5: Understand how critical chain methodology resolves project resource conflicts.

Classification: Critical Thinking AACSB: Analytical Thinking 80) A project is represented by the activity durations (in days, estimated at 90% likelihood of completion) and precedence requirements shown in the table. What is the length of the project buffer if this project is managed using critical chain methodology? Use the rule of thumb approach.

Activity Predecessor Length Activity Predecessor Length A -18 E C, D 13 B -16 F C 9 C A 22 G E, F 15 D B 14 A) 8.5 days B) 17 days C) 24.5 days D) 34 days Answer: B Diff: 2 Section: 11.4 The Critical Chain Solution to Project Scheduling LO: 11.5: Understand how critical chain methodology resolves project resource conflicts.

Classification: Critical Thinking AACSB: Analytical Thinking

81) Which of the following statement is BEST? A) The critical chain requires that all resource leveling be done before the critical chain can be identified.

B) The critical path usually jumps task dependency links.

C) The critical chain relies on task dependency and is discovered after the fact, once the network is laid out.

D) The critical chain is usually the same path as the critical path within an activity network.

Answer: A Diff: 2 Section: 11.4 The Critical Chain Solution to Project Scheduling LO: 11.5: Understand how critical chain methodology resolves project resource conflicts.

Classification: Concept AACSB: Application of Knowledge 82) Use the project information in the table to resolve resource conflicts, identify the critical chain and critical path, and create feeder buffers. A feeder buffer should be placed immediately before: Activity Predecessor Length Resource Activity Predecessor Length Resource A -11 P D C 13 P B A 7 M E -12 X C B 8 W F E 14 M A) Activity B. B) Activity F. C) Activity C. D) Activity A. Answer: B Diff: 2 Section: 11.4 The Critical Chain Solution to Project Scheduling LO: 11.5: Understand how critical chain methodology resolves project resource conflicts.

Classification: Critical Thinking AACSB: Analytical Thinking

83) Use the project information in the table to resolve resource conflicts, identify the critical chain and critical path, and create feeder buffers. The critical chain does NOT pass through: Activity Predecessor Length Resource Activity Predecessor Length Resource A -11 P D C 13 P B A 7 M E -12 X C B 8 W F E 14 M A) Activity A. B) Activity F. C) Activity E. D) Activity D. Answer: C Diff: 2 Section: 11.4 The Critical Chain Solution to Project Scheduling LO: 11.5: Understand how critical chain methodology resolves project resource conflicts.

Classification: Critical Thinking AACSB: Analytical Thinking 84) Use the project information in the table to resolve resource conflicts, identify the critical chain and critical path, and create feeder buffers. The project buffer follows: Activity Predecessor Length Resource Activity Predecessor Length Resource A -11 P D C 13 P B A 7 M E -12 X C B 8 W F E 14 M A) Activity A. B) Activity F. C) Activity E. D) Activity D. Answer: D Diff: 1 Section: 11.4 The Critical Chain Solution to Project Scheduling LO: 11.5: Understand how critical chain methodology resolves project resource conflicts.

Classification: Critical Thinking AACSB: Analytical Thinking 85) In order to resolve a resource conflict, it is advisable to: A) Work backwards from the end of the project.

B) Work forwards from the start of the project.

C) Begin activities at their earliest possible start time.

D) Complete activities at their earliest possible finish time.

Answer: A Diff: 1 Section: 11.5 Critical Chain Solutions to Resource Conflicts LO: 11.5: Understand how critical chain methodology resolves project resource conflicts.

Classification: Concept AACSB: Application of Knowledge 86) When choosing the most viable solution to resource conflict issues, the BEST option is the one that:

A) Minimizes total network slack.

B) Minimizes total network schedule disruption.

C) Maximizes total network slack.

D) Maximizes activity late start times.

Answer: B Diff: 2 Section: 11.5 Critical Chain Solutions to Resource Conflicts LO: 11.5: Understand how critical chain methodology resolves project resource conflicts.

Classification: Critical Thinking AACSB: Analytical Thinking 87) A feeder buffer is a buffer that is created for a non-critical path activity.

Answer: TRUE Diff: 1 Section: 11.4 The Critical Chain Solution to Project Scheduling LO: 11.5: Understand how critical chain methodology resolves project resource conflicts.

Classification: Concept AACSB: Application of Knowledge 88) An important element in critical chain scheduling is to change from a late-finish (procrastination) approach to an early-start approach.

Answer: FALSE Diff: 2 Section: 11.4 The Critical Chain Solution to Project Scheduling LO: 11.5: Understand how critical chain methodology resolves project resource conflicts.

Classification: Concept AACSB: Application of Knowledge 89) What are the implications for due dates and milestones when project slack is reapplied to the aggregated level?

Answer: Milestones are not used in the CCPM activity network; the only firm commitment is to the project delivery date. Team members responsible for individual activities may meet or miss deadlines and are much more likely to miss them if their usual safety margin has been taken from them for aggregation at the project level. The project organization must recognize the increased potential for missed deadlines so that finger pointing does not occur when deadlines are missed.

Lack of milestones makes it difficult to work with suppliers and subcontractors. Flexibility must be built into this system so they can deliver materials or be on site at a moment's notice or be bound by early start times if their functions lie on the critical path.

Diff: 2 Section: 11.4 The Critical Chain Solution to Project Scheduling LO: 11.5: Understand how critical chain methodology resolves project resource conflicts.

Classification: Critical Thinking AACSB: Analytical Thinking 90) Goldratt's solution to the variables involved in project scheduling involves the aggregation, or collectivizing, of all project risk in the form of uncertain duration estimates and completion times. Provide practical examples of how this aggregation works to the benefit of the overall project.

Answer: One example the authors cite is the insurance industry — many policy holders pay premiums and only a few actually file claims. If the actuaries have done their due diligence, then the collected premiums exceed the claim payments. Other examples of aggregation being used to

make life easier include other financial ventures such as investment, e.g. choosing a mutual fund rather than individual stocks, or choosing multiple financial instruments in which to invest.

Aggregation is also used in sales and operations planning to set overall levels for labor and capital needed to carry out operations over the coming year. As demand is revealed for specific model types, the resources may be deployed in favor of popular models at the expense of lessdemanded items.

Diff: 2 Section: 11.4 The Critical Chain Solution to Project Scheduling LO: 11.5: Understand how critical chain methodology resolves project resource conflicts.

Classification: Critical Thinking AACSB: Analytical Thinking 91) Picture yourself as a project manager intent on bringing CCPM to your organization that has historically used classic critical path project management. How would you convince your project team to develop 50% estimates for their project contributions rather than the 90% estimates they have used since they started with the company?

Answer: This will require a culture change for all project participants. The idea is that the project must work in a "no blame" environment and that all parties agree that it is literally a coin flip as to whether their piece of the project meets a 50% estimate. Answers will vary as to how to bring about the culture change. Some students may cite a need to manage a couple of projects this way before team members accept the new mindset. Training exercises, such as the Deming Red Bead experiment, might be used as a lesson, albeit as a counterexample. The project manager may take the estimates provided by the project team as given, then run a parallel analysis using the CCPM approach, to show the team after the fact, how things would have worked out — or — hold his team to their estimates but report to his superiors a CCPM schedule.

Diff: 2 Section: 11.4 The Critical Chain Solution to Project Scheduling LO: 11.5: Understand how critical chain methodology resolves project resource conflicts.

Classification: Critical Thinking AACSB: Analytical Thinking

92) A project that consists of six consecutive tasks that have average duration and worst-case duration estimates (in days) as shown in the table. Use Newbold's method to determine the aggregated two sigma buffer for this project. How does the project buffer computed this way compare with the estimation for project buffer offered by Goldratt?

Activity Average Worst-Case A 14 21 B 20 28 C 16 23 D 8 15 E 9 19 Answer: The Newbold estimate is calculated as: σ=

σ= σ=

= 8.8176

2σ = 17.6352 The Goldratt rule of thumb of retaining 50% of the total buffer is (106-67)/2=19.5.

The Goldratt buffer is larger by 1.86 days, thus the Goldratt project is 86.5 days and the Newbold 2 sigma project is 84.63 days.

Diff: 3 Section: 11.4 The Critical Chain Solution to Project Scheduling LO: 11.5: Understand how critical chain methodology resolves project resource conflicts.

Classification: Critical Thinking AACSB: Analytical Thinking

93) Use these activity durations (that have been estimated at 90%) and precedence requirements to create two project schedules — a traditional schedule based on early start times and a critical chain schedule with buffers.

Activity Time Predecessor A 8 B 15 C 19 B D 12 C E 3 C F 16 A G 12 F H 16 E R 7 D J 16 G, H K 12 R L 8 J, K Answer: The traditional case is exhibited immediately below. The Gantt chart shows no buffers and the project finishes at time 77.

The first step in creating the critical chain schedule is to reduce activity durations to a respectable 50% likelihood from their bloated 90% likelihood estimates. The new activity durations are as follows: Activity A B C D E F G H R J K L

Time 4 7.5 9.5 6 1.5 8 6 8 3.5 8 6 4

Predecessor

B C C A F E D G, H R J, K

The critical chain schedule with buffers added appears below. Project duration is now calculated as 63.5 days.

Diff: 2 Section: 11.4 The Critical Chain Solution to Project Scheduling LO: 11.5: Understand how critical chain methodology resolves project resource conflicts.

Classification: Critical Thinking AACSB: Analytical Thinking

94) Create a 5-activity example and use it to explain the difference between the critical path method and critical chain project management.

Answer: Examples will vary. The critical chain is usually not the same as the critical path within an activity network. The critical path depends on upon the task dependency; that is, the linkage of tasks with their predecessors. In this process, activity slack is discovered after the fact, once the network is laid out and the critical path identified, all other paths and activities may contain some level of slack. On the other hand, the critical chain usually jumps task dependency links.

This is because the critical chain requires that all resource leveling be done before the critical chain can be identified, not afterwards as in the case of PERT and CPM networks.

In the example, activities C and D of project ABCDE both require the same drum resource. The critical path method focuses only on the longest route from start to finish, path ACE.

The critical chain recognizes that the drum resource must be the focus of our scheduling efforts, so attention is called to this resource. The critical chain is shown as a dotted line in this example.

Diff: 2 Section: 11.4 The Critical Chain Solution to Project Scheduling LO: 11.5: Understand how critical chain methodology resolves project resource conflicts.

Classification: Critical Thinking AACSB: Analytical Thinking

95) A system-wide constraint is called a: A) Rope.

B) Resource.

C) Drum.

D) Chain.

Answer: C Diff: 1 Section: 11.6 Critical Chain Project Portfolio Management LO: 11.6: Apply critical chain project management to project portfolios.

Classification: Concept AACSB: Application of Knowledge 96) Drum buffers are: A) A safety margin separating different projects scheduled to use the same resource.

B) Extra safety that is applied to a project immediately after the use of the constrained resource.

C) A constraint separating different projects that requires a common buffer.

D) Extra safety that is applied to a project immediately before the use of the constrained resource.

Answer: D Diff: 2 Section: 11.6 Critical Chain Project Portfolio Management LO: 11.6: Apply critical chain project management to project portfolios.

Classification: Concept AACSB: Application of Knowledge 97) A resource constraint can be exploited using CCPM methodology by: A) Determining the priority among projects for access to the drum.

B) Scheduling each project to start based on the drum schedule.

C) Designating the critical chain as the chain from the first use of the constraining resource to the end of the project.

D) Resolving any conflicts if the creation of the capacity constraint buffers adversely affects the drum schedule.

Answer: A Diff: 2 Section: 11.6 Critical Chain Project Portfolio Management LO: 11.6: Apply critical chain project management to project portfolios.

Classification: Concept AACSB: Application of Knowledge 98) The term capacity constraint buffer refers to a safety margin separating different tasks scheduled to use the same resource.

Answer: FALSE Diff: 2 Section: 11.6 Critical Chain Project Portfolio Management LO: 11.6: Apply critical chain project management to project portfolios.

Classification: Application AACSB: Application of Knowledge 99) The legal department is needed to review all contracts a project organization enters. The legal department is continually swamped with work and all other departments find themselves waiting on legal before they can begin their work. Legal is the drum for this organization.

Answer: TRUE Diff: 2 Section: 11.6 Critical Chain Project Portfolio Management LO: 11.6: Apply critical chain project management to project portfolios.

Classification: Application AACSB: Application of Knowledge 100) Define and describe the function and interrelationship of a drum, drum buffer, and a capacity constraint buffer in CCPM. Answer: A drum is a system-wide constraint that sets the beat, effectively limiting the entire system or collection of projects. Drum buffers are extra safety that is applied to a project immediately before the use of the constrained resource to ensure that the resource will not be starved for work. A capacity constraint buffer is a safety margin separating different projects scheduled to use the same resource.

In the context of a single project the drum must be protected by an extra safety margin, the drum buffer. This extra protection is provided so the drum will not fall idle. As an organization adds more projects to its portfolio, the drum is protected by a capacity constraint buffer that separates the use of the drum from one project to the next.

Diff: 2 Section: 11.6 Critical Chain Project Portfolio Management LO: 11.6: Apply critical chain project management to project portfolios.

Classification: Concept AACSB: Application of Knowledge 101) What are the formal steps to apply CCPM to multiple project portfolios?

Answer: The formal steps necessary to apply CCPM to multiple project portfolios include: Identify the company resource constraint or the drum, the driving force behind multiple project schedules.

Exploit the resource constraint by preparing a critical chain schedule for each project independently, determining the priority among projects for access to the drum, and creating the multi-project drum schedule.

Subordinate the individual project schedules by scheduling each project to start based on the drum schedule, designating the critical chain, inserting capacity constraint buffers where appropriate, resolving any conflicts if the CCBs adversely affect the drum schedule, and inserting drum buffers to ensure that the constraint resource will not be starved for work.

Elevate the capacity constrained resource.

Iterate through this process starting with the second step.

Diff: 2 Section: 11.6 Critical Chain Project Portfolio Management LO: 11.6: Apply critical chain project management to project portfolios.

Classification: Concept AACSB: Application of Knowledge Project Management: Achieving Competitive Advantage, 6e (Pinto) Chapter 12 Resource Management 1) A project that must be finished by December 31st is: A) Time-constrained.

B) Resource-constrained.

C) Mix-constrained.

D) Capacity-constrained.

Answer: A Diff: 1 Section: 12.1 The Basics of Resource Constraints LO: 12.1: Recognize the variety of constraints that can affect a project, making scheduling and planning difficult.

Classification: Concept AACSB: Application of Knowledge 2) The One Shovel Construction Company is hired by the City of Edmond to lay sewer pipe from the east end of town to the west end of town using their single shovel to dig the trench.

While the crew would like to begin at both ends simultaneously and have a dramatic ceremony when both ends meet, they find themselves with a bit of a: A) Time constraint.

B) Resource constraint.

C) Mixed constraint.

D) Partial network.

Answer: B Diff: 1 Section: 12.1 The Basics of Resource Constraints LO: 12.1: Recognize the variety of constraints that can affect a project, making scheduling and planning difficult.

Classification: Application AACSB: Application of Knowledge

3) The assistant professor frantically prepared his tenure and promotion dossier for the personnel committee. The deadline loomed and he had several other things to accomplish – deadlines for papers and key correspondence that demanded replies. By his reckoning, he probably didn't have enough toner, paper, or computing time available to accomplish all that he had left to do. His project is unfortunately: A) Time constrained.

B) Resource constrained.

C) Mix-constrained.

D) Personally constrained.

Answer: C Diff: 1 Section: 12.1 The Basics of Resource Constraints LO: 12.1: Recognize the variety of constraints that can affect a project, making scheduling and planning difficult.

Classification: Application AACSB: Application of Knowledge 4) The BEST method for establishing the existence of resource conflicts across project activities uses: A) Gantt charts.

B) Network diagrams.

C) Pareto diagrams.

D) Resource loading charts.

Answer: D Diff: 1 Section: 12.1 The Basics of Resource Constraints LO: 12.1: Recognize the variety of constraints that can affect a project, making scheduling and planning difficult.

Classification: Concept AACSB: Application of Knowledge 5) In a resource constrained project, the work must be finished by a certain time, or date, as efficiently as possible.

Answer: FALSE Diff: 1 Section: 12.1 The Basics of Resource Constraints LO: 12.1: Recognize the variety of constraints that can affect a project, making scheduling and planning difficult.

Classification: Concept AACSB: Application of Knowledge

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

Answer: TRUE Diff: 1 Section: 12.1 The Basics of Resource Constraints LO: 12.1: Recognize the variety of constraints that can affect a project, making scheduling and planning difficult.

Classification: Concept AACSB: Application of Knowledge 7) The best method for establishing the existence of resource conflicts across project activities uses resource-loading charts.

Answer: TRUE Diff: 1 Section: 12.1 The Basics of Resource Constraints LO: 12.1: Recognize the variety of constraints that can affect a project, making scheduling and planning difficult.

Classification: Concept AACSB: Application of Knowledge 8) What are the three types of constraints that projects face; provide examples and suggest ways to address these constraints?

Answer: The three main types of constraints that a project manager faces are time constraints, resource constraints, and mixed constraints. Examples of each will vary.

In the time-constrained project, the work must be finished by a certain time, or date, as efficiently as possible. In the resource-constrained project, the work must not exceed some predetermined level of resource use within the organization. While the project is to be completed as rapidly as possible, speed is not the ultimate goal. The mixed-constraint project is primarily resource constrained but may contain some activities or work package elements that are time constrained to a greater degree.

Time constraints can be addressed by increasing the percentage of worked time until the due date by working overtime or on weekends and holidays. Increasing the labor pool through dedicated personnel or subcontractors or automating processes, buying more powerful or efficient equipment, or improving work methods can all help speed up a project. Resource constraints may be addressed by leveling a project or extending the time available. Mixed constraints can be addressed by some combination of these techniques.

Diff: 2 Section: 12.1 The Basics of Resource Constraints LO: 12.1: Recognize the variety of constraints that can affect a project, making scheduling and planning difficult.

Classification: Concept AACSB: Application of Knowledge

9) The amounts of individual resources that a schedule requires during specific time periods is referred to as the resource's: A) Loading.

B) Capacity.

C) Constraint.

D) Drag.

Answer: A Diff: 1 Section: 12.2 Resource Loading LO: 12.2: Understand how to apply resource-loading techniques to project schedules to identify potential resource overallocation situations.

Classification: Concept AACSB: Application of Knowledge 10) Placing resources on a detailed schedule of tasks is referred to as: A) Placing.

B) Rectifying.

C) Loading.

D) Dragging.

Answer: C Diff: 1 Section: 12.2 Resource Loading LO: 12.2: Understand how to apply resource-loading techniques to project schedules to identify potential resource overallocation situations.

Classification: Concept AACSB: Application of Knowledge 11) A resource loading form is also known as a(n): A) Load schedule.

B) Resource usage calendar.

C) Activity resource schedule.

D) Network resource profile.

Answer: B Diff: 2 Section: 12.2 Resource Loading LO: 12.2: Understand how to apply resource-loading techniques to project schedules to identify potential resource overallocation situations.

Classification: Concept AACSB: Application of Knowledge

12) What information is usually provided on a resource-usage calendar?

A) The tasks, the precedence requirements, and the money per unit time needed to reduce them.

B) The personnel, their hourly wage or salary, and the number of hours per week they are available.

C) The personnel, their responsibility for certain tasks, and the number of hours per week they are available.

D) The tasks, the people and equipment available, and the ownership and reporting relationships among them.

Answer: C Diff: 2 Section: 12.2 Resource Loading LO: 12.2: Understand how to apply resource-loading techniques to project schedules to identify potential resource overallocation situations.

Classification: Concept AACSB: Application of Knowledge 13) A resource loading form can be generated once you have developed: A) The activity network and productivity profile.

B) The work breakdown structure and the project budget.

C) The activity network and the work breakdown structure.

D) The project budget and the productivity profile.

Answer: C Diff: 2 Section: 12.2 Resource Loading LO: 12.2: Understand how to apply resource-loading techniques to project schedules to identify potential resource overallocation situations.

Classification: Concept AACSB: Application of Knowledge 14) Which of the following would NOT typically be displayed in a resource loading table?

A) The project team members B) The tasks the project team members have been assigned C) The time the activities are expected to take D) The expenses allocated to the activities Answer: D Diff: 2 Section: 12.2 Resource Loading LO: 12.2: Understand how to apply resource-loading techniques to project schedules to identify potential resource overallocation situations.

Classification: Concept AACSB: Application of Knowledge

15) In addition to identifying overallocation of people, a resource usage table can also be used to identify overallocation of: A) Tasks.

B) Managers.

C) Money.

D) Resources.

Answer: D Diff: 1 Section: 12.2 Resource Loading LO: 12.2: Understand how to apply resource-loading techniques to project schedules to identify potential resource overallocation situations.

Classification: Concept AACSB: Application of Knowledge 16) Use the resource loading table to determine which of the Yaki sisters is over-allocated.

Resource Work Details 23-Oct 30-Oct Suki 64 hrs Work 32h 32h A 16 hrs Work 16h C 24 hrs Work 16h 8h D 24 hrs Work 24h Terri 40 hrs Work 16h 16h 8h B 24 hrs Work 16h 8h E 16 hrs Work 8h 8h A) Suki B) Terri C) both D) Can't be determined from the information provided.

Answer: A Diff: 2 Section: 12.2 Resource Loading LO: 12.2: Understand how to apply resource-loading techniques to project schedules to identify potential resource overallocation situations.

Classification: Concept AACSB: Application of Knowledge

17) A resource loading chart displays: A) The amount of time needed as a function of resource limits.

B) The amount of resources required as a function of time.

C) The amount of time needed as a function of money.

D) The amount of resources needed as a function of money.

Answer: B Diff: 2 Section: 12.4 Resource Loading Charts LO: 12.2: Understand how to apply resource-loading techniques to project schedules to identify potential resource overallocation situations.

Classification: Concept AACSB: Application of Knowledge 18) The independent axis of a resource loading chart is in units of: A) Nothing — it is simply relative magnitude.

B) Resources.

C) Time.

