Slides and Practice Exams PMP Exam Power Prep

Managing Cost-Reimbursement Contracts
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PMP Exam Power Prep

Slides and Practice Exams
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PMP Exam Power Prep

Slides and Practice Exams
Copyright CMF Solutions and TwentyEighty Strategy Execution

October 2015
All rights reserved.
No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any
form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the
prior written permission of CMF Solutions and ESI International.
All material from A Guide to the Project Management Body of Knowledge (PMBOK Guide) is
reprinted with permission of the Project Management Institute, Four Campus Boulevard, Newtown
Square, Pennsylvania 19073-3299, USA, a worldwide organization for advancing the state-of-the-art
in project management. Phone: (610) 356-4600; Fax: (610) 356-4647.
PMI did not participate in the development of this publication and has not reviewed the content for
accuracy. PMI does not endorse or otherwise sponsor this publication and makes no warranty,
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any financial interest in this publication and has not contributed any financial resources.
PMI, PMP, and PMBOK are registered marks of the Project Management Institute, Inc.
Unit 1
INTRODUCTION
PMI, PMP, and PMBOK are registered marks of the Project Management Institute, Inc.
1-1
2015 CMF Solutions and TwentyEighty Strategy Execution, All Rights Reserved
Unit 1
INTRODUCTION
Course Concept and Guidelines
Key Materials
Agenda
Exam Structure and Test-Taking Tips
1-2
Unit 1
Course Concept
(Reference Manual p. 1-1)
Reduces and structures required study time:

- Targets testable material
- Filters out non-testable information
Provides a comprehensive review of testable topics:

- Opportunity for personal Q & A
- Practice exams taken and reviewed
- Take the test sooner (within days), if desired
- Approximately 95% first time pass rate
1-3
Unit 1
Key Materials
PMBOK Guide, 5th edition, 2013

Reference Manual:
- Chapter on each testable topic
- Drill practice (at the end of each chapter)
- Summary of Processes (Unit 14)
- Exercises (Unit 15)
Course Slides
Practice Exams
Formula and Process Guide
1-4
Unit 1
Typical Daily Agenda: 5-day Boot Camp

Lecture and Review:

Mon:
Introduction, PMI Concepts, Processes, Integration, Scope
Tue:
Time
Wed:
Cost, Quality
Thu:
Human Resource, Communication, Risk
Fri:
Procurement, Stakeholder
Facilitated Study, Review, and Practice Exams:

1. Review reference manual and PMBOK Guide for that day
2. Engage in group study and exercises, as appropriate
3. Review the drill practice topics for that day
4. Take the practice exams (approximately 3 times total)
1-5
Unit 1
Course Guidelines
Beware personal experience and real world

Slow the instructor down:
- Taking notes
- Asking questions
Normal meeting etiquette:

- Cell phones
- Conversations
1-6
Unit 1
The Exam
Computerized at Prometric (Sylvan Learning Center)

Multiple choice (200 questions, 4 choices)
4 hours: wordy questions / read ? first
Passing score:
66% is a safe guide for passing score!!!
- 25 pre-test or control questions; do not count in score

- Need 106 of remaining 175 (approx. 61%)
- Beware: if all 25 control questions correct but only 105 of the others;
your score is 65% (130/200) but you failed by one question!!
Test bank, random selection (more diverse than ever)

Questions jump from topic to topic (no defined sections)
No penalty for guessing (answer all questions)
1-7
Unit 1
Test-Taking Tips and Strategies

(Reference Manual pp. 1-3 to 1-5)
The day before: normal sleep, dining, beverages

You may not bring any personal item to the workstation Top of locker
Do the computer tutorial at the test site:
- Approximately 15 minutes (does not count against your 4 hours)
- 4 hour timer begins immediately upon completion of tutorial
- Brain dump formula list: see page 1-7, Reference Manual
- Calm down (adrenaline will be pumping at first)
Answer from PMI perspective and not your own experience (you
will not always agree with PMI)
Read carefully; find the pace that works for YOU (not too fast)
1-8
Unit 1
Processes, Inputs, Tools, Outputs

Many questions depend on your knowledge of inputs, tools, and
outputs
Use the tables and exercises provided (Units 14 & 15)
Know the sequence of the processes in a knowledge area
Examine the following summary of trends and patterns
Information
Typical Inputs
Documents
OPA
Plans
EEF
Actions
Typical Tools
Judgment
Analysis
Meetings &
methodologies
Estimating
Systems
Outcomes
Typical Outputs
Documents
Updates
Change requests
EEF = Enterprise Environmental Factors

OPA = Organizational Process Assets
1-9
Unit 1
Preparing for the Math

Testable math formulas are listed in the following 2 places:

Reference Manual, page 1-7
Formula and Process Guide (color coded handout)
There are approximately 39 formulas that have actually been

tested.
Every formula will be taught at the appropriate time.
All formulas are tested in the practice exams.
There is also a Math for the PMP Exam guide for extra
practice with the math. It appears in Unit 15-Exercises.
1-10
Unit 2
PMI CONCEPTS
2-1
Unit 2
PMI CONCEPTS
PMBOK Guide, Chapter 1: Introduction
PMBOK Guide, Chapter 2: Organizational Influences and
Project Life Cycle
Appendix I: PMI Code of Ethics and Professional Conduct
Appendix II: International Project Management
2-2
Unit 2
First Two Chapters of the PMBOK Guide

The first 2 PMBOK chapters are not so-called knowledge
areas; however, they do contain testable material.
Chapter 1, Introduction, describes foundational ideas and
defines key terms.
Chapter 2, Organizational Influences and Project Life Cycle,
addresses :
Various organizational structures
The vital role of key stakeholders
Typical project life cycle
2-3
Unit 2
PMBOK Guide, Chapter 1: Introduction

(Major Topics)
PMI Code of Ethics and Professional Conduct

Definitions of project and project management
Project constraints
Program and program management
Portfolios, Organizational Project Management, Governance
Project management office (PMO)
Role of the project manager
2-4
Unit 2
PMI Code of Ethics and Professional Conduct

(Reference Manual pp. 2-1 & 2-13 to 2-17, PMBOK Guide p. 2)
The code of ethics rests on 4 standards of conduct:

Responsibility
Respect
Fairness
Honesty
This material is no longer tested as much as it once was.

In-class coverage of the next 4 slides is optional.
2-5
Unit 2
First Key Value: Responsibility

(Reference Manual pp. 2-1, 2-14, PMBOK Guide p. 2)
Make decisions based on the best interests of society,

public safety, and the environment
Only accept assignments you are qualified for
Report unethical or illegal conduct to management
(never hide bad news)
Report ethics violations to PMI and cooperate in the
collection of information
File ethics complaints only when substantiated by facts
Know and uphold all laws and regulations that govern
your work
2-6
Unit 2
Second Key Value: Respect

Listen to others; respect the norms and customs of

others
Respect the physical and intellectual property rights of
others
Be professional even if it is not reciprocated
Do not use power for personal gain
Work directly with others when a conflict exists Escalation
Negotiate in good faith
Do not act in an abusive manner toward others
2-7
Unit 2
Third Key Value: Fairness

Be transparent, impartial, and objective when making

decisions
Never discriminate; make opportunities equally available
Hiring
Procurement
Disclose real or potential conflicts of interest

Competing loyalties
2-8
Unit 2
Fourth Key Value: Honesty

Never make misleading or false statements

Never state a half-truth or provide information out of context
Provide accurate information in a timely manner
Make commitments and promises in good faith
Do not mislead others for personal gain
Make others feel safe to tell the truth
2-9
Unit 2
Project and Project Management

(Reference Manual pp. 2-1 & 2, PMBOK Guide pp. 3 and 5-6)
Project:
A temporary endeavor undertaken to create a unique product,
service, or result
Temporary: the project has a defined start and finish
Unique: the product or service is different in a distinguishable

way
In contrast, operations are on-going and repetitive
Project Management:
The application of knowledge, skills, tools, and techniques to
project activities to meet project requirements
2-10
Unit 2
Project Constraints
(Reference Manual p. 2-2, PMBOK Guide p. 6)
Cost
Schedule
Scope
Cost, schedule, and scope are called the triple constraint

Project success is often measured against the triple constraint
A change in one factor is likely to affect other factors
Other Constraints (must also be balanced with triple constraint):
Quality
Resources
Risk
2-11
Unit 2
Program and Program Management

(Reference Manual pp. 2-2 & 3, PMBOK Guide p. 9)
Program:
A group of projects managed in a coordinated way to obtain benefits
not available from managing them individually
Programs are larger in scope than projects
It is not as clear when a program should end
Programs have elements of on-going, cyclical operations
Program Management:
Activities applied to a program to meet program requirements and
obtain benefits not available by managing the projects individually
2-12
Programs always contain related projects
However, projects may exist separately from programs
Unit 2
Portfolio and OPM

(Reference Manual p. 2-3, PMBOK Guide pp. 4-10)
Portfolio:
A collection of projects, programs, and operations managed as a
group to achieve strategic business objectives
One outcome of portfolio management would be the selection and

initiation of a new project or program
New projects and programs should always align with strategic

objectives
OPM (Organizational Project Management):

The overall strategy framework for pursuing organizational goals
and objectives
2-13
Projects, programs, and portfolios exist within this framework
Unit 2
Organizational Governance
Organizational Governance:
A high level of oversight and direction
2-14
Board of Directors or Board of Regents at a university
Ensures value is added to the organization before approving new

projects or programs
Unit 2
Project Management Office (PMO)

(Reference Manual pp. 2-3 & 4, PMBOK Guide pp. 10-12)
PMO:
Used to establish and coordinate the use of standard methodologies
and tools for managing projects
May operate with differing levels of control:
1. Supportive PMO: Consults and suggests best practices. PMO

control is low.
2. Controlling PMO: Empowered to require compliance with
standard methodologies. PMO control is moderate.
3. Directive PMO: Takes control of projects by directly managing
them. PMO control is high.
2-15
Unit 2
Role of the Project Manager (PM)

The PM is a critical link between the project team and the rest
of the organization
The PM must possess certain interpersonal skills (PLINCM)
The unit on HR will address this topic in detail
2-16
Unit 2
PMBOK Guide, Chapter 2:

Organizational Influences and Project Life Cycle
Organizational structures
Organizational process assets (OPA)
Enterprise environmental factors (EEF)
Stakeholders
Project team and other key project roles
Project life cycle
2-17
Unit 2
Organizational Structures
Three classic organizational structures have been tested:
Functional
Matrix
Projectized
A table in the Reference Manual, p. 2-6, describes advantages

and disadvantages of each approach.
2-18
Unit 2
Organizing for Projects: Functional Management

(Reference Manual pp. 2-4 & 2-5, PMBOK Guide pp. 21-26)
2-19
Unit 2
Organizing for Projects: Matrix Management

(Reference Manual pp. 2-5 & 2-6, PMBOK Guide pp. 21-26)
2-20
Unit 2
The Dedicated Project Team: Projectized

Project Manager
(high to almost total authority)
Engineers
Production
Other project
staff
Info Technology
2-21
Secretaries
Unit 2
Summary of Organizational Structures

Type of Structure
PM Authority
Functional:
1) PM (Working Level)
2) PE (PM from VP staff)
3) PC (PM from CEO staff)
Little to None
Little
Little
Matrix:
4) Weak
5) Balanced
6) Strong
Limited
Low to Moderate
Moderate to High
Dedicated Team:
7) Projectized
2-22
High to Almost Total
Unit 2
Organizational Process Assets (OPA)

OPA includes existing organizational processes, procedures,

policies, and knowledge bases
PMI has divided OPA into 2 categories:
Standard processes and procedures (may have been developed
by PMO)
Knowledge base
OPA is an explicitly listed input to 38 of 47 processes
2-23
Unit 2
OPA Standard Processes

(Reference Manual p. 2-7 , PMBOK Guide pp. 27-28)
OPA includes any standard process for how to do things

Examples include:
Safety, ethics, quality control
Risk management and WBS
Change control and work authorization procedures
Procurement procedures
Financial controls
Project closure
2-24
Unit 2
OPA Knowledge Base

OPA also includes an organizational knowledge base

The knowledge base would provide storage and allow retrieval
of the following types of information:
Historical files from similar, previous projects
Lessons learned databases
Process measurement databases
Defect management databases
Configuration management knowledge base
Financial databases
2-25
Unit 2
Enterprise Environmental Factors (EEF)

Factors that may influence the chances for project success

The following 13 examples are identified by PMI:
1. Organizational structure
2. Geographic distribution of facilities and resources
3. Government or industry standards that govern your work
4. Existing infrastructure (facilities and equipment)
5. Existing human resources (skill sets)
2-26
Unit 2
Enterprise Environmental Factors (EEF)

13 examples of EEF continued:

6. Personnel system (staffing, performance reviews, etc.)
7. Work authorization system (ensure the right work is done at
the right time and in the right sequence)
8. Marketplace (competitors and contractor base for outsourcing)
9. Stakeholder risk tolerance
10. Political climate
11. Communication system
12. Information system
13. Commercial databases for cost and risk
2-27
Unit 2
Stakeholders
Stakeholders may include anyone who is:

Involved in a project
Affected by project results
In a position to influence the project while it is underway
PMI heavily emphasizes the importance of identifying and

managing key stakeholders
PMBOK 5 includes a new knowledge area on stakeholder
management
2-28
Unit 2
Key Issues in Managing Stakeholders

Stakeholder requirements must be incorporated in the project

management plan
Stakeholder identification is a continuous process
Overlooking negative stakeholders may increase risk of failure
If stakeholder expectations come into conflict, resolution should
usually favor the customer
On some projects, the customer performs as the sponsor (no
separate internal sponsor)
2-29
Unit 2
Project Team and Other Roles

A project team consists of people with the right knowledge and

skills to carry out the work
PMI defines the following roles:
Project management staff (perform management activities)
Project staff (carry out the work with no management
responsibility)
Supporting experts (functional experts known as SMEs)
User or customer (liaisons who coordinate activities, advise on
requirements, and accept deliverables)
Sellers (also called vendors, suppliers, or contractors; a contract
usually governs the relationships for outsourced work)
2-30
Unit 2
Project Life Cycle: Cost and Staffing Levels

2-31
Unit 2
Risk, Influence, and Changes

2-32
Unit 2
Appendix I: PMI Code of Ethics

The Reference Manual describes the PMI Code of Ethics and
Professional Conduct (Unit 2, Appendix I).
This material is no longer tested as extensively as it once was.
However, a brief review of this material during your self-study
would be advisable.
2-33
Unit 2
Appendix II: International Project Management

The Reference Manual describes factors that often affect
projects conducted internationally (Unit 2, Appendix II).
This material is no longer tested as extensively as it once was.
However, a brief review of this material during your self-study
would be advisable.
2-34
Unit 2
Drill Practice Reminder

In the reference manual, there is an item called Drill Practice
It is the equivalent of a set of flash cards: question and answer
format
This is an effective way to help memorize key details
Many people do the drill practice just before taking the practice
exam for that chapter
Drill practice for this chapter starts on p. 2-11
2-35
Unit 3
PROCESSES
3-1
Unit 3
PMI PROCESSES
Processes and Process Groups
Activities Aligned with Process Groups
Project Information
Building Blocks of the Body of Knowledge
Mapping Processes, Process Groups, and Knowledge Areas
PMI Changes After 1 November
3-2
Unit 3
Processes
PMI defines a process as:

A set of interrelated actions performed to achieve a pre-specified
set of products, results, or services
Processes fall into 2 categories:

Product processes: specify and create the desired product
Project processes: used to initiate, plan, execute, control, and
close the project work (project management activities)
3-3
Unit 3
Process Groups
PMI has organized all 47 project management processes into

the following 5 process groups:
Initiating: defining and authorizing the project or phase
Planning: establishing scope, refining objectives, and defining a
course of action to attain the objectives
Executing: completing the work defined by the plan
Monitoring and Controlling: measuring progress, identifying
variances from the plan, and recommending corrective action
when necessary
Closing: formally accepting the project or phase results; bringing
the project to an orderly end
3-4
Unit 3
Process Groups: Key Characteristics

Process groups:
Are linked by the results they produce: an output often becomes
an input to the next process
Example: The charter is the output to Develop Project Charter and

becomes an input to the next process, Develop Project Plan
Are overlapping and iterating, e.g., a problem during execution

may require a revision to the plan
Occur in all phases of a project, i.e., each phase of a project must
be initiated, planned, executed, controlled, and closed
3-5
Unit 3
Process Group Activities: Initiating

Typical initiating activities include the following:

Perform project assessment using:
Available information
Lessons learned
Meetings with stakeholders
Purpose: evaluate feasibility of a new project
Identify key deliverables and manage customer expectations
Perform stakeholder analysis:
Align expectations
Gain support
Establish goals and objectives
3-6
Unit 3
Process Group Activities: Initiating (contd)

Additional initiating activities include:

Determine high level:
Product description, key deliverables, milestones
Constraints, assumptions, time and cost estimates
Resource requirements and risks
Define responsibilities of the PM
Conduct benefit analysis: validate project alignment with
organizational strategy and expected business value
Develop and obtain approval of project charter
Inform stakeholders of approved charter
3-7
Unit 3
Process Group Activities: Planning

Typical planning activities include the following:

Review and assess detailed project requirements based on the
project charter
Develop detailed management plans:
Change management, scope, schedule, cost
Quality, HR, communication
Risk, procurement, stakeholder
Create a detailed scope statement
Determine who is needed on the project team
3-8
Unit 3
Process Group Activities: Planning (contd)

Additional planning activities include:

Develop a WBS and associated WBS dictionary
Finalize needed team members
Create a network diagram and estimate durations
Determine critical path and develop schedule
Estimate costs and determine budget
3-9
Unit 3
Process Group Activities: Planning (contd)

Additional planning activities include:

Analyze stakeholder needs, interests, and potential impact:
Engage stakeholders in project decisions
Effectively manage stakeholder expectations
Develop a formal project management plan
Obtain formal approval of the project management plan
Conduct a kick-off meeting
3-10
Unit 3
Process Group Activities: Executing

Typical executing activities include the following:

Set up a project organization
Acquire, develop, and manage the project team
Manage stakeholders
Conduct team building
Perform quality assurance
Perform (execute) work packages
Manage the flow of information per the communication plan
Maintain stakeholder relationships and manage expectations
Note: PMI sometimes refers to executing as implementing
3-11
Unit 3
Process Group Activities: Monitoring/Controlling

Typical monitoring and controlling activities include the

following:
Perform integrated change control
Perform various control processes: scope, schedule, cost,
quality, risk, procurement, and stakeholder
Measure and report project performance
Monitor project variances: Plan minus Actual
Take corrective action
Capture, analyze, and manage lessons learned
Monitor procurement activities to verify compliance
3-12
Unit 3
Process Group Activities: Closing

Typical closing activities include the following:

Review and accept project results
Procurement audits
Product verification
Formal acceptance
Transfer ownership of deliverables to appropriate stakeholders
Evaluate project results (lessons learned)
Update and archive records
Obtain feedback from stakeholders
Reassign resources (release team)
3-13
Unit 3
Project Information
Know the following terminology:

Work performance data: raw measurements of work (Task A
took 4 days)
Work performance information: data that have been analyzed
and interpreted (Task A is ahead of schedule)
Work performance reports: presentation of results to the right
audience
3-14
Unit 3
Building Blocks of the Body of Knowledge

Fundamental Building Blocks:

Knowledge Areas:
10 management areas that must be handled by any PM
Integration, scope, time, cost, quality, HR, communication, risk,

procurement, stakeholder
Process Groups:
5 management domains that reflect the chronological progression

of project management
Initiating, planning, executing, monitoring and controlling, closing
Processes:
3-15
47 discrete processes that must be performed and that map to the

knowledge areas and process groups
Unit 3
Mapping Knowledge Areas, Process Groups, and Processes

Process Groups
Knowledge
Areas
Integration
Initiating
Develop project
charter
Planning
Develop project
mgmt plan
Executing
Controlling
Direct/manage
project work
Monitor/control
project work
Perform integrated
change control
Closing
Close project or
phase
Scope
The remaining 41 processes may be seen in the:
Time
Cost
Quality
Reference Manual p. 3-7
Formula and Process Guide
PMBOK Guide p. 61
HR
Communication
Risk
Procurement
Stakeholder
3-16
Unit 3
PMI Changes After 1 November 2015

(Exam Content Outline, June 2015)
What has not changed:

The 10 knowledge areas and 5 process groups are unchanged
4 hours to complete 200 multiple choice questions is unchanged
The scoring of the exam is unchanged
Qualifications to be allowed to take the exam are unchanged
What has changed:

The new exam content outline added 8 new tasks (see following
slides)
There will be increased emphasis on certain topics (see
following slides)
3-17
Unit 3
PMI Changes: New Initiating Tasks

New Initiating Tasks (3):

Identify key deliverables based on business requirements in
order to:
Manage customer expectations
Achieve project goals
Conduct benefit analysis with relevant stakeholders to:
Validate project alignment with organizational strategy
Validate expected business value
Inform stakeholders of the approved charter:
3-18
Ensure common understanding of key deliverables, milestones,

and stakeholder roles
Unit 3
PMI Changes: New Planning Tasks

New Planning Tasks (1):

Develop the stakeholder management plan by:
3-19
Analyzing needs, interests, and potential impact of stakeholders
Engaging stakeholders in project decisions
Unit 3
PMI Changes: New Executing Tasks

New Executing Tasks (2):

Manage the flow of information by:
Following the communications plan
Keeping stakeholders engaged (involved) and informed
Maintain stakeholder relationships by:
3-20
Following the stakeholder management plan
Managing expectations
Fostering continued support
Unit 3
PMI Changes: New Monitoring/Controlling Tasks

New Monitoring and Controlling Tasks (2):

Capture, analyze, and manage lessons learned:
Use lessons learned techniques to enable continuous

improvement
Monitor procurement activities in accordance with the

procurement plan:
3-21
Verify compliance with project objectives
Unit 3
PMI Changes: Closing Tasks

There are no new closing tasks!!
3-22
Unit 3
PMI Changes: Increased Emphasis Areas

Expect the following areas to receive more emphasis:

Benefits analysis
The opportunity side of risk management
Stakeholder management plans and associated communication
Lessons learned
3-23
Unit 3

In the reference manual, there is an item called Drill Practice:
It is the equivalent of a set of flash cards: question and
answer format
3-24
Unit 4
INTEGRATION MANAGEMENT
4-1
Unit 4
Integration Management Concept

Integration management unifies, coordinates, and manages the

interdependencies among all processes and project
management activities
It is the only knowledge area with processes in all 5 process
groups
Overview of processes:
Develop Project Charter
Develop Project Management Plan
Direct and Manage Project Work
Monitor and Control Project Work
Perform Integrated Change Control
Close Project or Phase
4-2
Unit 4
Overview of Topics in Unit 4

Integration Management Processes
Other Topics
Information that has been tested but is not covered by the
PMBOK Guide.
Drill Practice
4-3
Unit 4
Overview of Integration Management Processes

4.1 Develop Project Charter (a document that formally authorizes a

project or phase and also documents initial requirements)
4.2 Develop Project Management Plan (defining and integrating

subsidiary plans into a comprehensive master project management plan)
4.3 Direct and Manage Project Work (performing the work defined in
the project plan to achieve project objectives)
4.4 Monitor and Control Project Work (tracking, reviewing, and

regulating progress toward meeting performance objectives)
4.5 Perform Integrated Change Control (reviewing all change

requests and managing all changes to the project)
4.6 Close Project or Phase (finalizing all activities for a project or phase)
4-4
Unit 4
Selected Knowledge Area, Process Groups, and Processes

Process Groups
Knowledge
Areas
Integration
Initiating
Planning
Executing
Controlling
Develop
project charter
Develop project
mgmt plan
Direct/manage
project work
Monitor/control
project work
Perform
integrated
change control
Closing
Close project or
phase
Scope
Time
Cost
Quality
HR
Communication
Risk
Procurement
Stakeholder
4-5
Unit 4
Develop Project Charter: Introduction

Is one of only two processes in the initiating process group

Written document officially authorizing a project or phase
Documents initial, high-level requirements/scope and business
need
The initial requirements are established on the basis of
stakeholder needs and objectives
Identifies project manager and confers power/authority
4-6
Unit 4

Inputs
Tools
Project statement of work
Expert judgment
Business case
Facilitation techniques
Outputs
Project charter
Agreements
EEF
OPA
Note: EEF = Enterprise Environmental Factors

4-7
Unit 4
Develop Project Charter: Key Points

The charter:
Formally initiates the project.
Establishes a partnership between the performing and requesting
organizations.
Identifies the PM. Ideally, the PM would help write the charter.
However, the PM should not sign the charter and should never
be assigned later than the start of planning.
Upper management or the project sponsor should sign the
charter to increase authority of the PM.
4-8
Unit 4
Develop Project Charter: Key Points

(Reference Manual pp. 4-1 to 4-4, PMBOK Guide p. 66)
The charter:
Authorizes the PM to acquire and use organizational resources.
Provides a description of project goals and objectives.
Is supported by needs analysis and feasibility studies.
Is part of the initiating process group.
Is performed before Identify Stakeholders:
Project charter is an input to Identify Stakeholders
Stakeholder register is not an input to Develop Charter
4-9
Unit 4
Inputs to Develop Project Charter

The statement of work (SOW): Provides a narrative description of

products, services, or results to be delivered.
Internal projects: sponsor provides SOW based on business
needs.
External projects: customer provides SOW as part of proposal or
bid document.
Business case: Describes business need and cost-benefit analysis.