D) Workers/people.

Answer: C Diff: 2 Section: 12.4 Resource Loading Charts LO: 12.2: Understand how to apply resource-loading techniques to project schedules to identify potential resource overallocation situations.

Classification: Concept AACSB: Application of Knowledge 19) Splitting activities refers to: A) Assigning the work to two or more workers.

B) Assigning the work to two or more days.

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

D) Breaking each non-critical activity into two or more components and subdividing the resources they use by a similar divisor.

Answer: C Diff: 2 Section: 12.4 Resource Loading Charts LO: 12.2: Understand how to apply resource-loading techniques to project schedules to identify potential resource overallocation situations.

Classification: Critical Thinking AACSB: Analytical Thinking

20) In general, when constructing a resource loading chart, one should avoid: A) Splitting the activities.

B) Obeying the pre-established precedence requirements for the activities.

C) Identifying the slack for each activity.

D) Changing the duration of the activities.

Answer: D Diff: 2 Section: 12.4 Resource Loading Charts LO: 12.2: Understand how to apply resource-loading techniques to project schedules to identify potential resource overallocation situations.

Classification: Critical Thinking AACSB: Analytical Thinking 21) It's resource leveling time at Satriale's Pork Store and management is pondering four possibilities for task splitting. Which of these activities would be the worst candidate for splitting?

A) Silvio's task, which requires several workers B) Paulie's task, which is the most expensive C) Richie's task, which has high start up costs D) Ralph's task, which is the least expensiv Answer: C Diff: 2 Section: 12.4 Resource Loading Charts LO: 12.2: Understand how to apply resource-loading techniques to project schedules to identify potential resource overallocation situations.

Classification: Critical Thinking AACSB: Analytical Thinking

22) Use this resource load chart to determine which activity uses the fewest resources.

A) Activity A B) Activity B C) Activity C D) Activity D Answer: D Diff: 2 Section: 12.4 Resource Loading Charts LO: 12.2: Understand how to apply resource-loading techniques to project schedules to identify potential resource overallocation situations.

Classification: Critical Thinking AACSB: Analytical Thinking 23) Use this resource load chart to determine which activity uses the greatest number of resources.

A) Activity A B) Activity B C) Activity C D) Activity D Answer: A Diff: 2 Section: 12.4 Resource Loading Charts LO: 12.2: Understand how to apply resource-loading techniques to project schedules to identify potential resource overallocation situations.

Classification: Critical Thinking AACSB: Analytical Thinking

24) Use this resource load chart to determine which activity is the longest in duration.

A) Activity A B) Activity B C) Activity C D) Activity D Answer: B Diff: 1 Section: 12.4 Resource Loading Charts LO: 12.2: Understand how to apply resource-loading techniques to project schedules to identify potential resource overallocation situations.

Classification: Critical Thinking AACSB: Analytical Thinking

25) The project represented by this resource load chart has a maximum limit of 6 units of resource activity in any day. The first activities that are strong candidates for shifting are: A) Activity A B) Activities B and C C) Activities D and E D) Activity E and F Answer: C Diff: 2 Section: 12.4 Resource Loading Charts LO: 12.2: Understand how to apply resource-loading techniques to project schedules to identify potential resource overallocation situations.

Classification: Critical Thinking AACSB: Analytical Thinking

26) The project represented by this resource load chart has a maximum limit of 6 units of resource activity in any day. Which activity could be split to help the project team finish on time and meet the resource cap?

A) Activity A B) Activities B and C C) Activities D and E D) Activity E and F Answer: D Diff: 2 Section: 12.4 Resource Loading Charts LO: 12.2: Understand how to apply resource-loading techniques to project schedules to identify potential resource overallocation situations.

Classification: Critical Thinking AACSB: Analytical Thinking 27) All that is needed to create a resource loading calendar is the work breakdown structure and the activity network.

Answer: FALSE Diff: 2 Section: 12.2 Resource Loading LO: 12.2: Understand how to apply resource-loading techniques to project schedules to identify potential resource overallocation situations.

Classification: Concept AACSB: Application of Knowledge 28) The resource usage table tells us the project team members, their assigned tasks, and the time each task is expected to take.

Answer: TRUE Diff: 2 Section: 12.2 Resource Loading LO: 12.2: Understand how to apply resource-loading techniques to project schedules to identify potential resource overallocation situations.

Classification: Concept AACSB: Application of Knowledge 29) Resource loading charts are used to display the amount of resources required as a function of time on a graph.

Answer: TRUE Diff: 2 Section: 12.4 Resource Loading Charts LO: 12.2: Understand how to apply resource-loading techniques to project schedules to identify potential resource overallocation situations.

Classification: Concept AACSB: Application of Knowledge

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

Answer: FALSE Diff: 2 Section: 12.4 Resource Loading Charts LO: 12.2: Understand how to apply resource-loading techniques to project schedules to identify potential resource overallocation situations.

Classification: Concept AACSB: Application of Knowledge

31) Use this activity precedence table to create a resource loading profile. Activity lengths are given in days and an 8-hour day is assumed.

Activity Time Predecessor A 2 B 3 A C 6 B D 5 A E 3 C F 2 D G 2 E,F Answer: The loading chart is as follows: Task 1 2 3 4 A 8 8 B 8 8 C D 8 8 E F G Total 16 16 16 16

5

6

7

8

9

10 11 12 13 14 15 16

8 8

8 8

8

8

8

8

8

8 8

16 16 16 16 16 8

8

8

8

8

8

8

8

8

8 8

8 8

The loading profile shows the number of hours required for each of the 14 days of the project.

Diff: 2 Section: 12.2 Resource Loading LO: 12.2: Understand how to apply resource-loading techniques to project schedules to identify potential resource overallocation situations.

Classification: Critical Thinking AACSB: Analytical Thinking

32) Create a resource loading chart using early start times for the project described by this table.

Activity Time Predecessor Task A 14 -4 B 2 -5 C 4 A 5 D 9 B 4 E 8 C 5 F 2 C 3 G 3 D 2 H 5 F, G 4 K 1 E 3 L 13 H, K 4 Answer: The early start times appear in this table.

Activity A B C D E F G H K L

Time 14 2 4 9 8 2 3 5 1 13

Early Start Resources 0 4 0 5 14 5 2 4 18 5 18 3 11 2 20 4 26 3 27 4

Slack 0 6 0 6 0 2 6 2 0 0

Diff: 3 Section: 12.4 Resource Loading Charts LO: 12.2: Understand how to apply resource-loading techniques to project schedules to identify potential resource overallocation situations.

Classification: Critical Thinking AACSB: Analytical Thinking

33) Create a resource loading chart for the project described by this network.

Answer: Activities R and W gerrymander a bit and are indicated by shaded polygons.

Diff: 3 Section: 12.4 Resource Loading Charts LO: 12.2: Understand how to apply resource-loading techniques to project schedules to identify potential resource overallocation situations.

Classification: Critical Thinking AACSB: Analytical Thinking

34) Use this resource loading chart and the information in the table to fill in the rest of the table as completely as possible. All activities in the chart are shown with early start times.

Activity Duration Predecessors Early Start Early Finish Resources Slack A -B 9 A C 5 A D B E 11 D F C, E G 9 E H 8 F, G Answer: Regarding durations: activity A lines up neatly with major tick marks. Activities B and D must total 15 in length and activities E, F, and G must total 30. Resource use is open to some interpretation. Activities A, B, C, and F all line up with major tick marks; the remainder of the activities can be guesstimated.

Activity Duration Predecessors Early Start Early Finish Resources Slack A 15 -0 15 10 0 B 9 A 15 24 5 0 C 5 A 15 20 10 21 D 6 B 24 30 12 0 E 11 D 30 41 6 0 F 11 C, E 41 52 5 0 G 9 E 41 50 4 2 H 8 F, G 52 60 2.5 0 Diff: 2 Section: 12.4 Resource Loading Charts LO: 12.2: Understand how to apply resource-loading techniques to project schedules to identify potential resource overallocation situations.

Classification: Critical Thinking AACSB: Analytical Thinking 35) The process that addresses the complex challenges of project constraints is known as: A) TOC.

B) Resource leveling.

C) Constraint scheduling.

D) Resource scheduling.

Answer: B Diff: 2 Section: 12.3 Resource Leveling LO: 12.3: Apply resource-leveling procedures to project activities over the baseline schedule using appropriate prioritization heuristics.

Classification: Concept AACSB: Application of Knowledge 36) Consider the project that is neatly summarized in this table. What are the top two priority activities when using the smallest duration leveling heuristic?

Activity Duration Predecessors Workers Required A 2 -3 B 4 A 4 C 6 A 2 D 7 B 5 E 9 C, D, E 2 A) B and C B) A and B C) C and E D) A and E Answer: B Diff: 1 Section: 12.3 Resource Leveling LO: 12.3: Apply resource-leveling procedures to project activities over the baseline schedule using appropriate prioritization heuristics.

Classification: Concept AACSB: Application of Knowledge

37) Consider the project that is neatly summarized in this table. What are the top priority activity when using the most successors leveling heuristic?

Activity Duration Predecessors Workers Required A 8 -3 B 2 -4 C 6 A 2 D 7 B 5 E 9 C, D 2 A) A B) B C) C D) D Answer: A Diff: 1 Section: 12.3 Resource Leveling LO: 12.3: Apply resource-leveling procedures to project activities over the baseline schedule using appropriate prioritization heuristics.

Classification: Concept AACSB: Application of Knowledge 38) Consider the project that is neatly summarized in this table. What are the lowest priority activities when using the smallest amount of slack leveling heuristic?

Activity Duration Predecessors Workers Required A 8 -3 B 2 -4 C 6 A 2 D 7 B 5 E 9 C, D 2 A) A and B B) C and E C) A and D D) B and D Answer: D Diff: 2 Section: 12.3 Resource Leveling LO: 12.3: Apply resource-leveling procedures to project activities over the baseline schedule using appropriate prioritization heuristics.

Classification: Concept AACSB: Application of Knowledge

39) Consider the project that is neatly summarized in this table. What are the highest priority activities when using the most resources required leveling heuristic?

Activity Duration Predecessors Workers Required A 8 -3 B 2 -4 C 6 A 5 D 7 B 6 E 9 C, D 2 A) E and B B) C and E C) C and D D) B and D Answer: C Diff: 2 Section: 12.3 Resource Leveling LO: 12.3: Apply resource-leveling procedures to project activities over the baseline schedule using appropriate prioritization heuristics.

Classification: Concept AACSB: Application of Knowledge 40) Which of these statements about resource management is BEST? A) A mathematically optimal solution is almost always attainable and should be pursued.

B) The project manager should level resources as to maximize fluctuations from time period to time period.

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

D) Resource management is usually a univariate, combinatorial problem.

Answer: C Diff: 2 Section: 12.3 Resource Leveling LO: 12.3: Apply resource-leveling procedures to project activities over the baseline schedule using appropriate prioritization heuristics.

Classification: Application AACSB: Application of Knowledge

41) The project described in the table uses the same resource for activities A, B, C, and D. Which activity gets first use of this resource if we assign the resource based on the activity with the smallest amount of slack?

Activity Duration Predecessor WBS ID W 4 -12 A 3 W 16 B 4 W 15 C 5 W 13 D 6 W 14 E 1 B 17 Z 7 A, E, C, D 18 A) Activity A B) Activity B C) Activity C D) Activity D Answer: D Diff: 2 Section: 12.3 Resource Leveling LO: 12.3: Apply resource-leveling procedures to project activities over the baseline schedule using appropriate prioritization heuristics.

Classification: Critical Thinking AACSB: Analytical Thinking

42) The project described in the table uses the same resource for activities A, B, C, and D. Which activity gets first use of this resource if we assign the resource based on the activity with the shortest duration?

Activity Duration Predecessor WBS ID W 4 -12 A 3 W 16 B 4 W 15 C 5 W 13 D 6 W 14 E 1 B 17 Z 7 A, E, C, D 18 A) Activity A B) Activity B C) Activity C D) Activity D Answer: A Diff: 1 Section: 12.3 Resource Leveling LO: 12.3: Apply resource-leveling procedures to project activities over the baseline schedule using appropriate prioritization heuristics.

Classification: Critical Thinking AACSB: Analytical Thinking 43) The project described in the table uses the same resource for activities A, B, C, and D. Which activity gets first use of this resource if we assign the resource based on the activity with the greatest number of successor tasks?

Activity Duration Predecessor WBS ID W 4 -12 A 3 W 16 B 4 W 15 C 5 W 13 D 6 W 14 E 1 B 17 Z 7 A, E, C, D 18 A) Activity A B) Activity B C) Activity C D) Activity D Answer: B Diff: 1 Section: 12.3 Resource Leveling LO: 12.3: Apply resource-leveling procedures to project activities over the baseline schedule using appropriate prioritization heuristics.

Classification: Critical Thinking AACSB: Analytical Thinking 44) The project described in the table uses the same resource for activities A, B, C, and D. Which activity gets first use of this resource if we assign the resource based on the activity with the

lowest activity identification number?

Activity Duration Predecessor WBS ID W 4 -12 A 3 W 16 B 4 W 15 C 5 W 13 D 6 W 14 E 1 B 17 Z 7 A, E, C, D 18 A) Activity A B) Activity B C) Activity C D) Activity D Answer: C Diff: 1 Section: 12.3 Resource Leveling LO: 12.3: Apply resource-leveling procedures to project activities over the baseline schedule using appropriate prioritization heuristics.

Classification: Critical Thinking AACSB: Analytical Thinking 45) Use the project described in the table to determine the total resources required for activity D if a worker is expected to work half-time (four hours per day) on this project.

Activity Duration Predecessor A 5 days -B 4 days A C 5 days A D 6 days B E 6 days C, D F 6 days E A) 6 hours B) 40 hours C) 24 hours D) 48 hours Answer: C Diff: 1 Section: 12.3 Resource Leveling LO: 12.3: Apply resource-leveling procedures to project activities over the baseline schedule using appropriate prioritization heuristics.

Classification: Critical Thinking AACSB: Analytical Thinking 46) Use the project described in the table to determine the total resources required for this project if a worker is expected to devote half-time (four hours per day) to this project.

Activity A B

Duration 5 days 4 days

Predecessor -A

C 5 days A D 6 days B E 6 days C, D F 6 days E A) 36 hours B) 40 hours C) 64 hours D) 128 hours Answer: D Diff: 2 Section: 12.3 Resource Leveling LO: 12.3: Apply resource-leveling procedures to project activities over the baseline schedule using appropriate prioritization heuristics.

Classification: Critical Thinking AACSB: Analytical Thinking 47) Use the project described in the table to determine the total resources required for this project on day 2 if a worker is expected to devote half-time (four hours per day) to this project.

Activity Duration Predecessor A 5 days -B 4 days A C 5 days A D 6 days B E 6 days C, D F 6 days E A) 4 hours B) 2 hours C) 8 hours D) 6 hours Answer: A Diff: 1 Section: 12.3 Resource Leveling LO: 12.3: Apply resource-leveling procedures to project activities over the baseline schedule using appropriate prioritization heuristics.

Classification: Critical Thinking AACSB: Analytical Thinking

48) Use the project described in the table to determine the total resources required for this project during week 1 if a worker is expected to devote half-time (four hours per day) to this project.

Assume that the project work is conducted on a 5-day-per-week basis.

Activity Duration Predecessor A 5 days -B 4 days A C 5 days A D 6 days B E 6 days C, D F 6 days E A) 40 hours B) 20 hours C) 28 hours D) 36 hours Answer: B Diff: 1 Section: 12.3 Resource Leveling LO: 12.3: Apply resource-leveling procedures to project activities over the baseline schedule using appropriate prioritization heuristics.

Classification: Critical Thinking AACSB: Analytical Thinking 49) Use the project described in the table to determine the total resources required for this project during week 2 if a worker is expected to devote half-time (four hours per day) to this project.

Assume that the project work is conducted on a 5-day-per-week basis.

Activity Duration Predecessor A 5 days -B 4 days A C 5 days A D 6 days B E 6 days C, D F 6 days E A) 30 hours B) 20 hours C) 40 hours D) 36 hours Answer: C Diff: 2 Section: 12.3 Resource Leveling LO: 12.3: Apply resource-leveling procedures to project activities over the baseline schedule using appropriate prioritization heuristics.

Classification: Critical Thinking AACSB: Analytical Thinking

50) Use the project described in the table to determine the total resources required for this project on day 10 if a worker is expected to devote half-time (four hours per day) to this project. Assume that the project work is conducted on a 5-day-per-week basis.

Activity Duration Predecessor A 5 days -B 4 days A C 5 days A D 6 days B E 6 days C, D F 6 days E A) 5 hours B) 10 hours C) 4 hours D) 8 hours Answer: D Diff: 2 Section: 12.3 Resource Leveling LO: 12.3: Apply resource-leveling procedures to project activities over the baseline schedule using appropriate prioritization heuristics.

Classification: Critical Thinking AACSB: Analytical Thinking 51) Use the information in the table and assume that a worker is expected to devote half-time (four hours per day) to this project with work taking place on a 5-day-per-week basis. Which week has the lowest resource usage?

Activity Duration Predecessor A 5 days -B 4 days A C 5 days A D 6 days B E 6 days C, D F 6 days E A) Week 6 B) Week 2 C) Week 4 D) Week 3 Answer: A Diff: 2 Section: 12.3 Resource Leveling LO: 12.3: Apply resource-leveling procedures to project activities over the baseline schedule using appropriate prioritization heuristics.

Classification: Critical Thinking AACSB: Analytical Thinking

52) Use the information in the table and assume that a worker is expected to devote half-time (four hours per day) to this project with work taking place on a 5-day-per-week basis. Which week has the highest resource usage?

Activity Duration Predecessor A 5 days -B 4 days A C 5 days A D 6 days B E 6 days C, D F 6 days E A) Week 6 B) Week 2 C) Week 4 D) Week 3 Answer: B Diff: 2 Section: 12.3 Resource Leveling LO: 12.3: Apply resource-leveling procedures to project activities over the baseline schedule using appropriate prioritization heuristics.

Classification: Critical Thinking AACSB: Analytical Thinking

53) Use the information in the table and assume that a worker is expected to devote half-time (four hours per day) to this project with work taking place on a 5-day-per-week basis. Which week has the highest resource usage?

Activity Predecessor Hours per Day Time (Days) A -4 6 B A 4 11 C A 5 5 D B 4 6 E B 4 6 F B 6 3 G C, D 8 11 H E, F 8 8 J G, H 3 10 K J 6 4 A) Week 4 B) Week 5 C) Week 6 D) Week 7 Answer: C Diff: 3 Section: 12.3 Resource Leveling LO: 12.3: Apply resource-leveling procedures to project activities over the baseline schedule using appropriate prioritization heuristics.

Classification: Critical Thinking AACSB: Analytical Thinking

54) Use the information in the table and assume that a worker is expected to devote half-time (four hours per day) to this project with work taking place on a 5-day-per-week basis. Which week has the lowest resource usage?

Activity Predecessor Hours per Day Time (Days) A -4 6 B A 4 11 C A 5 5 D B 4 6 E B 4 6 F B 6 3 G C, D 8 11 H E, F 8 8 J G, H 3 10 K J 6 4 A) Week 3 B) Week 2 C) Week 9 D) Week 8 Answer: D Diff: 3 Section: 12.3 Resource Leveling LO: 12.3: Apply resource-leveling procedures to project activities over the baseline schedule using appropriate prioritization heuristics.

Classification: Critical Thinking AACSB: Analytical Thinking

55) Use the information in the table and assume that a worker is expected to devote half-time (four hours per day) to this project with work taking place on a 5-day-per-week basis. What is the total resource requirement for the project?

Activity Predecessor Hours per Day Time (Days) A -4 6 B A 4 11 C A 5 5 D B 4 6 E B 4 6 F B 6 3 G C, D 8 11 H E, F 8 8 J G, H 3 10 K J 6 4 A) 365 hours B) 335 hours C) 320 hours D) 310 hours Answer: A Diff: 3 Section: 12.3 Resource Leveling LO: 12.3: Apply resource-leveling procedures to project activities over the baseline schedule using appropriate prioritization heuristics.

Classification: Critical Thinking AACSB: Analytical Thinking

56) Use the information in the table and assume that a worker is expected to devote half-time (four hours per day) to this project with work taking place on a 5-day-per-week basis. What is the total resource requirement for activity G? Activity Predecessor Hours per Day Time (Days) A -4 6 B A 4 11 C A 5 5 D B 4 6 E B 4 6 F B 6 3 G C, D 8 11 H E, F 8 8 J G, H 3 10 K J 6 4 A) 22 hours B) 88 hours C) 44 hours D) 132 hours Answer: B Diff: 1 Section: 12.3 Resource Leveling LO: 12.3: Apply resource-leveling procedures to project activities over the baseline schedule using appropriate prioritization heuristics.

Classification: Critical Thinking AACSB: Analytical Thinking

57) A project consisting of six activities is shown in the table. If the project manager decides to operate on a late start schedule, which of these days has the highest resource requirements?

Activity Duration (days) Activity Cost Predecessor K 10 140 L 8 64 K, M M 12 96 N 6 120 M P 14 168 L Q 12 144 N A) Day 21 B) Day 18 C) Day 24 D) Day 15 Answer: A Diff: 2 Section: 12.3 Resource Leveling LO: 12.3: Apply resource-leveling procedures to project activities over the baseline schedule using appropriate prioritization heuristics.

Classification: Critical Thinking AACSB: Analytical Thinking 58) A project consisting of six activities is shown in the table. If the project manager decides to operate on a late start schedule, which of these days has the lowest resource requirements?

Activity Duration (days) Activity Cost Predecessor K 10 140 L 8 64 K, M M 12 96 N 6 120 M P 14 168 L Q 12 144 N A) Day 21 B) Day 18 C) Day 24 D) Day 15 Answer: D Diff: 2 Section: 12.3 Resource Leveling LO: 12.3: Apply resource-leveling procedures to project activities over the baseline schedule using appropriate prioritization heuristics.

Classification: Critical Thinking AACSB: Analytical Thinking

59) A project consisting of six activities is shown in the table. If the project manager decides to operate on an early start schedule, which of these days has the lowest resource requirements?

Activity Duration (days) Activity Cost Predecessor K 10 140 L 8 64 K, M M 12 96 N 6 120 M P 14 168 L Q 12 144 N A) Day 15 B) Day 19 C) Day 24 D) Day 29 Answer: B Diff: 2 Section: 12.3 Resource Leveling LO: 12.3: Apply resource-leveling procedures to project activities over the baseline schedule using appropriate prioritization heuristics.

Classification: Critical Thinking AACSB: Analytical Thinking 60) A project consisting of six activities is shown in the table. If the project manager decides to operate on an early start schedule, which of these days has the highest resource requirements?

Activity Duration (days) Activity Cost Predecessor K 10 140 L 8 64 K, M M 12 96 N 6 120 M P 14 168 L Q 12 144 N A) Day 5 B) Day 10 C) Day 15 D) Day 20 Answer: C Diff: 2 Section: 12.3 Resource Leveling LO: 12.3: Apply resource-leveling procedures to project activities over the baseline schedule using appropriate prioritization heuristics.

Classification: Critical Thinking AACSB: Analytical Thinking

61) The idea behind resource leveling is to avoid huge swings in utilization of labor and equipment.

Answer: TRUE Diff: 2 Section: 12.3 Resource Leveling LO: 12.3: Apply resource-leveling procedures to project activities over the baseline schedule using appropriate prioritization heuristics.

Classification: Concept AACSB: Application of Knowledge 62) The first step in the resource leveling process is to create the resource loading table.

Answer: TRUE Diff: 2 Section: 12.3 Resource Leveling LO: 12.3: Apply resource-leveling procedures to project activities over the baseline schedule using appropriate prioritization heuristics.

Classification: Concept AACSB: Application of Knowledge 63) Because resource management is typically a multivariate, combinatorial problem (i.e., one that is characterized by multiple solutions involving literally dozens, hundreds, or even thousands of activity variables) truly correct answers are not possible.

Answer: FALSE Diff: 2 Section: 12.3 Resource Leveling LO: 12.3: Apply resource-leveling procedures to project activities over the baseline schedule using appropriate prioritization heuristics.

Classification: Concept AACSB: Application of Knowledge 64) A resource loading table is created through identifying the project activities and the resources required for completion and applying this information to the project schedule baseline.

Answer: TRUE Diff: 2 Section: 12.3 Resource Leveling LO: 12.3: Apply resource-leveling procedures to project activities over the baseline schedule using appropriate prioritization heuristics.

Classification: Concept AACSB: Application of Knowledge

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

Answer: FALSE Diff: 2 Section: 12.3 Resource Leveling LO: 12.3: Apply resource-leveling procedures to project activities over the baseline schedule using appropriate prioritization heuristics.

Classification: Application AACSB: Application of Knowledge 66) What are any four heuristics for prioritizing resource allocation to activities? Why would a project manager choose one above another?

Answer: The decision rules for prioritizing resource allocation discussed in the text are: activities with the smallest amount of slack, activities with the smallest duration, activities with the lowest identification number, activities with the most successor tasks, activities requiring the most resources.

These decision rules can be applied more easily than searching for an optimal or near optimal solution given the complexity of a typical resource management problem. The first rule, prioritizing activities with the smallest slack has some support for resulting in the smallest overall schedule slippage. The fourth rule allows for completing the greatest number of tasks once the activity in question has been completed. There may be any number of individual circumstances why one rule is more appealing than another.

Diff: 2 Section: 12.3 Resource Leveling LO: 12.3: Apply resource-leveling procedures to project activities over the baseline schedule using appropriate prioritization heuristics.

Classification: Application AACSB: Application of Knowledge

67) A project consists of six activities (all times are given in days). Provide the range of days during which resource usage is highest and the range of days during which resource usage is lowest using a late start schedule.

Activity Activity time Activity Cost Predecessor K 10 140 L 8 64 K, M M 12 96 N 6 120 M P 14 168 L Q 12 144 N Answer: Highest resource usage occurs during days 21 and 22 with activities N and P requiring a combined 32 units of resources. The lowest usage of 8 resource units occurs on days 1 and 2 for activity M and days 13 through 16 with activity L. Diff: 3 Section: 12.3 Resource Leveling LO: 12.3: Apply resource-leveling procedures to project activities over the baseline schedule using appropriate prioritization heuristics.

Classification: Critical Thinking AACSB: Analytical Thinking 68) A project consists of six activities (all times are given in days). Provide the range of days during which resource usage is highest and the range of days during which resource usage is lowest using an early start schedule.

Activity Activity time Activity Cost Predecessor K 10 140 L 8 64 K, M M 12 96 N 6 120 M P 14 168 L Q 12 144 N Answer: Highest resource usage occurs during days 13 through 18 with activities L and N requiring a combined 28 units of resources. The lowest usage of 8 resource units occurs on days 11 and 12 for activity M. Diff: 3 Section: 12.3 Resource Leveling LO: 12.3: Apply resource-leveling procedures to project activities over the baseline schedule using appropriate prioritization heuristics.

Classification: Critical Thinking AACSB: Analytical Thinking

69) A project consists of eleven activities (all times are given in days) and has worker requirements as indicated in the table. Assume that all four workers employed by this organization are generalists. What schedule is attainable if the number of workers is not an issue?

What is the fastest the project can be completed while constrained by the four worker limitation?

Workers Activity Activity time Needed Predecessor A 10 1 B 4 2 C 7 3 A D 4 1 A E 8 2 B F 9 3 C,E G 13 1 D H 14 2 E,G J 13 3 F K 10 1 H, J L 5 2 K Answer: With no worker constraint, the project can be completed in 56 days by adhering to an early start schedule.

Activity A B C D E F G H J K L

Duration 10 4 7 4 8 9 13 14 13 10 5

Early Start Early Finish Late Start Late Finish 0 10 0 10 0 4 7 11 10 17 12 19 10 14 10 14 4 12 11 19 17 26 19 28 14 27 14 27 27 41 27 41 26 39 28 41 41 51 41 51 51 56 51 56

Unfortunately, this schedule fails the four worker constraint on days 11 & 12 with the need for six workers and again on days 28-39 when five workers are needed. Adjusting for the constraint will require shifting non-critical activities back. Activity C delays starting until day 13 rather than the ES of 11. Activity F starts on day 20 instead of its ES of day 18. This results in Activity H delaying by one day and starting on day 29, otherwise day 28 is overscheduled by one worker.

Activity J begins on day 43 and concludes on day 55, which delays K to starting on day 56 since H and J are both predecessors. L begins on day 66 and concludes on day 70. The four worker constraint delays the project completion by 14 days, from 56 days of project work to a full 70 days of work.

Diff: 3 Section: 12.3 Resource Leveling LO: 12.3: Apply resource-leveling procedures to project activities over the baseline schedule using appropriate prioritization heuristics.

Classification: Critical Thinking AACSB: Analytical Thinking

70) This resource loading table shows the requirements for a five-task project that has a 42-day duration. The table is designed to reflect an early start schedule. Activity D has only one predecessor and activities C and E have two each. What differences exist between this table and the late start resource table?

Answer: The late start table is below. The AC path has slack, so differences arise from the starting times for these activities. Activity A has almost as much slack (8) as its duration (10) as is the case for activity C (duration of 8 and slack of 6). Activity A needs 10 units of resources and C needs 15 units per period, so these resources can be shifted almost the entire duration of either (or both) activities.

Diff: 2 Section: 12.3 Resource Leveling LO: 12.3: Apply resource-leveling procedures to project activities over the baseline schedule using appropriate prioritization heuristics.

Classification: Application AACSB: Application of Knowledge

71) Use the information in the table and assume that a worker is expected to devote half-time (four hours per day) to this project with work taking place on a 5-day-per-week basis. If the project manager is told that the total number of hours per week cannot exceed 48, what is the first week that some resource leveling must occur?

Activity Predecessor Hours per Day Time (Days) A -4 6 B A 4 11 C A 5 5 D B 4 6 E B 4 6 F B 6 3 G C, D 8 11 H E, F 8 8 J G, H 3 10 K J 6 4 A) Week 2 B) Week 6 C) Week 4 D) Week 5 Answer: C Diff: 3 Section: 12.3 Resource Leveling LO: 12.4: Follow the steps necessary to effectively smooth resource requirements across the project life cycle.

Classification: Critical Thinking AACSB: Analytical Thinking

72) A project consists of eleven activities (all times are given in days) and has worker requirements as indicated in the table. Assume that all six workers employed by this organization are generalists and are able to work on any of the tasks. What is the fastest the project can be completed?

Activity Activity time Workers Needed Predecessor A 10 1 B 4 2 C 7 3 A D 4 1 A E 8 2 B F 9 3 C,E G 13 1 D H 14 2 E,G J 13 3 F K 10 1 H, J L 5 2 K A) 54 days B) 56 days C) 58 days D) 60 days Answer: B Diff: 2 Section: 12.3 Resource Leveling LO: 12.4: Follow the steps necessary to effectively smooth resource requirements across the project life cycle.

Classification: Critical Thinking AACSB: Analytical Thinking

73) A project consists of eleven activities (all times are given in days) and has worker requirements as indicated in the table. Assume that all four workers employed by this organization are generalists and are able to work on any of the tasks. What is the fastest the project can be completed while constrained by the four worker limitation?

Activity Activity time Workers Needed Predecessor A 10 1 B 4 2 C 7 3 A D 4 1 A E 8 2 B F 9 3 C,E G 13 1 D H 14 2 E,G J 13 3 F K 10 1 H, J L 5 2 K A) 68 days B) 70 days C) 66 days D) 72 days Answer: B Diff: 3 Section: 12.3 Resource Leveling LO: 12.4: Follow the steps necessary to effectively smooth resource requirements across the project life cycle.

Classification: Critical Thinking AACSB: Analytical Thinking

74) A project consists of eleven activities (all times are given in days) and has worker requirements as indicated in the table. Assume that all four workers employed by this organization are generalists and are able to work on any of the tasks. What is the first day where this project exceeds the four worker maximum?

Activity Activity time Workers Needed Predecessor A 10 1 B 4 2 C 7 3 A D 4 1 A E 8 2 B F 9 3 C,E G 13 1 D H 14 2 E,G J 13 3 F K 10 1 H, J L 5 2 K A) Day 10 B) Day 11 C) Day 12 D) Day 13 Answer: B Diff: 3 Section: 12.3 Resource Leveling LO: 12.4: Follow the steps necessary to effectively smooth resource requirements across the project life cycle.

Classification: Critical Thinking AACSB: Analytical Thinking

75) A project consists of eleven activities (all times are given in days) and has worker requirements as indicated in the table. Assume that all four workers employed by this organization are generalists and are able to work on any of the tasks. What day does activity C start under a leveled project with the four worker limitation?

Activity Activity time Workers Needed Predecessor A 10 1 B 4 2 C 7 3 A D 4 1 A E 8 2 B F 9 3 C,E G 13 1 D H 14 2 E,G J 13 3 F K 10 1 H, J L 5 2 K A) Day 13 B) Day 15 C) Day 17 D) Day 19 Answer: A Diff: 3 Section: 12.3 Resource Leveling LO: 12.4: Follow the steps necessary to effectively smooth resource requirements across the project life cycle.

Classification: Critical Thinking AACSB: Analytical Thinking

76) A project consists of eleven activities (all times are given in days) and has worker requirements as indicated in the table. Assume that all four workers employed by this organization are generalists and are able to work on any of the tasks. What day does activity H start under a leveled project with the four worker limitation?

Activity Activity time Workers Needed Predecessor A 10 1 B 4 2 C 7 3 A D 4 1 A E 8 2 B F 9 3 C,E G 13 1 D H 14 2 E,G J 13 3 F K 10 1 H, J L 5 2 K A) Day 27 B) Day 28 C) Day 29 D) Day 30 Answer: C Diff: 3 Section: 12.3 Resource Leveling LO: 12.4: Follow the steps necessary to effectively smooth resource requirements across the project life cycle.

Classification: Critical Thinking AACSB: Analytical Thinking

77) A project consists of eleven activities (all times are given in days) and has worker requirements as indicated in the table. Assume that all four workers employed by this organization are generalists and are able to work on any of the tasks. What day does activity K start under a leveled project with the four worker limitation?

Activity Activity time Workers Needed Predecessor A 10 1 B 4 2 C 7 3 A D 4 1 A E 8 2 B F 9 3 C,E G 13 1 D H 14 2 E,G J 13 3 F K 10 1 H, J L 5 2 K A) Day 56 B) Day 57 C) Day 58 D) Day 59 Answer: A Diff: 3 Section: 12.3 Resource Leveling LO: 12.4: Follow the steps necessary to effectively smooth resource requirements across the project life cycle.

Classification: Critical Thinking AACSB: Analytical Thinking

78) A project consisting of six activities is represented in the resource loading table shown below. There is a limit of 12 hours' time spent on this project for any given day. What activities are involved in the first resource problem in this schedule?

Act. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 A 4 4 4 4 B 4 4 4 4 4 4 4 4 4 4 4 C 5 5 5 5 5 D 4 4 4 4 4 4 E 4 4 4 4 4 4 F 6 6 6 A) Activities A, B, and C B) Activities B, C, and D C) Activities C, D, and E D) Activities D, E, and F Answer: D Diff: 1 Section: 12.3 Resource Leveling LO: 12.4: Follow the steps necessary to effectively smooth resource requirements across the project life cycle.

Classification: Critical Thinking AACSB: Analytical Thinking 79) A project consisting of six activities is represented in the resource loading table shown below. There is a limit of 12 hours' time spent on this project for any given day. Which activity should be left alone if at all possible in the adjustment process among the candidates?

Act. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 A 4 4 4 4 B 4 4 4 4 4 4 4 4 4 4 4 C 5 5 5 5 5 D 4 4 4 4 4 4 E 4 4 4 4 4 4 F 6 6 6 A) Activity B B) Activity C C) Activity F D) Activity E Answer: A Diff: 2 Section: 12.3 Resource Leveling LO: 12.4: Follow the steps necessary to effectively smooth resource requirements across the project life cycle.

Classification: Critical Thinking AACSB: Analytical Thinking

80) A project consisting of six activities is shown in the table. The project manager must achieve the lowest possible maximum resource requirement while adhering to a 34-day deadline. The lowest possible peak resource demand occurs: Activity Duration (days) Activity Cost Predecessor K 10 140 L 8 64 K, M M 12 96 N 6 120 M P 14 168 L Q 12 144 N A) On days 19 through 20 for an early start schedule.

B) On days 17 through 20 for a late start schedule.

C) On days 13 through 18 for an early start schedule.

D) On days 21 through 22 for a late start schedule.

Answer: C Diff: 3 Section: 12.3 Resource Leveling LO: 12.4: Follow the steps necessary to effectively smooth resource requirements across the project life cycle.

Classification: Critical Thinking AACSB: Analytical Thinking 81) Describe resource leveling; its objectives and the basic five-step technique to perform it.

Answer: Resource leveling is the process that addresses the complex challenges of project constraints. With resource leveling we are required to develop procedures that minimize the effects of resource demands across the project's life cycle. Resource leveling has two objectives: to determine the resource requirements so that they will be available at the right time, and to allow each activity to be scheduled with the smoothest possible transition across usage levels.

The basic steps necessary to produce a resource-leveled project schedule include the following: Create a project activity network diagram.

From this diagram, create a table showing the resources required for each activity, the activity durations, and total float available.

Develop a time-phased resource loading table that shows the resources required to complete each activity, the activity early starts, and late finish times.

Identify any resource conflicts and begin to smooth the loading table using one or more of the heuristics for prioritizing resource assignment across activities.

Repeat the fourth step as often as necessary to eliminate the source of resource conflicts.

Diff: 2 Section: 12.3 Resource Leveling LO: 12.4: Follow the steps necessary to effectively smooth resource requirements across the project life cycle.

Classification: Application AACSB: Application of Knowledge

82) Create a resource loading table and perform resource leveling on the project composed of the activities in this table. Activities listed in the table are measured in the number of eight-hour days. The maximum amount of time used per day is 16 hours.

Activity Time Predecessor A 6 -B 1 -C 2 A, B D 4 -E 1 C, D F 1 E G 6 E H 4 F J 4 F K 3 G, H L 5 J, K M 3 L Answer: The initial resource loading table with early starts is shown below:

Day 1 is problematic, but activities B and D both have plenty of slack. Activity B has a late start of 5 and D has a late start of 4. Starting D on Day 2 changes the schedule the least and keeps the project under 16 hours per day until Day 11. Activities G, H, and J combine for 24 hours on Days 11-14; G has no slack, H has 1 day slack, and J has 4 days slack. Move J back to a Day 15 start time to resolve this constraint and the new loading table appears below:

Diff: 3 Section: 12.3 Resource Leveling LO: 12.4: Follow the steps necessary to effectively smooth resource requirements across the project life cycle.

Classification: Critical Thinking AACSB: Analytical Thinking

83) Sam and Dave have identified 9 activities that are required to complete their next project and developed a snazzy resource loading table. Since they each work 8 hours a day, they need your help to perform resource leveling on their project such that they can finish it by the close of business on Day 24. Activity float times are indicated by bracketed cells in the table. Times indicated in the table are in hours; the top row shows the day number of the project. The total hours for each day are shown in the bottom row of the table and cannot exceed 16 hours. The total resource time in any day cannot exceed 16 hours.

Answer: Pushing activities X, T, and R back to their late start times accomplishes the objective of finishing on time and at less than 16 hours of labor each day.

Diff: 3 Section: 12.3 Resource Leveling LO: 12.4: Follow the steps necessary to effectively smooth resource requirements across the project life cycle.

Classification: Critical Thinking AACSB: Analytical Thinking

84) What resources have been initially over-allocated in the project described by the table?

Assume that all activities will begin at their early start times and require the number of hours per day indicated in the table. Each worker is available for 8 hours per day. Do not level this project.

Activity A B C D E F G H M J K L

Activity Length 9 8 13 11 6 9 9 9 9 4 1 11

Predecessor --A B B C D E F, G F, H M, J K

Resource Lisa Nathan Jake Nathan Jake Lisa Jake Lisa Nathan Lisa Nathan Jake

Resource Hours Per Day 1 7 6 6 4 4 5 6 7 2 6 7

Answer: Resource loadings are summarized in the table. Over-allocations occur with Lisa on day 23; Jake on days 10-14 and again on days 20-22.

Worker

Lisa

Nathan

Days 1-9 10-14 15-22 23 24-31 32-35 36-52 1-8 9-19 20-31 32-40 41 42-52 1-8 9 10-14 15-19 20-22 23-28 29-41 42-52

Loading 1 0 6 10 4 2 0 7 6 0 7 6 0 0 4 10 6 11 5 0 7

Jake Diff: 2 Section: 12.3 Resource Leveling LO: 12.4: Follow the steps necessary to effectively smooth resource requirements across the project life cycle.

Classification: Critical Thinking AACSB: Analytical Thinking

85) Create a resource loading chart for the project described by this table and then adjust activities by splitting them or delaying them in order to meet the resource constraints of 8 hours of work per day. Show your new resource loading chart, indicating which activities have been adjusted. What is the change in project completion dates?

Resource Activity Time Predecessor Time/Day Resource G 5 -5 1 F 2 -3 1, 2 D 4 G 2 2 R 3 F 5 3 W 5 D 4 1, 3 M 4 R 7 3 K 4 M, W 3 2, 3 Z 2 K 6 2 Answer: The initial resource loading chart is below; project completion time is 20 days but the combination of activities R and G and activities M and D exceed the 8-hour-per-day threshold.

Activities R and M both have 5 days of slack; if activity R is delayed until day 5, it will begin then and be completed on day 8. M must be delayed until D is completed, which will then delay the project's completion by 4 days.

Diff: 3 Section: 12.4 Resource Loading Charts LO: 12.4: Follow the steps necessary to effectively smooth resource requirements across the project life cycle.

Classification: Critical Thinking AACSB: Analytical Thinking 86) The amount of work waiting to be completed but delayed due to unavailable resources is known as: A) Resource utilization.

B) In-process inventory.

C) Resource underutilization.

D) Efficiency.

Answer: B Diff: 2 Section: 12.5 Managing Resources in Multiproject Environments LO: 12.5: Apply resource management within a multiproject environment.

Classification: Concept AACSB: Application of Knowledge 87) Excessive in-process inventory is often caused by: A) Schedule slippage.

B) Over-ordering supplies.

C) Lack of available resources.

D) Too much labor.

Answer: C Diff: 2 Section: 12.5 Managing Resources in Multiproject Environments LO: 12.5: Apply resource management within a multiproject environment.

Classification: Concept AACSB: Application of Knowledge

88) Consider the portfolio of projects described in the table. The resource requirements are in numbers of labor hours. The First in Line rule would begin work with project: Resource Resource Resource Project Date Rec'd Date Due 1 2 3 A Apr 2006 Oct 2006 125 200 100 B Feb 2006 Sep 2006 200 350 400 C Mar 2006 Aug 2006 100 650 200 D Jan 2006 Nov 2006 150 250 350 A) A. B) B. C) C. D) D. Answer: A Diff: 1 Section: 12.5 Managing Resources in Multiproject Environments LO: 12.5: Apply resource management within a multiproject environment.

Classification: Critical Thinking AACSB: Analytical Thinking 89) Consider the portfolio of projects described in the table. The resource requirements are in numbers of labor hours. The Greatest Resource Demand rule would begin work with project: Resource 1 200 125 100 150

Resource 2 350 200 650 250

Resource 3 400 100 200 350

Project Date Rec'd Date Due A Apr 2006 Oct 2006 B Feb 2006 Sep 2006 C Mar 2006 Aug 2006 D Jan 2006 Nov 2006 A) A. B) B. C) C. D) D. Answer: A Diff: 2 Section: 12.5 Managing Resources in Multiproject Environments LO: 12.5: Apply resource management within a multiproject environment.