Agreements: A contract is used for external customers.
EEF/OPA: Factors that influence success. Also, standard
procedures, templates, historical information, lessons learned.
4-10
Unit 4
Tools for Develop Project Charter

Expert judgment:
Assesses accuracy of technical and management information.
Is a tool for 28 of 47 processes.
Facilitation techniques:
Assisting the work of teams and small groups through the use of
specific techniques.
Brainstorming, conflict resolution, problem solving, and meeting
management.
4-11
Unit 4
Outputs from Develop Project Charter

Project charter. A formal document authorizing the project and

providing the following high-level information:
Project purpose and business/customer needs
Project objectives and success criteria
High-level requirements
High-level risks, budget, and milestone schedule
Stakeholder list
Approval requirements (acceptance criteria and who signs off on
the project)
Name and authority of the PM
Name and authority of the sponsor
4-12
Unit 4
Develop Project Management Plan: Introduction

Is part of the planning process group

Defines how the project will be executed, monitored, controlled,
and closed
Creates a comprehensive plan by integrating all detailed
subsidiary plans:
Scope
Schedule
Communication
Cost
Risk
Quality
HR/Staffing
Procurement
Stakeholder
Is developed by the entire team, not just the PM
4-13
Unit 4

Inputs
Tools
Project charter
Expert judgment
Outputs from other

processes
Outputs
Project management plan
EEF
OPA
4-14
Unit 4
Develop Project Management Plan: Key Points

(Reference Manual p. 4-4 PMBOK Guide p. 72)
Guides execution and control of a project

The completed plan must be presented to appropriate
stakeholders for approval to proceed
Changes to the plan must be approved using the integrated
change control process
Provides the guide for performing all project work
Forms the baseline against which any changes are made
4-15
Unit 4
Inputs to Develop Project Management Plan

Project charter: The output of the previous process often

becomes an input to the next process
Outputs from other processes:
The project plan is a collection of detailed subsidiary plans
Scope, schedule, cost, quality, HR, communication, risk,
procurement, and stakeholder
EEF/OPA:
Factors that may influence success
Standard procedures, templates, historical information, lessons
learned
4-16
Unit 4
Tools for Develop Project Management Plan

Expert judgment:
Assess accuracy of information used in developing the plan
Helps with tailoring the plan as well as technical and
management details
Facilitation techniques:
Assisting the work of teams through the use of specific
techniques
Brainstorming, conflict resolution, problem solving, and meeting
management
4-17
Unit 4
Outputs from Develop Project Management Plan

Project management plan. A formal, approved document used to

guide execution of the project
Is distributed as defined in the communication plan and

contains the following:
Scope management plan
Requirements management plan
Schedule management plan
Cost management plan
Quality and process improvement plans
4-18
Unit 4
Outputs from Develop Project Management Plan

Information contained in the project plan (continued):

Human resource management plan
Communication management plan
Risk management plan
Procurement management plan
Stakeholder management plan
Baselines: Scope, schedule, cost
4-19
Unit 4
Direct and Manage Project Work: Introduction

Is part of the executing process group

The PM and other managers direct performance of planned
activities
Previously approved changes must also be implemented as
part of directing and managing the work
Work performance data:
Describes the actual status of required deliverables
Is collected and fed into the performance reporting process
4-20
Unit 4

Inputs
Tools
Outputs
Expert judgment
Deliverables
Approved change
requests
Project management
information system
Work performance data
EEF
Meetings
Change requests
OPA
Project management plan updates

Project documents updates
4-21
Unit 4
Direct and Manage Project Work: Key Points

Actions performed while executing the project plan include:

Set up a project organization
Acquire, develop, and manage the project team
Obtain other resources (materials, equipment, facilities)
Lead, manage, and/or perform project activities
Manage the flow of information
Generate project data for status reports and forecasts
4-22
Unit 4
Direct and Manage Project Work: Key Points

Additional actions performed while executing the project plan:

Conduct change control and implement approved changes
Establish and manage communication channels
Manage risks
Obtain quotes, bids, and proposals for work to be outsourced
Manage sellers
Manage stakeholders and maintain stakeholder relationships
Collect and document lessons learned
4-23
Unit 4
Inputs to Direct and Manage Project Work

Project management plan: Provides the foundation for executing

the work of the project
Approved change requests:

Previously approved changes that may expand or reduce project
scope
The team must manage the implementation of the change
EEF/OPA:
Standard procedures, historical information, lessons learned
4-24
Unit 4
Tools for Direct and Manage Project Work

Expert judgment: Expertise of the PM and the team

Project management information system:
Provides access to information collection and distribution
systems
Also provides access to automated information systems for
change control, scheduling, budgeting, etc.
Meetings. PMI identifies 3 types of meetings:

Information exchange, brainstorming, and decision making
All meetings should have a: clearly defined purpose, agenda,
time frame, and be documented with minutes
4-25
Unit 4
Outputs from Direct and Manage Project Work

Deliverables: Any unique verifiable product, result, or capability that

must be completed as part of the project plan
Work performance data: Raw measurements of the actual status of

the work
Data are collected and fed to various control processes for
interpretation. Examples include:
Actual costs and durations
Actual start and finish dates
Number of defects
Number of change requests
4-26
Unit 4

Change requests: Used to modify procedures, scope, schedule,

cost, or quality
Change requests may lead to the use of:
Corrective actions
Preventive actions
Defect repairs
Read and know the following:
4-27
For the exam, be aware of situational questions in which various

parties (senior manager, customer, etc.) want a change to the
project. The appropriate first response is to evaluate the impact of
the change and meet with the team to discuss alternatives.
Common incorrect choices often involve meeting first with
management or the customer.
Unit 4

Project Management Plan and Project Documents Updates:

When there are changes to the project, the project plan or other
documents may require updates.
Any item that ends with the word updates is always an output.
Examples of changes to the project plan include: Scope,
schedule, cost, quality, etc.
Examples of other documents that may be changed include:
Issue logs, risk register, stakeholder register, etc.
4-28
Unit 4
Monitor and Control Project Work: Introduction

Is part of the monitoring and controlling process group

Involves tracking, reviewing, and regulating progress toward
meeting objectives
Monitoring collects data and interprets the status of the project
Controlling determines whether any responses are appropriate:
Corrective action
Preventive action
Defect repairs
4-29
Unit 4

Inputs
Tools
Outputs
Expert judgment
Change requests
Schedule forecasts
Analytical techniques
Work performance reports
Cost forecasts
Project management
information system
Validated changes
Meetings
Work performance
information
EEF
OPA
4-30
Unit 4
Monitor and Control Project Work: Key Points

Compares actual versus planned performance (variance

analysis)
Determines/recommends preventive or corrective action
Identifies risks, reports risk status, and ensures response plans
are implemented
Maintains a timely, accurate information base:
Status reports: variances tracked on a periodic basis
Progress reports: list of deliverables completed
Forecasts: predicting final cost and schedule outcomes
Monitors the implementation of approved changes

4-31
Unit 4
Inputs to Monitor and Control Project Work

Project management plan: The project baselines provide the plan

element for variance analysis (plan vs. actual).
Schedule and cost forecasts: Predicting cost and schedule

outcomes based on current progress.
Validated changes: Changes that have been approved using

integrated change control and must now be implemented.
Work performance information: Data that have been interpreted

and show the status of the work.
EEF/OPA:
Standard procedures, historical information, lessons learned
4-32
Unit 4
Tools for Monitor and Control Project Work

Expert judgment: Experts used to correctly interpret the information

collected
Analytical techniques. Various forecasting methods such as:

Trend or variance analysis
Earned value management
Project management information system: As before, provides

access to automated information tools.
Meetings. Stakeholders using 2 types of meetings:

User groups and review meetings
4-33
Unit 4
Outputs from Monitor and Control Project Work

Change requests: May be issued to adjust the project if deemed

necessary
As always, changes may involve:
Corrective action
Preventive action
Defect repairs
Work performance reports: Presentation of project information to

appropriate stakeholders
4-34
Unit 4
Outputs from Monitor and Control Project Work


documents may require updates
Examples of changes to the project plan include: Scope,
schedule, cost, quality, etc.
Examples of other documents that may be changed include:
Issue logs
Schedule and cost forecasts
4-35
Unit 4
Perform Integrated Change Control: Introduction


Reviews all requests to change or modify the project
Change requests may affect:
Deliverables
Baselines
Organizational processes
Project documents or the project management plan
All changes must be reviewed, approved or rejected, managed,

and the disposition communicated
4-36
Unit 4

Inputs
Tools
Outputs
Expert judgment
Approved change requests
Meetings
Change log
Change requests
Change control tools
EEF
OPA
4-37
Unit 4
Perform Integrated Change Control: Key Points

Changes are common and must be managed effectively

Informal changes that circumvent the system must be
prevented (no scope creep)
All change requests must be reviewed promptly:
Usually by the CCB (Change control board)
Small changes may designated to another party
All changes must be approved and managed using:

Proper documentation, tracking, and approval procedures
Effective communication to ensure stakeholder awareness
4-38
Unit 4

The integrity of baselines must be maintained (scope, schedule,

cost):
Only approved changes may be added to a revised baseline
The CCB must document the likely impact of changes:

Changes must be coordinated across the entire project
Example: A schedule change might affect cost, quality, staffing,
or risk
It is possible to have more than one CCB:

Different projects within a program
CCBs with technical vs. cost responsibility, etc.
4-39
Unit 4

The change control process should be able to accommodate

emergency changes:
Some changes may proceed without prior review and approval
However; review, approval, and proper documentation must be
accomplished as soon as practical
In some cases, changes may be approved by the customer (as

per contract provisions)
Any stakeholder may request a change at any time
Verbal change requests must always be recorded in writing
Every change request must be either approved or rejected with
supporting documentation
4-40
Unit 4
Change Control and Configuration Management

(Reference Manual p. 4-15 PMBOK Guide pp. 96-97)
Change control operates as a subset of configuration

management:
Configuration management is focused on specifying project
deliverables and processes
Change control manages changes to project documents, deliverables, or
baselines
Configuration management consists of 3 major activities:

1. Identify characteristics of the product or service and establish scope,
schedule, and cost baselines
2. Control changes to the baselines and keep careful records
3. Audit final project results to verify that all requirements, including
changes, have been met
Note: Configuration management controls emerging scope against the baseline
4-41
Unit 4
Inputs to Perform Integrated Change Control

Project management plan. Elements of the project plan which are

especially relevant to change control include:
Project baselines (scope, schedule, and cost). Note: changes are
made against these baselines.
Change management plan which addresses:

How change control will be managed
The role of the CCB
Work performance reports: Schedule, cost, resource availability,

and earned value reports
4-42
Unit 4
Inputs to Perform Integrated Change Control

Change requests: Change requests are outputs with this single

exception
Change control is not needed unless a change has, in fact, been
requested
Enterprise Environmental Factors (EEF):

The use of information systems such as configuration
management
Organizational Process Assets (OPA):

Change control procedures
Historical files
Configuration management knowledge base
4-43
Unit 4
Tools for Perform Integrated Change Control

Expert judgment: Appropriate experts must be on the CCB

Meetings: Change control meetings by the CCB.
Review change requests
Approve or reject
Communicate the results
Change control tools: Manual or automated tools to manage change

requests
4-44
Unit 4
Outputs from Perform Integrated Change Control

Approved change requests: All changes must be approved or

rejected
Approved changes are implemented through the Direct and
Manage Project Work process
The disposition of all change requests must be documented in
the change log
Change log: A written record of all change decisions and rationale

At any point in time: All change requests must be classified as to
disposition (approved, rejected, or pending)
4-45
Unit 4
Outputs from Perform Integrated Change Control


documents may require updates
Project plan updates would include:
Changes to any subsidiary plans (scope, schedule, cost,)
Changes to the baselines
Updates to other documents would include:
Change request log
4-46
Unit 4
Close Project or Phase: Introduction

Is part of the closing process group

Finalizes all activities across all process groups to formally
close a project or phase
Results in lessons learned and archiving of important records
4-47
Unit 4

Inputs
4-48
Tools
Outputs
Expert judgment
Final product, service, or result

transition
Accepted deliverables
OPA updates
OPA
Meetings
Unit 4
Close Project or Phase: Key Points

Review scope baseline to ensure all work has been completed

and project objectives have been met
Formalize acceptance of deliverables (sign-off)
Document circumstances if project is terminated before
completion; consult all appropriate stakeholders
Administrative aspects of closure:
Ensure exit criteria for phase or project have been met
Ensure product, service, or result has been transferred to next
phase, production, or operations
Collect and archive final records
Document lessons learned and final performance outcomes
4-49
Unit 4
Inputs to Close Project or Phase

Project management plan: The project plan is the agreement

between the PM and the sponsor about what constitutes completion.
Accepted deliverables: Deliverables that have been accepted as a

result of the Validate Scope process, Section 5.5.
Organizational Process Assets (OPA):

Guidelines for project or phase closure
Historical information and lessons learned
4-50
Unit 4
Tools for Close Project or Phase

Expert judgment: Experts ensure that closure is conducted using

correct standards
Analytical techniques:
Regression analysis
Trend analysis
Meetings:
User groups and review meetings
Lessons learned meetings
4-51
Unit 4
Outputs from Close Project or Phase

Final product, service, or result transfer: Transferring results to the

next step or phase
OPA updates. Record keeping of the following:

Project files: project management plan
Project or phase closure documents showing:
Completion of the project
Transfer of deliverables
Documentation if project terminated early
Historical information: lessons learned and historical data
4-52
Unit 4
Other Topics
(Reference Manual p. 4-20, PMBOK Guide No Reference)
Other Topics covers information known to be on the real exam

but not addressed by the PMBOK Guide:
Management by Objectives (MBO)
Project Evaluation
Customer Satisfaction
Roles and Responsibilities
4-53
Unit 4
Management by Objectives (MBO)

Created by Peter Drucker, MBO is a 3-step, collaborative

process for setting objectives.
1. Identify clear, realistic objectives
2. Measure progress toward meeting objectives
3. Take action or make adjustments if necessary
Workers and their managers jointly establish objectives

Objectives are considered to be clear if different parties agree
on the same meaning
MBO will be more successful if supported by top management
4-54
Unit 4
Project Evaluation
(Reference Manual pp. 4-20/21, PMBOK Guide No Reference)
Big picture look at the project usually conducted by outsiders

Mid-project evaluation is conducted during the project:
To determine whether the project is meeting its objectives and
whether those objectives are still relevant and worthwhile
Potential outcomes:
Identify problems
Implement changes
Terminate the project
4-55
Unit 4
Project Evaluation
Potential problems with mid-project evaluation:

Senior managers misusing evaluations to:
Find someone to blame or punish
Pursue political agendas
Project team may be hostile and uncooperative; may feel the
process is arbitrary and/or political
Evaluations can be time consuming
Post-project evaluation is conducted when the project is

complete:
Identify lessons learned and collect historical data
4-56
Unit 4
Customer Satisfaction
A primary determinant of customer satisfaction is whether:

An accurate needs assessment was done at the outset of the
project
If not, you might meet the triple constraint perfectly but deliver a
product the customer cannot or will not use
Requirements are devised from needs
Problem: The requirements are incorrect because they are
based on an inaccurate understanding of customer needs
4-57
Unit 4

Senior management:
Assign and empower project managers
Approve the project plan
Protect the project from attack by outsiders
Sponsor:
The source of funding for the project
Champion the project during initiation and thereafter
May lead project selection and development of initial
scope/charter
4-58
Unit 4

Project manager:
In charge of the project but not necessarily the resources
Plan and lead the project
Assign tasks to team members
Team members:
Help develop WBS
Provide estimates for their personal tasks
Perform their tasks
Resolve conflict directly without escalating as the first resort
4-59
Unit 4

In the reference manual, there is an item called Drill Practice:
It is the equivalent of a set of flash cards: question and
answer format
4-60
Unit 5
SCOPE MANAGEMENT
5-1
Unit 5
Scope Management Concept

Scope management ensures that a project includes all the

work required and only the work required to complete the
project successfully
Primary concern: defining and managing what is and is not
included in the project
Overview of 6 processes:
Plan Scope Management
Collect Requirements
Define Scope
Create WBS
Validate Scope
Control Scope
5-2
Unit 5
Scope Management: Key Points

Two kinds of scope:

Product scope: Features and functions of the product, service,
or result
Project scope: Management activities required to deliver the
product, service, or result
Scope baseline consists of the approved:

Scope statement
WBS
WBS dictionary
Note: the scope baseline should only be changed using formal
change control procedures!
5-3
Unit 5

Scope Management Processes
Other Topics
PMBOK Guide
Drill Practice
5-4
Unit 5
Overview of Scope Management Processes

5.1 Plan Scope Management (creating a scope management plan that

documents how project scope will be defined, validated, and controlled)
5.2 Collect Requirements (defining and documenting stakeholders

needs and requirements to meet project objectives)
5.3 Define Scope (developing a detailed description of the project and

product)
5.4 Create WBS (subdividing project deliverables into smaller, more

manageable components)
5.5 Validate Scope (formalizing acceptance of completed project

deliverables)
5.6 Control Scope (monitoring status of the project and product scope, and
managing changes to the scope baseline)
5-5
Unit 5

Process Groups
Knowledge
Areas
Initiating
Planning
Executing
Controlling
Closing
Integration
Scope
Plan scope mgmt
Validate scope
Collect requirements
Control scope
Define scope
Create WBS
Time
Cost
Quality
HR
Communication
Risk
Procurement
Stakeholder
5-6
Unit 5
Plan Scope Management: Introduction


Results in a scope management plan which:
Documents how project scope will be defined, validated, and
controlled
Plans the approach for accomplishing the remaining 5 processes:
Define scope
Create WBS
Validate scope
Control scope
5-7
Unit 5
Plan Scope Management

Inputs
Tools
Outputs
Expert judgment
Project charter
Meetings
EEF
OPA

5-8
Unit 5
Inputs to Plan Scope Management

Project management plan: Approved subsidiary plans may

influence the approach taken for planning and managing scope
Scope, schedule, cost
Quality, HR, communication
Risk, procurement, stakeholder
Project charter: Provides high-level project and product requirements

EEF/OPA: Factors that influence success, standard procedures,
templates, historical information, and lessons learned
5-9
Unit 5
Tools for Plan Scope Management

Expert judgment:
Expertise provided by parties knowledgeable about scope
management plans
Meetings:
Selected stakeholders who attend meetings to develop the scope
management plan
5-10
Unit 5
Outputs from Plan Scope Management

Scope management plan: Describes how scope will be defined,

monitored, validated, and controlled. Includes:
Process for preparing a scope statement
Process for creating and maintaining the WBS
Process for formal acceptance of deliverables
Process for managing scope changes
5-11
Unit 5
Outputs from Plan Scope Management

Requirements management plan: Describes how requirements

will be analyzed, documented, and managed. Includes:
How requirements will be planned, tracked, and reported
How changes to requirements will be handled
Requirements prioritization processes
Product metrics
Traceability structure
5-12
Unit 5
Collect Requirements: Introduction


Determines, documents, and manages stakeholders needs and
requirements
Project success is directly influenced by stakeholder
involvement in decomposing needs into requirements
Requirements form the basis for:
Developing the WBS
Schedule, cost, quality, and procurement plans
5-13
Unit 5
Inputs
Tools
Outputs
Interviews
Requirements
documentation
Focus groups
Requirements traceability
matrix
Facilitated workshops
Project charter
Group creativity techniques
Stakeholder register
Group decision-making techniques

Questionnaires and surveys
Observations
Prototypes
Benchmarking
Context diagrams
Document analysis
5-14
Unit 5
Collect Requirements: Key Points

(Reference Manual pp. 5-3 & 4 PMBOK Guide pp. 110-112)
Requirements include the documented needs and expectations

of the sponsor, customer, and other stakeholders
Requirements must be recorded in enough detail to be
measured during project execution
Development of requirements begins with analysis of
information contained in the:
Project charter
5-15
Unit 5
Collect Requirements: Key Points

Requirements may be classified as follows:

Business: Higher-level needs of the organization; business
opportunities; purpose of the project
Stakeholder: Perceived needs of a stakeholder or group
Solution: Features, functions, and characteristics of the product,
service, or result
Transition: Training and data conversion needed to switch from
the old (as-is) state to the new (to-be) state
Quality: Criteria needed to validate successful completion of
project deliverables
Project: Conditions the project needs to meet
5-16
Unit 5
Inputs to Collect Requirements

Scope management plan: Clarifies which types of requirements

need to be collected
Requirements management plan: Identifies the processes to be

used in defining stakeholder needs
Stakeholder management plan: Identifies required levels of

stakeholder involvement
Project charter: Identifies high-level project and product

requirements
Stakeholder register: Identifies key stakeholders who can provide

information on requirements
5-17
Unit 5
Tools for Collect Requirements

(Reference Manual pp. 5-6 to 5-8, PMBOK Guide pp. 114-117)
Interviews: Used to identify features and functions of desired product

deliverables
May also be used to obtain confidential information
Focus groups:
Interactive discussions guided by trained moderators
Purpose: document stakeholder expectations about a proposed
product, service, or result
Facilitated workshops:
Interactive discussions for defining cross-functional requirements
Purpose: build trust, improve communications, and uncover
issues
5-18
Unit 5

Group creativity techniques: Ways for a group to generate ideas

Brainstorming and nominal group technique
See reference manual (pp. 5-6 & 7) for other examples and
descriptions
Group decision-making techniques:

Unanimity: requires 100% agreement
Majority: requires greater than 50% agreement
Plurality: decision by agreement of the largest voting block

Dictatorship: decision made by one individual
5-19
Unit 5

Questionnaires and surveys. A written set of questions used for:

Reaching large audiences quickly
Enabling statistical analysis
Observations (also called job shadowing):

Discreetly observing someone doing their job
Assists people who cannot articulate requirements without help
Prototypes. Mock-ups and working models to:

Assist progressive elaboration of requirements
Allows stakeholders to interact and experiment with a model
Iterative cycles improves development of requirements
5-20
Unit 5

Benchmarking: Compares planned or actual practices to other

organizations
Generates ideas for improvement
Provides new standards for measuring performance
Context diagrams: Visual depictions of product scope
Shows how people interact with the new product or system
Document analysis: May provide insights into requirements

Business plans and marketing literature
RFPs (Requests for Proposals), laws, ordinances
Business processes
5-21
Unit 5
Outputs from Collect Requirements

Requirements documentation: Describes how requirements meet

business needs
Requirements start as high-level information and become
progressively more detailed (elaborated)
Every requirement should link to a business need
Requirements should be measureable, testable, traceable,
complete, consistent, and acceptable to stakeholders
Possible categories:
Business, stakeholder, solution
Transition, quality, project
5-22
Unit 5
Outputs from Collect Requirements

Requirements traceability matrix: A table that links requirements to

business needs
Uses of the matrix:
Provides tracking of requirements during the project
Helps in checking that requirements have been met (project
closure)
Helps track changes to requirements
Shows decomposition of high-level requirements into the
more detailed requirements
5-23
Unit 5
Define Scope: Introduction


Produces a written, detailed scope statement
The scope statement:
Is an agreement between the project team and the customer
Defines which requirements will be included or excluded from the
project scope
5-24
Unit 5
Define Scope
Inputs
5-25
Tools
Outputs
Expert judgment
Project scope statement
Project charter
Product analysis
Requirements
documentation
Alternatives generation
OPA
Facilitated workshops
Unit 5
Define Scope: Key Points