Classification: Critical Thinking AACSB: Analytical Thinking

90) Consider the portfolio of projects described in the table. The resource requirements are in numbers of labor hours. The Greatest Resource Utilization rule would begin work with project: Resource Resource Resource Project Date Rec'd Date Due 1 2 3 A Apr 2006 Oct 2006 200 0 400 B Feb 2006 Sep 2006 150 200 170 C Mar 2006 Aug 2006 0 250 200 D Jan 2006 Nov 2006 150 100 0 A) A. B) B. C) C. D) D. Answer: B Diff: 2 Section: 12.5 Managing Resources in Multiproject Environments LO: 12.5: Apply resource management within a multiproject environment.

Classification: Critical Thinking AACSB: Analytical Thinking 91) The Minimum Late Finish Time rule stipulates that: A) The earliest late finishers are scheduled last.

B) The latest early finishers are scheduled first.

C) The earliest late finishers are scheduled first.

D) The latest late finishers are scheduled first.

Answer: C Diff: 1 Section: 12.5 Managing Resources in Multiproject Environments LO: 12.5: Apply resource management within a multiproject environment.

Classification: Concept AACSB: Application of Knowledge 92) Mathematical programming is sometimes used to generate optimal solutions to resource constrained problems in a multi-project setting but suffers from: A) An inability to model project and activity due dates.

B) Resource substitution.

C) Resource constraints.

D) Problem complexity.

Answer: D Diff: 2 Section: 12.5 Managing Resources in Multiproject Environments LO: 12.5: Apply resource management within a multiproject environment.

Classification: Application AACSB: Application of Knowledge

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

Answer: FALSE Diff: 2 Section: 12.5 Managing Resources in Multiproject Environments LO: 12.5: Apply resource management within a multiproject environment.

Classification: Concept AACSB: Application of Knowledge 94) In-process inventory represents the amount of work waiting to be completed but delayed due to unavailable resources.

Answer: TRUE Diff: 2 Section: 12.5 Managing Resources in Multiproject Environments LO: 12.5: Apply resource management within a multiproject environment.

Classification: Concept AACSB: Application of Knowledge 95) What are the trade-offs among schedule slippage, resource utilization, and in-process inventory for a project manager in a multi-project environment?

Answer: Schedule slippage is a negative consequence on time performance for a project.

Resource utilization is the degree to which available resources are deployed and in-process inventory represents the amount of work waiting to be completed but delayed due to unavailable resources. Resource utilization can be increased by deploying all available resources as fully as possible.

Diff: 1 Section: 12.5 Managing Resources in Multiproject Environments LO: 12.5: Apply resource management within a multiproject environment.

Classification: Application AACSB: Application of Knowledge

96) A project is composed of the seven activities shown in the table where all activities are in weeks.

Activity J F P I N T O

Activity time 10 16 18 8 14 10 8

Resource Usage 90 144 180 128 196 220 80

Predecessor I J, F I P, N P, N

The resource profile for an early start schedule is plotted below.

Suppose that the line representing resource usage is a function of time and is described by the equation Usage=f(t). What is the definite integral of this function over the domain 0 to 52? In other words, find the solution to:

for this project.

Answer: Mercifully, there's nothing to integrate here. The area under the curve is the total usage of resources for the project, which is the sum of that column in the table. The total is 1038.

Diff: 2 Section: 12.5 Managing Resources in Multiproject Environments LO: 12.5: Apply resource management within a multiproject environment.

Classification: Application AACSB: Application of Knowledge

97) What are any three common heuristics that can be used to schedule resources in a multiproject environment? Comment on their advantages and disadvantages.

Answer: The heuristics discussed in the text are first in line, greatest resource demand, greatest resource utilization, minimum late finish time, and mathematical programming.

The first in line heuristic allocates resources based upon which project enters the queue first.

This is the easiest heuristic to follow, but it can defy common sense in favor of ease of use.

The greatest resource demand decision rule determines which projects in the company's portfolio will pose the greatest demand on available resources; these projects are allocated resources first and then other projects are scheduled. The assumption being made is that projects that are more consumptive of resources are likely sources of bottlenecks, so these activities should be accommodated first and the rest of the system subordinated to the bottlenecks' needs. This rule and the greatest resource utilization rule may result in dedicating too many resources to a project that simply isn't profitable or has poor margins when compared with projects that may represent low hanging fruit.

Greatest resource utilization is a slight variation on the greatest resource demand heuristic.

Projects with high levels of resource utilization are scheduled first, resulting in good performance on the utilization performance measure. If other projects are added to the company portfolio while the first project is still viable, the utilization of resources may remain high when the new projects are considered with the existing projects.

The minimum late finish time prioritizes projects with minimal slack, in effect keeping them as close as possible to on schedule. Projects with more slack can wait a while for the resources without becoming late. The danger is that resource starvation of projects with seemingly abundant slack may result in every project in the portfolio being delivered late.

Mathematical programming can generate optimal decisions to resource constrained problems.

While solutions are optimal, the problem set up and solution can be extraordinarily complex.

Diff: 1 Section: 12.5 Managing Resources in Multiproject Environments LO: 12.5: Apply resource management within a multiproject environment.

Classification: Application AACSB: Application of Knowledge 98) Rank the three key parameters, schedule slippage, resource utilization, and in-process inventory, from most critical to least critical for an organization and justify your ranking.

Answer: Answers may vary, however from a project management standpoint, schedule slippage is a natural choice as most critical. A missed delivery date may result in a dissatisfied customer, loss of repeat business, penalties for late delivery, and possible missed sales and market share for new products and services. In-process inventory is cited as the reason for employing more resources and tends to have a cascading effect in creating still more inventory and possibly more missed deadlines. Perhaps the least critical parameter is the full utilization of all resources. If projects are completed on time and not all resources are fully utilized, there shouldn't be cause for concern. A company where everyone is working nonstop is likely involved in a great deal of busywork and is creating inventory simply to look busy.

Diff: 2 Section: 12.5 Managing Resources in Multiproject Environments LO: 12.5: Apply resource management within a multiproject environment.

Classification: Critical Thinking AACSB: Application of Knowledge 99) What is mathematical programming, how can it be applied to resource decisions, and what are the advantages and disadvantages of doing so?

Answer: Math programming is sometimes used to generate optimal solutions to resource-

constrained problems in the multi-project setting, just as it can be employed for single projects.

The common goals of minimizing total development time and lateness and maximizing resource utilization across all projects can all be addressed by mathematical programming. The constraints of limited resources, precedence relationships among activities and projects, due dates, opportunities for activity splitting, concurrent and otherwise activity performance requirements, and resource substitution limit our ability to achieve the aforementioned goals. While mathematical programming can achieve an optimal solution to these problems, its use is limited due to the complexity of the problem, the large number of computational variables, and the time necessary to generate a sufficiently small set of options.

Diff: 2 Section: 12.5 Managing Resources in Multiproject Environments LO: 12.5: Apply resource management within a multiproject environment.

Classification: Application AACSB: Application of Knowledge Project Management: Achieving Competitive Advantage, 6e (Pinto) Chapter 13 Project Evaluation and Control 1) The first step in the control cycle is: A) Setting a goal.

B) Measuring progress.

C) Comparing actual with planned performance.

D) Taking action.

Answer: A Diff: 1 Section: 13.1 Control Cycles - A General Model LO: 13.1: Understand the nature of the control cycle and four key steps in a general project control model.

Classification: Concept AACSB: Application of Knowledge 2) Project goal setting includes setting a baseline plan, which is predicated on: A) The progress measurement.

B) An accurate work breakdown structure.

C) The type of gap analysis the project team plans to use.

D) The budget and schedule limitations.

Answer: B Diff: 2 Section: 13.1 Control Cycles - A General Model LO: 13.1: Understand the nature of the control cycle and four key steps in a general project control model.

Classification: Concept AACSB: Application of Knowledge 3) Measurement mechanisms should include a clear definition of: A) The project baseline.

B) The reporting relationships among members of the project team.

C) What to measure.

D) Trigger points.

Answer: C Diff: 2

Section: 13.1 Control Cycles - A General Model LO: 13.1: Understand the nature of the control cycle and four key steps in a general project control model.

Classification: Concept AACSB: Application of Knowledge

4) A measurement process that determines the project goals and then the degree to which the actual performance lives up to these goals is: A) A metric system.

B) Goal-performance linkage.

C) Five degrees of separation.

D) Gap analysis.

Answer: D Diff: 2 Section: 13.1 Control Cycles - A General Model LO: 13.1: Understand the nature of the control cycle and four key steps in a general project control model.

Classification: Concept AACSB: Application of Knowledge 5) If significant deviations from the project plan are detected, corrective action is taken and then: A) The monitoring and control cycle begins anew.

B) Project goals are adjusted to reflect current reality.

C) The project stakeholders are informed of the budget or time difficulties.

D) The critical chain is reviewed for task dependency.

Answer: A Diff: 2 Section: 13.1 Control Cycles - A General Model LO: 13.1: Understand the nature of the control cycle and four key steps in a general project control model.

Classification: Concept AACSB: Application of Knowledge 6) The project control cycle is continuous.

Answer: TRUE Diff: 1 Section: 13.1 Control Cycles - A General Model LO: 13.1: Understand the nature of the control cycle and four key steps in a general project control model.

Classification: Concept AACSB: Application of Knowledge 7) Gap analysis refers to any measurement process that first determines the goals and then the degree to which the actual performance lives up to those goals.

Answer: FALSE Diff: 2 Section: 13.1 Control Cycles - A General Model LO: 13.1: Understand the nature of the control cycle and four key steps in a general project control model.

Classification: Concept AACSB: Application of Knowledge

8) Sketch the project control cycle and discuss the activities that take place in each step.

Answer: The project control cycle consists of setting a goal, measuring progress, comparing actual with planned performance, and taking action and recycling the process. Project goal setting goes beyond overall scope development to include setting the project baseline plan, predicated on an accurate work breakdown structure. Progress measurement should be achieved by a system that allows for ongoing measurement to be focused on what matters, conducted quickly, and in real time. Comparing actual with planned performance is the basis for gap analysis; the smaller the gaps, the more successful the project. Finally, taking action to narrow the gaps between actual and planned performance is considered corrective action in most cases, although a project could be terminated if the gaps are too wide or cannot be closed sufficiently.

This process is iterative, so after corrective action is taken, the goal-setting process can begin anew.

Diff: 2 Section: 13.1 Control Cycles - A General Model LO: 13.1: Understand the nature of the control cycle and four key steps in a general project control model.

Classification: Concept AACSB: Application of Knowledge 9) What is a tracking Gantt chart and what are the benefits and drawbacks of its use?

Answer: A tracking Gantt chart is a Gantt chart with an indication of current project status for each activity. The bar representing each activity changes color to reflect the percentage completion status, ranging from 0% to 100%, of the activity. At any given point in time it is possible to see the progress that has been made on all activities and to determine whether a project is progressing on, ahead of, or behind schedule.

A benefit of tracking Gantt charts is that they are easy to understand. This type of chart can be updated quickly allowing for real-time control. While they show the status of activities, they do not convey why the activities are in their current state. Tracking Gantt charts also do not allow for future projections of the project's status or predictions regarding project completion time or adherence to budget.

Diff: 2 Section: 13.1 Control Cycles - A General Model LO: 13.1: Understand the nature of the control cycle and four key steps in a general project control model.

Classification: Concept AACSB: Application of Knowledge 10) Define human factors and discuss their impact on project success?

Answer: Human factors in project management focus on how humans behave and interact with

the project management process. The controls discussed in the chapter all rely on objective and measurable data based on project outcomes. It is also important to maintain a clear understanding of the importance of people in the project implementation process. Humans must use these technical systems and at times the systems may be ill-suited for convenient use or the circumstances facing the users may provide incentives for the systems to be gamed or deliberately misused. Both non-technical and technical measures should be deployed in order to get a complete picture of how a project is progressing.

Diff: 1 Section: 13.1 Control Cycles - A General Model LO: 13.1: Understand the nature of the control cycle and four key steps in a general project control model.

Classification: Concept AACSB: Application of Knowledge

11) Identify a different key success driver and inhibitor for the project stages of formation, buildup, main phase, and close-out.

Answer: There is considerable overlap in many of the key success drivers and inhibitors for project success. The presence of team and personal motivation and top management support appear throughout all of the phases of successful projects. Poor leadership and an unmotivated team are equally popular in each phase of a failed project. The breakdown in its entirety appears in the table.

Diff: 2 Section: 13.1 Control Cycles - A General Model LO: 13.1: Understand the nature of the control cycle and four key steps in a general project control model.

Classification: Application AACSB: Application of Knowledge 12) The classic project S-curve is a plot of: A) Labor hours versus money expended.

B) Money expended versus elapsed time.

C) Elapsed time versus labor hours.

D) Number of personnel versus days behind schedule.

Answer: A Diff: 2 Section: 13.2 Monitoring Project Performance LO: 13.2: Recognize the strengths and weaknesses of common project evaluation and control methods.

Classification: Concept AACSB: Application of Knowledge

13) Use the S-curve to choose the BEST statement about the project it describes. The horizontal axis is in weeks.

A) The total project costs in week 10 are less than budgeted.

B) The total project costs in week 10 exceed the budgeted cost.

C) The project cost more from weeks 25 through 30 than it did in weeks 10 through 15.

D) The total amount spent on the project at the end of the 20th week is approximately $30,000.

Answer: C Diff: 2 Section: 13.2 Monitoring Project Performance LO: 13.2: Recognize the strengths and weaknesses of common project evaluation and control methods.

Classification: Critical Thinking AACSB: Analytical Thinking 14) Use the S-curve to choose the BEST statement about the project it describes. The horizontal axis is in weeks.

A) More time passes from weeks 5 to 10 than from weeks 20 to 25.

B) More time passes from $50,000 to $60,000 than from $5,000 to $10,000.

C) More money is spent from weeks 0 to 10 than from weeks 30 to 40.

D) The total amount spent on the project at the end of the 40th week is approximately $110,000.

Answer: D Diff: 2 Section: 13.2 Monitoring Project Performance LO: 13.2: Recognize the strengths and weaknesses of common project evaluation and control methods.

Classification: Critical Thinking AACSB: Analytical Thinking

15) Use the S-curve where the solid line is actual cost and the dashed line is budgeted cost to choose the BEST statement.

A) The project is further ahead of budget from weeks 36 through 40 than from weeks 8 through 12.

B) The project never experiences negative variance.

C) The project is further behind budget from weeks 0 through 16 than from 24 through 40.

D) The project is in a constant state of positive variance.

Answer: A Diff: 2 Section: 13.2 Monitoring Project Performance LO: 13.2: Recognize the strengths and weaknesses of common project evaluation and control methods.

Classification: Critical Thinking AACSB: Analytical Thinking

16) Use the S-curve where the solid line is actual cost and the dashed line is budgeted cost to choose the BEST statement.

A) The project never experiences negative variance.

B) With regards to budget, the project starts badly but finishes well C) With regards to budget, the project starts well but finishes badly.

D) The project is in a constant state of positive variance.

Answer: B Diff: 2 Section: 13.2 Monitoring Project Performance LO: 13.2: Recognize the strengths and weaknesses of common project evaluation and control methods.

Classification: Concept AACSB: Application of Knowledge 17) A project manager that uses milestones as a project control device is using a: A) Proactive control system.

B) Predictive control system.

C) Feedback control system.

D) Reactive control system.

Answer: D Diff: 1 Section: 13.2 Monitoring Project Performance LO: 13.2: Recognize the strengths and weaknesses of common project evaluation and control methods.

Classification: Concept AACSB: Application of Knowledge

18) An excellent way to coordinate schedules with vendors and suppliers is through the use of: A) Milestones.

B) S-curves that plot expenditures against time.

C) S-curves that plot planned expenditures against time.

D) A tracking Gantt chart.

Answer: A Diff: 1 Section: 13.2 Monitoring Project Performance LO: 13.2: Recognize the strengths and weaknesses of common project evaluation and control methods.

Classification: Concept AACSB: Application of Knowledge 19) Milestones are generally considered to be: A) Demotivators for the project team.

B) Key project review gates.

C) The end of the project for all team members except the project manager.

D) Points where two or more activities merge.

Answer: B Diff: 1 Section: 13.2 Monitoring Project Performance LO: 13.2: Recognize the strengths and weaknesses of common project evaluation and control methods.

Classification: Concept AACSB: Application of Knowledge 20) A tracking Gantt chart: A) Monitors costs and budget expenditures.

B) Identifies key points in the project's progress.

C) Identifies the stage of completion for each task.

D) Identifies the performance to budget for the overall project by a certain date.

Answer: C Diff: 2 Section: 13.2 Monitoring Project Performance LO: 13.2: Recognize the strengths and weaknesses of common project evaluation and control methods.

Classification: Concept AACSB: Application of Knowledge

21) How does a tracking Gantt chart's appearance differ from a standard Gantt chart?

A) The tracking Gantt chart has a plot against time on the X1 axis and shows progress against budget on the X2 axis.

B) The tracking Gantt chart is composed of dollar signs that show the relative expense of the activity in comparison with other activities.

C) Each bar in the tracking Gantt chart shows who is responsible for completion of the activity in question.

D) Each bar in the tracking Gantt chart varies from 100% solid if the activity is completed to 100% alternative pattern if the activity has not begun.

Answer: D Diff: 2 Section: 13.2 Monitoring Project Performance LO: 13.2: Recognize the strengths and weaknesses of common project evaluation and control methods.

Classification: Concept AACSB: Application of Knowledge 22) It is possible to measure: A) Only positive deviations from the schedule baseline with a tracking Gantt chart.

B) Only negative deviations from the schedule baseline with a tracking Gantt chart.

C) Both positive and negative deviations from the schedule baseline with the tracking Gantt chart.

D) Both positive and negative deviations from the budget with the tracking Gantt chart.

Answer: A Diff: 1 Section: 13.2 Monitoring Project Performance LO: 13.2: Recognize the strengths and weaknesses of common project evaluation and control methods.

Classification: Concept AACSB: Application of Knowledge 23) The classic S-curve is a plot of cumulative cost versus elapsed time in weeks.

Answer: TRUE Diff: 1 Section: 13.2 Monitoring Project Performance LO: 13.2: Recognize the strengths and weaknesses of common project evaluation and control methods.

Classification: Concept AACSB: Application of Knowledge

24) Positive variance on an S-curve represents significant project progress.

Answer: FALSE Diff: 2 Section: 13.2 Monitoring Project Performance LO: 13.2: Recognize the strengths and weaknesses of common project evaluation and control methods.

Classification: Concept AACSB: Application of Knowledge 25) One strength of S-curve analysis is that it provides real-time tracking information.

Answer: TRUE Diff: 2 Section: 13.2 Monitoring Project Performance LO: 13.2: Recognize the strengths and weaknesses of common project evaluation and control methods.

Classification: Concept AACSB: Application of Knowledge 26) Since a project may get ahead of or fall behind schedule, a calendar date cannot be a milestone.

Answer: TRUE Diff: 2 Section: 13.2 Monitoring Project Performance LO: 13.2: Recognize the strengths and weaknesses of common project evaluation and control methods.

Classification: Concept AACSB: Application of Knowledge 27) It is possible to measure both positive and negative deviations from the schedule baseline with the tracking Gantt chart.

Answer: TRUE Diff: 2 Section: 13.2 Monitoring Project Performance LO: 13.2: Recognize the strengths and weaknesses of common project evaluation and control methods.

Classification: Concept AACSB: Application of Knowledge

28) Use the S-curves for this project to create a table showing budgeted and actual expenses and variance in thousands of dollars and comment on the project's performance. The horizontal axis is in weeks.

Answer: The project experiences positive variance from the beginning through week 40 after which point the variance becomes negative. The largest positive variance occurs at the end of the 15th week when the variance is $3,000 and the largest negative variance occurs at the end when the discrepancy is $2,000. The full set of values for the project are computed in the table below.

The performance is unknown; budget performance appears to be good, but we are not given information regarding client acceptance.

Cumulative Budgeted Cost 2 4 7.5 12.5 18.5 25.5 30.5 33.5 35.5 36.5

Cumulative Actual Cost 3 6 10.5 14.5 19.5 25.5 31.5 33.5 34.5 34.5

Time 5 10 15 20 25 30 35 40 45 50 Diff: 2 Section: 13.2 Monitoring Project Performance LO: 13.2: Recognize the strengths and weaknesses of common project evaluation and control methods.

Classification: Critical Thinking AACSB: Analytical Thinking

29) What are any four benefits to using milestones as a form of project control? What advantage do they hold over pure S-curve analysis?

Answer: There are several benefits to using milestones as a form of project control: Milestones signal the completion of important project steps.

Milestones can motivate the project team.

Milestones offer points at which to reevaluate client needs and any potential change requests.

Milestones help coordinate schedules with vendors and suppliers.

Milestones identify key project review gates.

Milestones signal other team members when their participation is expected to begin.

S-curve analysis is a plot of expense versus time, but it is difficult to ascertain why variance from the anticipated curve exists and whether the variance is good news or bad news.

Diff: 2 Section: 13.2 Monitoring Project Performance LO: 13.2: Recognize the strengths and weaknesses of common project evaluation and control methods.

Classification: Application AACSB: Application of Knowledge 30) What are drawbacks to a pure S-curve analysis?

Answer: S-curves do not allow troubleshooting (interpretation as to the cause of a negative or positive variance). The project may incur expenses far under what was budgeted, but solely by examining the curve, there is no way to tell if less work has been completed than planned or if some amazingly cost-effective method of completing work has been implemented. The same holds true for the opposite effect, expenses could be far above what was anticipated and instead of being ahead of schedule, the project could be in serious financial trouble. Such are the vicissitudes of S-curves.

Diff: 2 Section: 13.2 Monitoring Project Performance LO: 13.2: Recognize the strengths and weaknesses of common project evaluation and control methods.

Classification: Application AACSB: Application of Knowledge

31) What are the problems with milestones as a project control mechanism?

Answer: The problem with milestones is that they are a reactive control system. You must first engage in project activities and then evaluate them relative to your goal. If you significantly underperform your work to that point, you are faced with having to correct what has already transpired. Imagine, for example, that a project team misses a milestone by a large margin. Not having received any progress reports until the point that the bad news becomes public, the project manager is probably not in a position to craft an immediate remedy for the shortfall. At this point, the problems are compounded. Due to the delay in receiving the bad news, remedial steps are themselves delayed, pushing the project even farther behind.

Diff: 2 Section: 13.2 Monitoring Project Performance LO: 13.2: Recognize the strengths and weaknesses of common project evaluation and control methods.

Classification: Application AACSB: Application of Knowledge 32) Earned value management is also known as: A) The golden triangle method (GTM).

B) The achieved value method (AVM).

C) The program evaluation and review method (PERM).

D) Earned value analysis (EVA).

Answer: A Diff: 1 Section: 13.3 Earned Value Management LO: 13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification: Concept AACSB: Application of Knowledge 33) Earned value management jointly considers the impact of: A) Time, cost, and planned cost.

B) Project performance, planned performance, and cost.

C) Performance, cost, and time.

D) Planned cost, planned performance, and time.

Answer: C Diff: 2 Section: 13.3 Earned Value Management LO: 13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification: Concept AACSB: Application of Knowledge

34) Which of these tools allows a project team to make future projections of project status based on its current state?

A) Tracking Gantt chart B) Milestone chart C) S-curve D) Earned value management Answer: C Diff: 2 Section: 13.3 Earned Value Management LO: 13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification: Concept AACSB: Application of Knowledge 35) Take the factors considered by earned value analysis and subtract those considered by project S-curves. The factor(s) you have remaining are: A) Performance and cost.

B) Cost and schedule.

C) Time.

D) Performance.

Answer: D Diff: 2 Section: 13.3 Earned Value Management LO: 13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification: Application AACSB: Application of Knowledge 36) Take the factors considered by earned value analysis and subtract those considered by tracking Gantt charts. The factor(s) you have remaining are: A) Cost.

B) Cost and schedule.

C) Schedule and performance.

D) Performance.

Answer: A Diff: 2 Section: 13.3 Earned Value Management LO: 13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification: Concept AACSB: Application of Knowledge

37) Planned value is: A) The total budget for the project.

B) A cost estimate of the budgeted resources across the project's life cycle.

C) The real budgeted value of the work that has actually been performed to date.

D) The cumulative total costs incurred in accomplishing the various project work packages.

Answer: B Diff: 2 Section: 13.3 Earned Value Management LO: 13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification: Concept AACSB: Application of Knowledge 38) Earned value is: A) The total budget for the project.

B) A cost estimate of the budgeted resources across the project's life cycle.

C) The real budgeted value of the work that has actually been performed to date.

D) The cumulative total costs incurred in accomplishing the various project work packages.

Answer: C Diff: 2 Section: 13.3 Earned Value Management LO: 13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification: Concept AACSB: Application of Knowledge 39) The earned value to date divided by the planned value of work scheduled to be performed is the: A) Cost performance index.

B) Budgeted cost at completion index.

C) Budget efficiency index.

D) Schedule performance index.

Answer: D Diff: 2 Section: 13.3 Earned Value Management LO: 13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification: Critical Thinking AACSB: Analytical Thinking

40) The earned value divided by the actual, cumulative cost of the work to date is the: A) Cost performance index.

B) Budgeted cost at completion index.

C) Budget efficiency index.

D) Schedule performance index.

Answer: A Diff: 2 Section: 13.3 Earned Value Management LO: 13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification: Critical Thinking AACSB: Analytical Thinking 41) A project manager can calculate the projected schedule of the project to completion by using the: A) Cost performance index.

B) Schedule performance index.

C) Budgeted cost at completion index.

D) Budget efficiency index.

Answer: B Diff: 2 Section: 13.3 Earned Value Management LO: 13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification: Concept AACSB: Application of Knowledge 42) A project manager can calculate the projected budget to completion by using the: A) Budgeted cost at completion index.

B) Budget efficiency index.

C) Cost performance index.

D) Schedule performance index.

Answer: C Diff: 2 Section: 13.3 Earned Value Management LO: 13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification: Concept AACSB: Application of Knowledge

43) The project baseline is established by combining data from the: A) Work breakdown structure and the project budget.

B) Time-phased project budget and the PERT chart.

C) S-curve and the project budget.

D) Time-phased project budget and the work breakdown structure.

Answer: D Diff: 2 Section: 13.3 Earned Value Management LO: 13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification: Concept AACSB: Application of Knowledge 44) Use the data to calculate the earned value for the project. All amounts are in thousands of dollars.

A) $38,500 B) $43,250 C) $54,750 D) $100,000 Answer: A Diff: 2 Section: 13.3 Earned Value Management LO: 13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification: Critical Thinking AACSB: Analytical Thinking

45) Use the data to calculate the earned value for the project. All amounts are in thousands of dollars.

A) $38,500 B) $46,550 C) $56,750 D) $61,125 Answer: B Diff: 2 Section: 13.3 Earned Value Management LO: 13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification: Critical Thinking AACSB: Analytical Thinking

46) Use the data to calculate the earned value for the project. All amounts are in thousands of dollars.

A) $65,500 B) $69,550 C) $71,100 D) $76,125 Answer: C Diff: 2 Section: 13.3 Earned Value Management LO: 13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification: Critical Thinking AACSB: Analytical Thinking

47) At the end of week 20, this project has cost $79,000 and has an earned value as indicated in the table. Use the data to calculate the cost performance index for the project. All amounts are in thousands of dollars.

A) 1.11 B) 0.82 C) 0.94 D) 0.90 Answer: D Diff: 3 Section: 13.3 Earned Value Management LO: 13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification: Critical Thinking AACSB: Analytical Thinking 48) At the end of week 10, this project has cost $9,000 and has an earned value as indicated in the table. Use the data to calculate the cost performance index for the project. All amounts are in thousands of dollars.

A) 2.5 B) 2.1 C) 1.8 D) 1.5 Answer: A Diff: 3 Section: 13.3 Earned Value Management LO: 13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification: Critical Thinking AACSB: Analytical Thinking

49) Use the data to calculate the schedule performance index for the project for the end of week 20. All amounts are in thousands of dollars.

A) 1.14 B) 0.88 C) 0.94 D) 0.81 Answer: B Diff: 3 Section: 13.3 Earned Value Management LO: 13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification: Critical Thinking AACSB: Analytical Thinking 50) Use the data to calculate the schedule performance index for the project for the end of week 10. All amounts are in thousands of dollars.

A) 1.24 B) 0.93 C) 0.81 D) 0.76 Answer: C Diff: 3 Section: 13.3 Earned Value Management LO: 13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification: Critical Thinking AACSB: Analytical Thinking

51) The first step in earned value management is to: A) Create the activity and resource usage schedules.

B) Develop a time-phased budget that shows expenditures across the project's life.

C) Total the actual costs of doing each task to arrive at the actual cost of work performed.

D) Clearly define each activity that will be performed including its resource needs and budget.

Answer: D Diff: 2 Section: 13.3 Earned Value Management LO: 13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification: Concept AACSB: Application of Knowledge 52) In earned value management analysis, the cumulative amount of the budget becomes the: A) Planned value.

B) Scheduled value.

C) Cost basis.

D) Cost driver.

Answer: A Diff: 2 Section: 13.3 Earned Value Management LO: 13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification: Concept AACSB: Application of Knowledge 53) In earned value management, schedule variance is defined as: A) The difference between the earned value and the actual cost.

B) The difference between the earned value and the planned value.

C) The difference between the actual cost and the planned value.

D) The difference between the cost and schedule performance indices multiplied by the budgeted cost at completion.

Answer: B Diff: 2 Section: 13.3 Earned Value Management LO: 13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification: Concept AACSB: Application of Knowledge

54) The budget variance is calculated as: A) Earned value minus planned value.

B) Planned value minus actual cost.

C) Earned value minus actual cost.

D) Cost minus planned value.

Answer: C Diff: 2 Section: 13.3 Earned Value Management LO: 13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification: Concept AACSB: Application of Knowledge 55) Use the earned value table (all amounts indicated are dollars) to determine the earned value to the nearest hundred dollars given the indicated state of the project. % Complete 100% 100% 100% 95% 75% 80% 45%

Activity 5 10 15 20 25 30 35 Plan A 850 350 1,200 B 400 125 525 C 1,275 650 1,925 D 2800 4,500 350 7,650 E 680 400 1,080 F 125 875 1,000 G 300 1200 1,500 Monthly Plan 850 750 1,400 3,450 5,180 1,175 2,075 14,880 Monthly Act 900 650 1,350 3,875 4,780 850 2,000 A) $16,900 B) $14,900 C) $14,400 D) $13,200 Answer: D Diff: 2 Section: 13.3 Earned Value Management LO: 13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification: Concept AACSB: Analytical Thinking

56) Use the earned value table to determine the schedule performance index given the indicated state of the project. % Activity 5 10 15 20 25 30 35 Plan Complete A 850 350 1,200 100% B 400 125 525 100% C 1,275 650 1,925 100% D 2800 4,500 350 7,650 95% E 680 400 1,080 75% F 125 875 1,000 80% G 300 1200 1,500 45% Monthly Plan 850 750 1,400 3,450 5,180 1,175 2,075 14,880 Monthly Act 900 650 1,350 3,875 4,780 850 2,000 A) 0.89 B) 0.92 C) 1.09 D) 1.13 Answer: A Diff: 2 Section: 13.3 Earned Value Management LO: 13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification: Concept AACSB: Analytical Thinking

57) Use the earned value table to determine the cost performance index given the indicated state of the project. % Activity 5 10 15 20 25 30 35 Plan Complete A 850 350 1,200 100% B 400 125 525 100% C 1,275 650 1,925 100% D 2800 4,500 350 7,650 95% E 680 400 1,080 75% F 125 875 1,000 80% G 300 1200 1,500 45% Monthly Plan 850 750 1,400 3,450 5,180 1,175 2,075 14,880 Monthly Act 900 650 1,350 3,875 4,780 850 2,000 A) 0.89 B) 0.92 C) 1.09 D) 1.13 Answer: B Diff: 2 Section: 13.3 Earned Value Management LO: 13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification: Concept AACSB: Analytical Thinking

58) Use the earned value table to determine the estimated time to completion given the indicated state of the project. % Activity 5 10 15 20 25 30 35 Plan Complete A 850 350 1,200 100% B 400 125 525 100% C 1,275 650 1,925 100% D 2800 4,500 350 7,650 95% E 680 400 1,080 75% F 125 875 1,000 80% G 300 1200 1,500 45% Monthly Plan 850 750 1,400 3,450 5,180 1,175 2,075 14,880 Monthly Act 900 650 1,350 3,875 4,780 850 2,000 A) 35 days B) 37 days C) 39 weeks D) 41 weeks Answer: C Diff: 2 Section: 13.3 Earned Value Management LO: 13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification: Concept AACSB: Analytical Thinking

59) Use the earned value table to determine the estimated cost to completion given the indicated state of the project. % Activity 5 10 15 20 25 30 35 Plan Complete A 850 350 1,200 100% B 400 125 525 100% C 1,275 650 1,925 100% D 2800 4,500 350 7,650 95% E 680 400 1,080 75% F 125 875 1,000 80% G 300 1200 1,500 45% Monthly Plan 850 750 1,400 3,450 5,180 1,175 2,075 14,880 Monthly Act 900 650 1,350 3,875 4,780 850 2,000 A) $15,966 B) $16,235 C) $18,164 D) $17,441 Answer: B Diff: 2 Section: 13.3 Earned Value Management LO: 13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification: Concept AACSB: Analytical Thinking

60) Use the earned value table for Project Makeready to determine the earned value at week 49. % Plan Complete 575 100% 635 100% 625 100% 1,765 80% 1,100 70% 550 25% 5,250

Activity 7 14 21 28 35 42 49 Install fixtures 325 250 Refinish floors 550 85 Replace doors 350 275 Complete tiling 1,200 565 Install back door 875 225 Landscaping 200 350 Monthly Plan 325 800 435 1,475 1,440 425 350 Monthly Act 550 550 550 1,100 1,650 550 1,100 A) $4,950 B) $6,050 C) $4,155 D) $5,250 Answer: C Diff: 2 Section: 13.3 Earned Value Management LO: 13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification: Critical Thinking AACSB: Analytical Thinking

61) What is the cost variance of Project Makeready based on the data in the earned value table shown below? % Activity 7 14 21 28 35 42 49 Plan Complete Install fixtures 325 250 575 100% Refinish floors 550 85 635 100% Replace doors 350 275 625 100% Complete tiling 1,200 565 1,765 80% Install back door 875 225 1,100 70% Landscaping 200 350 550 25% Monthly Plan 325 800 435 1,475 1,440 425 350 5,250 Monthly Act 550 550 550 1,100 1,650 550 1,100 A) -$1,896 B) -$1,096 C) -$800 D) -$406 Answer: A Diff: 2 Section: 13.3 Earned Value Management LO: 13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification: Critical Thinking AACSB: Analytical Thinking

62) Use the earned value table for Project Makeready to determine the schedule variance. % Plan Complete 575 100% 635 100% 625 100% 1,765 80% 1,100 70% 550 25% 5,250

Activity 7 14 21 28 35 42 49 Install fixtures 325 250 Refinish floors 550 85 Replace doors 350 275 Complete tiling 1,200 565 Install back door 875 225 Landscaping 200 350 Monthly Plan 325 800 435 1,475 1,440 425 350 Monthly Act 550 550 550 1,100 1,650 550 1,100 A) -$1,896 B) -$1,096 C) -$800 D) -$206 Answer: B Diff: 2 Section: 13.3 Earned Value Management LO: 13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification: Critical Thinking AACSB: Analytical Thinking

63) Use the earned value table for Project Makeready to calculate their schedule performance index. % Activity 7 14 21 28 35 42 49 Plan Complete Install fixtures 325 250 575 100% Refinish floors 550 85 635 100% Replace doors 350 275 625 100% Complete tiling 1,200 565 1,765 80% Install back door 875 225 1,100 70% Landscaping 200 350 550 25% Monthly Plan 325 800 435 1,475 1,440 425 350 5,250 Monthly Act 550 550 550 1,100 1,650 550 1,100 A) 1.46 B) 0.68 C) 0.79 D) 1.26 Answer: C Diff: 2 Section: 13.3 Earned Value Management LO: 13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification: Critical Thinking AACSB: Analytical Thinking

64) Use the earned value table for Project Makeready to calculate the estimated cost to completion. % Activity 7 14 21 28 35 42 49 Plan Complete Install fixtures 325 250 575 100% Refinish floors 550 85 635 100% Replace doors 350 275 625 100% Complete tiling 1,200 565 1,765 80% Install back door 875 225 1,100 70% Landscaping 200 350 550 25% Monthly Plan 325 800 435 1,475 1,440 425 350 5,250 Monthly Act 550 550 550 1,100 1,650 550 1,100 A) $4,285 B) $5,250 C) $6,050 D) $7,645 Answer: D Diff: 2 Section: 13.3 Earned Value Management LO: 13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification: Critical Thinking AACSB: Analytical Thinking 65) If an activity's progress is defined as 0% until the activity is complete, the project manager is using: A) The 50/50 rule.

B) The all or nothing rule.

C) The 0/100 rule.

D) The Do Not Pass Go rule.

Answer: C Diff: 1 Section: 13.5 Issues in the Effective Use of Earned Value Management LO: 13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification: Concept AACSB: Application of Knowledge

66) Once an activity is begun, it is assumed to be half done under the: A) "Once begun, half done" rule.

B) Minimal effort rule.

C) Midway rule.

D) 50/50 rule.

Answer: D Diff: 1 Section: 13.5 Issues in the Effective Use of Earned Value Management LO: 13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification: Concept AACSB: Application of Knowledge 67) Each activity contained a series of milestones that represented a previously agreed-upon amount of work. Once the low graffiti was erased, 35% of the activity had been completed and once the mid-level graffiti was erased, 70% of the activity had been completed. This project manager was clearly in the: A) Percentage complete camp.

B) Micromanagement camp.

C) 35/70 camp.

D) 3K specifications camp.

Answer: A Diff: 1 Section: 13.5 Issues in the Effective Use of Earned Value Management LO: 13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification: Critical Thinking AACSB: Analytical Thinking 68) Very short work packages would be better managed by: A) The percentage complete rule.

B) The 0/100 rule.

C) The caveat emptor rule.

D) The prior knowledge rule.

Answer: B Diff: 2 Section: 13.5 Issues in the Effective Use of Earned Value Management LO: 13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification: Critical Thinking AACSB: Analytical Thinking

69) Earned value directly links all three primary project success metrics (cost, schedule, and customer satisfaction).

Answer: FALSE Diff: 2 Section: 13.3 Earned Value Management LO: 13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification: Concept AACSB: Application of Knowledge 70) The one factor that earned value management considers that an S-curve does not include is performance.

Answer: TRUE Diff: 2 Section: 13.3 Earned Value Management LO: 13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification: Concept AACSB: Application of Knowledge 71) The earned value of a project is the cumulative total costs incurred in accomplishing the various work packages.

Answer: FALSE Diff: 2 Section: 13.3 Earned Value Management LO: 13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification: Concept AACSB: Application of Knowledge 72) A project manager needs the work breakdown structure and a time-phased project budget to establish the project baseline.

Answer: TRUE Diff: 2 Section: 13.3 Earned Value Management LO: 13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification: Concept AACSB: Application of Knowledge

73) Five weeks in the semester you have completed 0% of your project management class under the 0/100 rule.

Answer: TRUE Diff: 2 Section: 13.5 Issues in the Effective Use of Earned Value Management LO: 13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification: Concept AACSB: Application of Knowledge 74) Your organization is in the midst of a project in uncharted waters; nothing you have attempted before comes close to many of the activities that are necessary to bring this project to completion. Your earned value management should probably be tracked closely with a percentage complete rule in increments of 5 to 10 percent.

Answer: FALSE Diff: 2 Section: 13.5 Issues in the Effective Use of Earned Value Management LO: 13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification: Concept AACSB: Application of Knowledge

75) You are the new consultant to the project manager for a large chicken project. During your first meeting with the project manager he brings you up to speed on the project status by showing you these S-curves. You glance at the graph, compose your thoughts, and make what comments on this project?

Answer: The solid line, representing the cumulative actual expenses, stops at the end of the 6th month, meaning that the project is probably at the end of the 6th month or in the 7th month with no figures yet reported. Another possibility is that the project was abandoned, but if you're having this meeting about it, chances are that it is still a viable concern. Finally, the project could be done, but again, this is unlikely if you're being brought in to consult at this stage.

The project has been performing poorly with respect to budget. From the beginning, the variance has been positive and seems to be increasing as the project progresses. This may be the result of every single activity costing more than estimated or a common thread such as labor or transportation costs that weaves through every activity that costs more than estimated. Other explanations include that the project was purposely underestimated so it would be approved or that the budget was cut by someone not closely associated with its planning or execution.

You can't reliably comment on when the project will finish; it may be performing badly on the time-phased budget because actual work is ahead of schedule. For this reason you can't say the project will end in an over-budget situation.

Diff: 2 Section: 13.3 Earned Value Management LO: 13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification: Critical Thinking AACSB: Analytical Thinking

76) What is earned value management and how can it be used to monitor project status?

Answer: Earned Value Management (EVM) is a project status tracking tool that jointly monitors budget, time, and performance and allows future projections of project status based on current state and baseline. Earned value is the real budgeted cost, or value, of the work that has actually been performed. This is compared to the planned value across the project's life cycle and the actual costs incurred in accomplishing the various work packages. The work breakdown structure and a time-phased budget can be combined to create a project baseline that allows a project manager to compare the project's progress and expenses against plan at any and all stages of project completion.

Diff: 2 Section: 13.3 Earned Value Management LO: 13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification: Application AACSB: Application of Knowledge 77) What are the inputs and the steps in applying earned value management as a project management tool?

Answer: The two pieces of data required to implement earned value management are the work breakdown structure and a time-phased project budget. The work breakdown structure identifies the individual work packages and tasks necessary to accomplish the project. It also gives us some understanding of the hierarchy of tasks, in order to set up work packages and identify personnel needs. The time-phased budget allows us to identify the correct sequencing of tasks and enables the project team to determine the points in the project when budget money is likely to be spent in pursuit of those tasks. These two pieces of information are combined to form the project baseline, which shows time-phased activities and expenditures for them.

Earned value is calculated by applying the percentage completion of all project activities to the expenses of those activities. We can then compare the planned budget against the actual earned value, using the original project budget baseline.

Diff: 2 Section: 13.3 Earned Value Management LO: 13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification: Concept AACSB: Application of Knowledge

78) Geoff coolly surveyed his earned value table at the conclusion of month 24. It was hard to believe that two short years ago, with his membership at Match.com about to expire, he had managed to craft an ad that was both urbane and manly enough as to catch the eye of the divine Miss Smylie. (The male model photo he substituted for his own certainly didn't hurt either.) Now he was almost done managing this critical project. Some might think him crass for taking such an approach, but he practiced what he preached at the small commuter school where he taught.

Calculate all of the schedule and cost variances (costs in the table are in dollars) for this project and comment on Geoff's skills as a project manager.

Activity 4 8 12 16 20 24 28 Total % Complete Courtship 1000 2000 3000 3000 3000 1000 13000 90% Proposal 500 5000 0 0 5000 10500 100% Negotiations 500 0 1000 1500 100% Invitations 800 800 100% Showers 400 800 800 2000 100% Musicians 400 1000 1400 20% Caterer 200 2000 5000 7200 30% Rehearsal 400 4000 4400 10% Party 1000 2000 3000 20% Ceremony 500 500 500 500 3500 5500 20% Reception 1000 1000 6000 8000 30% Honeymoon 2000 4000 6000 40% Total 1000 3000 10700 5900 9700 7500 25500 63300 Cumulative 1000 4000 14700 20600 30300 37800 63300 Actual 2500 5100 12700 6400 10600 9000 0 Cumulative Actual 2500 7600 20300 26700 37300 46300 Answer: The schedule variances for this earned value management table are as follows: Planned value (PV) is $37,800 from the table.