The level of uncertainty in defining project scope is greater for

more complex projects
The Define Scope process selects:
Which requirements from the Collect Requirements process will
actually be included in the final, approved project scope
Approves a detailed description of the project and product,
service, or result
Existing assumptions, constraints, and risks are checked for

completeness and updated if necessary
5-26
Unit 5
Inputs to Define Scope

Scope management plan: Establishes how project scope will be

developed, monitored, and controlled
Project charter: Provides a high-level description of the project and

product
Requirements documentation:
This list of desired requirements was an output of the Collect
Requirements process
Final, approved requirements are selected from this list
OPA: Procedures, templates, historical files, and lessons learned
5-27
Unit 5
Tools for Define Scope

Expert judgment: Expertise related to technical details

Product analysis: Helpful when creating a product instead of a
service or other result
Uses techniques to develop measureable deliverables and
requirements
Examples: Product breakdown, requirements analysis, systems
engineering, value engineering, and value analysis
Alternatives generation: Techniques to identify potential options

Brainstorming
Lateral thinking
Analysis of alternatives
5-28
Unit 5
Tools for Define Scope

Facilitated workshops:
Was also a tool of Collect Requirements
Guided interactive discussions to:
Develop cross-functional requirements
Develop common understanding of objectives and any
issues
5-29
Unit 5
Outputs from Define Scope

Project scope statement: A detailed description of project

deliverables and the work required to create them
Provides common understanding of scope
Describes major objectives
Supports subsequent detailed planning
Guides execution and future decisions
Provides a baseline
5-30
Unit 5

Project scope statement (continued). Typical contents of the scope

statement include:
Product description: Characteristics of the product, service, or
result. May evolve through stages of progressive elaboration.
Acceptance criteria: Conditions required for acceptance of
deliverables
Deliverables: Unique products, results, or capabilities that must
be delivered
5-31
Unit 5

Project scope statement (continued). Other typical contents of the

scope statement include:
Exclusions: Explicit list of items considered out of scope
(manages stakeholders expectations)
Constraints: Limiting factors or restrictions imposed on the
project team by other stakeholders
Predefined budget
Imposed date or milestone
Assumptions: Factors believed to be true for planning
Should be documented in writing
May pose a risk
5-32
Unit 5

Project documents updates:

Requirements documentation
Requirements traceability matrix
5-33
Unit 5
Create WBS: Introduction


Subdivides project deliverables into smaller, more manageable
components
Provides a structured vision of what has to be delivered
5-34
Unit 5
Create WBS
Inputs
Tools
Outputs
Decomposition
Scope baseline
Expert judgment
EEF
OPA
5-35
Unit 5
Create WBS: Key Points

Organizes and defines the total scope of the project

Work not in the WBS is outside the scope of the project
When subdividing (decomposing) work, tasks at the lowest level
of the WBS are called work packages
Work packages:
The level PMI considers adequate for scheduling, cost
estimating, monitoring, and controlling the work
Accurate work packages = Accurate project planning
5-36
Unit 5
Create WBS: Key Points

A WBS dictionary contains a detailed description for each work

package
A code of accounts provides a unique numerical identifier for
each work package
An OBS (organizational breakdown structure) maps work
assignments from organizational units to the WBS
A key benefit of accurate decomposition:
Carefully thinking through all required work
Less likely to forget tasks (therefore schedule and cost estimates
are more likely to be accurate)
5-37
Unit 5
Inputs to Create WBS

Scope management plan: Specifies how to create the WBS

Project scope statement: Identifies deliverables which must be
accomplished
Requirements documentation: Detailed requirements that describe

work that must be done to complete the project
EEF: Industry-specific WBS standards and templates are sometimes

available
OPA:
Policies, procedures, and templates
Historical files
Lessons learned
5-38
Unit 5
Tools for Create WBS

(Reference Manual p. 5-13 & 14, PMBOK Guide p. 128)
Decomposition: Breaking the work into smaller , more manageable

elements
The work package is the desired level of detail
Decomposition improves ability to plan, manage, and control the
work
Excessive decomposition may lead to non-productive tracking
and reporting of minute details (micro-management)
Expert judgment: Technical knowledge of the work helps with

decisions about decomposition
5-39
Unit 5
Outputs from Create WBS

Scope baseline: Includes scope statement, WBS, and WBS

dictionary
Scope statement: Already produced from Define Scope;
identifies major deliverables
WBS. Decomposition of total scope and includes:
Work packages: Lowest level of detail displayed and the
level at which individual responsibility is assigned
Control accounts: Contain one or more work packages;
lowest level at which organizational responsibility is assigned
Planning packages: Used in place of work packages for
planning future work in less detail
Code of accounts: Provides a WBS numbering system
5-40
Unit 5

Scope baseline: Includes scope statement, WBS, and WBS

dictionary
WBS dictionary. A companion document to the WBS and
contains:
Description of the work and technical requirements
Responsible resources and deliverables
Estimated costs and durations; list of milestones
Predecessor activities for sequencing
Code of accounts numbers for each work package
Acceptance criteria
5-41
Unit 5

Project Documents Updates:

Approved change requests may require updates to the
requirements documentation
5-42
Unit 5
ADDITIONAL WBS INFORMATION

The next five slides elaborate on the topic of the WBS
Topics covered include:
PMI historical concepts and catch-phrases
Uses of the WBS
Visual depictions of decomposition
Code of accounts
5-43
Unit 5
WBS: Identifying the Work

5-44
Unit 5
Uses of the WBS

5-45
Unit 5
WBS: Scope Decomposition

5-46
Unit 5
WBS Decomposition
5-47
Unit 5
WBS Code of Accounts

5-48
Unit 5
Validate Scope: Introduction


Obtaining formal acceptance of project deliverables by
stakeholders
Reviewing work results to determine whether work was
completed correctly
5-49
Unit 5
Validate Scope
Inputs
Tools
Outputs
Inspection
Accepted deliverables
Group decisionmaking techniques
Change requests
matrix
Work performance information
Verified deliverables
5-50
Unit 5
Validate Scope: Key Points

If a project is terminated early, validation must document the

extent of the work actually completed
Scope validation differs from quality control (QC):
Validation is primarily about acceptance
QC is primarily about correctness of the work
Control Quality is generally performed before Validate Scope

but the processes may overlap somewhat
5-51
Unit 5
Inputs to Validate Scope

Project management plan: Contains the scope baseline which

identifies all the work that must be performed
Scope management plan: How acceptance will be obtained
Scope baseline: Scope statement (product description and
acceptance criteria) and WBS (deliverables that must be accepted)
Requirements documentation: Lists all requirements and

acceptance criteria
Requirements traceability matrix: Links requirements to their

business need and tracks them
5-52
Unit 5
Inputs to Validate Scope

Verified deliverables: Work that has been completed and checked

for correctness as part of Control Quality
Work performance data. Collects the following:

Degree of compliance
Number of nonconformities
Severity of the nonconformities
5-53
Unit 5
Tools for Validate Scope

Inspection: Determining whether work results conform to

requirements
Involves measuring, examining, and validating
Other names for inspection: reviews, product reviews, audits, and
walkthroughs
Group decision-making techniques. Provides four voting methods

for reaching validation decisions:
Unanimity
Majority
Plurality
Dictatorship
5-54
Unit 5
Outputs from Validate Scope

Accepted deliverables:
Deliverables that met the acceptance criteria and have been
formally signed off
This formal documentation is forwarded to the Close Project or
Phase process
Change requests: Deliverables not accepted may require a change

request for defect repair
5-55
Unit 5
Outputs from Validate Scope

(Reference Manual p. 5-17, PMBOK Guide pp. 136)
Work performance information:

Identifies which tasks have started and actual progress
Identifies which tasks have finished and been formally accepted

Any documents that describe the product
Any documents that report actual status of the work
5-56
Unit 5
Control Scope: Introduction


Monitors the status of project and product scope by tracking
variances
Also manages changes to the scope baseline by:
Following integrated change control guidelines
Ensuring proper documentation, tracking, and approval levels
Always evaluating every change request; never automatically
accept or refuse a change!
5-57
Unit 5
Control Scope
Inputs
5-58
Tools
Variance analysis
Outputs
Change requests
matrix

updates
OPA
OPA updates
Unit 5
Control Scope: Key Points

PMI states: Change is inevitable and a change control process

is mandatory for all projects
The integrated change control process is the master plan for
handling all changes and provides for:
Review of all change requests
Recommended preventive or corrective actions and defect
repairs
Successful control of scope changes prevents the uncontrolled

expansion of project scope known as scope creep
5-59
Unit 5
Inputs to Control Scope

Project management plan. The following elements of the project

plan assist in controlling scope:
Scope baseline: The current baseline is compared to actual results to
determine if changes are needed
Scope management plan: Directions on how scope will be

monitored and controlled
Change management plan: Defines the process for managing

changes; Is part of the configuration management system
Configuration management plan: Defines items that require formal

change control and the process for controlling those changes
Requirements management plan: Describes how requirements will

be analyzed, documented, and managed
Requirements documentation: Requirements should be

measureable, testable, traceable, complete, consistent, and
acceptable to stakeholders
5-60
Unit 5
Inputs to Control Scope

Requirements traceability matrix: Useful in understanding the

potential effect of requirements changes upon business needs
Work performance data. Tracks the following:

Number of change requests received
Number of change requests accepted
Number of deliverables completed
OPA:
Procedures, policies, and guidelines
Monitoring and reporting methods
5-61
Unit 5
Tools for Control Scope

Variance analysis:
Assesses the magnitude of variations from the scope baseline
Determines whether corrective action is necessary
5-62
Unit 5
Outputs from Control Scope

Work performance information: Tracking of:

Scope variances and scope changes
Forecasts of future scope outcomes
Change requests: Requested scope changes should be processed

using integrated change control
Change requests are often the result of:
External event such as a regulatory change
Error in defining scope (left something out)
Value adding change (value analysis or value engineering)
5-63
Unit 5
Outputs from Control Scope

Project Management Plan Updates: Approved changes may

require updates to the scope, schedule, or cost baselines
Project Documents Updates: Includes possible updates to the

requirements documentation or requirements traceability matrix
OPA Updates. Updates to the historical knowledge base:

Causes of variances
Corrective actions employed
Any other lessons learned
5-64
Unit 5
Other Topics

There are no Other Topics in this Unit!
5-65
Unit 5
5-66
Unit 6
TIME MANAGEMENT
6-1
Unit 6
Time Management Concept

Time management includes the processes for managing timely

completion of the project
Plan Schedule Management
Define Activities
Sequence Activities
Estimate Activity Resources
Estimate Activity Durations
Develop Schedule
Control Schedule
6-2
Unit 6
Time Management: Key Points

A schedule model is a representation of the plan for executing

project activities and includes:
Durations and dependencies
Other planning information (e.g. resources)
Schedule data are the detailed information contained in the

schedule model
The schedule baseline is the approved version of a schedule
model and is the basis for comparing actual results
You must know how to evaluate a schedule: forward and
backward pass, float, critical path, schedule compression, etc.
6-3
Unit 6

Time Management Processes
Other Topics
PMBOK Guide.
Drill Practice
Self-Study Network Diagrams
6-4
Unit 6
Overview of Time Management Processes

6.1 Plan Schedule Management (establishing procedures for planning,

developing, managing, executing, and controlling the schedule)
6.2 Define Activities (identifying specific activities to be accomplished)

6.3 Sequence Activities (identifying and documenting relationships
among activities, i.e., dependencies)
6.4 Estimate Activity Resources (estimating type and quantity of

resources needed)
6.5 Estimate Activity Durations (approximating the number of work

periods to complete individual activities with estimated resources)
6.6 Develop Schedule (analyzing sequences, resource requirements,

durations, and schedule constraints to create the schedule)
6.7 Control Schedule (monitoring the status of the project and managing
changes to the schedule baseline)
6-5
Unit 6

Process Groups
Knowledge
Areas
Initiating
Planning
Executing
Controlling
Closing
Integration
Scope
Time
Plan schedule mgmt

Define activities
Sequence activities
Estimate resources
Estimate durations
Develop schedule
Control schedule
Cost
Quality
HR
Communication
Risk
Procurement
Stakeholder
6-6
Unit 6
Plan Schedule Management: Introduction


Results in a schedule management plan which:
Documents how the schedule will be planned, developed,
managed, executed, and controlled
Define activities
Sequence activities
Estimate activity resources
Estimate activity durations
Develop schedule
Control schedule
6-7
Unit 6
Plan Schedule Management

Inputs
Tools
Expert judgment
Project charter
EEF
Meetings
Outputs
OPA

6-8
Unit 6
Inputs to Plan Schedule Management

Project management plan: Contains the following
Scope baseline: The scope statement and WBS may be used for
defining activities, estimating durations, and managing the schedule
Other information: Cost and risk information that may affect the
schedule
Project charter: Provides a high-level, summary milestone schedule

6-9
Unit 6
Tools for Plan Schedule Management

Expert judgment:
Applying expert judgment combined with historical information to
select appropriate scheduling methods
Analytical techniques: Assessing

Appropriate scheduling methods
Whether to use project management software
Whether to employ fast tracking and/or crashing
Meetings:
Selected stakeholders who attend meetings to develop the
schedule management plan
6-10
Unit 6
Outputs from Plan Schedule Management

Schedule management plan: Describes how the schedule will be

developed, monitored, and controlled. Includes
Schedule model: Chooses scheduling method
Acceptable accuracy: For duration estimates
Units of measure: How to track time (hours, days, ) or
materials (liters, tons, )
Schedule maintenance: How to update schedule status
Control thresholds: How much schedule variance is normal vs.
when do you need corrective action
Performance measurement: Rules for partially completed tasks
when doing a status report
Reporting formats: Formats and frequency for reporting
6-11
Unit 6
Define Activities: Introduction


Identifies and documents specific activities that must be
accomplished to complete the project
Activities are decomposed to the work package level
Work packages are the lowest level displayed in the WBS
However, work packages may be decomposed into smaller
components called activities:
Activities represent the more discrete work effort to accomplish
deliverables within a work package
6-12
Unit 6
Define Activities
Inputs
Tools
Outputs
Decomposition
Activity list
Scope baseline
Rolling wave planning
Activity attributes
EEF
Expert judgment
Milestone list
OPA
6-13
Unit 6
Inputs to Define Activities

Schedule management plan: Prescribes the level of detail needed

to manage the work
Scope baseline: Contains the WBS and its deliverables; also

provides constraints and assumptions from the scope statement
EEF: Organizational culture, commercially available databases, and

project management information system
OPA: Activity lists from previous projects, lessons learned, standard

scheduling processes
6-14
Unit 6
Tools for Define Activities

(Reference Manual pp. 6-4 and 5, PMBOK Guide p. 151)
Decomposition: As with the WBS, breaking work into smaller

components
Work packages are decomposed into the activities needed to
produce individual deliverables
Involving the team leads to more accurate results
Rolling wave planning: Using progressive elaboration

Work in the near term: Planned in detail using work packages
Work farther in the future: Planned with less detail and less
accuracy using planning packages
Expert judgment: Using experts to ensure the activity list is accurate
6-15
Unit 6
Outputs from Define Activities

Activity list: A comprehensive list of all activities, even those below

the work package level
Should include a description of the work
May also include an activity title and code of accounts number
Activity attributes: Similar to the WBS dictionary, includes details for

each activity
Activity ID, WBS ID, activity title, activity description
Predecessor and successor activities, type of dependency
Leads and lags, resource requirements
Imposed dates, constraints, assumptions
Assigned resources, geographical location
6-16
Unit 6
Outputs from Define Activities

Milestone list: A list of important points in time when work should

have started or finished
Milestones have zero duration
Tracking of specified milestones may be requested by any
stakeholder
A milestone chart is an excellent way to display a high-level
schedule to customers and/or management
6-17
Unit 6
Sequence Activities: Introduction


Identifies and documents interactivity dependencies
Dependencies are also called logical relationships
Shows the logical sequence for performing the work:
Some work is planned sequentially: Task 1 and then Task 2
Parts of the work may be done in parallel (fast tracking)
6-18
Unit 6
Sequence Activities
Inputs
Tools
Outputs
Precedence diagramming
method (PDM)
Project schedule network

diagrams
Activity list
Dependency determination
Activity attributes
Leads and lags
Milestone list
EEF
OPA
6-19
Unit 6
Sequence Activities: Key Points

(Reference Manual p. 6-6 and 6-9 PMBOK Guide pp. 120-121)
Except for the first and last, all activities must have a
predecessor and a successor No hanging tasks!
Leads and lags may be incorporated to make the schedule
more realistic
Sequencing may be done manually or with software
6-20
Unit 6
Inputs to Sequence Activities

Schedule management plan: Identifies the intended scheduling

method
Activity list: Identifies all activities that must be sequenced

Activity attributes: Includes predecessors and successors for each
activity
Milestone list: Milestones must also be sequenced and may have

imposed dates in some instances
Project scope statement: Describes product characteristics which

may indicate that certain dependencies would be mandatory
EEF: Industry standards, information system, scheduling tool

OPA: Historical files and scheduling templates
6-21
Unit 6
Tools for Sequence Activities

Precedence diagramming method (PDM): A method for displaying

a schedule as a network diagram
Also called activity-on-node; was developed in the 1960s at
Stanford University
Activity listed inside boxes (nodes) and connected with lines or
arrows to show sequencing
Design
Test
Produce
Uses four types of dependencies (next slide)
6-22
Unit 6
Tools for Sequence Activities

PDM continued:
Four types of dependencies:
Finish-to-Start: Start of the successor depends on finish of the
predecessor
Start-to-Start: Start of the successor depends on start of the

predecessor
Finish-to-Finish: Finish of the successor depends on finish of

the predecessor
Start-to-Finish: Finish of the successor depends on start of the

predecessor
Note: The next four slides show visual examples
6-23
Unit 6
PDM: Finish-to-Start
6-24
Unit 6
PDM: Start-to-Start
6-25
Unit 6
PDM: Finish-to-Finish
6-26
Unit 6
PDM: Start-to-Finish
6-27
Unit 6
Advantages of PDM
Flexibility in sequencing:
Can choose from four types of dependencies
Arrow diagrams were limited to one type (Finish-to-Start)
Does not require dummy activities

Added the concept of lag and lead times
6-28
Unit 6
Tools for Sequence Activities (continued)

(Reference Manual p. 6-8, PMBOK Guide pp. 157-159
)
Dependency determination:
Mandatory: Hard logic involving work with physical limitations
such that the work must be done in sequence
Discretionary: Soft logic or preferential logic in which there is
more than one possible sequence
External: Work performed outside the project team; outside the
direct control of the team
Internal: Work within the direct control of the team
Leads and lags: Adjusts the timing of the work

Lead: Allows the successor activity to be accelerated
Lag: Delays the successor activity
6-29
Unit 6
Outputs from Sequence Activities

Project schedule network diagrams: A schematic display of project

activities
The display shows logical dependencies
PDM is the most common display method
Arrow diagrams were removed from the PMBOK Guide but have
still appeared on the exam

Activity lists and attributes
Milestone list and risk register
6-30
Unit 6
PDMs and Network Diagrams: Additional Information

The next series of slides elaborates on the topics of PDM

displays and network diagrams
Arrow diagrams (ADM: Arrow Diagram Method)
PDM basics
PDM: Forward pass, backward pass, float, critical path
PDM: Free float, most float, least float
Leads and lags
Sample diagram with multiple types of dependencies
6-31
Unit 6
Arrow Diagrams with Multiple Dependencies

6-32
Unit 6
Arrow Diagrams with Multiple Dependencies

6-33
Unit 6
PDM Does Not Require Dummy Task

6-34
Unit 6
Scheduling Using PDM Approach

6-35
Unit 6
PDM: Forward Pass

6-36
Unit 6
PDM: Backward Pass

6-37
Unit 6
PDM: Calculating Float and Marking Critical Path

6-38
Unit 6
PDM: Effect of an Additional Dependency (C-E)

6-39
Unit 6
Sample Questions on Float

6-40
Unit 6
Float Calculation Continued

6-41
Unit 6
Float Depicted on a Numerical Scale

6-42
Unit 6
Leads and Lags: A Tool of Sequence Activities

6-43
Unit 6
Sample Network: Finish-to-Finish, Start-to-Start, Lag

6-44
Unit 6
Sample Network: Finish-to-Finish, Start-to-Start, Lag

6-45
Unit 6
Scheduling Definitions
(Reference Manual pp. 6-7 to 6-9, PMBOK Guide Glossary pp. 526-567)
6-46
Unit 6
Estimate Activity Resources: Introduction


Determines what resources will be needed:
People
Equipment
Materials
Facilities
Resource estimates also apply to cost estimating
6-47
Unit 6
Estimate Activity Resources

Inputs
Tools
Outputs
Expert judgment
Activity resource requirements
Activity list
Alternative analysis
Resource breakdown structure

(RBS)
Activity attributes
Published estimating
data
Resource calendars
Bottom-up estimating
Risk register
Project management
software
Activity cost estimates

EEF
OPA
6-48
Unit 6
Inputs to Estimate Activity Resources

Schedule management plan: Specifies desired level of accuracy

and units of measure for resources needed
Activity list: Identifies activities which will require resources

Activity attributes: Developed previously for Define Activities; this is
primary data for estimating resources
Resource calendars: Identifies the typical working schedule for the

organization and addresses the following
Time periods in which a given resource is available
Experience level or capability of a resource
Geographical location of a given resource
6-49
Unit 6
Inputs to Estimate Activity Resources

Risk register: Risk events may affect resource availability, i.e., a

union contract may be up for renewal
Activity cost estimates: Some resources may be more expensive;

relative cost may affect resource selection
EEF: Resource infrastructure currently available in-house

OPA:
Staffing policies
Procedures for purchasing supplies and equipment
Historical information about resource usage on similar projects
6-50
Unit 6
Tools for Estimate Activity Resources

Expert judgment: Experts who help judge the completeness and

accuracy of resource estimates
Alternative analysis: Required resources may be affected by the

various alternative methods of doing the work
Published estimating data: Some organizations publish data on

cost of resources and typical durations for performing work
Bottom-Up estimating: Decomposing work into smaller components

if resource estimating proves difficult at the higher level
Project management software: Organizing resource data by

defining
Resource availability and labor rates
Resource calendars and resource breakdown structures (RBS)
6-51
Unit 6
Outputs from Estimate Activity Resources

Activity resource requirements: Type and quantity of resources

needed for each activity. Should include
Basis of the estimate (method used)
Any assumptions
Resource availability and quantity needed
Resource breakdown structure (RBS): Tracks work assignments

for specific individuals
Determines whether a resource is available when needed
The RBS tracks time periods in which a resource already has
task assignments
6-52
Unit 6
Outputs from Estimate Activity Resources


Activity list and attributes
Resource calendars
6-53
Unit 6
Estimate Activity Durations: Introduction


Assessing the number of work periods needed to complete an
activity
Accurate duration estimating supports the development of a
realistic schedule
6-54
Unit 6
Estimate Activity Durations

Inputs
Tools
Outputs
Expert judgment
Activity duration estimates
Activity list
Analogous estimating
Activity attributes
Parametric estimating
Three-point estimating
Resource calendars
Group decision-making
techniques
Reserve analysis
Risk register
EEF
OPA
6-55
Unit 6
Estimate Activity Durations: Key Points

Duration estimates should be:

Progressively elaborated (become more accurate as the project
progresses)
Adjusted for elapsed time: Addresses whether weekends are
official work periods
Duration estimates should consider the difference between

effort and duration:
Effort: If three people work ten hours each on a task, you must
pay for 30 hours of work. Effort affects cost estimating.
Duration: If those three people are working simultaneously, the
duration of the task would be ten hours. Duration affects
schedules.
6-56
Unit 6
Inputs to Estimate Activity Durations

Schedule management plan: Defines the estimating method and

desired level of accuracy
Activity list: Durations must be estimated for each activity

Activity attributes: Developed previously and provides data to assist
in estimating durations
Activity resource requirements: Durations are clearly affected by

the number of resources assigned
Resource calendars: Identify the availability and capability of all

required resources
6-57
Unit 6

Project scope statement: Documents constraints and assumptions

that may affect durations
Constraint: A stakeholder may have imposed a deadline for a key
task
Assumption: You may plan on the assumption that the new union
contract will be signed and resources will be available on time
Risk register: Provides a list of known risk events

RBS: Identifies resources by category (labor, materials, )
6-58
Unit 6

EEF:
Duration estimating databases
Productivity metrics
Published commercial information
OPA:
Project calendars
Scheduling methodology
6-59
Unit 6
Tools for Estimate Activity Durations

Expert judgment: The use of expert judgment guided by historical

information
Analogous estimating: A form of top-down estimating

Uses actual durations from similar activities
Adjusts for differences in size, complexity, and risk
Done early in the project life cycle (initiating)
Not costly to develop but also less accurate
Parametric estimating: Uses historical data

Example: you might discover that a drawing historically takes 10
hours
Then you only need to know how many drawings are needed
6-60
Unit 6

Three-point estimating: Improves accuracy by considering risk

Uses three estimates and calculates an average
Optimistic: The best-case outcome
Most Likely: The most likely outcome
Pessimistic: The worst-case outcome
Three-point is similar to PERT; comparisons are covered later
Group decision-making techniques: PMI believes teams can

produce more accurate estimates; teaming also leads to increased
commitment to the results
6-61
Unit 6

Reserve analysis: Reserves are added to duration estimates to

account for risk
Contingency reserve:
Extra time allocated within the schedule baseline
Associated with known-unknowns
Certain work packages are known to be risky
Management reserve:
Extra time withheld from the schedule baseline
Associated with unknown-unknowns
Difficult to predict which work will be affected by the risk
event
6-62
Unit 6
Outputs from Estimate Activity Durations

Activity duration estimates: Number of work periods needed to

complete activities and, by extension, the project
PMI recommends that duration estimates include a range of
possible results
Estimates with wider ranges indicate work with inherently more
risk (the results are less predictable or stable)

Activity attributes
Assumptions associated with durations
6-63
Unit 6
Develop Schedule: Introduction


Builds upon previous processes to produce a project schedule
The approved schedule becomes the schedule baseline:
The baseline is used to track actual progress and calculate
schedule variances
6-64
Unit 6
Develop Schedule
Inputs
Tools
Outputs
Schedule network analysis
Schedule baseline
Activity list
Critical path method
Project schedule
Activity attributes
Critical chain method
Schedule data
Project schedule network diagrams
Resource optimization
techniques
Project calendars
Modeling techniques

updates
Resource calendars
Leads and lags
Schedule compression
Scheduling tool
Risk register
Project staff assignments
EEF
OPA
6-65
Unit 6
Develop Schedule: Key Points

A schedule exists when every activity has a planned start and

finish
Once approved, a schedule becomes a baseline:
Resource availability to support the planned schedule must be
verified
The schedule baseline is used to track variances and may only
be changed using the integrated change control process
6-66
Unit 6
Inputs to Develop Schedule

Schedule management plan: Identifies the scheduling method

Critical path method or critical chain method or simulation
Activity list: Identifies each activity that must be scheduled

Activity attributes: Provides the details for each activity
Project schedule network diagrams: Shows the intended
sequencing
Activity resource requirements: Identifies types and quantities of

resources needed
Resource calendars: Availability and capability of resources

6-67
Unit 6

Activity duration estimates: The number of work periods needed to

complete activities
Project scope statement: Documents any constraints or

assumptions that may affect the schedule, e.g.
Dates imposed by the customer, upper management, or other
stakeholders
Key events that have been promised or demanded by a certain
date
Risk register: Risk events that may affect the schedule
6-68
Unit 6

Project staff assignments: Documents which resources have been

assigned to each activity
Resource breakdown structure: Documents how resource

availability is affecting the schedule
EEF:
Communication channels and standards
Scheduling tool to be used
OPA:
Scheduling methodology
Project calendar
6-69
Unit 6
Tools for Develop Schedule

Schedule network analysis: Choosing from various scheduling

techniques
What-if analysis (simulation)
Resource optimization (resource leveling and smoothing)
6-70
Unit 6

Critical path method (CPM): Estimates the minimum required

project duration and determines the amount of scheduling flexibility
Uses forward and backward pass to determine early and late
times
Calculates available float or slack (schedule flexibility)
Determines the critical path
Longest path (shows shortest possible duration)
Path with zero float
Path with least float available
Negative float on critical path indicates: Behind schedule
Positive float on critical path indicates: Ahead of schedule
6-71
Unit 6

Critical path method (CPM): Additional key points about the

critical path
Multiple critical paths may exist; would make the schedule more
risky
A near-critical path exists when the duration of a path is almost
as long
Near-critical paths must also be monitored carefully
Subsequent slides will compare CPM and PERT
6-72
Unit 6

Critical chain method: Manages the schedule by monitoring duration

buffers instead of float and the critical path
Determine the critical path
Apply resource limitations
The resource-constrained critical path is known as the critical
chain
Schedule all activities to late start (what happened to float?)
Apply duration buffers to account for limited resources and
uncertainty with the work
The size of the buffer reflects the uncertainty for that sequence of
activities
6-73
Unit 6

Resource optimization: Adjusting the schedule when resource

demand does not match resource supply
Resource leveling: Used when supply of resources is
inadequate
When there are not enough resources for the work
scheduled, move tasks with available positive float
Tends to result in a longer project duration than planned
Resource smoothing: Adjusting start times to ensure that
resource usage does not exceed pre-defined limits
You must operate within available float
The critical path is not allowed to change
It may not be possible to optimize all resources
6-74
Unit 6

Modeling techniques: Two related, classic techniques follow

What-If Scenario Analysis:
Compares the potential effect of differing project conditions
(e.g., hurricane, labor strike, blizzard, etc.)
Helps with risk assessment and evaluating feasibility of the
planned schedule
Often used in conjunction with simulations
Simulation:
Calculates numerous potential project durations with
associated probabilities
Again, helps with risk assessment and feasibility
Uses software programs such as Risk+, Crystal Ball, etc.
6-75
Unit 6

Leads and lags: Used to adjust the timing of the work to account for
delays or accelerations
Schedule compression: Ways to shorten the schedule

Crashing:
Adds resources to critical path activities to shorten durations;
raises project costs
Fast tracking:
Doing more activities in parallel; increases risk of
overlapping (conflicting) resource assignments
Scheduling tool: The use of automated scheduling tools

Makes it easier to produce a schedule and track changes
6-76
Unit 6
Tools for Develop Schedule: Additional Information

The next series of slides elaborates on the tools involved in

developing the schedule
Comparison of three-point estimates, CPM, and PERT
Crashing
Fast-tracking
6-77
Unit 6
Three-Point vs. PERT Estimates

6-78
Unit 6
CPM vs. PERT vs. Three-Point

6-79
Unit 6
CPM vs. PERT

6-80
Unit 6
Schedule Compression: Crashing vs. Fast Tracking

6-81
Unit 6
Exercise: Crashing the Project

6-82
Unit 6

Find critical path and lowest cost crashable tasks!
6-83
Unit 6

Find cheapest way to reduce the longest path!
6-84
Unit 6

Ensure no path exceeds the new goal of 5 days!
6-85
Unit 6
Outputs from Develop Schedule

Schedule baseline: The approved schedule becomes the baseline

Actual performance is measured against the baseline
The baseline should only be changed using formal change
control procedures
6-86
Unit 6

(Reference Manual pp. 6-20 &21, PMBOK Guide p. 182)
Project schedule: The schedule may be presented in several ways

Project schedule network diagrams: Is the best display to see
dependencies and the critical path
Gantt charts (referred to as bar charts by PMI): Easy to read and
preferred as a presentation method
Best display to see progress and variances
A summary level view may use hammock activities
Milestone charts: A milestone is an important event with zero
duration
An excellent way to communicate high-level schedule status
to customers and upper management
6-87
Unit 6

Schedule data: Detailed data that support the schedule

Activities and attributes, milestones, assumptions, constraints
Resource requirements
Alternative schedules
Contingency reserves for risk
Project calendars: The working calendar for the project

The default calendar in most software is Monday to Friday, 8 am
to 5 pm
6-88
Unit 6

Project Management Plan Updates:

Schedule baseline

Activity attributes (resources, durations, risks, etc.)
Project calendar
Risk register
6-89
Unit 6
Control Schedule: Introduction


Involves monitoring schedule status (variances) and managing
schedule changes
Again, the schedule baseline may only be changed using the
Perform Integrated Change Control process
Control Schedule supports the Integrated Change Control
process by:
Determining the current status of the schedule
Influencing factors that create schedule changes
Determining that schedule changes have occurred
Managing those schedule changes
6-90
Unit 6
Control Schedule
Inputs
Tools
Outputs
Performance reviews
Project schedule
Project management
software
Schedule forecasts
Resource optimization
techniques
Change requests
Project calendars
Modeling techniques

updates
Schedule data
Leads and lags
OPA
OPA updates
Scheduling tool
6-91
Unit 6
Inputs to Control Schedule

Project management plan: Contains the schedule management

plan and schedule baseline
The baseline is compared to actual outcomes to determine if a
change, preventive action, or corrective action is needed
Project schedule: The approved schedule is the baseline; it is this

baseline that changes if schedule changes are approved
Work performance data: Information about actual progress (which

activities actually started, actual duration, percent complete)
Project calendars: Identifies time periods available for completing

work
6-92
Unit 6
Inputs to Control Schedule

Schedule data: Data that have been interpreted and show the status
of the work
OPA:
Policies for controlling schedule changes and making decisions
about corrective action and preventive action
Schedule control tools
Reporting methods
6-93
Unit 6
Tools for Control Schedule

Performance reviews: Comparing planned vs. actual performance

data. Various techniques may be used to analyze this data
Trend analysis
Earned value management
Note: Variance = Plan-Actual
Project management software: Provides automated means to track

performance
Resource optimization techniques: Optimizes the application of

resources to the work that must be done
Leveling and smoothing
6-94
Unit 6
Tools for Control Schedule

Modeling techniques: Using what-if analysis and simulation to

analyze the probability of certain schedule outcomes
Leads and lags: Bringing the schedule back in line with the plan by
delaying or accelerating the work
Schedule compression: Realigning schedule performance with the

plan using crashing and/or fast tracking
Scheduling tool: Producing an updated schedule using manual or

automated means
6-95
Unit 6
Outputs from Control Schedule

Work performance information: Communicating schedule variance

and schedule performance index to stakeholders
Schedule forecasts: Predicting schedule outcomes based on the

status revealed using work performance information
Change requests: Change requests may arise from analysis of

schedule variances; they should be processed using integrated
change control
6-96
Unit 6
Outputs from Control Schedule

Project Management Plan Updates:

Schedule baseline
Cost baseline if incur additional costs compressing the schedule

Risk register
OPA Updates: New lessons learned that must be added to the OPA
knowledge base
Causes of variances
Corrective actions chosen
Other lessons learned about controlling the schedule
6-97
Unit 6
Other Topics

Monte Carlo analysis compared to CPM and PERT
GERT (Graphical Evaluation and Review Technique)
6-98
Unit 6
Monte Carlo Analysis Compared to CPM and PERT

CPM and PERT tend to understate durations compared to

Monte Carlo
Monte Carlo can account for path convergence; CPM and
PERT are not as statistically sophisticated and cannot take as
many factors into account
6-99
Unit 6
Monte Carlo Analysis Compared to CPM and PERT

6-100
Unit 6
GERT
A sophisticated schedule development tool that can account for:

Loops (Activities that occur more than once in an iterative
fashion)
Conditional branches (Activities that occur only if something
else happens first; If-Then logic)
6-101
Unit 6
6-102
Unit 6
Self-Study: Additional Review of Scheduling Concepts

See Unit 15, Reference Manual for additional practice with
network diagrams, including:
Review of the differences between PDM, Arrow diagram, and
Gantt charts
Practice network diagrams with solutions
Practice crashing problems with solutions
6-103
Unit 7
COST MANAGEMENT
7-1
Unit 7
Cost Management Concept

Cost management includes the processes for managing and

controlling costs so that the project can completed within the
approved budget
Plan Cost Management
Estimate Costs
Determine Budget
Control Costs
7-2
Unit 7
Cost Management: Key Points

The ability to influence cost is greatest during the early stages

of a project:
Therefore, early scope definition is crucial
Various stakeholders will measure costs at different times:
When the acquisition decision is made
When the order is placed
When the item is delivered
When financial accounting of the expense occurs
7-3
Unit 7
Cost Management: Key Points

PMI endorses the concept of life cycle cost; also called the total
cost of ownership
Life cycle cost includes the following components:
Project (or acquisition) costs
Operating and maintenance costs incurred by the user
Disposal costs (safe and environmentally responsible)
Conclusion: Do not reduce project costs at the expense of high

operating and maintenance costs
7-4
Unit 7

Cost Management Processes
Other Topics
PMBOK Guide.
Cost Exercise
Drill Practice
Math for the PMP Exam
7-5
Unit 7
Overview of Cost Management Processes

7.1 Plan Cost Management (establishing procedures for planning,

managing, expending, and controlling costs)
7.2 Estimate Costs (estimating the total cost of all project activities)
7.3 Determine Budget (aggregating estimated costs to establish a cost
baseline)
7.4 Control Costs (monitoring cost status and controlling changes to the
cost baseline)
7-6
Unit 7

Process Groups
Knowledge
Areas
Initiating
Planning
Executing
Controlling
Closing
Integration
Scope
Time
Plan cost management
Estimate costs
Determine budget
Cost
Control costs
Quality
HR
Communication
Risk
Procurement
Stakeholder
7-7
Unit 7
Plan Cost Management: Introduction


Results in a cost management plan which:
Establishes procedures for planning, managing, expending, and
controlling project costs
Estimate costs
Determine budget
Control costs
7-8
Unit 7
Plan Cost Management

Inputs
Tools
Expert judgment
Project charter
EEF
Meetings
Outputs
OPA

7-9
Unit 7
Inputs to Plan Cost Management


Scope baseline: Contains the scope statement and WBS details for
cost estimating
Schedule baseline: Defines when costs will be incurred for budgeting

Other information: Cost-related scheduling, communication, and risk
information
Project charter: Provides high-level cost estimates

7-10
Unit 7
Tools for Plan Cost Management

Expert judgment:
choose appropriate cost estimating methods
Analytical techniques: Assessing

Various funding methods (self-funding, incur debt )
Whether to lease or buy needed equipment
Meetings:
Selected stakeholders who attend meetings to develop the cost
management plan
7-11
Unit 7
Outputs from Plan Cost Management

Cost management plan: Describes how estimating, budgeting, and

controlling will be conducted. Includes
Acceptable accuracy: Accuracy varies by stage of the project
Units of measure: How to track time (hours, days, ) or
materials (liters, tons, )
Control thresholds: How much cost variance is normal vs.
when do you need corrective action
Performance measurement: Rules for partially completed tasks
when doing a status report
Reporting formats: Formats and frequency for reporting
7-12
Unit 7
Estimate Costs: Introduction


Estimates the costs of all resources needed to complete the
project
Labor and materials
Equipment and facilities
Other cost factors:

Services, contingency for risks, inflation, cost of financing
Accuracy of estimates increases as project moves through the
life cycle
7-13
Unit 7
Estimate Costs: Accuracy

Know the following three types of estimates:

Order of Magnitude (aka ROM):
Used for initiating or project approval
Range of accuracy -25% to +75%
Budget:
Used for initial funding in early stages of planning
Definitive (aka Bottom-Up):
Used to establish cost baseline in latter stages of planning
7-14
Unit 7
Estimate Costs
Inputs
Tools
Outputs
Expert judgment
Human resource
management plan
Analogous estimating
Basis of estimates
Scope baseline
Parametric estimating
Project documents
updates
Project schedule
Bottom-up estimating
Risk register
Three-point estimating
EEF
Reserve analysis
OPA
Cost of quality
Project management software
Vendor bid analysis
Group decision-making techniques
7-15
Unit 7
Inputs to Estimate Costs

Cost management plan: Defines how costs will be managed and

controlled
Human resource management plan: Contains labor rates and a

resource calendar
Scope baseline: Contains the following

Scope statement: Product description, constraints, assumptions
Will estimates include direct and indirect costs?
WBS: Identifies cost accounts and work packages
WBS dictionary: Identifies details for the effort needed to produce
deliverables
7-16
Unit 7
Inputs to Estimate Costs

Project schedule: Identifies how long a resource will be needed

thereby enabling determination of what the resource will cost
Risk register: Provides data so that risk mitigation costs can be

estimated
EEF: Market conditions for outsourced work and commercially

available cost estimating databases
OPA: Estimating policies, templates, historical information, and

lessons learned
7-17
Unit 7
Tools for Estimate Costs

Expert judgment:
improve the accuracy of estimating data
Also helps in choosing appropriate estimating methods
Analogous estimating: A form of top-down estimating

Uses actual durations from similar activities
Adjusts for differences in size, complexity, and risk
Done early in the project life cycle (initiating)
Not costly to develop but also less accurate
7-18
Unit 7

Parametric estimating: Uses historical data

Example 1: $ per square foot in housing construction
Example 2: $ per pound in aircraft development
Note: Parametric estimates are reliable if historical methods of
doing the work remain similar
Bottom-up estimating:
Detailed, accurate estimates of individual work activities
Estimates are summarized at higher levels to get project total
Work packages into cost accounts into project total
More work to develop but much more accurate
7-19
Unit 7

Three-point estimating: Uses cost data instead of durations

Uses three estimates and calculates an average:
Optimistic: The best-case outcome
Most Likely: The most likely outcome
Pessimistic: The worst-case outcome
This technique is most useful when the work is uncertain or risky
7-20
Unit 7

Reserve analysis: Reserves are added to duration estimates to

account for risk
Contingency reserve:
Extra time allocated within the schedule baseline
Associated with known-unknowns
Certain work packages are known to be risky
Management reserve:
Extra time withheld from the schedule baseline
Associated with unknown-unknowns
Difficult to predict which work will be affected by the risk
event
7-21
Unit 7

Cost of quality: The cost of activities such as training and quality

audits
Project management software: Facilitates rapid cost comparisons

of various project scenarios
Vendor bid analysis: The cost of outsourced work

Group decision-making techniques: PMI believes teams can
produce more accurate estimates; teaming also leads to increased
commitment to the results
7-22
Unit 7
Outputs from Estimate Costs

Activity cost estimates: The likely costs of resources needed to

complete the project
Cost estimates are usually refined during the project life cycle
Cost estimates should consider risks
Basis of estimates: Documentation of the following

Description of the work (usually the WBS is sufficient)
Basis of the estimate (which method: bottom-up, parametric)
Assumptions and constraints
Range (expected accuracy)
Project documents updates: Updates to the risk register

7-23
Unit 7
Determine Budget: Introduction


Aggregates cost estimates for all individual activities
Establishes a cost baseline so that actual cost performance can
be monitored and controlled (on track or not)
The baseline:
Includes authorized budgets and contingency reserves
Excludes management reserves
7-24
Unit 7
Determine Budget
Inputs
Tools
Outputs
Cost aggregation
Cost baseline
Scope baseline
Reserve analysis
Project funding requirements
Expert judgment
Basis of estimates
Historical relationships
Project schedule
Funding limit reconciliation
Resource calendars
Risk register
Agreements
OPA
7-25
Unit 7
Inputs to Determine Budget

Cost management plan: Describes how costs will be managed and

controlled
Scope baseline:
Scope statement: Identifies any constraints on spending
WBS and dictionary:
Cost accounts: Organizes estimates into useful categories
Work packages: Identifies work that must be scheduled and
paid for
Dictionary: Identifies deliverables that must be produced
Activity cost estimates: Provides data to estimate costs of activities,

work packages, and cost accounts
7-26
Unit 7

Basis of estimates: Documentation of the following details

Scope, assumptions, and constraints
Estimating method and range of accuracy
Whether indirect costs are included or not
Project schedule: Identifies when specific costs will be incurred

Resource calendars: Identifies which resources are assigned and
when
7-27
Unit 7

Risk register: Identifies costs associated with risk response

strategies
Agreements: Identifies costs incurred through outsourcing portions of

the work
OPA:
Formal and informal cost budgeting procedures
Cost budgeting tools
Reporting methods
7-28
Unit 7
Tools for Determine Budget

Cost aggregation: Costs are established for work packages and

summarized at higher levels (cost accounts and entire project)
Reserve analysis: Establishes the approach for contingency and

management reserves
Expert judgment: Improves the accuracy of the budget

Historical relationships: Referred to as parametric estimating in the
previous process. Parametrics are used for cost estimating and
budgeting
Funding limit reconciliation: Preventing large fluctuations in annual

expenditures
May involve changing the timing of activities
7-29
Unit 7
Outputs from Determine Budget

Cost baseline: The approved time-phased budget

Includes work package estimates plus contingency reserves
Excludes management reserves
Should only be changed using formal change control procedures
Is used to measure and monitor cost performance
Large projects or programs may have multiple cost baselines
Note: The following five slides show visual displays and review
key principles
7-30
Unit 7
Cost Baseline: Historical Display

7-31
Unit 7
Cost Baseline: Modern Display Using Excel and Power Point

7-32
Unit 7
Is This Project In Trouble??

7-33
Unit 7
Baseline vs. Reserve

7-34
Unit 7
Contingency and Management Reserve

7-35
Unit 7
Outputs from Determine Budget

Project funding requirements:

Funding is often made available on an incremental basis
The amounts of money or the timing of the disbursements may or
not be evenly distributed
Note: The next slide shows the relationship of funding
requirements to the cost baseline

Risk register
Project schedule
7-36
Unit 7
Funding Requirements: Additional Information

7-37
Unit 7
Control Costs: Introduction


Involves monitoring cost status (variances) and managing cost
changes
Earned Value Management (EVM) is a special system for
monitoring cost and schedule variances
The cost baseline may only be changed using the Perform
Integrated Change Control process
7-38
Unit 7
Control Costs
Inputs
7-39
Tools
Outputs
Earned value
management
Project funding
requirements
Forecasting
Cost forecasts
To-complete performance
index
Change requests
OPA
Performance reviews

updates
Project management
software
Reserve analysis
OPA updates
Unit 7
Control Costs: Key Points

Knowing that spending is within the authorized budget only has

meaning if you also know that the right amount of work is
getting done
EVM is one way to know whether the right amount of work is
getting done
Cost control involves:
Influencing factors that create cost changes and preventing
unapproved changes
Ensuring change requests are handled in a timely manner
Monitoring cost variances and managing actual changes
Informing stakeholders of approved changes and bringing
expected overruns within acceptable limits
7-40
Unit 7
Inputs to Control Costs

Project management plan: Contains the cost baseline and cost

management plan
Project funding requirements: Identifies projected expenditures

Work performance data: Includes
Deliverables completed or partially completed
Costs authorized vs. costs actually incurred (plan vs. actual)
Forecasts for completing the work
OPA: Includes
Formal and informal cost control procedures
Cost control tools and reporting methods
7-41
Unit 7
Tools for Control Costs

Earned Value Management (EVM): A methodology that forms a

performance baseline based on scope, schedule, and cost data
Provides current cost and schedule status at planned intervals
(cost and schedule variances)
Also measures cost and schedule efficiencies using cost and
schedule indexes)
Forecasting: EVM also predicts future project performance at each

reporting interval using various formulas
To-Complete Performance Index (TCPI): Calculates the cost

performance required to meet a specific goal
7-42
Unit 7
Tools for Control Costs

Performance reviews: Assessing cost performance using

Variance analysis: Planned vs. actual cost and schedule
comparisons
Trend analysis: Determining whether performance is improving,
deteriorating, or remaining constant
Earned value: Special technique combining variance and trend
analysis
Project management software: Automates the analysis of earned

value data
Reserve analysis: Monitors whether contingency or management

reserves need adjusting
7-43
Unit 7
Additional Information on EVM

Topics to be covered:
EVM origin and basic concept
Three basic variables (EV, PV, AC)
Measuring variances from the baseline
Forecasting future project outcomes
Diagrams: An alternate method for EVM exam questions (less
likely but possible)
7-44
Unit 7
EVM Origin and Basic Concept

Created by the U.S. government to control progress payments

on large programs
Purpose: progress payments were supposed to reimburse work
actually completed
Progress payments were not intended to reimburse cost
overruns
Basic information provided by EVM:

Current cost and schedule status in the form of variances and
indexes
Forecasts of future project outcomes using various formulas
7-45
Unit 7
Three Basic Variables

Planned Value (PV): budgeted cost for the work that should be
done at a given time
Old name: BCWS (budgeted cost of work scheduled)
Earned Value (EV): budgeted amount for the work that has been
accomplished (measured at the same point in time as PV)
Old name: BCWP (budgeted cost of work performed)
Actual Cost (AC): actual or total cost incurred in doing the work
accomplished thus far (as measured by EV)
Old name: ACWP (actual cost of work performed)
7-46
Unit 7
Cost Variance and Cost Performance Index