Earned value (EV) is the sum of the products of the activity total costs times their percentage complete.

EV =

× 1000

EV = $35,880 Schedule Performance Index: EV/PV = 35,880/37,800 = 0.949 Estimated Time to Completion: (1/SPI) Planned Time = (1/.949)28 = 29.498 months The cost variances for the EVM table are: Actual cost of work performed (AC): $46,300 (from table) Earned value (EV): $35,880 (calculated above) Cost performance index (CPI): EV/AC=35,880/46,300 = 0.775 Estimated cost to completion: (1/CPI) Plan Budget = (1/0.775) ∗ 63,300 = $81,683

Geoff's skills as a project manager are a cause for concern; instead of bringing the project in for $63,300 and in 28 months, he stands to spend an extra $18,383 and not complete the project by the 28th month, extending past this deadline an extra 6 weeks. EVM isn't everything though; what's an extra $18 grand and 6 weeks when you've found your soul mate?

Diff: 2 Section: 13.3 Earned Value Management LO: 13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification: Critical Thinking AACSB: Analytical Thinking 79) Inspired by his trip to Greece, the gentleman farmer decided he needed a Mykonos-style windmill pumping a pond for his sheep and orchard. His earned value table for the project appears below. At the end of June, what was the estimated time to completion and the estimated cumulative cost to completion? % Earned Activity Jan Feb Mar Apr May Jun Jul Plan Complete Value Grading 500 150 650 100% 650 Footings 200 150 350 100% 350 Foundation 800 300 1,100 80% 880 Masonry 300 300 200 800 70% 560 Interior 700 2,000 2,700 50% 1,350 Pump Install 3,000 3,000 40% 1,200 Painting 350 400 750 25% 188 Monthly Plan 500 350 950 600 1,000 2,550 3,400 9,350 5,178 Cumulative 500 850 1,800 2,400 3,400 5,950 9,350 Monthly Actual 600 400 900 800 800 2,800 0 Cumulative Actual 600 1,000 1,900 2,700 3,500 6,300 Answer: At the end of June, the PV=5950; EV=5,178; and AC=6,300. The SPI=0.87 and the estimated time to completion is 8.04 months. The cost performance is 0.82, so the estimated cost to completion is $11,377.

Diff: 3 Section: 13.3 Earned Value Management LO: 13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification: Critical Thinking AACSB: Analytical Thinking

80) Inspired by his trip to Greece, the gentleman farmer decided he needed a Mykonos-style windmill pumping a pond for his sheep and orchard. His earned value table for the project appears below. Develop a plot that shows the project baseline and earned value through June and comment on the project. % Earned Activity Jan Feb Mar Apr May Jun Jul Plan Complete Value Grading 500 150 650 100% 650 Footings 200 150 350 100% 350 Foundation 800 300 1,100 80% 880 Masonry 300 300 200 800 70% 560 Interior 700 2,000 2,700 50% 1,350 Pump Install 3,000 3,000 40% 1,200 Painting 350 400 750 25% 188 Monthly Plan 500 350 950 600 1,000 2,550 3,400 9,350 5,178 Cumulative 500 850 1,800 2,400 3,400 5,950 9,350 Monthly Actual 600 400 900 800 800 2,800 0 Cumulative Actual 600 1,000 1,900 2,700 3,500 6,300 Answer: The project is slightly over budget and slightly behind, but not dramatically so.

Diff: 2 Section: 13.3 Earned Value Management LO: 13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification: Critical Thinking AACSB: Analytical Thinking

81) What is the significance of the 0/100 rule and the 50/50 rule and why would each be used?

Answer: The 0/100 rule and the 50/50 rule are both techniques for assigning a completion value to activities in a project. A completion value for every activity is a vital piece of information when applying earned value management analysis. The 0/100 rule says that an activity is 0% complete until it is finished, at which time it is 100% complete. The 50/50 rule says that once an activity has been started, it is assigned a value of 50% complete until it is completed, at which time it is 100% complete. Both rules are easy to apply; rather than trying to estimate a precise completion percentage, the project manager or subcontractor needs only supply one of two numbers. These rules are appropriate when work packages are short or are of a nature that vendor deliveries are required.

Diff: 1 Section: 13.5 Issues in the Effective Use of Earned Value Management LO: 13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification: Concept AACSB: Application of Knowledge 82) Earned value management at the portfolio level requires: A) A single project manager with a single metric system.

B) Aggregation of all earned value measures across the firm's entire project portfolio.

C) Only positive variances for both budget and schedule.

D) Only negative variances for both budget and schedule.

Answer: B Diff: 2 Section: 13.4 Using Earned Value to Manage a Portfolio of Projects LO: 13.4: Use Earned Value Management for project portfolio analysis.

Classification: Concept AACSB: Application of Knowledge 83) Can earned value be used to manage a portfolio of projects? If so, how would this analysis proceed?

Answer: I'm glad you asked! Earned value management can indeed be used at the portfolio level. The process involves the aggregation of all earned value measures across the firm's entire project portfolio in order to give an indication as to the efficiency with which a company is managing its projects. Each project is described by its own EVM calculations and these calculations are rolled up into an overall portfolio number that reflects schedule and cost variance and estimated completion costs.

Diff: 1 Section: 13.4 Using Earned Value to Manage a Portfolio of Projects LO: 13.4: Use Earned Value Management for project portfolio analysis.

Classification: Concept AACSB: Application of Knowledge

84) A recurring problem with establishing accurate or meaningful EVM results has to do with: A) The 0/100 rule.

B) Over-reliance on the S-curve.

C) The need to recognize the human factor.

D) The need to satisfy stakeholders within budget and time parameters.

Answer: C Diff: 2 Section: 13.6 Human Factors in Project Evaluation and Control LO: 13.5: Understand behavioral concepts and other human issues in evaluation and control.

Classification: Concept AACSB: Application of Knowledge 85) In the formation stage, failed projects are more likely to have: A) Technical limitations.

B) Personal ambition.

C) Clear objectives.

D) Team motivation.

Answer: A Diff: 2 Section: 13.6 Human Factors in Project Evaluation and Control LO: 13.5: Understand behavioral concepts and other human issues in evaluation and control.

Classification: Concept AACSB: Application of Knowledge 86) In the build-up stage of a successful project, it is important that: A) An adequate budget exists.

B) Top management support exists.

C) The project personnel are in a state of flux.

D) There is a clear sense of earned value management.

Answer: B Diff: 2 Section: 13.6 Human Factors in Project Evaluation and Control LO: 13.5: Understand behavioral concepts and other human issues in evaluation and control.

Classification: Concept AACSB: Application of Knowledge

87) An unmotivated team is a key success inhibitor in every project stage with the EXCEPTION of the: A) Main phase.

B) Formation phase.

C) Close-out phase.

D) Build-up phase.

Answer: C Diff: 2 Section: 13.6 Human Factors in Project Evaluation and Control LO: 13.5: Understand behavioral concepts and other human issues in evaluation and control.

Classification: Concept AACSB: Application of Knowledge 88) Funding problems are a key success inhibitor in the: A) Build-up phase.

B) Close-out phase.

C) Main phase.

D) Formation phase.

Answer: D Diff: 2 Section: 13.6 Human Factors in Project Evaluation and Control LO: 13.5: Understand behavioral concepts and other human issues in evaluation and control.

Classification: Concept AACSB: Application of Knowledge 89) The critical success factor that relates to the underlying purpose for the project is the: A) Project mission.

B) Technical acceptance.

C) Technical tasks.

D) Client consultation.

Answer: A Diff: 1 Section: 13.6 Human Factors in Project Evaluation and Control LO: 13.5: Understand behavioral concepts and other human issues in evaluation and control.

Classification: Concept AACSB: Application of Knowledge

90) The project control process is captured in the critical success factor of: A) Communication.

B) Monitoring and feedback.

C) Troubleshooting.

D) Client consultation.

Answer: B Diff: 2 Section: 13.6 Human Factors in Project Evaluation and Control LO: 13.5: Understand behavioral concepts and other human issues in evaluation and control.

Classification: Concept AACSB: Application of Knowledge 91) Knowing the correct steps to take once problems develop is a function of a team's: A) Communication ability.

B) Technical task ability.

C) Troubleshooting ability.

D) Client acceptance ability.

Answer: B Diff: 2 Section: 13.6 Human Factors in Project Evaluation and Control LO: 13.5: Understand behavioral concepts and other human issues in evaluation and control.

Classification: Concept AACSB: Application of Knowledge 92) The Project Implementation Profile includes this critical success factor.

A) Task interdependence B) Continuous quality improvement C) Self-actualization D) Technical tasks Answer: C Diff: 2 Section: 13.6 Human Factors in Project Evaluation and Control LO: 13.5: Understand behavioral concepts and other human issues in evaluation and control.

Classification: Concept AACSB: Application of Knowledge

93) Project control should be: A) Maintained by the project organization using the most complete measurement system, earned value management.

B) Maintained by the project organization using the simplest measurement, an S-curve.

C) Maintained by both the project organization and the customer using the most complete measurement system, earned value management.

D) Tailored to the needs and culture for which an organization intends it.

Answer: D Diff: 2 Section: 13.6 Human Factors in Project Evaluation and Control LO: 13.5: Understand behavioral concepts and other human issues in evaluation and control.

Classification: Concept AACSB: Application of Knowledge 94) The project implementation profile assesses the performance of the project team with respect to 10 critical success factors and can be used on an ongoing project.

Answer: TRUE Diff: 2 Section: 13.6 Human Factors in Project Evaluation and Control LO: 13.5: Understand behavioral concepts and other human issues in evaluation and control.

Classification: Concept AACSB: Application of Knowledge

95) Briefly describe any seven critical success factors for project success contained in the Project Implementation Profile.

Answer: The project implementation profile contains ten critical success factors: - Project mission relates to the underlying purpose for the project. Project success is predicated on the importance of clearly defining objectives as well as ultimate benefits to be derived from the project.

- Top management support is essential for managers and their teams for authority, direction, and support, and also as the conduit for implementing top management's plans or goals for the organization.

- Project plans and schedules refers to the importance of developing a detailed plan (including scope definition, scheduling of time frames and milestones, and scheduling labor, equipment and other resources) of the required stages of the implementation process.

- Client consultation is essential if clients' needs are to be met. Their degree of involvement correlates highly with their support for the project.

- Personnel includes the recruitment, selection, and training of project team members.

- Technical tasks refers to the necessity of having not only the necessary numbers of personnel for the implementation team but ensuring that they possess technical skills and have the necessary technology and technical support to perform their tasks.

- Client acceptance refers to the final stage of the project development process at which time the overall efficacy of the project is to be determined.

- Monitoring and feedback refer to the project control process by which at each stage of the project implementation, key personnel receive feedback on how the project is progressing compared to initial projections.

- Communication channels, both within the project team and with external stakeholders, are important in creating an atmosphere for successful implementation.

Troubleshooting is the ability to take corrective measures once problems develop.

Diff: 3 Section: 13.6 Human Factors in Project Evaluation and Control LO: 13.5: Understand behavioral concepts and other human issues in evaluation and control.

Classification: Application AACSB: Application of Knowledge

96) Use this earned schedule table to determine the schedule variance ($) for this project at the end of Month 6.

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 PV ($) $125 $275 $500 $875 $1,485 $2,325 $2,670 EV ($) $50 $120 $255 $420 $715 $865 $0 A) -$1,460 B) -$865 C) $865 D) $2325 Answer: A Diff: 2 Section: Appendix 13.1 Earned Schedule LO: 13.6: Understand the advantages of Earned Schedule methods for determining project schedule variance, schedule performance index, and estimates to completion.

Classification: Application AACSB: Application of Knowledge 97) Use this earned schedule table to determine the schedule variance (t) for this project at the end of Month 6.

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 PV ($) $125 $275 $500 $875 $1,485 $2,325 $2,670 EV ($) $50 $120 $255 $420 $715 $865 $0 A) -2.74 B) -3.74 C) -2.26 D) -1.26 Answer: B Diff: 3 Section: Appendix 13.1 Earned Schedule LO: 13.6: Understand the advantages of Earned Schedule methods for determining project schedule variance, schedule performance index, and estimates to completion.

Classification: Application AACSB: Application of Knowledge

98) Use this earned schedule table to determine the schedule performance index (t) for this project at the end of Month 6.

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 PV ($) $125 $275 $500 $875 $1,485 $2,325 $2,670 EV ($) $50 $120 $255 $420 $715 $865 $0 A) 0.71 B) 0.54 C) 0.38 D) 0.21 Answer: C Diff: 3 Section: Appendix 13.1 Earned Schedule LO: 13.6: Understand the advantages of Earned Schedule methods for determining project schedule variance, schedule performance index, and estimates to completion.

Classification: Application AACSB: Application of Knowledge 99) Use this earned schedule table to determine the earned schedule for this project at the end of Month 6.

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 PV ($) $125 $275 $500 $875 $1,485 $2,325 $2,670 EV ($) $50 $120 $255 $420 $715 $865 $0 A) 2.93 B) 2.74 C) 2.38 D) 2.26 Answer: D Diff: 3 Section: Appendix 13.1 Earned Schedule LO: 13.6: Understand the advantages of Earned Schedule methods for determining project schedule variance, schedule performance index, and estimates to completion.

Classification: Application AACSB: Application of Knowledge 100) The closer to completion a project gets, the less precise and useful is the information that EVM provides.

Answer: TRUE Diff: 2 Section: Appendix 13.1 Earned Schedule LO: 13.6: Understand the advantages of Earned Schedule methods for determining project schedule variance, schedule performance index, and estimates to completion.

Classification: Concept AACSB: Application of Knowledge

101) The closer to completion a project gets, the less precise and useful is the information that EVM provides.

Answer: TRUE Diff: 2 Section: Appendix 13.1 Earned Schedule LO: 13.6: Understand the advantages of Earned Schedule methods for determining project schedule variance, schedule performance index, and estimates to completion.

Classification: Concept AACSB: Application of Knowledge 102) Briefly describe the important differences between Earned Value Management and Earned Schedule. Why is Earned Schedule gaining acceptance in project management circles?

Answer: One key difference between Earned Value Management and Earned Schedule is the units used in their basis; Earned Value Management uses the project budget in dollars (or other units of money) as the point of reference while Earned Schedule uses time as the point of reference. The attraction of using time is that classic Earned Value calculations express schedule slippage in terms of dollars. This leaves the project manager with the unenviable task of translating dollar amount to weeks to provide the client with a true indication of how far behind or ahead the project is. The second key difference between the two systems has to do with the accuracy and precision as the project nears completion. As project expenditures rise to approach the planned cost, the ability to measure the lateness of a project disappears. For this reason, Earned Schedule, which uses data already being collected by Earned Value systems, is an increasingly attractive option for project management and progress reporting.

Diff: 2 Section: Appendix 13.1 Earned Schedule LO: 13.6: Understand the advantages of Earned Schedule methods for determining project schedule variance, schedule performance index, and estimates to completion.

Classification: Application AACSB: Application of Knowledge

103) Use the information in the table regarding this seven-month project to calculate the SPI in terms of dollars and compare it with the SPI calculated in terms of time. Perform both calculations for months 1 through 6. Then use the SPI(t) to provide the Estimate at Completion for Time (EACt).

PV ($) EV ($) Answer:

PV ($) EV ($) SV ($) SPI ($)

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 $125 $275 $500 $875 $1,485 $2,325 $2,670 $150 $320 $510 $850 $1425 $2280 $0

Month 1 $125 $150 $25 1.20

Month 2 Month 3 $275 $500 $320 $510 $45 $10 1.16 1.02

C 1 2 3 ES 1.2 3.3 4.04 SV(t) 0.20 1.3 1.04 SPI(t) 1.20 1.65 1.35 The Estimate at Completion for Time is: EACt =

=

Month 4 Month 5 $875 $1,485 $850 $1425 -$25 -$60 0.97 0.96

Month 6 Month 7 $2,325 $2,670 $2280 $0 -$45 0.98

3 3.93 -0.67 0.98

5 5.95 -0.05 0.99

4 4.90 -0.09 0.98

= 7.063 months

Diff: 3 Section: Appendix 13.1 Earned Schedule LO: 13.6: Understand the advantages of Earned Schedule methods for determining project schedule variance, schedule performance index, and estimates to completion.

Classification: Application AACSB: Application of Knowledge

104) Use the information in the table regarding this seven-month project to create two plots. The first plot should be the S-curve for Earned Value. Indicate on this plot whether the project is ahead or behind schedule and by how much. The second plot should be the Earned Schedule and the Estimate at Completion for Time. Comment on the symmetry of this graph and whether you would expect a similar plot from any other project to exhibit similar characteristics.

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 PV ($) $125 $275 $500 $875 $1,485 $2,325 $2,670 EV ($) $140 $280 $480 $800 $1,280 $1,975 $2,950 Answer: The Earned Schedule table appears below.

PV ($) EV ($) SV ($) SPI ($)

Month 1 $125 $140 $15 1.12

Month 2 Month 3 $275 $500 $280 $480 $5 -$20 1.02 0.96

Month 4 Month 5 $875 $1,485 $800 $1,280 -$75 -$205 0.91 0.86

Month 6 Month 7 $2,325 $2,670 $1,975 $2,950 -$350 $280 0.85 1.10

C ES SV(t) SPI(t)

1 1.12 0.12 1.12

2 3.03 1.03 1.52

3 3.80 -0.2 0.95

5 5.58 -0.42 0.93

2 2.91 -0.09 0.97

4 4.66 -0.34 0.93

7 8.81 1.81 1.26

The Earned Value plot appears below. The earned value (dashed red line) falls below the planned value line (solid blue line). Thus, the project is behind schedule by an amount corresponding to the gap between the two lines.

The Earned Schedule and Estimate at Completion Time lines show a symmetry about the average of the two, converging at the completion date of the project. The two lines are inversely related, as the project falls behind schedule, the earned schedule should fall while the estimate at completion should rise.

Diff: 3 Section: Appendix 13.1 Earned Schedule LO: 13.6: Understand the advantages of Earned Schedule methods for determining project schedule variance, schedule performance index, and estimates to completion.

Classification: Application AACSB: Application of Knowledge Project Management: Achieving Competitive Advantage, 6e (Pinto) Chapter 14 Project Closeout and Termination 1) The project was over, so each worker went back to her usual assignment, taking with them the notebook they were issued when the project began. They never were sure whether the project had been successful or unsuccessful, but they could be positive that the project was terminated by: A) Extinction.

B) Addition.

C) Integration.

D) Starvation.

Answer: A Diff: 2 Section: 14.1 Types of Project Termination LO: 14.1: Distinguish among the four main forms of project termination.

Classification: Concept AACSB: Application of Knowledge 2) Termination by addition occurs when: A) Scope creep adds too many activities to the project that prevent it from being completed on time or within budget.

B) The project is so successful that it becomes institutionalized.

C) A new project is added to the organization and it commands all of the resources for the original project.

D) New members join the project team once the project has begun and their skills are insufficient to successfully complete the project.

Answer: B Diff: 2 Section: 14.1 Types of Project Termination LO: 14.1: Distinguish among the four main forms of project termination.

Classification: Concept AACSB: Application of Knowledge 3) Once the project was successfully concluded, the team members returned to their roles in the organization, occasionally congregating at the water cooler to relive their halcyon days of yore.

No one could argue that their project was: A) Terminated by extinction.

B) Terminated by addition.

C) Terminated by integration.

D) Terminated by starvation.

Answer: C Diff: 2 Section: 14.1 Types of Project Termination LO: 14.1: Distinguish among the four main forms of project termination.

Classification: Application AACSB: Application of Knowledge

4) The departmental patriarch spent his last years at the university developing and promoting a Student Portfolio Project that required all departmental faculty to create integrated course projects and maintain a database of their students' work. New graduates could refer their prospective employers to the Student Portfolio Project database to mine examples of their work.

The patriarch retired, funding and effort dried up, and the project lingered in a few syllabi and on the department's web site for a year or two but now any mention of it elicits either puzzled looks or wry grins from the remaining faculty. The patriarch's Student Portfolio Project has officially been terminated by: A) Extinction.

B) Addition.

C) Integration.

D) Starvation.

Answer: D Diff: 2 Section: 14.1 Types of Project Termination LO: 14.1: Distinguish among the four main forms of project termination.

Classification: Application AACSB: Application of Knowledge 5) Which two types of project termination are reserved for successful projects?

A) Addition and integration B) Integration and starvation C) Starvation and extinction D) Extinction and addition Answer: A Diff: 2 Section: 14.1 Types of Project Termination LO: 14.1: Distinguish among the four main forms of project termination.

Classification: Concept AACSB: Application of Knowledge 6) Which two types of project termination can occur for unsuccessful projects?

A) Integration and starvation B) Starvation and extinction C) Extinction and addition D) Addition and integration Answer: B Diff: 2 Section: 14.1 Types of Project Termination LO: 14.1: Distinguish among the four main forms of project termination.

Classification: Concept AACSB: Application of Knowledge

7) Which type of project termination can occur for a project that is successful and for a project that is unsuccessful?

A) Termination by addition B) Termination by integration C) Termination by extinction D) Termination by starvation Answer: C Diff: 2 Section: 14.1 Types of Project Termination LO: 14.1: Distinguish among the four main forms of project termination.

Classification: Concept AACSB: Application of Knowledge 8) A successful project that also creates a need for a change to organizational structure is probably terminated by: A) Extinction.

B) Integration.

C) Starvation.

D) Addition.

Answer: D Diff: 2 Section: 14.1 Types of Project Termination LO: 14.1: Distinguish among the four main forms of project termination.

Classification: Concept AACSB: Application of Knowledge 9) The emeritus physics professor taught at the university for forty years and had built quite a following in the community and an enviable LinkedIn network of alumni donors. The university was loath to ask him to retire, so they set up a lab where he could pursue his two passions, a perpetual motion machine and cold fusion, either of which would solve the world's energy problems. As the years passed, the budget was held constant and suffered due to the rise in prices for perpetual motion machine parts. Cold fusion material certainly wasn't getting any cheaper either, and it was evident to all the other physicists that the project was subjected to termination by: A) Extinction.

B) Integration.

C) Starvation.

D) Addition.

Answer: C Diff: 2 Section: 14.1 Types of Project Termination LO: 14.1: Distinguish among the four main forms of project termination.

Classification: Concept AACSB: Application of Knowledge

10) In August 2012, after twenty years in development, the combination heart monitor-ashtray for hospital intensive care patients was finally terminated, a victim of the change in the social acceptability of smoking in general and in particular, smoking by hospital patients. This is an example of natural termination.

Answer: FALSE Diff: 1 Section: 14.0 Introduction LO: 14.1: Distinguish among the four main forms of project termination.

Classification: Concept AACSB: Application of Knowledge 11) The trailer had been reinforced, re-decked and had a fresh coat of paint. It was fully complete and finally ready for a run to Kansas City to pick up a rebounding son. This project has achieved natural termination.

Answer: TRUE Diff: 1 Section: 14.0 Introduction LO: 14.1: Distinguish among the four main forms of project termination.

Classification: Concept AACSB: Application of Knowledge 12) A project that is terminated by extinction is not completed successfully.

Answer: FALSE Diff: 1 Section: 14.1 Types of Project Termination LO: 14.1: Distinguish among the four main forms of project termination.

Classification: Concept AACSB: Application of Knowledge 13) Termination by addition and termination by integration both represent successful project completion.

Answer: TRUE Diff: 2 Section: 14.1 Types of Project Termination LO: 14.1: Distinguish among the four main forms of project termination.

Classification: Concept AACSB: Application of Knowledge 14) The new dean was completely uninterested in international programs, so he selected the least competent faculty to serve on the committee and took away their doughnut budget, effectively terminating the project by starvation.

Answer: TRUE Diff: 2 Section: 14.1 Types of Project Termination LO: 14.1: Distinguish among the four main forms of project termination.

Classification: Concept AACSB: Application of Knowledge 15) What is the difference between natural termination and unnatural termination of a project?

Provide an example of each.

Answer: In natural termination, the project has achieved its goals and is moving towards its

logical conclusion. In unnatural termination, a shift in political, economic, customer or technological conditions has rendered the project without purpose. Examples will vary.

Diff: 2 Section: 14.0 Introduction LO: 14.1: Distinguish among the four main forms of project termination.

Classification: Application AACSB: Application of Knowledge 16) How do the four types of project termination differ?

Answer: There are four chief reasons for projects to be terminated: by extinction, addition, integration, and starvation. Terminations by addition and by integration both occur when a project has been successful; a termination by addition project is so successful to the point of being more successful than imagined. The project organization institutionalizes the project as a formal part of the organization. Termination by integration officially brings the project resources into the organization. Termination by extinction can occur when a project has been successful or unsuccessful. In the successful case, the project is transferred to its intended users and all final phase-out activities are conducted. In the unsuccessful stage the project work is stopped and human resources return to their starting points. Termination by starvation amounts to benign neglect; a project is officially kept open although no work progresses and no new resources are assigned.

Diff: 2 Section: 14.1 Types of Project Termination LO: 14.1: Distinguish among the four main forms of project termination.

Classification: Application AACSB: Application of Knowledge 17) The final items that are left to accomplish or correct at the end of a construction project are on the: A) Punch list.

B) Check list.

C) Check sheet.

D) Errata sheet.

Answer: A Diff: 1 Section: 14.2 Natural Termination - The Closeout Process LO: 14.2: Recognize the seven key steps in formal project closeout.

Classification: Concept AACSB: Application of Knowledge

18) Of the project closeout management steps listed, the first is to: A) Hand over the project.

B) Finish the work.

C) Gain acceptance for the product.

D) Review how it all went.

Answer: B Diff: 1 Section: 14.2 Natural Termination - The Closeout Process LO: 14.2: Recognize the seven key steps in formal project closeout.

Classification: Concept AACSB: Application of Knowledge 19) Of the project closeout management steps listed, the last is to: A) Hand over the project.

B) Finish the work.

C) Gain acceptance for the product.

D) Review how it all went.

Answer: D Diff: 1 Section: 14.2 Natural Termination - The Closeout Process LO: 14.2: Recognize the seven key steps in formal project closeout.

Classification: Concept AACSB: Application of Knowledge 20) Which of these project closeout management steps listed is ongoing throughout the closeout process?

A) Disband the team B) Finish the work C) Gain acceptance for the product D) Review how it all went Answer: A Diff: 1 Section: 14.2 Natural Termination - The Closeout Process LO: 14.2: Recognize the seven key steps in formal project closeout.

Classification: Concept AACSB: Application of Knowledge

21) A significant challenge during the finishing the work element of project closeout management is to: A) Demonstrate viability of the project.

B) Gain customer acceptance of the product.

C) Maintain focus on the current project.

D) Capitalize on new opportunities that arise from this project.

Answer: C Diff: 2 Section: 14.2 Natural Termination - The Closeout Process LO: 14.2: Recognize the seven key steps in formal project closeout.

Classification: Concept AACSB: Application of Knowledge 22) The PFI arrangement in the United Kingdom for projects is an acronym for: A) Project Failure Insurance.

B) Profiterole Filling Inclusion.

C) Private Finance Initiative.

D) Primary Figure Investment.

Answer: C Diff: 2 Section: 14.2 Natural Termination - The Closeout Process LO: 14.2: Recognize the seven key steps in formal project closeout.

Classification: Concept AACSB: Application of Knowledge 23) The BOT option for large projects is designed to: A) Automate the payment process.

B) Automate the closeout process.

C) Keep the door open for new projects between the customer and project organization.

D) Limit risk for the customer in the short run.

Answer: D Diff: 2 Section: 14.2 Natural Termination - The Closeout Process LO: 14.2: Recognize the seven key steps in formal project closeout.

Classification: Concept AACSB: Application of Knowledge

24) Under the BOT option for a project: A) The project organization must operate the work product of the project for a while.

B) The customer organization must accept the work product of the project at the scheduled delivery date.

C) The project organization may build the work product to their own specifications instead of the customer's.

D) The customer organization transfers employees to the project organization for the duration of the project.

Answer: A Diff: 2 Section: 14.2 Natural Termination - The Closeout Process LO: 14.2: Recognize the seven key steps in formal project closeout.

Classification: Concept AACSB: Application of Knowledge 25) The difference between a BOT contract and a BOOT contract is that under the BOOT contract: A) The customer must observe all phases of the project process before the product is handed over.

B) The project organization is obligated to complete the project on time.

C) The project organization must take initial ownership of the product.

D) The customer must organize the project's resources for the project organization.

Answer: C Diff: 2 Section: 14.2 Natural Termination - The Closeout Process LO: 14.2: Recognize the seven key steps in formal project closeout.

Classification: Concept AACSB: Application of Knowledge 26) The disadvantage of a BOOT contract to the project organization is that they must take on: A) Higher safety risks.

B) Higher failure risks.

C) Higher financial risks.

D) Higher competitive risks.

Answer: C Diff: 2 Section: 14.2 Natural Termination - The Closeout Process LO: 14.2: Recognize the seven key steps in formal project closeout.

Classification: Concept AACSB: Application of Knowledge

27) A research study on the critical success factors for projects found that an important determination of whether the project is successful is the element of: A) Putting it all to bed.

B) Reviewing how it all went.

C) Disbanding the team.

D) Gaining acceptance for the product.

Answer: D Diff: 2 Section: 14.2 Natural Termination - The Closeout Process LO: 14.2: Recognize the seven key steps in formal project closeout.

Classification: Concept AACSB: Application of Knowledge 28) In order to facilitate acceptance for the project, the project team should start planning for the project's transfer and use during: A) The project development phase.

B) The project termination phase.

C) The project close-out phase.

D) The project work phase.

Answer: A Diff: 2 Section: 14.2 Natural Termination - The Closeout Process LO: 14.2: Recognize the seven key steps in formal project closeout.

Classification: Application AACSB: Application of Knowledge 29) The key to begin harvesting the benefits of a project is to first develop an effective: A) Client relationship with the project team.

B) Measurement system for project use and value assessment.

C) BOOT agreement that clearly stipulates when transfer of title occurs.

D) Enterprise resource planning package to manage human, financial, and material resources.

Answer: A Diff: 2 Section: 14.2 Natural Termination - The Closeout Process LO: 14.2: Recognize the seven key steps in formal project closeout.

Classification: Concept AACSB: Application of Knowledge

30) Systematic errors could be BEST described as: A) The result of a one-time occurrence.

B) The result of an external cause.

C) The result of some freak accident.

D) The result of an internal cause.

Answer: D Diff: 2 Section: 14.2 Natural Termination - The Closeout Process LO: 14.2: Recognize the seven key steps in formal project closeout.

Classification: Concept AACSB: Application of Knowledge 31) A lessons-learned analysis falls under the project closeout management element of: A) Heviewing how it all went.

B) handing over the product.

C) Finishing the work.

D) Putting it all to bed.

Answer: A Diff: 1 Section: 14.2 Natural Termination - The Closeout Process LO: 14.2: Recognize the seven key steps in formal project closeout.

Classification: Concept AACSB: Application of Knowledge 32) The project review session was one epiphany after another for the project organization. A number of systematic errors were properly identified and the root causes of a number of problems were identified. Sadly, the review session was not leveraged to its fullest extent thanks to: A) The disbanding of the project team.

B) Failure to enforce the archiving of this knowledge.

C) A restrictive BOOT contract.

D) A liberal BOT contract.

Answer: B Diff: 2 Section: 14.2 Natural Termination - The Closeout Process LO: 14.2: Recognize the seven key steps in formal project closeout.

Classification: Application AACSB: Application of Knowledge

33) An important guideline to follow in a lessons-learned meeting is to: A) Make sure to properly assign blame for all that went wrong.

B) Make sure that events receive necessary spin.

C) Fix the problems.

D) Include all stakeholders.

Answer: C Diff: 2 Section: 14.2 Natural Termination - The Closeout Process LO: 14.2: Recognize the seven key steps in formal project closeout.

Classification: Concept AACSB: Application of Knowledge 34) The goal of a lessons-learned meeting is to recapitulate the series of events: A) As subjectively as possible.

B) From the project manager's viewpoint.

C) As intuitively as possible.

D) From all possible viewpoints.

Answer: D Diff: 2 Section: 14.2 Natural Termination - The Closeout Process LO: 14.2: Recognize the seven key steps in formal project closeout.

Classification: Concept AACSB: Application of Knowledge 35) The closeout step that requires all contractual documents be recorded and archived is: A) Putting it all to bed.

B) Finishing the work.

C) Reviewing how it all went.

D) Harvesting the benefits.

Answer: A Diff: 2 Section: 14.2 Natural Termination - The Closeout Process LO: 14.2: Recognize the seven key steps in formal project closeout.

Classification: Concept AACSB: Application of Knowledge

36) Research clearly indicates that when team members have experienced positive psychosocial outcomes from a project: A) They are actually less likely to work collaboratively in the future.

B) They tend to fear future projects because they feel the law of averages will catch up with them.

C) Their enthusiasm level wanes due to mental and physical exhaustion.

D) They are more likely to work collaboratively in the future.

Answer: D Diff: 2 Section: 14.2 Natural Termination - The Closeout Process LO: 14.2: Recognize the seven key steps in formal project closeout.

Classification: Concept AACSB: Application of Knowledge 37) Disbanding the project team should be: A) Celebrated so there is motivation for future projects.

B) Done in a highly structured manner.

C) Done in a highly informal manner.

D) Handled in an off-hand manner.

Answer: A Diff: 1 Section: 14.2 Natural Termination - The Closeout Process LO: 14.2: Recognize the seven key steps in formal project closeout.

Classification: Application AACSB: Application of Knowledge 38) Which statement about project closeout activities is BEST? A) Closeout activities are usually given a high priority.

B) Getting the project signed off discourages other closeout activities.

C) Because all projects are unique, the actual carryover from project to project is minimal.

D) Closeout activities are impossible to ignore.

Answer: B Diff: 1 Section: 14.2 Natural Termination - The Closeout Process LO: 14.2: Recognize the seven key steps in formal project closeout.

Classification: Concept AACSB: Application of Knowledge

39) All projects are unique: A) Therefore all project management circumstances are equally unique.

B) So knowledge cannot be transferred.

C) But they may have several common points.

D) So knowledge should not be transferred to avoid bias in future projects.

Answer: C Diff: 2 Section: 14.2 Natural Termination - The Closeout Process LO: 14.2: Recognize the seven key steps in formal project closeout.

Classification: Concept AACSB: Application of Knowledge 40) Lessons-learned analysis is BEST described as: A) A bookkeeping process.

B) A personnel reassignment process.

C) A pressure relief process.

D) An organizational learning process.

Answer: D Diff: 2 Section: 14.2 Natural Termination - The Closeout Process LO: 14.2: Recognize the seven key steps in formal project closeout.

Classification: Concept AACSB: Application of Knowledge 41) In the United States, a Private Finance Initiative is used to protect the excessive financial exposure of a contracting agency to a project being developed.

Answer: FALSE Diff: 2 Section: 14.2 Natural Termination - The Closeout Process LO: 14.2: Recognize the seven key steps in formal project closeout.

Classification: Concept AACSB: Application of Knowledge 42) The build, operate, transfer option for projects requires the project contractor to take initial ownership of the project in order to make sure it works, thus mitigating risk in the short run.

Answer: FALSE Diff: 2 Section: 14.2 Natural Termination - The Closeout Process LO: 14.2: Recognize the seven key steps in formal project closeout.

Classification: Concept AACSB: Application of Knowledge

43) Systematic errors are not one-time incidents, but instead represent built-in components of the project management process.

Answer: TRUE Diff: 2 Section: 14.2 Natural Termination - The Closeout Process LO: 14.2: Recognize the seven key steps in formal project closeout.

Classification: Concept AACSB: Application of Knowledge 44) The actual carryover from one project to another is minimal because projects are unique, one-time events.

Answer: FALSE Diff: 2 Section: 14.2 Natural Termination - The Closeout Process LO: 14.2: Recognize the seven key steps in formal project closeout.

Classification: Concept AACSB: Application of Knowledge 45) Closeout activities are typically among the highest priority activities in a project.

Answer: FALSE Diff: 2 Section: 14.2 Natural Termination - The Closeout Process LO: 14.2: Recognize the seven key steps in formal project closeout.

Classification: Concept AACSB: Application of Knowledge 46) One major deterrent to effective project closeout is client acceptance of the project.

Answer: TRUE Diff: 2 Section: 14.2 Natural Termination - The Closeout Process LO: 14.2: Recognize the seven key steps in formal project closeout.

Classification: Concept AACSB: Application of Knowledge

47) Sketch the Seven Elements of Project Closeout Management model and discuss what takes place at each step.

Answer: The seven elements of project closeout management are represented in the diagram below:

Finishing the work — This element is just as described; there are always final tasks that require polish or a punch list of items to repair before the project is officially finished.

Handing over the product — Transferring ownership requires more than just handing over the keys; it may include training, transfer of technical knowledge, or a highly structured ownership/operating agreement while the project work product is proven to be error free.

Gaining acceptance for the product — Gaining acceptance may take considerable effort to convince the customer that they can operate and rely on the project.

Harvesting the benefits — This can take the form of financial benefits, public appeal beyond that of stakeholders, future business awarded on the basis of this work product, or other advancement for the project organization.

Reviewing how it all went — This entails a thoughtful lessons-learned analysis that describes successes and failures and includes analysis on how to capitalize on knowledge gained from this venture.

Putting it all to bed — This step closes out all of the paperwork; the legal, cost, and personnel records and all documentation and correspondence relating to the project.

Disbanding the team — The project team is dismissed to go to their regular duties or on to the next project with a formal or informal discharge by the project manager and organization.

Diff: 3 Section: 14.2 Natural Termination - The Closeout Process LO: 14.2: Recognize the seven key steps in formal project closeout.

Classification: Concept AACSB: Application of Knowledge

48) What are three different ways that a project can be handed over from the project organization to the client? Describe their differences.

Answer: Transferring the project to the intended user can be one that is straightforward or one that is complex, such as a BOT or BOOT, depending on contractual terms. With all types of transfers, the project transition period may entail training, transfer of engineering blueprints or other technical know-how, or other service after the sale.

A straightforward transfer is easiest on the project organization but has the highest level of risk for the customer. The BOT (build, operate and transfer) concept is a method for allowing the eventual owner to mitigate risk in the short run by having the project organization operate the project for a time to ensure that all features are functional. The BOOT (build, own, operate, transfer) option takes this a step further by requiring the project organization to own the project's work product during this trial period. This adds an element of risk to the project organization.

Diff: 2 Section: 14.2 Natural Termination - The Closeout Process LO: 14.2: Recognize the seven key steps in formal project closeout.

Classification: Application AACSB: Application of Knowledge 49) What can a project organization do to increase the likelihood of acceptance for the final product of the project?

Answer: The process of gaining customer acceptance can be complicated so it is necessary to begin planning well in advance for both the transfer of the final product to the client and the creation of a program to ease their transition to ownership. This sequence suggests that a plan for acceptance and transfer of ownership should be part of the initial project plan. The project team should identify possible objections and concerns regarding the project and develop countermeasures to these concerns as work progresses. Project transfer contracts such as BOT and BOOT options can help instill confidence as would detailed training and follow-up on the part of the project organization.

Diff: 2 Section: 14.2 Natural Termination - The Closeout Process LO: 14.2: Recognize the seven key steps in formal project closeout.

Classification: Application AACSB: Application of Knowledge

50) Review the project sign-off documents contained in Appendix 14.1. How can these forms be improved?

Answer: The tables in Appendix 14.1 elicit a wide variety of information from all number of potential project participants. Suggestions for improvement will vary, but may include using the documents in electronic form, increasing the space available for comments or providing a means to display lengthier responses on another sheet, and providing some means of dating some entries that are time-specific.

Diff: 2 Section: 14.2 Natural Termination - The Closeout Process LO: 14.2: Recognize the seven key steps in formal project closeout.

Classification: Critical Thinking AACSB: Reflective Thinking

51) What are the keys to begin harvesting the benefits of a project? What are the major components of a meaningful project assessment system and how does an assessment system help the project organization?

Answer: The key to begin harvesting the benefits of a project is to first develop an effective and meaningful measurement system that identifies goals, time frame, and responsibilities involved in project use and value assessment. At a minimum, a project assessment system should measure the following: The criteria by which benefits of the project or service will be measured.

The points in time at which the measurement or assessment will be carried out.

The individual who has accepted responsibility for carrying out the measurement or assessment in the agreed way at the agreed points in time.

Diff: 2 Section: 14.2 Natural Termination - The Closeout Process LO: 14.2: Recognize the seven key steps in formal project closeout.

Classification: Application AACSB: Application of Knowledge 52) What is a lessons-learned meeting with regards to project management? Describe the benefits and behaviors of such a meeting.

Answer: A lessons-learned meeting is a post-project review that examines the project process and how it served the project organization well and where it might have failed. The potential benefits of a lessons-learned meeting are enormous. The project organization can uncover better ways of organizing the entire range of their project work. These lessons, if properly archived and disseminated, can become part of the organization's knowledge base. During such a meeting there are three important guidelines for project teams to follow: Establish clear rules of behavior for all parties to the meeting.

Describe as objectively as possible what occurred.

Fix the problem not the blame.

Diff: 2 Section: 14.2 Natural Termination - The Closeout Process LO: 14.2: Recognize the seven key steps in formal project closeout.

Classification: Application AACSB: Application of Knowledge

53) What are any two common mistakes in a post-project lessons-learned meeting?

Answer: The author presents three common errors: Misidentifying systematic errors. It is human nature to attribute failures or mistakes to external causes, rather than internal reasons. Closely related to this error is the desire to perceive mistakes as one-time or nonrecurring events. Rather than looking at our project management systems to see if the mistakes could be the result of underlying problems with them, many of us prefer the easier solution of believing that these results were unpredictable, that they were a one-time occurrence and not likely to recur, and that therefore we could not have prepared for them and do not need to prepare for them in the future.

Misapplying or misinterpreting appropriate lessons based on events. A related error of misinterpretation occurs when project team members or those reviewing the project wrongfully perceive the source of an encountered problem. Sometimes the correct lessons from a terminated project are either ignored or altered to reflect a prevailing viewpoint.

Failing to pass along lessons-learned conclusions. Although it is true that an organization's projects are characterized as discrete, one-time processes, they do retain enough areas of overlap, particularly within a single firm's sphere, to make the application of lessons-learned programs extremely useful.

Diff: 2 Section: 14.2 Natural Termination - The Closeout Process LO: 14.2: Recognize the seven key steps in formal project closeout.

Classification: Application AACSB: Application of Knowledge 54) What three guidelines are offered to derive maximum benefit from a lessons-learned meeting? Provide counter examples for each one of these behaviors.

Answer: During a lessons-learned meeting there are three important guidelines for project teams to follow: 1) Establish clear rules of behavior for all parties to the meeting; 2) Describe as objectively as possible what occurred; and 3) Fix the problem not the blame. Counter examples will vary, but will hopefully be entertaining.

Diff: 2 Section: 14.2 Natural Termination - The Closeout Process LO: 14.2: Recognize the seven key steps in formal project closeout.

Classification: Application AACSB: Application of Knowledge

55) What are the major types of paperwork that must be closed out at the end of a project? What are some elements of each type?

Answer: The end of a project requires the close out of a substantial amount of paperwork that document and record processes, close resources, and track contractual obligations. Some of the major types of paperwork include: Documentation — All pertinent records must be archived including schedule and planning documents, all monitoring and control materials, any records of materials or other resource usage, customer change requests, and specification change approvals.

Legal — All contractual agreements must be filed and archived.

Cost — All accounting records must be carefully closed out including cost accounting records, lists of materiel, major purchases, and budgetary items. All cost accounts must be closed and unused funds or budget reverted back to the company budget.

Personnel — The costs and other charges for all project team personnel must be accounted for, their time charged against project accounts, and any company overhead in the form of benefits identified.