7-47
Unit 7
Schedule Variance and Schedule Performance Index

7-48
Unit 7
Earned Value Interpretation

7-49
Unit 7
Forecasting: Estimate at Completion

7-50
Unit 7
EAC: Second Formula

7-51
Unit 7
EAC: Third Formula

7-52
Unit 7
Estimate to Complete (ETC)

7-53
Unit 7
Variance at Completion (VAC)

7-54
Unit 7
To-Complete Performance Index (TCPI)

7-55
Unit 7
To-Complete Performance Index (TCPI)

7-56
Unit 7
EVM Performance Measurement Rules

7-57
Unit 7
Diagrams: First Example-Alternate Type of EVM Question

7-58
Unit 7

7-59
Unit 7

7-60
Unit 7
Diagrams: Second Example

7-61
Unit 7
Diagrams: Third Example

7-62
Unit 7
EVM Terms and Formulas

PV (BCWS): Planned Value (Budgeted Cost of Work Scheduled). How much work
should be done at any point in time ($ or hours).
EV (BCWP): Earned Value (Budgeted Cost of Work Performed). How much work
has been completed/performed ($ or hours).
AC (ACWP): Actual Cost (Actual Cost of Work Performed). Actual amount of effort
expended ($ or hours).
BAC: Budget at Completion. Original cost estimate for the total project.
SV: Schedule Variance. EV-PV or (BCWP-BCWS)
CV: Cost Variance. EV-AC or (BCWP-ACWP)
CPI: Cost Performance Index. EV / AC or (BCWP / ACWP)
SPI: Schedule Performance Index. EV / PV or (BCWP / BCWS)
EAC: Estimate at Completion. A revised estimate of the total project cost at
completion. BAC/CPI or AC + (BAC-EV) or AC + (BAC-EV)/(CPI x SPI)
ETC: Estimate to Complete. Estimated remaining cost. EAC-AC or BAC-EV
VAC: Variance at completion. Estimated difference between the original cost (BAC) &
the revised cost (EAC). BAC-EAC
TCPI: To Complete Performance Index. What the CPI will need to be to finish at a
specific goal. (BAC-EV) / (BAC-AC) or (BAC-EV) / EAC-AC)
7-63
Unit 7
Outputs from Control Costs

Work performance information: The data calculated using EVM is

communicated to stakeholders
Cost forecasts: The latest EAC is communicated to stakeholders

Change requests: Changes to the cost baseline which must be
reviewed using the Perform Integrated Change Control process
Project management plan updates: Potential changes to the cost

baseline or cost management plan
Project documents updates: Potential changes to cost estimates or

the basis of those estimates
OPA updates: New lessons learned (causes of variances and

corrective actions)
7-64
Unit 7
Other Topics
(Reference Manual pp. 7-15 to 7-18, PMBOK Guide No Reference)

Financial concepts:
Opportunity cost, sunk cost, payback period,
Benefit-cost ratio, present value, net present value, IRR
Return on investment, learning curve
Depreciation of capital and value analysis
Law of diminishing returns and variable vs. fixed costs
Direct vs. indirect costs and working capital
7-65
Unit 7
Opportunity Cost and Sunk Cost

Opportunity cost: The benefit you give up by choosing not to do a

project (usually pursuing a better project that has superior financial
potential)
Sunk cost: Expended costs which you no longer control

Money already spent that cannot be recovered
Sunk costs should be ignored when deciding to spend the
remaining money needed to finish a project
7-66
Unit 7
Payback Period
7-67
Unit 7
Benefit Cost Ratio (BCR)

7-68
Unit 7
Present Value
7-69
Unit 7
Net Present Value (NPV)

7-70
Unit 7
Internal Rate of Return (IRR)

7-71
Unit 7
IRR: Additional Notes

Consider Project A from the previous slide:

At an interest rate lower than 18% (say 14%), the project would
still show a profit using NPV calculations
At an interest rate of 18%, NPV showed that Project A would be
at an exact breakeven point
At interest rates higher than 18%, NPV calculations would begin
showing financial losses for the cash flows on Project A
For Project B:
Project B is stronger financially because it still shows profits
above the 18% interest rate
IF there were a Project C under consideration and its IRR was
40%, then it would be the best project
7-72
Unit 7
Return on Investment (ROI)

7-73
Unit 7
ROI: Example
Assume the following information has been estimated:

Your technology project has been under way for three years.
Total revenues have been measured at $800,000
Total costs in those three years were $580,000
What is the ROI?

(Revenue-Costs)/Costs = ($800k-$580k)/$580k = $220k/$580k
The ROI is 0.379 or 37.9%
An ROI greater than zero indicates a profit
7-74
Unit 7
Learning Curve: Parametric Cost Estimating

7-75
Unit 7
Depreciation of Capital
When purchasing capital equipment, part of the expense may

be written off on your taxes
The following are methods for accelerating the tax credit:
Double declining balance
Sum of the years digits
You do not need to know the procedure
7-76
Unit 7
Value Analysis
Also called value engineering

Most people consider the terms interchangeable
A cost reduction tool using four classic steps:
1) Identify the discrete functions in an existing item or the design
of a new item
2) What portion of the overall cost does each function represent?
3) Determine whether each function is a need or a want. Can
anything be deleted?
4) Search for different approaches that will deliver the needed
functionality at a lower cost
7-77
Unit 7
Law of Diminishing Returns

Situations in which you put more and more into something and
get less and less back
If you study too long in the same day, you get tired and become
inefficient
If you are spending money to develop cutting edge technology,
you sometimes reach a plateau. Spending more money will
yield little improvement!
7-78
Unit 7
Variable vs. Fixed Costs

Fixed costs: Non-recurring start-up cost

Installing a production line: Buy the equipment, put it in place,
test its use, and make adjustments
Variable costs: Vary with the size of the project or the number of
units to be produced
Labor and materials in each item produced
For the exam:

The cost of 100 units would be the fixed cost to get started plus
the variable cost of 100 units
The cost of 20 additional or extra units would be just the
variable cost for the additional 20 units
7-79
Unit 7
Direct vs. Indirect Costs

Direct costs: Incurred directly by a specific project

Salaries of project staff including the project manager
Labor and materials to do the specific work of the project
Indirect costs: The organizations cost of doing business

Security guards
Electricity
Fringe benefits
Insurance
Taxes
Projects share these costs on a pro-rated basis
7-80
Unit 7
Working Capital
Current assets minus current liabilities
7-81
Unit 7
7-82
Unit 8
QUALITY MANAGEMENT
8-1
Unit 8
Quality Management Concept

Quality management includes the processes that determine

quality policies and objectives so that project needs will be
satisfied
Plan Quality Management Planning
Perform Quality Assurance Executing
Control Quality
8-2
Monitoring and Controlling
Unit 8
Quality Management: Key Points

Know the following concepts and definitions:

Quality management is aimed at meeting project needs and
requirements
Quality is the degree to which a set of inherent characteristics
fulfills requirements
Quality and grade are not the same thing:
Grade is features and functions. You might choose a lower
grade to save money. Days Inn instead of Hilton Resort!
However, low quality is not acceptable because it means
you are not fully meeting requirements
8-3
Unit 8

Concepts and definitions (continued):

Gold-plating is providing a solution that exceeds the original
requirement
PMI: Gold-plating is bad because it usually makes the
project cost more and/or take longer
Your customer will be happy if you accurately identify and
meet requirements
You must produce accurate and precise (exact) outcomes:
Precision means outcomes with low variation
However, you must also produce accurate outcomes or the
results could consistently fail to meet requirements
8-4
Unit 8

Concepts and definitions (continued):

PMI also states that modern quality management emphasizes:
Customer satisfaction: Emphasizing conformance to
requirements (produce what you said you would) and fitness for use
(product or service meets real needs)
Prevention over inspection: The cost of avoiding mistakes is

less than the cost of correcting them
Continuous improvement: Using PDCA (plan-do-check-act) as

the basis for quality improvement
Management responsibility: Management has the greatest

role in providing adequate resources for effective quality programs
Cost of quality: Effectively managing costs of conformance vs.

costs of non-conformance
8-5
Unit 8

Quality Management Processes
Other Topics
PMBOK Guide.
Drill Practice
8-6
Unit 8
Overview of Quality Management Processes

8.1 Plan Quality Management (identifying quality requirements and

standards and how to demonstrate compliance)
8.2 Perform Quality Assurance (auditing quality requirements and

quality control measurements to ensure appropriate quality standards are
used)
8.3 Control Quality (monitoring results to assess performance and

recommend necessary changes)
8-7
Unit 8

Process Groups
Knowledge
Areas
Initiating
Planning
Executing
Controlling
Closing
Integration
Scope
Time
Cost
Quality
Plan quality
management
Perform quality
assurance
Control quality
HR
Communication
Risk
Procurement
Stakeholder
8-8
Unit 8
Plan Quality Management: Introduction


Results in a quality management plan which:
Identifies quality requirements and standards for the project and
documents how to demonstrate compliance
Provides guidance on how quality will be managed and validated
Emphasizes that quality should be planned in, not inspected in
8-9
Unit 8
Plan Quality Management

Inputs
Tools
Outputs
Cost-benefit analysis
Quality management plan
Cost of quality
Process improvement plan
Risk register
Seven basic quality tools
Quality metrics
Requirements
documentation
Benchmarking
Quality checklists
EEF
Design of experiments
OPA
Statistical sampling
Additional quality planning
tools
Meetings

8-10
Unit 8
Inputs to Plan Quality Management


Scope baseline: Contains the scope statement (product description
and acceptance criteria) and WBS (deliverables and work packages)
Schedule baseline: Approved start and finish times

Cost baseline: Planned costs and time intervals for measuring and
reporting actual performance
Other management plans (HR, risk, etc.): May identify actionable

quality concerns
Stakeholder register: Identifies stakeholders with an interest in the

project
Risk register: May contain information related to quality concerns

that could threaten the project
8-11
Unit 8
Inputs to Plan Quality Management

Requirements documentation: Identifies product and project

requirements that must be met
EEF:
Regulations (mandatory, require compliance) and standards
(optional, preferred practices)
Working conditions and cultural attitudes toward quality
OPA:
Quality policies and procedures
PMI on quality policy: The overall intention of top management
toward quality
Historical data and lessons learned
8-12
Unit 8
Tools for Plan Quality Management

Cost-benefit analysis: The cost of quality management activities vs.

the resulting benefits. The benefits of meeting quality requirements
Less rework and higher productivity
Lower overall costs and increased stakeholder satisfaction
Cost of quality (COQ):

Includes costs of conformance (preventing defects and
assessing quality) and costs of non-conformance (fixing
defects)
Prevention (spending on conformance) is preferred as it is
believed that it will reduce overall costs
8-13
Unit 8
Additional Information on COQ

Prevention
Appraisal
Failure
(Build a Quality Product)

Conformance
(Assess Quality)
Conformance
Handle Defects
Nonconformance
Planning
Testing
Training
Process control
Good processes
Inspection
Internal Failure
(Found by Project)
Rework
Maintain equipment
Scrap
Time to do it right
External Failure
(Found by Customer)
Liabilities (recalls)
Warranty work
Lost business
Note: 80-90% of the cost of quality is the responsibility of management!!
8-14
Unit 8

Seven basic quality tools: Known as 7QC, these classic tools are
used to solve quality related problems
Cause and effect diagram: Also known as fishbone or Ishikawa
diagram
Problem statement placed at the head of the fishbone
Then trace the source of the problem back to actionable root
causes
See additional slide
Flowcharts: Also called process maps

Diagrams used to help analyze and improve processes
Flowcharts show activities, decision points, and the sequence of
steps performed
8-15
Unit 8

7QC (continued):
Checksheets: Also called tally sheets
Organizes quick data collection in a standard format
Data often collected: Defect cause and location, number of defects
Data used in Pareto charts often comes from checksheets
Pareto diagrams:
Based on the notion that 80% of problems/defects come from only
20% of the sources/causes
A vertical bar chart, tallest bar on the left, and descending in order
to the right
The tallest bar on the left shows the number one cause of defects
8-16
Unit 8

7QC (continued):
Histograms: Vertical bar charts that prioritize or rank order data
Pareto diagram is a specific type of histogram
Control charts: Used to determine whether a process is under control

Tracks three types of data:
1) The center line which is the perfect or average outcome
2) Control limits (show the variation of the process)
3) Specification limits (show how much variation is acceptable to
the customer)
See additional slides (and reference manual, Unit 8)
Scatter diagrams: Plot the relationship between two variables

8-17
Unit 8
Example of Cause and Effect Diagram

8-18
Unit 8
Example of Pareto Diagram

8-19
Unit 8
Control Charts: Normal and Random

8-20
Unit 8
Control Charts: Add Specification Limits

8-21
Unit 8
Control Charts: Special Cause

8-22
Unit 8
Control Charts: Rule of Seven (Heuristic)

8-23
Unit 8
Scatter Diagram: Regression Analysis

8-24
Unit 8
Tools for Plan Quality Management (continued)

Benchmarking: Comparing planned or actual practices to

Generate ideas for improvement
Provide a standard or goal to work toward
Design of experiments: Observations conducted under controlled

circumstances
Used for optimizing products or processes
Statistical sampling: Choosing part of a population for inspection

Done to reduce the cost of quality
A sampling plan is created so that the total cost of quality can be
calculated
8-25
Unit 8

Additional quality planning tools: General tools that may be applied

to quality planning
Brainstorming
Force field analysis
Nominal group technique
Other quality management tools (also listed under quality
assurance)
Meetings:
Selected stakeholders who attend meetings to develop the
quality management plan
8-26
Unit 8
Outputs from Plan Quality Management

Quality management plan: Describes how the team will implement

quality policy
Process improvement plan: Steps for improving existing processes

Process boundaries: Describes the purpose, start, and end of the
process
Process configuration: A diagram or flowchart that shows all steps

and interfaces in the process
Process metrics: For measuring performance and improvements

Targets for improved performance: Goals that guide improvement
activities
8-27
Unit 8
Outputs from Plan Quality Management

Quality metrics: Measurements of actual outcomes

Defect frequency, reliability, failure rate, and test results
Quality checklists: A structured tool to verify that all steps in a

process have been performed

Responsibility assignment matrix
WBS and WBS dictionary
8-28
Unit 8
Perform Quality Assurance: Introduction


Audits quality requirements and quality control measurements
to ensure appropriate quality standards are used
8-29
Unit 8
Perform Quality Assurance

Inputs
Tools
Outputs
Quality management and control Change requests

tools
Process improvement plan
Quality audits
Project management
plan updates
Quality metrics
Process analysis
Project documents
updates
Quality control measurements
OPA updates
Project documents
8-30
Unit 8
Perform Quality Assurance: Key Points

Creates a management system:

Audits quality requirements
Reviews organizational processes
Captures results from quality control (QC measurements)
Builds confidence that future work outputs will meet quality
requirements
Quality assurance is also the umbrella for continuous

improvement
An iterative means for improving the quality of all processes
QA uses data from the Plan Quality and Control Quality

processes
8-31
Unit 8
Inputs to Perform Quality Assurance

Quality management plan: Describes QA and continuous

improvement approaches for the project
Process improvement plan: Describes intended improvement

processes and plans
Quality metrics: Attributes to be measured (developed previously in

the quality management plan)
Quality control measurements: An output of quality control, this

data indicates whether processes are performing to required
standards
Project documents: Monitoring documents within the context of

configuration management
8-32
Unit 8
Tools for Perform Quality Assurance

Quality management and control tools:

QA uses tools from quality planning and quality control
Other general tools, e.g., affinity diagrams, may be applied to QA.
See reference manual for examples.
Quality audits: Structured, independent reviews to determine if

project activities comply with organizational policies and procedures
Objectives of a quality audit:
Identify and share best practices
Identify shortcomings and nonconformities
Document lessons learned and proactively offer positive assistance
Audits may be scheduled or random (unannounced)

8-33
Unit 8
Tools for Perform Quality Assurance

Process analysis: Identifying and implementing needed

improvements by using process improvement plans developed earlier
8-34
Unit 8
Outputs from Perform Quality Assurance

Change requests: Change requests should always be handled using

the Integrated Change Control process
In this case, changes would be aimed at quality improvement
As always, changes may be used to initiate corrective or
preventive action or to request defect repair
Project management plan updates:

8-35
Unit 8
Outputs from Perform Quality Assurance


Quality audit reports
Training plans
Process documentation
OPA updates:
Quality standards
Quality management system
8-36
Unit 8
Quality Assurance: Other Information

Two types of quality evaluation:

Formative: Similar to mid-project evaluation, done during the project to
make corrections
Summative: Similar to post-project evaluation, done at completion to

document lessons learned
Responsibility for quality:

For a Task: Belongs to the employee performing the task
For the Project: Belongs to the project manager
8-37
Unit 8
Control Quality: Introduction


Involves monitoring and recording specific project results to
assess performance and recommend necessary changes
Validates that project deliverables met requirements so that
formal acceptance may be accomplished
8-38
Unit 8
Control Quality
Inputs
8-39
Tools
Outputs
Seven basic quality tools
QC measurements
Quality metrics
Statistical sampling
Validated changes
Quality checklists
Inspection
Verified deliverables
Approved change
requests review
Change requests
Deliverables

updates
Project documents
Organizational process
assets
OPA updates
Unit 8
Control Quality: Key Points

QA and QC differ as follows:

QA is used during planning and executing to provide confidence
that future work will meet requirements
QC is used during executing and closing to provide reliable data
that actual work results met requirements
Know the following terminology:

Prevention: keep errors out of the process vs. inspection: keep
errors from reaching the customer
Attribute sampling: the result conforms or not (dented or not dented)

vs. variable sampling: the result must be measured and conform to a
certain exactness
Tolerance: the result is within specification limits vs. control limits:

the process is under control if outcomes remain within the control limits
8-40
Unit 8
Inputs to Control Quality

Project management plan: Contains the quality management plan

Quality metrics: Identifies attributes to be measured such as MTBF
(Mean Time Between Failure) and MTTR (Mean Time To Repair)
Quality checklists: Developed previously as part of planning

Work performance data:
Planned vs. actual technical performance
Planned vs. actual schedule performance
Planned vs. actual cost performance
Approved change requests: May affect work methods; the team

must verify correct and timely implementation of changes
8-41
Unit 8
Inputs to Control Quality

Deliverables: Any verifiable product or work result

Project documents:
Agreements (contracts), change logs, and quality audit reports
Training plans and process documentation (records of actual
results)
OPA:
Quality standards and policies
Standard work guidelines
Issue and defect reporting policies
8-42
Unit 8
Tools for Control Quality

Seven basic quality tools: Covered during planning, 7QC also

applies to quality control
Statistical sampling: Sampling plans were described in planning;

sampling reduces the cost of quality control. Sampling is appropriate
when
The population is large
The cost of inspection is high
Destructive testing is required
You have reason to believe the defect rate is low
8-43
Unit 8
Tools for Control Quality

(Reference Manual pp. 8-15 & 16, PMBOK Guide pp. 252)
Inspection: Examining a work result to determine whether it conforms

to documented standards. Also called
Reviews or peer reviews
Audits
Walkthroughs
Approved change requests review: Verifying that approved

changes have been implemented correctly
8-44
Unit 8
Outputs from Control Quality

QC measurements: Described in QA, these measurements evaluate

whether current quality standards are effective (defect rate is low)
Validated changes: Repaired or changed items are inspected

Verified deliverables: Deliverables confirmed as correct are reported
as such to the Validate Scope process for formal acceptance
Work performance information: Performance data that have been

analyzed
Causes for rejected work
Rework and process adjustments
8-45
Unit 8
Outputs from Control Quality

Change requests: Used to request corrective action, preventive

action, and defect repair
Must be processed using Perform Integrated Change Control
Project management plan updates: May update the quality

management or process improvement plans
Project documents updates: Potential changes to cost estimates or

the basis of those estimates
Quality standards and agreements
Quality audit reports and change logs
Training plans and process documentation
OPA updates: Recording the use of checklists in historical database

8-46
Unit 8
Other Topics

Graphs, kaizen, and continuous improvement
Priority of quality, cost, and schedule
Design vs. quality, JIT, kanban
Motivation vs. quality, marginal analysis, Taguchi method
Basic terminology, three vs. six sigma, TQM
ISO 9000, run chart
8-47
Unit 8
Graphs and Kaizen

Graphs: Pictorial displays that are easily understood

Pie chart (relative or comparative effect)
Line graphs (shows a trend if one exists)
Histograms (vertical bar charts that group or rank order data, the Pareto
diagram is a histogram)
Kaizen and continuous improvement: Kaizen is the name for

incremental, continuous improvement
Purpose: Reduce variances and particularly the cost of nonconformance
Warusa kagen: Japanese name for something that isnt wrong but is not
exactly right either (e.g., Rule of Seven)
8-48
Unit 8
Priority of Quality and Design vs. Quality

Priority of quality compared to cost and schedule: Quality should

share genuinely equal priority
Design vs. quality: Careful up-front design of a product or service should

increase reliability and maintainability (two important quality concepts)
Quality should be designed in, not inspected in!!
Primary responsibility for developing design specifications belongs to
project engineers
8-49
Unit 8
JIT and Kanban

JIT (Just-in-Time): Inventory approach that reduces work-in-process

inventory to zero buffer or safety stock
If an organization has low quality (high rate of defects) while attempting
to implement JIT, what will happen to the schedule?
Discuss with instructor
Kanban: Works as part of JIT as the means for a worker to request more
input to their work station
In JIT, work is not pushed forward but is rather requested when needed
Kanban is the communication mechanism to request more input:
8-50
Scanning bar codes, runners, ping pong balls through vacuum

tubes, etc.
Unit 8
Motivation, Marginal Analysis, and Taguchi

Motivation vs. quality: Higher quality is likely when team members display
pride and commitment
One way to harm such a culture: allow frequent turnover of people
assigned to the project
Marginal analysis: Borrowed from the literature on economics

Optimal quality occurs where the incremental revenue from an
improvement equals the incremental cost to secure it
Taguchi method: Developed by Dr. Genichi Taguchi

Calculated a loss function using statistical quality control
Showed that when finished products were closer to customer
specifications, the organization experienced lower financial losses
(greater profits)
8-51
Unit 8
Attribute, Variable, Probability

Attribute: A quality characteristic that shows conformance or nonconformance, can be objective or subjective
Variable: A quality characteristic that is numerically measurable in

increments
Diameter of a bolt measured in inches or centimeters
Probability: The likelihood that something will happen

For attributes: Like a coin toss, 50-50 chance to occur or not occur
For variables: Involves ranges of possible outcomes and is more
complicated. Two familiar distributions
Normal distribution or bell curve
Histogram, e.g. a Pareto diagram
8-52
Unit 8
Population, Sample, Standard Deviation

Population: The entire group of items that we wish to measure

Sample: Measuring a portion of the items in a population hoping for an
accurate picture of the entire group at a lower measurement cost
Standard deviation: Measures expected variations around an estimated

average outcome (also referred to as sigma). Know this difference:
+/- 3 Sigma: PMI calls it the traditional approach to setting quality
standards
If your processes are designed to this standard, 99.7% of outcomes
will meet requirements (3 items per 1000 will be defective)
+/- 6 Sigma: PMI calls this the modern approach to setting quality
standards.
At this standard, 99.9997% of outcomes will meet requirements (3.4
items per 1,000,000 will be defective)
8-53
Unit 8
TQM, ISO 9000, Run Chart

TQM (Total Quality Management): An approach for implementing a

quality improvement program and for pursuing continuous improvement
ISO 9000: Created by the International Organization for Standardization

A set of documented standards to ensure that organizations meet
certain minimum levels of performance
Run chart: A trend analysis using a line graph that plots data points in exact
chronological order of occurrence. The data may show:
Variances
Trends (performance improving, deteriorating, or remaining constant)
8-54
Unit 8
8-55
Unit 9
HUMAN RESOURCE MANAGEMENT
9- 1
Unit 9
Human Resource (HR) Management Concept

HR management includes the processes that organize,

manage, and lead the project team
9- 2
Plan HR Management
Planning
Acquire Project Team
Executing
Develop Project Team
Executing
Manage Project Team
Executing
Unit 9
HR Management: Key Points

HR processes are aimed at making the most effective use of

people:
Sponsor, upper management, the customer
PM, team members, other stakeholders
The sponsor is important in matters of funding, clarifying scope,
and influencing other stakeholders to support the project
Participation of team members during planning:

Adds their expertise
Strengthens their commitment to the project
9- 3
Unit 9
HR Management: Key Points

Managing and leading include:

Influencing the team: controlling communication, politics, cultural
issues, and interpersonal issues
Professional and ethical behavior:
The management team must behave in an ethical manner
The management team must also ensure ethical behavior in
other team members
9- 4
Unit 9

HR Management Processes
Other Topics
PMBOK Guide.
Drill Practice
9- 5
Unit 9
Overview of HR Management Processes

9.1 Plan HR Management (establishing roles, responsibilities, reporting

relationships, and creating a staffing management plan)
9.2 Acquire Project Team (getting the human resources needed to

complete the project)
9.3 Develop Project Team (improving competencies and interaction of

team members)
9.4 Manage Project Team (tracking performance, providing feedback,

resolving issues, and coordinating changes)
9- 6
Unit 9

Process Groups
Knowledge
Areas
Initiating
Planning
Executing
Controlling
Closing
Integration
Scope
Time
Cost
Quality
Plan HR
management
HR
Acquire project team

Develop project team
Manage project team
Communication
Risk
Procurement
Stakeholder
9- 7
Unit 9
Plan HR Management: Introduction


Results in a human resource management plan which:
Identifies and assigns roles, responsibilities, and reporting
relationships
Creates a staffing management plan which addresses:
Acquisition and release of team members
Training needs and reward systems
Considers that the project is competing for limited human
resources
9- 8
Unit 9
Plan HR Management
Inputs
Tools
Organization charts and

position descriptions
Activity resource
requirements
Networking
EEF
Organizational theory
OPA
Expert judgment
Outputs
HR management plan
Meetings

9- 9
Unit 9
Inputs to Plan HR Management

Project management plan: Other parts of the project plan which

might support development of the HR plan
Processes for each phase of the life cycle
Change and configuration management plans
How integrity of project baselines will be maintained
Communication needs and methods
Activity resource requirements: Human resources needed for

activities are also estimated as part of time management
9- 10
Unit 9
Inputs to Plan HR Management

EEF:
Organizational structure: PM has less control over the team in a
functional silo or weak matrix structure
Existing human resources: Resources already available in-house

Personnel administration policies: The system for hiring new
people and assigning people to specific project teams
Marketplace: Availability of contractors to accept outsourcing
OPA:
Organizational processes, procedures, lessons learned, and
historical information
Templates for organizational charts and job descriptions
Escalation procedures for handling personnel issues
9- 11
Unit 9
Tools for Plan HR Management

Organization charts and position descriptions: Documenting roles

and responsibilities
RAM (responsibility assignment matrix) displays who does what

A RACI chart is more detailed: Shows Responsible,
Accountable, Consult, and Inform
Key points:
9- 12
A RACI chart should never show more than one person

accountable
A RAM does not show timing of the work
Unit 9
Tools for Plan HR Management

Networking: Expanding the extent of your personal influence and ability to

get information
Luncheons, conferences, and recreational activities
Organizational theory: Using published literature and studies on

organizational structures and issues
Virtual teams
Success factors in managing functional vs. matrix vs. projectized
structures
Expert judgment: Used to determine required skills, reporting

relationships, and resource risks
Meetings: Selected experts who meet to develop the HR management plan

9- 13
Unit 9
Outputs from Plan HR Management

HR management plan:
Roles and responsibilities:
Role: The function performed by a person (engineer, business
analyst)
Responsibility: The task you are assigned and expected to perform
Authority: The right to make decisions, apply resources, and grant
approvals
Project organization charts: Display of reporting relationships

Staffing management plan: How resource requirements will be met
9- 14
Staff acquisition: Whether resources will come from inside or

outside the organization
Unit 9
Outputs from Plan HR Management

Staffing management plan (continued):
Resource calendar: A popular planning calendar is a resource

histogram (see additional slide)
Staff release plan: Moving people off the project when they are no
longer needed. Two benefits are
Reduced costs by not letting someone sit idle
Improved morale by reducing uncertainty about assignments
9- 15
Training needs: Used if any team members arrive lacking required

competencies or skills
Recognition and reward systems: To promote and reinforce desired

behaviors
Compliance and safety: strategies for complying with regulations

and providing a safe working environment
Unit 9
Staffing Management Plan: Resource Histogram

9- 16
Unit 9
Acquire Project Team: Introduction


Involves getting the right people assigned to the project
Failure to do so in a timely manner may affect schedules, costs,
risks, quality, and customer satisfaction
The project management team may or may not have direct
control over team member selection
9- 17
Unit 9

Inputs
Tools
Outputs
HR management plan
Pre-assignment
EEF
Negotiation
Resource calendars
OPA
Acquisition

updates
Virtual teams
Multi-criteria decision analysis
9- 18
Unit 9
Inputs to Acquire Project Team

HR management plan: Identifies skill sets, quantities, and timing

EEF:
HR information:
Who is available and experience/skill set
Cost rate and level of interest in being on the project
Personnel policies: How outsourcing is conducted

Organizational structure: Functional, matrix, or projectized
Location: Single or multiple, domestic or international
OPA: HR procedures for staff assignments
9- 19
Unit 9
Tools for Acquire Project Team

Pre-assignment:
People promised by name in a competitive proposal
Key people assigned in the project charter
Negotiation: Agreement with functional managers and other project

teams about assignments (who you need and when)
Acquisition: Procuring needed resources from outside the

organization
9- 20
Unit 9

Virtual teams: Teams that spend little or no time working face to face
Communication and conflict management especially important
Makes teaming possible in the following circumstances:
Members in different geographic areas, people who work from

home or different shifts
To defray travel costs or to acquire special expertise not available

locally
Potential disadvantages of virtual teams:
9- 21
Difficulty sharing information, misunderstandings, feelings of

isolation
Need for expensive communication technology
Unit 9

Multi-criteria decision analysis: Criteria used to rate or score

potential team members
Availability, cost, experience
Ability, knowledge, skills
Attitude, international factors (location, time zones, language
skills)
9- 22
Unit 9
Outputs from Acquire Project Team

Project staff assignments: Publishing assignments using

organizational charts and team directories
Resource calendars: Documents time periods when resources can be

used. Should anticipate changes due to
Vacations, illness
Promotions, retirements
Needs of other projects
Project management plan updates: Changes to the staffing plan

Team member lacks the right skill set or experience is lower than
needed
Accident leads to loss of a team member
9- 23
Unit 9
Develop Project Team: Introduction


Improving project performance by improving competencies and
team interaction
9- 24
Unit 9

Inputs
Tools
Outputs
HR management plan
Interpersonal skills
Team performance
assessments
Training
EEF updates
Resource calendars
Team-building activities
Ground rules
Colocation
Recognition and rewards
Personnel assessment tools
9- 25
Unit 9
Develop Project Team: Key Points

Objectives of developing the project team:

Improve the ability of individual team members to contribute to the
project
Improve the ability of the team to function effectively (teamwork, trust,
cohesiveness, and collaborative problem solving)
Enhance project performance
Team development is important throughout the entire project life

cycle
Developing an effective team is a primary responsibility of the
PM:
Motivation, team building, effective communication
Managing conflict, collaborative problem solving, and managing cultural
diversity
9- 26
Unit 9
Inputs to Develop Project Team

HR management plan: Provides guidance about team issues such as

team building, rewards, training, and feedback
Project staff assignments: Identifies the people on the team who may
need development
Resource calendars: Identifies when team members would be available

for development activities
Team building
Training
9- 27
Unit 9
Tools for Develop Project Team

Interpersonal skills: Behavioral competencies also called soft skills

(remember the following list as PLINCM)
Problem solving: Defining the problem, identifying alternatives, and

making a timely decision
Leadership: Developing a vision and strategy and motivating others to

achieve that vision
Influencing: Getting things done even though you may have limited
formal power
Negotiating and conflict management: Conferring with others to reach

an agreement or to overcome a problem
Communicating: The exchange of information

Motivating: Energizing people to high levels of performance
9- 28
Unit 9

Training: Formal (classroom) or informal (coaching or mentoring) to develop

competence and enhance performance
Team-building activities: Range from quick exercises during a meeting to

professionally facilitated team sessions such as a ropes course
Objective: Develop rapport and trust, develop collaborative problem
solving skills
Be familiar with the Tuckman model (or ladder): Identifies five stages
teams experience in working together
9- 29
See next slide!
Unit 9

Tuckman model: Five stages of behavior experienced by project teams

Forming: Team meets and learns about the project. Members
experience some confusion and uncertainty. Members are independent
and not yet open to other members.
Storming: As work begins, members are committed to their own ideas
and compete for assignments and control. Conflict between sub-groups
may occur.
Norming: Members begin to adjust and support the team. Trust begins
to develop. Ideas and information are shared.
Performing: Team functions as a cohesive, well organized unit. Issues
are handled smoothly.
Adjourning: Team completes the project and begins to be reassigned.
Separation anxiety may occur.
Note: Stages may be skipped or repeated or never achieved!
9- 30
Unit 9

Ground rules: The team establishes its own behavioral expectations and
guidelines
Listening
Being on time
Taking personal responsibility for communication
Colocation: Team members sit in the same physical vicinity

Also called a tight matrix
Enhances communication and team development
When colocation is not possible, a war room is recommended
A war room creates a better sense of identity with the project
9- 31
Unit 9

Recognition and rewards: Actions that promote or reinforce desired

behaviors
Project teams may need their own system (the organization may not
directly support individual projects)
Examples: Access to education opportunities, a computer upgrade, time
off
Personnel assessment tools: Gaining insights into team strengths and

weaknesses
Attitudinal surveys and structured interviews
Ability tests and focus groups
9- 32
Unit 9
Outputs from Develop Project Team

Team performance assessments: Formal or informal assessments

Indicators of good team performance:
Project technical, schedule, and cost goals are met
Improvements occur in skills and team cohesion
Reduced turnover rates
EEF updates:
Updates to employee training records
Skill assessments
9- 33
Unit 9
Manage Project Team: Introduction


Involves tracking team performance, providing feedback,
resolving issues, and managing team changes
Key skills in managing the team:
Communicating and negotiating
Managing conflict and leadership
Managing the team is more complicated when members report

to more than one boss (especially problematic in the matrix)
9- 34
Unit 9
Manage Project Team

Inputs
Tools
Outputs
HR management plan
Observation and conversation
Change requests
Project performance appraisals

updates
Team performance
assessments
Conflict management
Project documents
updates
Issue log
EEF updates
OPA updates
OPA
9- 35
Unit 9
Inputs to Manage Project Team

HR management plan: Addresses acquiring, managing, controlling, and

releasing resources. Especially important information
Roles and responsibilities
Organizational structure
Staffing management plan
Project staff assignments: The list of team members who may need
performance reviews and who must be managed
Team performance assessments: Assessment of the entire teams

performance as a group. Purpose: Deal with conflict and improve
communication
Issue log: Assigns responsibility to handle specific issues by a target date

9- 36
Unit 9
Inputs to Manage Project Team

Work performance reports: Documents actual performance against the

following plans
Scope, schedule, cost
Quality and procurement
OPA: OPA in this case identifies ways to show appreciation and reward
people
Certificates of appreciation
Recognizing peoples work in newsletters and on websites
Financial bonuses
Corporate apparel, back-packs, briefcases
Special parking, window office, computer upgrade
9- 37
Unit 9
Tools for Manage Project Team

Observation and conversation: Techniques to be in touch with morale

and feelings of the team
MBWA: Management by walking around (get out of your office

and interact with people)
Project performance appraisals: The need for appraisals is affected by

several factors
Policies on appraisals
Length of the project (will the appraisal come due?)
Organizational structure (PM has little input in a weak matrix)
9- 38
Unit 9

Conflict management: Expect numerous potential questions on this topic

PMI survey: Top 7 sources of conflict (in order of likelihood)
Schedules
Priorities
Resources
Technical opinions
Administrative procedures
Costs
Personalities
Conflict can be constructive:
9- 39
May increase creativity and lead to better decision making
Unit 9

Conflict management (continued):

Conflict should be:
Addressed early
Usually handled in private
Handled with a direct, collaborative approach
There is a model created by Thomas and Kilmann with five methods for
handling conflict:
Technique
Problem Solve/Collaborate
Description
Approached as a problem to be solved
Open exchange of information
Satisfy the needs of both parties, win-win
Issues are too important for compromise
Requires cooperation and commitment to a
genuine search for the win-win solution
9- 40
Unit 9
Conflict Model (continued)

Technique
Compromise/Reconcile
Description
Find solutions with a degree of satisfaction
Partial wins for each party
Concessions and trade-offs
Used as back-up when problem solving breaks
down or running out of time
A temporary solution is needed
TK: Might result in lose-lose if solution not
supported
Smooth/Accommodate
Emphasizing areas of agreement vs. areas of

disagreement
Conceding your position to maintain harmony
Used when a problem is threatening your ability
to reach an agreement
Problem: The solution may be temporary
9- 41
Unit 9
Conflict Model (continued)

Technique
Withdraw/Avoid
Description
Retreating temporarily from conflict
Used when belligerent, angry behavior
threatens the agreement and relationship
Also used when the issue is not important
enough to risk damaging the relationship
Force/Compete
Offers only win-lose solutions

Pursuing your viewpoint at the expense of
others
Used in an emergency or to protect your team
from outside, forceful attack or pressure
Caution: May cause the following 2 problems
Create an enemy
Stalemate
9- 42
Unit 9

Interpersonal skills: Getting the best from your team using these skills
Leadership: Creating a vision and the energy to achieve it
Influencing: Get things done when you lack formal authority
Decision making (Referred to earlier as problem solving)
9- 43
Unit 9
Outputs from Manage Project Team

Change requests: Staffing changes should be handled using the

Integrated Change Control process
Project management plan updates: The HR management plan may be

updated
Project documents updates: Includes potential updates to the issue log,

roles description, and staff assignments
EEF updates:
Inputs to performance appraisals
Personnel skill updates
OPA updates:
Historical information, lessons learned, templates, standard processes
9- 44
Unit 9
Other Topics

Power and authority
Motivation theories:
Hierarchy of needs, Theory X-Theory Y, Hygiene factors
Expectancy theory, Trichotomy of needs, Managerial grid
Myers-Briggs Type Indicator
Leadership styles, Delegating, Resource Gantt chart

Kick-off meetings, Halo error, Concurrent engineering
Fringe benefits, Perquisites, Arbitration, Productivity
9- 45
Unit 9
Sources of Power and Authority for the PM

Legitimate/Formal: Derived from job title and position on

organizational chart
Technical/Expert: Technical knowledge of the product

Reward: Leverage via $ and other rewards
Referent: Name dropping (using someone elses power)
Coercive or Penalty: Threats or retribution (use sparingly)
Bureaucratic: You know how to work the system and people
owe you a favor
Charisma: Interpersonal skills that elicit cooperation because

people like you
9- 46
Unit 9
Maslows Hierarchy of Needs

9- 47
Unit 9
McGregors Theory X and Theory Y

Theory X:
McGregors traditional view that workers are basically lazy
Appropriate management style: Strong, top-down control
Man is not spontaneously fond of work Freud
Theory Y:
McGregors social view that workers are inherently motivated
Management style: Provide support, training, and a good work
environment. The workers will do the rest
9- 48
Unit 9
Herzbergs Hygiene Factors

Hygiene factors are working conditions such as:

Attitude of your boss
An adequate place to work
Being paid fairly compared to others doing the same work
Inadequate attention to hygiene factors may lead to low

morale, dissatisfaction, and outright anger
Conversely, satisfying these conditions is simply
expected and will not directly produce high motivation in
workers
9- 49
Unit 9
Vrooms Expectancy Theory

People will be productive and motivated IF:

1. They believe successful results are feasible or possible
AND
2. They believe a successful outcome will be rewarded
9- 50
Unit 9
McClellands Trichotomy of Needs

Also called Needs-Achievement Index, addresses the following needs:
Need for Achievement:

Prefer tasks with personal responsibility
Want results based on personal effort; not just good luck
Prefer prompt feedback on work results
Need for Power:

Desire chance to wield power and influence over others
Seek positions with status and authority
May be more concerned about influence than work results
Need for Affiliation:

Motivated by being liked and accepted
Will participate and support social events
May be uncomfortable with conflict
9- 51
Unit 9
Blake and Moutons Managerial Grid

Measures the following two aspects of how people lead:
Concern for Production:

Leaders with a high concern for results or production
Concerned primarily about tasks and getting things done
Concern for People:

Leaders with a high concern for feelings and morale
High concern for good workplace environment and employee
comfort
Note: Effective leadership is combining these two factors in a balanced

way and not over-emphasizing one dimension:
9- 52
A 1,9 score (total concern for people)

A 9,1 score (total concern for results)
A 5,5 score (balanced approach)
Unit 9

9- 53
Unit 9
Leadership Styles
Autocratic:
Leader makes decisions without input from others
Quick and efficient when you have all the facts
Not a good dominant style in some cultures
Laissez-faire:
Leave be; let alone
Good style with high-knowledge experts
Need clear objectives and support from boss, otherwise this style
is passive and hands-off
Democratic:
A participative style
Leader seeks input and builds consensus
Voting may be involved
9- 54
Unit 9
Delegating
Delegating is the process of distributing authority from the

project manager to another person
You may delegate authority but not responsibility (the PM
remains ultimately responsible)
Failure to delegate effectively is expensive and unproductive
Develops team skills
Improves productivity and morale
9- 55
Unit 9
What Not to Delegate

Sensitive aspects of leadership:

Hiring
Firing
Pay
Organizational policies
Management of key stakeholders
9- 56
Unit 9
Resource Gantt Chart

Uses the structure of a traditional Gantt chart: The task and the
timing
Adds assigned resources to the display: The result is who does

what and when
Recall earlier we said the RAM did not show timing: The
resource Gantt chart shows everything (who, what, when)
9- 57
Unit 9
Kick-Off Meetings
Kick-off meetings are the responsibility of the PM

This question sometimes asked as a negative: Which is not
PMI list of objectives for kick-off meetings:
Introduce team members
Establish working relationships
Establish lines of communication
Set/review goals and objectives
Review project status
Review project management plan
Identify problems and issues
Establish responsibilities and accountabilities
Obtain commitments
9- 58
Unit 9
Halo Error and Concurrent Engineering

Halo error: Rating someone consistently high or low based on preconceived notions
Concurrent engineering:
Overlapping tasks and phases in a project
Forming a multi-disciplinary core team early in the project
More work done in parallel and fewer late changes
Technique has proven track record in reducing costs and improving
schedules
9- 59
Unit 9
Definitions
Fringe benefits: Standard items provided to employees

Education, training, profit sharing
Medical benefits, employer matching of social security payments
Perquisites (perks): Special awards only for select people

Executive dining room and company car
A corner office and special parking place
Arbitration: Disputes heard by a neutral third party

Productivity: A ratio of output divided by input
Usable items produced divided by hours of labor
9- 60
Unit 9
9- 61
Unit 10
COMMUNICATIONS MANAGEMENT
10-1
Unit 10
Communications Management Concept

Communications management includes the processes required

to ensure timely handling of information:
Planning
Managing:
Creating
Distributing
Storing
Retrieving
Disposing
Controlling
10-2
Unit 10
Communications Management: Key Points

Dimensions of communicating:
Written and oral
Formal and informal
Verbal (voice inflection) and non-verbal (body language)
Internal (within the project) and external (outside the project)
Vertical (bosses, subordinates) and horizontal (peers)
Official (published reports) and unofficial (off the record)
Note: Written-oral and formal-informal will receive special attention in
the Other Topics section of the unit!
10-3
Unit 10
Communication Skills for Project Managers

Active listening
Paraphrasing, repeating what you think the sender meant
Questioning and probing

Educating to increase the teams knowledge
Fact-finding and managing expectations
Persuading, motivating, and coaching others
Negotiating and resolving conflict
Summarizing, recapping, and identifying next steps
10-4
Unit 10

Communications Management Processes
Other Topics
PMBOK Guide.
Drill Practice
10-5
Unit 10
Overview of Communications Management Processes

10.1 Plan Communications Management (determining the

information needs of stakeholders and defining a communication approach)
10.2 Manage Communications (creating, collecting, distributing, storing,

retrieving, and disposing of project information in accordance with the plan)
10.3 Control Communications (ensuring the information needs of

stakeholders are actually met)
10-6
Unit 10

Process Groups
Knowledge
Areas
Initiating
Planning
Executing
Controlling
Plan
communications
management
Manage
communications
Control
Communications
Closing
Integration
Scope
Time
Cost
Quality
HR
Communication
Risk
Procurement
Stakeholder
10-7
Unit 10
Plan Communications Management: Introduction


Involves discovering information needs of stakeholders and
devising an appropriate communication plan
The communication plan should address:
Who needs what information
When they need it
How they will get it
Who will give it to them
Communication planning should be done early in the project and

reviewed regularly
10-8
Unit 10
Effective vs. Efficient Communication

Effective communication:
Information to the right audience
At the right time
In the right format
Efficient communication:
Providing only the information needed
Avoiding information overload
10-9
Unit 10
Plan Communications Management

Inputs
Tools
Outputs
Communication
requirements analysis
Communications
management plan
Communication technology
EEF
Communication models
OPA
Communication methods
Meetings

10-10
Unit 10
Inputs to Plan Communications Management

Project management plan: Describes how the project will be executed,

monitored, controlled, and closed
Stakeholder register: Identifies potentially important stakeholders

EEF: All 13 factors are potentially relevant to communication planning
OPA: All OPA information is potentially relevant (standard procedures and
knowledge base)
Historical information and lessons learned are especially important
10-11
Unit 10
Tools for Plan Communications Management

Communication requirements analysis: Determines the information

needed by stakeholders
Focus on information really needed
Avoid information overload and distracting minutiae
Understand the number of communication channels you must support
The number of channels is a measure of communication complexity
Know that communication channels increase at greater than a linear rate
10-12
Unit 10
Communication Channel Example

10-13
Unit 10
Communication Channels: More Examples

You had 21 members on your project team and you just lost 5 of
them. How many fewer channels do you now have?
Calculate the number of channels for 21 people
Calculate the number of channels for 16 people and determine the
difference
Answer: ________
You had 17 members on your project team and you just lost 4 of
them. A new stakeholder just raised an important issue. How
many communication channels do you now have to maintain?
The new number of people is: 17-4+1 = 14 people
Calculate the number of channels for 14 people
Answer: ________
10-14
Unit 10

Communication technology: Methods used to transfer information

Can be low tech: Conversations and meetings
Can be high tech: Automated, computerized
Factors in choosing appropriate technology:
Urgency and technology already in use (is it sufficient?)
Availability and ease of use
Project environment (a virtual team might require advanced
technologies)
Sensitivity and need for confidentiality
10-15
Unit 10

Communication models: PMI describes the following basic model

Encode: Sender encodes thoughts into a message
Transmit message: Send message using appropriate medium (voice,
letter, email, )
Noise is anything that interferes with receipt or understanding
Decode: Receiver translates message
Acknowledge: Receiver acknowledges receipt
Receipt of a message does not equal agreement or understanding
Feedback/Response: Response to the sender
Note: A PMI survey found project managers spend up to 90% of their
time communicating and handling information
10-16
Unit 10
Communication Models: Other Information

Sender is responsible for:

Making the information clear, unambiguous, and complete
Confirming receivers understanding
Receiver is responsible for:

Making sure the entire message was received
Confirming accurate understanding (active listening is recommended)
Other notes:
Formal communication is best in writing
Advantages of verbal communication:
Fast and immediate feedback is possible
Supports brainstorming of a complex problem
10-17
Unit 10
Communication Models: Effective Listening

Effective listening includes:

Asking for clarification
Repeating what you heard
Observing body language (non-verbal clues)
Maintaining eye contact
10-18
Unit 10
Tools for Plan Communications Management (continued)

Communication methods: PMI identifies three methods for sharing

information
Interactive communication: Multi-directional, two or more parties,
quick and efficient
Push communication: Information sent to specific recipients, does not
ensure receipt
Pull communication: Posting information so that it can be accessed
(pulled) when needed
Meetings:
Used to resolve problems and make decisions
Meetings should be adequately planned: Purpose, agenda, time, place,
etc.
10-19
Unit 10
Outputs from Plan Communications Management

Communications management plan: Documents how information will

be handled and contains
Stakeholder communication requirements
Information to be communicated
Purpose for the information
Senders, receivers, format, medium, technology
Frequency and method for updates
Escalation process
Information flows and glossary of terms
10-20
Unit 10
Outputs from Plan Communications Management