Diff: 2 Section: 14.2 Natural Termination - The Closeout Process LO: 14.2: Recognize the seven key steps in formal project closeout.

Classification: Application AACSB: Application of Knowledge

56) What are any four items that prevent effective project closeouts and how can each be avoided?

Answer: The author lists five common reasons why project closeout is handled haphazardly or ineffectively in many companies. These reasons, and possible countermeasures are shown in the table.

Reasons

Getting the project signed off discourages other closeout activities.

The assumed urgency of all projects pressures us to take shortcuts on the back end.

Closeout activities are given a low priority and are easily ignored.

Countermeasures Don't issue the final OK until closeout is completed. Withhold a significant reward until all personnel have completed all of their duties.

Emphasize the importance of final closeout activities. Don't start too many new projects before existing ones or limit the company to a certain number of open projects.

Emphasize the importance of final closeout activities. Demonstrate the value of previous closeout activities and the pitfalls associated with rushing this important step.

Keep lessons-learned analyses on display and on workers' minds for a longer period once the project is completed. Review lessons-learned at current project meetings whenever possible.

Lessons-learned analysis is simply viewed as a bookkeeping process.

People may assume that because all projects are unique, the actual carryover Draw parallels from old projects to new from project to project is minimal. ones to carry over common themes.

Diff: 2 Section: 14.2 Natural Termination - The Closeout Process LO: 14.2: Recognize the seven key steps in formal project closeout.

Classification: Application AACSB: Application of Knowledge 57) A static factor that may lead to early termination for a project is: A) Less capital availability.

B) High sunk costs.

C) Intermittent rewards.

D) Loss of the project champion.

Answer: B Diff: 3 Section: 14.3 Early Termination for Projects LO: 14.3: Understand key reasons for early termination of projects.

Classification: Application AACSB: Application of Knowledge

58) Research indicates that the number one reason for terminating research and development projects is: A) That the project is found to be inconsistent with organizational goals.

B) The project costs more to complete than originally planned.

C) The low probability of achieving technical or commercial success.

D) Increased government restrictions.

Answer: C Diff: 3 Section: 14.3 Early Termination for Projects LO: 14.3: Understand key reasons for early termination of projects.

Classification: Concept AACSB: Application of Knowledge 59) Which of these factors weighs heavily in the decision to terminate a project?

A) Inability to protect results B) Increased market receptiveness C) Meeting project cost milestones D) Low probability of return on investment Answer: D Diff: 2 Section: 14.3 Early Termination for Projects LO: 14.3: Understand key reasons for early termination of projects.

Classification: Concept AACSB: Application of Knowledge 60) A behavioral issue that is crucial to maintaining the ongoing viability of a project is: A) Worker commitment.

B) Increasing importance to the firm.

C) Financial impact to the company.

D) Relatively minor technical problems.

Answer: A Diff: 2 Section: 14.3 Early Termination for Projects LO: 14.3: Understand key reasons for early termination of projects.

Classification: Concept AACSB: Application of Knowledge

61) Surveys on the early warning signs of project failure indicate that a red flag for failure is: A) The time to complete the project lengthens.

B) The lack of viable commercial objectives.

C) The political forces have turned against the project.

D) The benefits of the project won't be realized until the end.

Answer: B Diff: 2 Section: 14.3 Early Termination for Projects LO: 14.3: Understand key reasons for early termination of projects.

Classification: Concept AACSB: Application of Knowledge 62) Researchers have determined that one significant early warning sign of project failure is: A) The time to complete the project lengthens.

B) The rewards were available on an intermittent basis.

C) The new product being developed was targeting a market that few new products and firms were entering or exiting.

D) There was little prior experience on the project team.

Answer: C Diff: 2 Section: 14.3 Early Termination for Projects LO: 14.3: Understand key reasons for early termination of projects.

Classification: Concept AACSB: Application of Knowledge 63) Which of these statements about early termination decisions is BEST? A) The decision to pull the plug is usually clear-cut.

B) A project's viability is usually a purely internal issue.

C) Projects that can fulfill a useful purpose in the marketplace are not killed.

D) External reasons, such as a change in the organization's environment, are often the reasons for project termination.

Answer: D Diff: 2 Section: 14.3 Early Termination for Projects LO: 14.3: Understand key reasons for early termination of projects.

Classification: Application AACSB: Application of Knowledge

64) A mainframe computer company decided to enter the personal computer market with its Floridian Project, but subsequently decided to leave the market to focus on the mainframe business. The decision rule that they probably applied was to get out: A) When the project no longer meets strategic fit criteria.

B) When deadlines continue to be missed.

C) When project personnel turn over too rapidly.

D) When technology evolves beyond the project's scope.

Answer: A Diff: 2 Section: 14.3 Early Termination for Projects LO: 14.3: Understand key reasons for early termination of projects.

Classification: Application AACSB: Application of Knowledge 65) The rapid evolution of technology and the need to freeze a project's scope can combine to render a project: A) Too costly to complete.

B) Obsolete before it can be finished.

C) A poor fit with current company strategy.

D) So complex that it will take too long to complete.

Answer: B Diff: 2 Section: 14.3 Early Termination for Projects LO: 14.3: Understand key reasons for early termination of projects.

Classification: Application AACSB: Application of Knowledge 66) The work breakdown for project termination issues can be broadly categorized into: A) Emotional and devotional issues.

B) Visceral and discrete issues.

C) Intellectual and intersectional issues.

D) Intellectual and emotional issues.

Answer: D Diff: 2 Section: 14.3 Early Termination for Projects LO: 14.3: Understand key reasons for early termination of projects.

Classification: Concept AACSB: Application of Knowledge

67) Loss of team identity is: A) An emotional staff issue.

B) An emotional client issue.

C) An intellectual internal issue.

D) An intellectual external issue.

Answer: A Diff: 2 Section: 14.3 Early Termination for Projects LO: 14.3: Understand key reasons for early termination of projects.

Classification: Concept AACSB: Application of Knowledge 68) Construction of the largest egg in the world seemed like a good idea when the Pixley city council awarded Halliburton the construction contract, but as the weeks turned into months the idea had lost much of its charm. What emotional issues might the project team be facing?

A) Availability of key personnel B) Loss of project-derived motivation C) Disposal of unused material D) Communicating closure Answer: B Diff: 2 Section: 14.3 Early Termination for Projects LO: 14.3: Understand key reasons for early termination of projects.

Classification: Concept AACSB: Application of Knowledge 69) An internal intellectual issue that arises when a project is terminated is: A) Agreement with suppliers on outstanding commitments.

B) Closing down facilities.

C) Identification of remaining deliverables.

D) Determinants of requirements for audit trail data.

Answer: C Diff: 2 Section: 14.3 Early Termination for Projects LO: 14.3: Understand key reasons for early termination of projects.

Classification: Concept AACSB: Application of Knowledge

70) When a project is shut down, the project team must ensure that all relevant stakeholders are clearly aware of the project shut down, including the date by which all activities will cease. This is an: A) Intellectual and internal issue.

B) Emotional issue of the project team.

C) Emotional issue of the clients.

D) Intellectual and external issue.

Answer: D Diff: 2 Section: 14.3 Early Termination for Projects LO: 14.3: Understand key reasons for early termination of projects.

Classification: Concept AACSB: Application of Knowledge 71) Projects accumulate quantities of unused supplies and materials. It is imperative that an organization have a method for disposing of these materials when a project is terminated. This issue is: A) Intellectual and internal.

B) Intellectual and external.

C) Emotional and of the project team.

D) Emotional and of the client.

Answer: A Diff: 2 Section: 14.3 Early Termination for Projects LO: 14.3: Understand key reasons for early termination of projects.

Classification: Concept AACSB: Application of Knowledge 72) Many times, clients will shift new people into the project who have no experience with it as they move their key people to new challenges. This issue is: A) An emotional one for the project team.

B) An emotional one for the clients.

C) One that is internal and intellectual.

D) One that is external and intellectual.

Answer: B Diff: 2 Section: 14.3 Early Termination for Projects LO: 14.3: Understand key reasons for early termination of projects.

Classification: Concept AACSB: Application of Knowledge

73) The Microserf was in a blind panic; now that the latest version of the Bob operating system was ready for sale, he would have to latch onto a new project team or face life on the mean streets of Redmond. This is indubitably an: A) Emotional issue for the clients.

B) Internal, intellectual issue.

C) Emotional issue for the project team.

D) External, intellectual issue.

Answer: C Diff: 2 Section: 14.3 Early Termination for Projects LO: 14.3: Understand key reasons for early termination of projects.

Classification: Application AACSB: Application of Knowledge 74) An example of an external intellectual issue is: A) The control of charges to the project.

B) The screening of partially completed tasks.

C) The identification of outstanding commitments.

D) The determinants of requirements for audit trail data.

Answer: D Diff: 2 Section: 14.3 Early Termination for Projects LO: 14.3: Understand key reasons for early termination of projects.

Classification: Concept AACSB: Application of Knowledge 75) An ex-gratia claim made when a project is closed down is made when: A) There is no contractual basis for a claim.

B) The project company fails to perform to the terms of the contract.

C) The client company fails to perform to the terms of the contract.

D) A third party causes either the client or project company to fail to perform to the terms of the contract.

Answer: A Diff: 2 Section: 14.3 Early Termination for Projects LO: 14.3: Understand key reasons for early termination of projects.

Classification: Concept AACSB: Application of Knowledge

76) When contractual claims are defaulted due to the failure of a project to be completed and delivered: A) The client firm should file an ex-gratia claim.

B) The client firm may have some legal claim to punitive damages.

C) The project firm should file an ex-gratia claim.

D) The project firm may have some legal claim to recovery.

Answer: B Diff: 2 Section: 14.3 Early Termination for Projects LO: 14.3: Understand key reasons for early termination of projects.

Classification: Concept AACSB: Application of Knowledge 77) The formalized system of dealing with grievances and administering corrective justice to parties in a bargaining position is: A) Collective bargaining.

B) Distributive justice.

C) Arbitration.

D) Compensation.

Answer: C Diff: 2 Section: 14.3 Early Termination for Projects LO: 14.3: Understand key reasons for early termination of projects.

Classification: Concept AACSB: Application of Knowledge 78) Binding arbitration: A) Requires that a terminated project be completed before damages are awarded.

B) Requires empanelment of equal numbers from both the client and project organizations to reach a verdict.

C) Should be used to settle disputes only if the principle of caveat emptor does not apply.

D) Can settle outstanding claims or disputes provided that all parties agree to its use.

Answer: D Diff: 2 Section: 14.3 Early Termination for Projects LO: 14.3: Understand key reasons for early termination of projects.

Classification: Concept AACSB: Application of Knowledge

79) In non-binding arbitration: A) The judge can offer suggestions for dispute resolution but cannot enforce these opinions.

B) The two parties agree to open up, or unbind, their books for inspection by the other party.

C) The client and project organizations both agree to perform exactly what the judge decrees.

D) The client and project organizations are not bound by the rules of law.

Answer: A Diff: 2 Section: 14.3 Early Termination for Projects LO: 14.3: Understand key reasons for early termination of projects.

Classification: Concept AACSB: Application of Knowledge 80) Static factors that may play a role in the decision to terminate a project early include company image and the presence of high sunk costs.

Answer: TRUE Diff: 2 Section: 14.3 Early Termination for Projects LO: 14.3: Understand key reasons for early termination of projects.

Classification: Concept AACSB: Application of Knowledge 81) A classic early warning sign of project failure is the realization that a product being developed was targeting a market that few new products and firms were entering.

Answer: TRUE Diff: 2 Section: 14.3 Early Termination for Projects LO: 14.3: Understand key reasons for early termination of projects.

Classification: Concept AACSB: Application of Knowledge 82) Loss of team identity during project termination is a significant internal intellectual issue.

Answer: FALSE Diff: 2 Section: 14.3 Early Termination for Projects LO: 14.3: Understand key reasons for early termination of projects.

Classification: Concept AACSB: Application of Knowledge 83) Arbitration refers to the formalized system for dealing with grievances and administering corrective justice to parties in a bargaining situation.

Answer: TRUE Diff: 2 Section: 14.3 Early Termination for Projects LO: 14.3: Understand key reasons for early termination of projects.

Classification: Concept AACSB: Application of Knowledge 84) What are the six major categories of factors that may influence the decision to terminate a project early? Provide examples of each.

Answer: Researchers have identified six categories of factors that influence the decision to terminate a project before its time. These factors include:

static factors like prior experience, company image, and political forces; task team factors such as difficulty achieving technical performance, loss of enthusiasm, and missing milestones; sponsorship factors, including lower impact on the company, less importance to the firm, and loss of project champion; economic factors such as lower projected ROI, less capital availability, and missing cost milestones; environmental factors like increased competition and increased government restrictions; and user factors of market need obviated, market factors changed and reduced likelihood of successful commercialization.

Diff: 2 Section: 14.3 Early Termination for Projects LO: 14.3: Understand key reasons for early termination of projects.

Classification: Application AACSB: Application of Knowledge 85) Describe the four early warning signs of project failure.

Answer: One study attempted to determine the warning signs of early project termination before the decision had, in fact, been made. The four early warning signs identified by the study were that the project had a low probability of achieving commercial objectives, not possessing team members with sufficient decision authority, projects that were targeted into relatively stable markets, and those that were given low priority by top R&D management.

Diff: 2 Section: 14.3 Early Termination for Projects LO: 14.3: Understand key reasons for early termination of projects.

Classification: Application AACSB: Application of Knowledge

86) Describe and rank any three decision rules for terminating an ongoing project before completion.

Answer: Answers will vary with students' rankings. The decision rules listed in the text include the following: When cost exceeds business benefits.

When the project no longer meets strategic fit criteria.

When deadlines continue to be missed.

When technology evolves beyond the project's scope.

The latter may not be a concern in many situations; evolution of technology probably hasn't cancelled a home construction project for a while. Costs exceeding benefits may be critical for smaller firms and extremely large corporations may be less sensitive to cost issues.

Diff: 2 Section: 14.3 Early Termination for Projects LO: 14.3: Understand key reasons for early termination of projects.

Classification: Critical Thinking AACSB: Analytical Thinking 87) What are the four major categories in the work breakdown structure for project termination?

Provide examples of specific tasks within each of these four categories.

Answer: Work breakdown structure for project termination issues can be divided into an emotional and an intellectual half. The emotional side can be divided into staff and client sides.

The intellectual half can be divided into internal and external halves. Emotional staff issues include the fear of no future work, diversion of effort, and loss of interest in remaining tasks.

Emotional client issues include a change in attitude, loss of interest in the project, and unavailability of key personnel. Intellectual internal issues include certification needs, control of charges to the project, and disposal of unused material. Intellectual external issues include communicating closure, closing down facilities, and agreement with suppliers on outstanding commitments.

Diff: 2 Section: 14.3 Early Termination for Projects LO: 14.3: Understand key reasons for early termination of projects.

Classification: Concept AACSB: Application of Knowledge

88) What are the two types of claims that can arise in the event of project closure and why would one be chosen over another?

Answer: There are two common types of claims that can arise in the event of project closure, exgratia and default. Ex-gratia claims are made by a client when there is no contractual basis for the claim. The client considers that because of some unexpected event there is a moral or commercial obligation on the project organization to pay compensation. When contractual claims are defaulted due to the failure of a project to be completed and delivered, the client firm may have some legal claim to cost recovery or punitive damages. The discrepancy between the two rides on whether a contract has been broken; if so, then the project company is in default; if not, then an ex-gratia claim must be filed.

Diff: 2 Section: 14.3 Early Termination for Projects LO: 14.3: Understand key reasons for early termination of projects.

Classification: Application AACSB: Analytical Thinking 89) What is arbitration, how does it work, when is it used and what are the two different types?

Answer: Arbitration is a formalized system for dealing with grievances and administering corrective justice to parties in a bargaining situation. If two or more parties disagree on the nature of contractual terms and conditions, a third party, usually a court-appointed arbitrator, facilitates the settlement of the disputed terms. If all parties agree to the use of arbitration, it can serve as a binding settlement to all outstanding claims or disputes arising from a contract that was not adequately completed. Parties may adopt non-binding arbitration, in which case the judge can offer suggestions or avenues for settlement but cannot enforce these opinions.

Diff: 2 Section: 14.3 Early Termination for Projects LO: 14.3: Understand key reasons for early termination of projects.

Classification: Concept AACSB: Application of Knowledge 90) The final project report should answer questions related to project performance, such as: A) How the organization's operating structure either helped or hindered the project team and their efforts.

B) How the project fared compared to baseline schedule and budget.

C) How consistently the organization estimated the completion time for activities.

D) How close the project came to achieving its goals.

Answer: B Diff: 2 Section: 14.4 Preparing the Final Project Report LO: 14.4: Know the challenges and components of a final project.

Classification: Concept AACSB: Application of Knowledge

91) Administrative performance review is an important component of the final project report.

Which item is a key facet of administrative performance?

A) The method of assuring that project team members have adequate training B) The method of determining activity and resource costs C) The method of determining the number of signatures in the change order process D) The method of measuring stakeholder satisfaction Answer: C Diff: 1 Section: 14.4 Preparing the Final Project Report LO: 14.4: Know the challenges and components of a final project.

Classification: Application AACSB: Application of Knowledge 92) The final report should include an assessment of the effectiveness of the project team, not only in terms of actual performance on the project, but also with regard to: A) Imagined performance on the project.

B) Planned performance on the project.

C) Team-building and staffing policies.

D) Their progression through the stages of group development.

Answer: C Diff: 2 Section: 14.4 Preparing the Final Project Report LO: 14.4: Know the challenges and components of a final project.

Classification: Concept AACSB: Application of Knowledge 93) A final report section on the techniques of project management would include an honest assessment of whether the: A) Benefits promised to the client were actually delivered.

B) Resource costs could be better estimated.

C) Project workers came together as a team.

D) The project finished on time.

Answer: B Diff: 1 Section: 14.4 Preparing the Final Project Report LO: 14.4: Know the challenges and components of a final project.

Classification: Concept AACSB: Application of Knowledge

94) The primary goal in requiring a project final report is to: A) Formally close out the project.

B) Provide the customer with a sense of completion.

C) Lay the groundwork for successful future projects.

D) Find out the root cause for all failures, both major and minor.

Answer: C Diff: 1 Section: 14.4 Preparing the Final Project Report LO: 14.4: Know the challenges and components of a final project.

Classification: Concept AACSB: Application of Knowledge 95) The project final report is fundamentally: A) An historical record.

B) A review of human activity.

C) Window dressing for the project.

D) A forward-looking document.

Answer: D Diff: 1 Section: 14.4 Preparing the Final Project Report LO: 14.4: Know the challenges and components of a final project.

Classification: Concept AACSB: Application of Knowledge 96) Some of the greatest challenges facing project teams during termination is: A) Maintaining the energy and motivation to finish.

B) Providing accurate data for the project final report.

C) Providing accurate root cause analysis for the project final report.

D) Finding another project to begin.

Answer: A Diff: 2 Section: 14.4 Preparing the Final Project Report LO: 14.4: Know the challenges and components of a final project.

Classification: Concept AACSB: Application of Knowledge

97) A classic statement regarding project termination and closeout is, "The termination of a project is: A) The start of the next project."

B) A project."

C) Never ending."

D) An opportunity."

Answer: B Diff: 2 Section: 14.4 Preparing the Final Project Report LO: 14.4: Know the challenges and components of a final project.

Classification: Concept AACSB: Application of Knowledge 98) The difference between a manager with ten years' experience and one with a year's experience ten times is: A) Dependent on the manager's tenure with the company.

B) Nine years.

C) Whether lessons-learned were truly learned.

D) Dependent on whether the manager's projects were successful.

Answer: C Diff: 2 Section: 14.4 Preparing the Final Project Report LO: 14.4: Know the challenges and components of a final project.

Classification: Concept AACSB: Application of Knowledge 99) The goal in requiring a final project report is to lay the groundwork for successful future projects.

Answer: TRUE Diff: 2 Section: 14.4 Preparing the Final Project Report LO: 14.4: Know the challenges and components of a final project.

Classification: Concept AACSB: Application of Knowledge

100) What purpose does a final project report serve? What are the major elements of the final project report and what information should be contained in each one?

Answer: The final project report is the administrative record of the completed project, identifying all its functional and technical components as well as other important project history.

The final report is an evaluative document that highlights both the strengths and weaknesses of its development; a candid assessment of what went right and what went wrong for the project over its life cycle. The major elements and information in each are as follows: Project performance — Project achievements relative to plan are assessed. How did the project compare on time, cost, performance, and client acceptance?

Administrative performance — What standard administrative practices occur within the organization and what are the benefits and drawbacks to the project?

Organizational structure — Comments on how the organization's operating structure either helped or hindered the team and its efforts.

Team performance — The report should reflect on the effectiveness of the project team in terms of their actual performance on the project and with regard to team building and staffing policies, training or coaching, and performance evaluation.

Techniques of project management — The report should examine the methods of estimation as well as scheduling processes and techniques.

Benefits to the organization and customer — All projects are guided by a goal or series of discrete goals that have, as the bottom line, the assumption of providing benefits to the sponsoring organization and the project's clients. This section of the report should consider the degree to which the project succeeded in accomplishing its goals and providing the anticipated benefits.

Diff: 2 Section: 14.4 Preparing the Final Project Report LO: 14.4: Know the challenges and components of a final project.

Classification: Application AACSB: Application of Knowledge 101) It has been said that the act of terminating of a project is a project in itself. Explain why you agree or disagree with this statement.

Answer: This statement suggests that the degree to which a project team makes a systematic and planned effort to close out a project affects whether the termination will be done efficiently and with minimal wasted effort or loss of time. In the case of projects that are naturally terminated through being completed, the steps in termination can be thought out in advance and pursued in an orderly manner. On the other hand, in circumstances where the project suffers early termination, the closeout process may be shorter and more ad hoc, that is, it may be done in a less-than-systematic manner.

Diff: 2 Section: 14.4 Preparing the Final Project Report LO: 14.4: Know the challenges and components of a final project.

Classification: Critical Thinking AACSB: Reflective Thinking