Project schedule
10-21
Unit 10
Manage Communications: Introduction


Involves creating, collecting, distributing, storing, retrieving, and
disposing of information in accordance with the plan
Ensures relevant information is:
Distributed
Received
Understood
Allows response to follow-on requests for information
10-22
Unit 10
Manage Communications
Inputs
Tools
Outputs
Communications management
plan
Communication technology
Project communications
Communication models

updates
EEF
Project documents
updates
OPA
Information management
systems
OPA updates
Performance reporting
10-23
Unit 10
Manage Communications: Key Points

Effective communication uses the following:

Sender-receiver models
Appropriate media
Writing style and presentation techniques
Meeting management
Listening techniques
10-24
Unit 10
Inputs to Manage Communications

Communications management plan: Describes how communications

will be planned, structured, monitored, and controlled
Work performance reports: Used to collect and distribute project status;

the information should be accurate and current
EEF:
Organizational structure, regulations and standards
Information system
OPA:
Policies, procedures, and templates
10-25
Unit 10
Tools for Manage Communications

Communication technology: Choosing appropriate communication

technologies
Communication models: Selecting and using appropriate communication

models
Managing communication barriers and noise
Communication methods: The use of interactive, push, and pull methods
10-26
Unit 10
Tools for Manage Communications

Information management systems: Distributing information using

Hard copy documents: Letters, memos, and reports
Electronic communications: E-mail, voice mail, telephone, video and
web conferencing
Electronic project management tools: Project management software,
portals, and collaborative work management tools
Performance reporting: Analyzing the difference between planned status

and actual status (identifying variances and taking corrective action)
Reporting by exception is recommended (avoid information overload)
Three major types of reports:
Status reports (analyzing variances)
Progress reports (listing deliverables completed)
Forecasts (predicting future status using measures such as EAC)
10-27
Unit 10
Outputs from Manage Communications

Project communications: Typical communications may include

Performance reports, status of deliverables
Status of schedules, costs, and changes
Project management plan updates: Actual performance outcomes may

dictate changes in three areas of the plan
Project baselines (scope, schedule, cost)
Stakeholder management
10-28
Unit 10
Outputs from Manage Communications

(Reference Manual p. 10-9 & 10, PMBOK Guide pp. 301-303)

Issue log
Project schedule
Funding requirements
OPA updates:
Lessons learned documentation
Project records, reports, and presentations
Information provided to stakeholders
Feedback from stakeholders
10-29
Unit 10
Control Communications: Introduction


Ensures the information needs of stakeholders are met
effectively and efficiently
May result in iterations of the previous planning and managing
processes to make appropriate adjustments
Ultimate goal: Deliver the right message to the right people at
the right time
10-30
Unit 10
Control Communications
Inputs
10-31
Tools
Outputs
Information
management systems
Expert judgment
Change requests
Issue log
Meetings

updates
OPA
OPA updates
Unit 10
Inputs to Control Communications

Project management plan: Contains the communications management

plan with the following important information
Reason, timing, and frequency for required information
Who communicates the information
Who receives the information
Project communications: Provides the status of deliverables, schedules,

and costs
Issue log: Assigns an action, owner, and target date for resolution
10-32
Unit 10
Inputs to Control Communications

Work performance data: Organizes raw performance data so that actual

outcomes can be compared to planned baselines
OPA:
Report templates and communication technologies
Policies, standards, and procedures
Communication media
Record retention and security requirements
10-33
Unit 10
Tools for Control Communications

Information management systems: Provides a standard set of tools

that use distribution formats such as
Table reports and spreadsheet analysis
Presentations
Graphical methods to visually present project performance data
Expert judgment: Technical and management knowledge to determine the

need for intervention and action plans
Meetings: Provide a forum for discussing project performance and

responding to stakeholders
10-34
Unit 10
Outputs from Control Communications

Work performance information: Summarizes performance data, usually

in the areas of scope, schedule, and cost
Change requests: Controlling communications may result in the need for

intervention, action, and adjustment
Always use Perform Integrated Change Control to process changes
Changes may lead to:
Revisions to activities, schedules, costs, resources, and risks
Updates to the project plan
Recommendations for corrective or preventive actions
10-35
Unit 10
Outputs from Control Communications

Project management plan updates: May update the human resource,

communications, or stakeholder management plans
Project documents updates: May update forecasts, issue logs, and

performance reports
OPA updates: Adding any new lessons learned to the OPA knowledge
base
10-36
Unit 10
Other Topics

Barriers to communication
Improving team communication (six actions)
Roles for a meeting chairperson
Documentation
Organizational structure and complexity of communication
Formal-informal combined with written-oral
10-37
Unit 10
Barriers to Communication
Cultural differences
Lack of clear communication channels
Physical and temporal distance (time zones)
Technical language
Distracting environment (noise, temperature)
Poor attitudes (antagonism)
Note: The presence of any communication barriers increases the chance of
conflict!
10-38
Unit 10
Six Actions to Improve Team Communications

Be an effective communicator:
Foster 2-way communication including feedback and consensus
PMI: Effective communicators have high regard for the opinions and
feelings of other people
Be a Communications expeditor:
Use both formal and informal channels
Enhances project integration
Discourage communications blockers:

Itll never work, the boss wont buy it
Get real, Thats nice but its too expensive
We tried thatit didnt work
10-39
Unit 10
Six Actions to Improve Team Communications

Use a tight matrix: Not the same as weak or strong matrix!

Physical colocation of the team
Improves communication, enhances team relationships, minimizes
distractions
Get a project war room:

A room assigned to the team for the duration of the project
Improves identity with the team
Make meetings effective: Have good meeting policies (PALM)

Communicate the Purpose, have and follow an Agenda
Communicate length, location, other Logistics
Publish Minutes and consider team building
10-40
Unit 10
Roles for the Meeting Chairperson

Encourage participation: Ensure quiet people are heard

Handle differences of opinion
Prevent drift and disruption: Use and enforce an agenda
Periodically summarize key issues: Be the gatekeeper who keeps the
meeting on track
10-41
Unit 10
The Role of Good Documentation

Documentation is important regardless of project size

Disciplined documentation will reduce unauthorized changes in
scope
Project management plan especially important:
The analysis in preparing the plan actually reduces uncertainty
Distributing the plan keeps stakeholders informed
10-42
Unit 10
Organizational Structure
One challenge of the matrix organizational structure:

The communication and information flows are more complex than for
projectized or functional structures
10-43
Unit 10
Formal-Informal vs. Written-Oral Communications

Method
10-44
When Used
Formal, Written
Contractual issues
Project documentation
Some e-mails
Formal, Oral
Presentations
Speeches
Some meetings
Informal, Written
Memos
Notes
Some e-mails
Informal, Oral
Conversations
Some meetings
Unit 10
10-45
Unit 11
RISK MANAGEMENT
11-1
Unit 11
Risk Management Concept

Risk management includes the processes concerned with

planning, identifying, analyzing, responding, and controlling
project risks
Objectives:
Increase likelihood and impact of positive events
Decrease likelihood and impact of negative events
11-2
Unit 11
Risk Management: Key Points

Risk: An uncertain event that could have a positive or a negative effect on

the project
Known risks: Have been identified and can be managed

May be assigned a contingency reserve
Unknown risks: Cannot be adequately understood in advance

May be assigned a management reserve
Risk management: Identifying, analyzing, and responding to project risks

Failure to proactively manage risks increases the chance of failure
11-3
Unit 11
Risk Management: Key Points

Utility theory or utility function: Balancing a risk against the potential

reward
Also called risk tolerance or preference
Some organizations are likely to take risk while others prefer to avoid it
Uncertainty vs. risk: PMI defines uncertainty as a lack of information that

makes it difficult to estimate the likelihood of an event
Risk factors:
Risk event (description of what might happen to the project)
Risk probability (the likelihood that the event will occur)
Amount at stake (the magnitude of the loss or gain)
11-4
Unit 11
Business Risk vs. Insurable Risk

Business Risk
Insurable Risk
The normal risk of doing business
Protecting from injury or property damage
Opportunity for gain or loss
Only an opportunity for loss
Should be managed:
Should be insured:
Plan
Property damage (fire, flood, wind)
Identify
Indirect loss (cost of cleanup after a

loss)
Qualitative analysis
Quantitative analysis
Response
Legal liability (injury to visitors)

Personal injury (employee injuries,
worker compensation)
Control
11-5
Unit 11

Risk Management Processes
Other Topics
PMBOK Guide.
Drill Practice
11-6
Unit 11
Overview of Risk Management Processes

11.1 Plan Risk Management (defining how to conduct risk management

activities)
11.2 Identify Risks (determining which risk events might affect the project)
11.3 Perform Qualitative Risk Analysis (performing qualitative
analysis and prioritizing of risks)
11.4 Perform Quantitative Risk Analysis (numerically analyzing

identified risks)
11.5 Plan Risk Responses (deciding how to enhance opportunities and

reduce threats)
11.6 Control Risks (identifying new risks, tracking identified risks,

implementing risk response plans, and evaluating risk management
effectiveness)
11-7
Unit 11

Process Groups
Knowledge
Areas
Initiating
Planning
Executing
Controlling
Closing
Integration
Scope
Time
Cost
Quality
HR
Communication
Plan risk management
Identify risks
Qualitative analysis
Quantitative analysis
Plan risk responses
Risk
Control risks
Procurement
Stakeholder
11-8
Unit 11
Plan Risk Management: Introduction


Involves deciding how to conduct risk management activities for
the project
The risk management plan is important:
For establishing communication with stakeholders
Obtaining continuing support from stakeholders
Risk planning should begin during project initiation and be

completed early during the planning process
11-9
Unit 11
Plan Risk Management

Inputs
Tools
Project charter
Expert judgment
Meetings
Outputs
EEF
OPA

11-10
Unit 11
Inputs to Plan Risk Management

Project management plan: All subsidiary management plans must be

taken into account so that the risk management plan is consistent
Project charter: Identifies high-level risks and requirements

Stakeholder register: Identifies potentially important stakeholders who
may have concerns or information relevant to project risks
EEF: Risk attitudes and tolerances within the organization

OPA:
Risk categories, risk statement formats, and standard templates
Roles, responsibilities, and common definitions
Lessons learned and authority levels for decisions
11-11
Unit 11
Tools for Plan Risk Management

Analytical techniques: Used to understand the overall risk management

context
Risk context is a combination of risk attitudes and risk exposure
A risk profile analysis documents stakeholder risk attitudes
Risk scoring sheets could quantify the risk exposure of the project
Expert judgment: Used to improve the risk management plan

Meetings: Planning meetings attended by key stakeholders
Develop the risk management plan
Estimate contingency and reserve amounts, assign risk responsibilities
Develop risk templates
11-12
Unit 11
Outputs from Plan Risk Management

Risk management plan: Documents how risk identification, qualitative

and quantitative analysis, response planning, and control will be handled
Methodology, roles, and responsibilities
Budgeting and timing
Risk categories (may use a risk breakdown structure, RBS)
Definitions of probability and impact
Probability and impact matrix
Revised stakeholder tolerances
Reporting formats and tracking
11-13
Unit 11
Identify Risks: Introduction


Determining which risk events are likely to affect the project
Risk identification is an iterative process (not a one-time event)
The risk statement should allow comparison of the relative effect
of various risk events
The project team should be involved to develop a sense of
ownership
11-14
Unit 11
Identify Risks
Inputs
Tools
Documentation reviews
Information gathering techniques
Checklist analysis
Assumptions analysis
HR management plan
Diagramming techniques
Scope baseline
SWOT analysis
Expert judgment
Outputs
Risk register

Project documents
Procurement documents
EEF
OPA
11-15
Unit 11
Inputs to Identify Risks

Risk management plan: Assigns roles and responsibilities, establishes

required budget and schedule for risk management activities
Cost management plan: Establishes how cost reserves will be handled

Schedule management plan: Requires duration estimates with ranges
and addresses how schedule reserves will be handled
Quality management plan: May provide information about technical risks

HR management plan: May provide information about human resource
risks
11-16
Unit 11

Scope baseline: Contains the scope statement and the WBS

The scope statement documents assumptions (which may pose risks)
One use of the WBS is risk identification (by work package)
Activity cost estimates: Estimates with wider cost ranges are more risky
Activity duration estimates: Estimates with wider ranges indicate work
that is inherently more risky
Stakeholder register: Stakeholders may provide information about risks

Project documents: Documents aimed at improving team communication
Project charter, project schedules, issue log
Quality checklist and any other miscellaneous information
11-17
Unit 11

Procurement documents: Helps assess outsourcing risks

EEF:
Published information, including commercial databases
Academic and industry studies
Benchmarking and organizational risk attitudes
OPA:
Project files (historical data)
Risk statement templates
Lessons learned
11-18
Unit 11
Tools for Identify Risks

Documentation reviews: A structured review of all subsidiary

management plans (scope, schedule, cost, )
Information-gathering techniques:
Brainstorming: Generates, refines, and categorizes risk information
Delphi technique: Experts answer questions anonymously and the
results are summarized
Objective: Reach consensus among the experts after several
iterations
Interviewing: Conducted by experienced subject matter experts
Root cause analysis: Grouping risks by cause or category
11-19
Unit 11

Checklist analysis: Uses information from previous, similar projects

Allows the creation of customized lists on the likely sources of risk:
Technology, cost, schedule, internal, external
Procurement, legal, poor planning, changes in requirements
Assumptions analysis: Re-examining the validity of all assumptions

Diagramming techniques:
Cause and effect diagrams (Ishikawa, Fishbone)
Flowcharts (process or system)
Influence diagrams (graphical depictions of possible causal influences)
11-20
Unit 11

SWOT analysis: Strengths, Weaknesses, Opportunities, Threats

Considers risk from multiple perspectives
Also considers both positive and negative factors
Expert judgment: The use of subject matter experts with experience on

similar projects
11-21
Unit 11
Outputs from Identify Risks

Risk register: The risk register (database) is built in stages

New information is added as each process is performed
At this point, the risk register contains:
A list of potential risk events
A list of potential responses (if known from previous experience)
Risk triggers may also be developed:
11-22
A symptom or warning sign that a risk is about to occur
Example: You are concerned about cost risk and decide to track
the CPI. The CPI must remain within an established threshold or a
corrective action is triggered.
Unit 11
Perform Qualitative Risk Analysis: Introduction


Assesses the likelihood and impact of identified risks
Objective: Prioritize the risks and determine whether the project is facing
high risks
This technique uses qualitative methods and tools
By comparison, the next process (quantitative analysis) uses more
rigorous statistical methods such as simulations and decision trees
11-23
Unit 11
Perform Qualitative Risk Analysis

Inputs
Tools
Risk probability and impact

assessment
Scope baseline
Probability and impact matrix
Risk register
Risk data quality assessment
EEF
Risk categorization
OPA
Risk urgency assessment
Outputs
Project documents
updates
Expert judgment
11-24
Unit 11
Inputs to Perform Qualitative Risk Analysis

Risk management plan: Assigns roles and responsibilities as well as

monetary and time resources to accomplish risk management
Scope baseline: The scope statement provides insight into the basic nature
of the project
Some projects are inherently risky:
Technology developments
Projects with high complexity
Risk register:
The list of risk events identified during the previous process
11-25
Unit 11
Inputs to Perform Qualitative Risk Analysis

EEF:
Industry studies of similar projects
Risk databases from industry or proprietary sources
OPA:
Risks on similar projects (historical information)
Lessons learned
11-26
Unit 11
Tools for Perform Qualitative Risk Analysis

Risk probability and impact assessment:

Probability is the likelihood an event will occur
Impact is the effect on project objectives if the event actually occurs
These assessments are determined through interviews and meetings
Probability and impact matrix: Assigns risk ratings based on combined

probability and impact scores
Each risk event is classified as high, moderate, or low risk
The risk score helps guide risk responses
See the next slide for a visual example
Risk Data Quality Assessment: The quality of the risk data is related
directly to previous experience with similar projects
11-27
Unit 11
Probability and Impact Matrix

11-28
Unit 11
Tools for Perform Qualitative Risk Analysis

Risk categorization: The RBS (risk breakdown structure) groups related

risks into categories
Risk urgency assessment: Some risks require immediate, near-term

responses
Expert judgment: Used to more accurately assess probability and impact

for each risk event
11-29
Unit 11
Outputs from Perform Qualitative Risk Analysis

Project documents updates: Updating the risk register and assumptions

log
Risk rankings of the overall project and individual risk events
Information updated includes probabilities, impacts, category, and
urgency
Risks that may require additional analysis
A watch list is created for low risks that may require future monitoring
11-30
Unit 11
Perform Quantitative Risk Analysis: Introduction


Similar to qualitative analysis, this process assesses the
combined effects of probability and impact
The major difference is in the methods and tools used in the
analysis
Quantitative analysis uses more rigorous statistical methods
such as simulation, decision trees, and expected monetary
value
PMI says some projects do not need this level of sophisticated
analysis
11-31
Unit 11
Perform Quantitative Risk Analysis

Inputs
Tools
Data gathering and

representation techniques
Quantitative risk analysis and

modeling techniques
Expert judgment
Outputs
Project documents
updates
Risk register
EEF
OPA
11-32
Unit 11
Perform Quantitative Risk Analysis: Key Points

Monte Carlo simulation and decision tree analysis permit the

following:
Determine the probability that specific cost and schedule objectives can
be met
Quantify risk exposure to determine the amount of cost and schedule
reserves
Identify which risks require the most attention
Identify realistic cost, schedule, and technical performance targets
Determine how much reserve is needed to protect against cost and
schedule overruns
11-33
Unit 11
Inputs to Perform Quantitative Risk Analysis

Risk management plan: Establishes roles, responsibilities, budget, and

time needed to accomplish risk management activities
Cost management plan: Provides guidelines for handling risk reserves

Schedule management plan: Provides guidelines for handling risk
reserves
Risk register: Provides information from all previous processes

List of identified risks
Risk priorities from qualitative analysis
Risk categories
11-34
Unit 11
Inputs to Perform Quantitative Risk Analysis

EEF:
Industry studies of similar projects
Risk databases from industry groups or proprietary sources
OPA:
Information from previous, similar projects
11-35
Unit 11
Tools for Perform Quantitative Risk Analysis

Data gathering and representation techniques:

Interviewing: Collecting data from subject matter experts to build
probability distributions
Similar to the idea of optimistic, most likely, and pessimistic estimates in
PERT
Probability distributions: The outcome of interviewing is establishing

distributions such as normal, uniform, beta, and triangular
11-36
Unit 11

Quantitative risk analysis and modeling techniques:

Sensitivity analysis: Determines which risks have the most potential
impact on the project
Similar to the idea of optimistic, most likely, and pessimistic estimates in
PERT
Example: What is the effect on costs, quality, and resource usage if task
duration varies?
Tornado diagrams compare the relative impact of variables with a high range
of uncertainty to those that are more stable
Tornado diagrams also identify which risk events have positive impacts that
are greater than the potential negative impact
An example: PMBOK Guide, Figure 11-15, p. 338
11-37
Unit 11

Quantitative risk analysis and modeling techniques (continued):

Expected monetary value (EMV): Calculates average outcome for
future uncertain scenarios
EMV = Probability of outcome multiplied by value of the outcome
Outcomes may be positive (gains) or negative (losses)
EMV is used as part of decision tree analysis
See examples of EMV in the following six slides
Modeling and simulation: Using a computer software model to

simulate possible project outcomes
Most common form is Monte Carlo
Can quantify potential risks, e.g. schedule and cost
Produces a distribution of possible outcomes with probabilities
CPM and PERT understate durations and are too optimistic compared to
Monte Carlo analysis
Simulation results are affected by the statistical distribution used
11-38
Unit 11
EMV Example #1
You are on vacation and have some mad money to spend at the Aces and
Eights Casino. You decide to play the following game: You wager $25 on the
chance of winning $1,000 or $100 or losing your money. With the following data
in mind, is the game a good idea financially?
Outcome
Probability
EMV
Win $1,000
1%
$10.00
Win $100
9%
$9.00
Lose $25
90%
-$22.50
Overall EMV:
11-39
-$3.50
Unit 11
EMV Example #2
You are attempting to prioritize the potential effects of several risk events. Your
boss wants to know which risk is the most important to manage carefully. You
decide to use EMV to calculate the expected losses from each event. With the
following data, which risk event poses the greatest financial risk in Euros?
Risk Event
Probability
Expected Loss
EMV
25%
-2,000,000
-500,000
70%
-450,000
-315,000
55%
-1,250,000
-687,500
90%
-900,000
-810,000
For the exam, Risk D (because of the high probability) calculates as

the greatest average loss when using EMV.
In the real world, other factors may also be relevant.
11-40
Unit 11
EMV: Other Examples

What is the EMV of a $500,000 gain if the probability is 80%?

500,000 x .80 = $400,000
What is the overall EMV for a project if it has a 60% chance of returning a
$200,000 profit and a 40% chance of suffering a $50,000 loss?
Outcome
Probability
EMV
$200,000
60%
$120,000
-$50,000
40%
-$20,000
Overall EMV
11-41
$100,000
Unit 11
Decision Tree: Example Scenario

You must decide whether to introduce a new snow blower into

stores in January or wait until February
The new product has design flaws that, if not fixed, may lead to
a high rate of returns with associated financial losses
Decision:
Release in January and take your chances
You must estimate sales and losses from repairs
Fix the design, release in February, and suffer some lost sales
Again, you must estimate sales and losses from repairs
11-42
Unit 11
Basic Structure of a Decision Tree

11-43
Unit 11
Decision Tree Example: Add EMV Data

11-44
Unit 11
Decision Trees: Key Points

11-45
Unit 11
Monte Carlo Simulation: Effect of Path Convergence

11-46
Unit 11

Expert judgment: Subject matter experts used to provide data and validate
quantification results
11-47
Unit 11
Outputs from Perform Quantitative Risk Analysis

Project documents updates: Updating the risk register

Probabilistic analysis of the project: Forecast of cost and schedule
outcomes with confidence levels (probability data)
Probability of achieving cost and schedule objectives: A quantitative
analysis of the likelihood of meeting specified goals
Prioritized list of quantified risks: Risks that pose the greatest threats
or offer the greatest opportunities
Trends in quantitative risk analysis results: Documenting trends, if
any, in the risk analysis
11-48
Unit 11
Plan Risk Responses: Introduction


Deciding how to enhance opportunities and reduce threats
Owners for each risk response should be assigned:
Take responsibility for each assigned response
Risk responses should be:

Appropriate for the severity of the risk
Cost effective and timely
Agreed upon and realistic
Owned by a specific person
11-49
Unit 11
Plan Risk Responses

Inputs
Tools
Outputs
Strategies for negative risks or

threats

updates
Risk register
Strategies for positive risks or

opportunities
Project documents
updates
Contingent response strategies

Expert judgment
11-50
Unit 11
Inputs to Plan Risk Responses

(Reference Manual pp. 11-16, PMBOK Guide p. 343)
Risk management plan:

Assigns risk owners
Defines thresholds for low, moderate, and high risks
Establishes the time and budget for conducting response activities
Risk register: Contains the results of previous processes

Identified risks, priority, and risk triggers
Root causes and risk categories
List of potential responses
Risks requiring near-term response
Watch list of low risks
11-51
Unit 11
Tools for Plan Risk Responses

Strategies for negative risks or threats:

Avoid: Attempts to eliminate the threat
Reduce scope or change project objectives
Extend the schedule or adopt a safer, proven approach
Transfer: Bringing another party into play (also called deflect)

Insurance and/or warranty
Outsource the work and use a fixed price contract
Mitigate: Actions to reduce the probability or impact of a risk

Use a less complex approach or conduct more tests
Employ redundancy and back-up systems, choose proven suppliers
Accept: The only technique that applies to both negative risks and
positive opportunities
Used for a low risk: Take no action, handle the risk later if it actually occurs
11-52
Unit 11

Strategies for positive risks or opportunities:

Exploit: Apply maximum possible support
Assign the best resources, use the best technologies
Sponsor exerts maximum influence, provide better cost and schedules
Share: Joint ventures, alliances, and other collaboration

Share costs and risks
Build on synergy of each partner doing what they excel at
Enhance: Increasing the probability or impact of an opportunity

Maximize natural advantages: superior technology or distribution channels
Add resources to finish earlier
Accept: Minimal support of inferior opportunities

Do not divert your best resources away from more promising opportunities
11-53
Unit 11

Contingent response strategy: Response plans only used when specific

events occur first
Example: A response plan is triggered only if a given milestone was
missed
Expert judgment: Subject matter experts assisting with response planning
11-54
Unit 11
Outputs from Plan Risk Responses

Project management plan updates: Typical changes may include

Schedule and cost management plans
Quality, HR, and procurement management plans
Baselines: Scope, schedule, cost
Project documents updates: Updates to the risk register

Assignment of risk owners and agreed response strategies
Budget and schedule needed to implement response plans
Risk triggers and contingency reserves
Contingency and fallback plans
Residual and secondary risks
Other: Assumptions log, technical documents, change requests
11-55
Unit 11
Control Risks: Introduction


Involves:
Identifying new risks
Ensuring that response plans are implemented
Evaluating the effectiveness of response plans
Monitoring residual risks (risks not covered by formal planning)
Other control activities:

Determine whether assumptions are still valid
Decide whether to change or retire a risk
Decide whether to modify cost or schedule reserves
11-56
Unit 11
Control Risks
Inputs
Tools
Outputs
Risk reassessment
Risk register
Risk audits
Change requests
Variance and trend

analysis

updates
Technical performance
measurement
Reserve analysis
OPA updates
Meetings
11-57
Unit 11
Inputs to Control Risks

(Reference Manual pp. 11-20, PMBOK Guide pp. 350-351)
Project management plan: Contains the risk management plan

Assigns risk owners and the resources to carry out risk monitoring
Risk register: Information from previous processes

Identified risks, risk owners, risk triggers
Residual and secondary risks, watch list, and planned reserves
Work performance data: The status of the work indicates whether certain
risks are occurring (deliverables, schedules, costs)
Work performance reports: Analyzing work performance data to create

status reports and forecasts
11-58
Unit 11
Tools for Control Risks

Risk reassessment: Identifies new risks, tracks current risks, and closes
risks that are outdated
For new risks: A response plan must be devised
For previously identified risks that actually occur: Evaluate the
effectiveness of the response plan (lessons learned)
For previously identified risks that do not occur: Record the data for
future use (quality of risk data)
Risk audits: Evaluates and documents the effectiveness of risk responses

and risk processes
May be part of regular status meetings or separate events
Variance and trend analysis: Used to monitor overall performance and

whether any deviations are caused by risks
11-59
Unit 11
Tools for Control Risks

Technical performance measurement: Using the results of testing and

prototyping to determine whether technical outcomes are on track
Reserve analysis: Evaluates whether remaining reserves are adequate to

cover remaining risks
Meetings: Risk management should be on the agenda for regular team

meetings
11-60
Unit 11
Outputs from Control Risks

Work performance information: Summarizes performance data and

provides a mechanism for on-going decision making
Change requests: Implementing contingency plans sometimes leads to

project changes (money, schedules, resources, etc.)
Changes may lead to corrective or preventive actions
Corrective actions may include:
Contingency plans: Devised up-front when a high risk is first
identified
Workarounds: A risk response devised after the risk has already
occurred (used when a low risk was previously accepted)
11-61
Unit 11
Outputs from Control Risks

Project management plan updates: May update risk information in the

project plan
Project documents updates: Updating the risk register

Risk reassessment and risk audit activities
Recording the occurrence of risk events and effectiveness of responses
OPA updates:
Templates for the risk plan and risk register
New lessons learned from risk management activities
11-62
Unit 11
Other Topics
(Reference Manual pp. 11-22 & 23, PMBOK Guide No Reference)

Probability theory
Risk versus estimating range
11-63
Unit 11
Probability Theory
The questions on probability have always been relatively simple

The questions have also assumed that the events in question
are statistically independent and mutually exclusive:
In other words, each event is an independent trial and is not affected by
what happened on another event
Probability of heads on a coin toss = 50%

Probability of heads on any subsequent trial also = 50%
Probability of heads twice in a row = 50% x 50% = 25%
If the probability of Event A is 30%, the probability of A not
happening is 70%, i.e. 1-P(A)
11-64
Unit 11
Probability Theory (continued)

If the probability of Event B is 20% during any given month, what

is the probability that Event B will not occur in the third month?
80%: Each month is an independent trial and the probability of this event
not occurring = 80% = 1-20%
From the previous question, what is the probability that Event B

will not occur two months in a row?
Probability of the event not occurring = 80%
Not occurring two months in a row = 80% x 80% = 64%
If the P(A) is 50% and the P(B) is 60%, what is the probability
that A and B both occur? Multiply the probabilities: 50% x 60% = 30%
11-65
Unit 11
Risk vs. Estimating Range

Recall that if your cost or duration estimate has a wider range,

you are communicating that the work is more uncertain
Which of the following three cost estimates shows work with the
highest risk or uncertainty?
a. $100,000 plus or minus $10,000
b. $95,000 to $110,000
c. $88,000 to $105,000
11-66
Unit 11
11-67
Unit 12
PROCUREMENT MANAGEMENT
12-1
Unit 12
Procurement Management Concept

Procurement management includes the processes for

purchasing or acquiring products and services from outside the
organization
Under U.S. contract law, contracts are:
Legally binding (if they meet four conditions-will be covered later)
Subject to remedy in the courts
12-2
Unit 12
Procurement Management: Key Points

A contract may also be called an agreement, an understanding,

a subcontract, or a purchase order
Because they are legally binding, contracts are usually subject
to a more extensive review process than other documents
Complex projects usually involve managing multiple contracts
The seller may be called a contractor, subcontractor, vendor,
service provider, or supplier
The buyer may be called a client, customer, acquiring
organization, service requestor, or purchaser
A buyer may also be called a prime contractor or contractor when the
contractor is, in turn, outsourcing part of their work
12-3
Unit 12

Procurement Management Processes
Other Topics
PMBOK Guide.
Drill Practice
12-4
Unit 12
Overview of Procurement Management Processes

12.1 Plan Procurement Management (documenting what to purchase,

specifying the approach, and identifying potential sellers)
12.2 Conduct Procurements (obtaining seller responses, selecting

sellers, and awarding contracts)
12.3 Control Procurements (managing procurement relationships,

monitoring contract performance, and making changes as needed)
12.4 Close Procurements (completing project procurements)
12-5
Unit 12

Process Groups
Knowledge
Areas
Initiating
Planning
Executing
Controlling
Plan procurement
management
Conduct
procurements
Control
procurements
Closing
Integration
Scope
Time
Cost
Quality
HR
Communication
Risk
Procurement
Close
procurements
Stakeholder
12-6
Unit 12
Plan Procurement Management: Introduction


Involves deciding which products or services should be procured
from outside the organization
This process also involves:
Specifying the procurement approach to be used
Identifying potential sellers
Specific questions that must be answered:

Whether to procure a product or service from outside
What, how, when, and how much to procure
12-7
Unit 12
Plan Procurement Management: Key Points

Procurement planning must consider the following:

Potential sellers (Is a buy decision feasible?)
The desired schedule (Best met through make in-house or buy from
the outside)
Risks (Best managed in-house or through buy from the outside)
The appropriate type of contract for the work
The exam has focused primarily on two types of contracts:
Fixed price
Cost reimbursable
12-8
Unit 12
Plan Procurement Management

Inputs
Tools
Outputs
Make-or-buy analysis Procurement management plan
Expert judgment
Procurement statement of work
Risk register
Market research
Activity resource
requirements
Meetings
Source selection criteria
Project schedule
Make-or-buy decisions
Change requests
EEF
OPA
12-9
Unit 12
Inputs to Plan Procurement Management

Project management plan: Describes project need and contains the

scope baseline
Scope statement: Requirements, deliverables, constraints,
assumptions, and acceptance criteria
Constraints include: delivery dates and available skilled resources
WBS: Describes and organizes the work

WBS dictionary: Details for control accounts and work packages
Requirements documentation: Identifies project requirements

Some requirements have contractual and legal implications: Health,
safety, environmental, licenses, and permits
These legal issues may dictate that outsourcing is necessary
12-10
Unit 12

Risk register: Outsourcing via a contract is sometimes chosen as a risk

mitigation strategy
Activity resource requirements: Work may be outsourced using a

contract if equipment and human resources are not available in-house
Project schedule: Outsourcing if in-house capabilities cannot meet the

required timeline
Activity cost estimates: Outsourcing if in-house costs are too high

Stakeholder register: Lists key stakeholders and their level of interest in
the project
12-11
Unit 12

EEF:
Conditions of the marketplace:
Is the product or service available in the marketplace?
Is a reputable contractor available at the right time?
Typical terms and conditions for the specific work needed

Unique local requirements that may exist geographically
OPA:
Procurement policies: Will certain work be set aside for small and
disadvantaged business?
Procedures for selecting contract type: You must know the differences
between fixed price and cost reimbursable contracts
12-12
Unit 12
Contract Types: Three Major Categories

Fixed price: Used for well defined product and risk is low
Seller bears most of the risk
Seller legally obligated to deliver finished product even if they lose
money
Cost reimbursement: Used when scope of work cannot be adequately

defined and risk is high
Buyer bears most of the risk
Seller not required to deliver finished product (must deliver best effort)
Time and material: Hybrid mix of fixed price and cost reimbursement
Seller paid a preset amount per unit, e.g., $200 per hour for engineering
services
Quantity to be delivered is left open ended (how many hours used)
12-13
Unit 12
Types of Contracts: Key Issues

Risk and type of contract

Factors in selecting appropriate type of contract
Cost reimbursement types:
Cost Plus Percentage of Cost (CPPC)
Cost Plus Fixed Fee (CPFF)
Cost Plus Incentive Fee (CPIF)
Cost Plus Award Fee (CPAF)
Fixed price types:

Fixed Price Incentive Fee (FPIF)
Firm Fixed Price (FFP)
Fixed Price with Economic Price Adjustment (FP-EPA)
12-14
Unit 12
Risk and Type of Contract

12-15
Unit 12
Factors in Selecting Type of Contract

Factor
12-16
Fixed Price
Cost Reimbursement
Ability to define scope
Scope is well defined
Scope vague, hard to define
Risk
Risk is low
Risk is high
Ability to estimate costs

accurately
Cost estimates are accurate
Cost estimates are difficult
Unit 12
CPPC Pricing: Cost Plus Percentage of Cost

12-17
Unit 12
CPFF Pricing: Cost Plus Fixed Fee

12-18
Unit 12
CPIF Pricing: Cost Plus Incentive Fee

12-19
Unit 12
CPIF Pricing: Calculation of Fee and Price

Given:
Solution:
Target cost = $100,000
Step 1. Calculate Fee Adjustment:
Target fee = $20,000
(Target cost Actual cost) x SSR
Share ratio = 50:50
(100k-90k) x .50
Problem to solve:
If actual costs are $90,000
What fee will seller earn?
What price does buyer pay?
+10k x .5 = +5k
Step 2. Calculate Fee:
Target fee + Adjustment
20k + 5k = 25k
Step 3. Calculate Buyer Price:
Actual Cost + Actual Fee
90k + 25k = 115k
Conclusion: Saved $10,000
Seller got half added to fee
Buyer got half subtracted from price
12-20
Unit 12
FPIF Pricing: Fixed Price Incentive Fee

12-21
Unit 12
FPIF: Pricing Exercise (PTA, Fee, Price)

Given:
Solution (PTA):
PTA Formula:

Share ratio = 75:25 (BS)
Ceiling price = $150,000
Ceiling Price-Target Price

Buyer Share
Problem to solve:
Calculate PTA:
(150,000-120,000) + 100,000
.75
What is the PTA?

40,000
+ Target Cost
+ 100,000 = $140,000
Next Slide Shows Fee and Price Calculations!
12-22
Unit 12
FPIF Pricing: Calculation of Fee and Price

Given:
Solution:
Step 1. Calculate Fee Adjustment:
(Target cost - Actual cost) x SSR
Share ratio = 75:25 (BS)
(100k-120k) x .25
Problem to solve:
-20k x .25 = -5k

Step 2. Calculate Fee:
Target fee + Adjustment
20k - 5k = 15k
Step 3. Calculate Buyer Price:
Actual Cost + Actual Fee
120k + 15k = 135k
Conclusion: Over by $20,000:
Seller got 25% ($5k) subtracted from fee
Buyer got 75% ($15k) added to price
12-23
Unit 12
CPIF vs. FPIF: Similarities and Differences

12-24
Unit 12
FFP Pricing: Firm Fixed Price

12-25
Unit 12
Risk and Type of Contract: Summary

12-26
Unit 12
Special Contract Types

PMI identifies two special types of contracts:

Fixed Price with Economic Price Adjustment (FP-EPA)
Cost Plus Award Fee (CPAF)
12-27
Unit 12
Fixed Price with Economic Price Adjustment

Long-term performance period (usually several years)

Protects the seller from rising costs:
Inflation rate changes
Changes in cost of materials, fuel, etc.
Provides for adjustments to the final contract price

Adjustments usually based on a designated financial index
12-28
Unit 12
Cost Plus Award Fee

Subjective performance criteria established at the outset

An award fee pool in a specified monetary amount is
established
Buyer decides how much of the fee the seller has earned
Gives the buyer significant leverage
Award fee pools can be combined with virtually any type
of contract
12-29
Unit 12
Purpose and Effectiveness of Incentives

Types of incentive contracts in the PMBOK Guide:

CPIF, CPAF, FPIF
Purpose of incentives: Align the objectives of both parties, i.e. find a

zone that is win-win
If the contractor can perform below the target cost, the fee is
adjusted upward and the price is adjusted downward
Effectiveness of incentives:
Real world evidence shows that incentives really work, they are not
just a theory!
An entire interstate highway exchange was rebuilt in one weekend;
the motivation was a significant award fee (pot of money)
12-30
Unit 12
Tools for Plan Procurement Management

Make-or-buy analysis: Examines the cost effectiveness of producing inhouse (make) or procuring from the outside (buy)
The analysis should consider both direct and indirect costs
Indirect costs are the costs of managing the contractor
Expert judgment: Expertise to develop evaluation criteria and to judge the

proposals received
Special expertise required: Purchasing, legal, and technical
Market research: Examines capability of potential contractors to actually

complete the work successfully
Meetings: Meetings with potential bidders, e.g., bidder conferences
12-31
Unit 12
Outputs from Plan Procurement Management

Procurement management plan: A component of the project plan,

describes how procurement processes will be managed
Types of contracts
Whether independent estimates will be used
Managing multiple suppliers
Coordinating procurement with resource needs, schedules, costs
Formats for the statement of work and maintenance of the WBS
Constraints, assumptions, and lead times
Managing risks
Identifying pre-qualified sellers
Metrics for performance reporting
12-32
Unit 12

Procurement statement of work (SOW): A narrative description of

goods or services to be supplied under contract
The SOW may also identify other services such as performance
reporting, project reviews, and post-project support
May also be called a:
Statement of requirements (SOR)
Statement of objectives (SOO)
Procurement documents: Used to request proposals from prospective

sellers
A procurement may be initiated as a unilateral contract (a purchase
order for standard items at established prices)
Alternatively, a bilateral contract may be initiated in one of several ways
12-33
Unit 12

Procurement documents (continued):

Request for Information (RFI): Asks for expressions of interest,
provides a forum to clarify requirements, and may help establish a
qualified sellers list
Invitation for Bid (IFB, aka Sealed Bid): Used for routine, well-defined
items
Objective: Best price (usually low bid); no negotiating or discussion
Request for Quotation (RFQ): Also used for routine, well-defined items
Objective: Best value; considers other factors (schedule, quality, etc.)
Negotiating and discussion are allowed
Request for Proposal (RFP): Used for complex, non-standard items of

relatively high monetary value
Objective: Must develop a new item; Negotiating and discussion are usually
necessary
12-34
Unit 12

Source selection criteria: Used to rate or score proposals

The criteria may be objective: The project manager must have a PMP
The criteria may be subjective: The PM must have relevant experience
Example criteria:
Price, overall life cycle cost
Understanding of need
Technical capability
Past performance
Financial and production capacity
Intellectual property and proprietary rights
Warranty and risk
Management approach
12-35
Unit 12

Make-or-buy decisions: Buy decisions drive the process to find an outside

supplier
Change requests: When change requests arise during procurement, they

must be processed using the Perform Integrated Change Control process

Requirements traceability matrix
Risk register
12-36
Unit 12
Conduct Procurements: Introduction


Includes the processes for:
Obtaining seller responses
Selecting a seller
Awarding a contract
12-37
Unit 12
Conduct Procurements
Inputs
Tools
Outputs
Procurement Management plan Bidder conferences
Selected sellers
Proposal evaluation techniques
Agreements
Source selection criteria
Independent estimates
Resource calendars
Seller proposals
Expert judgment
Change requests
Project documents
Advertising
Project management
plan updates
Make-or-buy decisions
Project documents
updates
Procurement statement of work
Procurement negotiations
OPA
12-38
Unit 12
Conduct Procurements: Key Points

During this process, qualified seller lists are often created to:
Speed up the process
Reduce the chance of awarding to a poorly qualified seller
Bidder conferences are also used to clarify requirements and

improve the quality of proposals
Common practice: Screen initial responses to create a list of sellers who
are in the competitive range
Weighting and screening systems establish a preferred sequence of the
best offers
Some organizations use a practice known as BAFO (best and

final offer)
Used as a way to suggest that prospective sellers lower their prices
12-39
Unit 12
Inputs to Conduct Procurements

Procurement management plan: An output of the previous process,

describes how procurement processes will be managed
Procurement documents: Chooses the appropriate document to request

seller responses (IFB, RFQ, RFP)
Source selection criteria: Used to evaluate and compare bids or

proposals
Seller proposals: Submitted by potential sellers in response to buyers

procurement document package (PDP)
A proposal is a legal offer, if accepted its the basis for a contract
PDP contains: a) Procurement document (IFB, RFQ, or RFP), b) List of
evaluation criteria, and c) Instructions (Due date, table of contents,
required formatting, etc.)
12-40
Unit 12

Project documents: The risk register and decisions to outsource because

of risk
Make-or-buy decisions: Factors influencing these decisions

Core capability (technical capability to perform the work in-house)
Value added by a vendor
Risk comparison: make vs. buy
Procurement statement of work (SOW): Describes goals and

requirements that must be met, SOW may include
Specifications, quantity, quality, and performance data
Period of performance, work location, other information as appropriate
12-41
Unit 12

OPA:
Listings of qualified sellers
Past experience with specific sellers
Prior contractual agreements (historical files)
12-42
Unit 12
Tools for Conduct Procurements

Bidder conferences: Used to ensure all bidders share a clear

understanding of requirements
All potential sellers must be given equal access to information
Proposal evaluation techniques: Established source selection

procedures
Establishes the approach for evaluating and selecting winning proposals
May establish a screening system: A minimum criteria that must be met
For example, your proposal is discarded without further review if your
PM does not have a PMP
Independent estimates: In-house verification that bids are fair and

reasonable, important if not using competitive procurement
12-43
Unit 12

Expert judgment: Financial, technical, and managerial expertise needed to

evaluate proposals
Advertising: Additional advertising to increase the extent of competition

Analytical techniques: Evaluating past performance information to ensure
prospective sellers will be capable of meeting project requirements
Procurement negotiations: Reaching mutual agreement on contract

requirements prior to signing
Objectives of negotiation:
Obtain a fair and reasonable price
Develop and preserve a good working relationship for both parties (by
achieving a win-win solution)
12-44
Unit 12

Procurement negotiations (continued):

Common negotiating tactics:
Deadline: We have to catch a flight and must go home with a signed deal
Good cop/bad cop: One person is friendly and helpful, the other is
demanding and difficult
Fait accompli: Pretending that a condition is either a done deal or is not
negotiable
Missing man: Only my boss can agree to that, how about this instead
Limited authority: Im only authorized to offer up to $50,000
Delay: Were running out of time, lets handle that later (like smoothing in
the conflict model)
Personal insults: Trying to intimidate or undermine someones confidence
Fair and reasonable: An appeal to your good nature to be fair
12-45
Unit 12
Outputs from Conduct Procurements

Selected sellers: A seller who has submitted a proposal that has been
accepted
The proposal becomes the basis for the contract, subject to any final
negotiating of terms and conditions
Agreements: The contract establishes a legal relationship subject to remedy

in the courts
Is mutually binding: Obligates the seller to provide the specified product
and the buyer to pay for it
Elements of a legally enforceable contract:
Agreement must be voluntary: An offer and an acceptance
Agents must be legally authorized to enter into an agreement (the
authorization can be written or verbal)
There must be sufficient cause or consideration (an exchange of value)
The contract must be for work that is legal
12-46
Unit 12
Outputs from Conduct Procurements

Resource calendars: Documenting the quantity needed and availability of

contracted resources
Change requests: Any change requests during the procurement must be

handled using the Perform Integrated Change Control process

Cost, schedule, and scope baselines
Communication and procurement management plans

Requirements documentation and traceability information
Risk and stakeholder registers
12-47
Unit 12
Control Procurements: Introduction


Both parties ensure the other meets its contractual obligations
Involves:
Monitoring performance
Managing interfaces among multiple providers
Handling changes and making corrections
Processing interim or progress payments
May involve managing early termination of a contract:
By mutual agreement
For default
For convenience of the buyer
12-48
Unit 12
Control Procurements
Inputs
Tools
Outputs
Contract change control system Work performance

information
Procurement performance
reviews
Change requests
Agreements
Inspections and audits

updates
Performance reporting
Project documents
updates
Payment systems
OPA updates
Claims administration
Records management system
12-49
Unit 12
Inputs to Control Procurements

Project management plan: Contains the procurement management plan

which describes how procurement processes will be handled
Procurement documents: The contract and the SOW are two of the most
important guiding documents
Agreements: The contract or other agreement (understanding, subcontract,

purchase order)
Approved change requests: Provides information on modifications to

contract terms, especially any effect on the triple constraint
Verbally discussed but undocumented change requests should not be
implemented
12-50
Unit 12
Inputs to Control Procurements

Work performance reports: Documentation on seller performance

Technical progress
Cost, schedule, and resource performance
Forecasts
Work performance data: Actual outcomes

Costs incurred
Deliverables completed
Interim or progress payments processed
Are quality standards being met?
12-51
Unit 12
Tools for Control Procurements

Contract change control system: Establishes procedures by which

changes can be approved
Includes paperwork, tracking, and approval levels
Also includes dispute resolution procedures
Procurement performance reviews: Structured review of sellers

progress
Cost, schedule, scope, quality
Purpose: Document whether seller is able to complete the work as
planned
Inspections and audits: Techniques used to check seller compliance with

contract requirements
12-52
Unit 12
Tools for Control Procurements

Performance reporting: Documents sellers effectiveness in meeting

contract objectives
Payment systems: Handling of progress payments if appropriate

Claims administration: Contested or constructive changes may lead to a
dispute about whether a change was authorized
If the parties cannot agree, dispute resolution procedures come into play
See p. 12-20 in the reference manual for a definition of constructive
change
Records management system: Management of contract documents

Usually involves a disciplined index system for archiving and retrieval
12-53
Unit 12
Outputs from Control Procurements

Work performance information: Provides information to check seller

performance and compliance with the contract
Change requests: Processed using integrated change control, disputed

changes receive special attention

Procurement management plan
Cost or schedule baselines
12-54
Unit 12
Outputs from Control Procurements


The contract and supporting schedules
Status of change requests still under review
Status of deliverables, especially technical progress
Invoices and payment records
Contractually required inspections
OPA updates: A big procurement record keeping exercise

All important correspondence: Decisions, inspections, audits, changes
Handling of payments
Seller performance evaluation
12-55
Unit 12
Close Procurements: Introduction

Is part of the closing process group

Supports the Close Project or Phase process, Integration Unit
Involves:
Product verification: Was the work completed correctly?
Administrative closeout: Updating and archiving of records
Early termination is a possibility:

Mutual agreement
Default
Convenience of the buyer
12-56
Unit 12
Close Procurements
Inputs
Tools
Outputs
Procurement audits
Closed procurements
OPA updates
12-57
Unit 12
Inputs to Close Procurements


which provides guidelines for closing each procurement
Procurement documents: Collecting, indexing, and filing all

documentation
The information is used for:
Estimating future contracts
Evaluating contractors on future procurements
Lessons learned
12-58
Unit 12
Tools for Close Procurements

Procurement audits: Structured reviews to identify successes and failures

Procurement audits are also known as lessons learned
The information is used to improve current and future projects
Procurement negotiations: Final settlement of issues, claims, and

disputes
Negotiation is preferred but alternate dispute resolution methods may be
called on if needed
Records management system: Provides a consistent, structured

method for archiving contract records
12-59
Unit 12
Outputs from Close Procurements

Closed procurements: Buyer provides formal, written notice that the

contract is complete
OPA updates:
Procurement file: An official, complete set of indexed contract
documentation
Deliverable acceptance: Formal, written notice that deliverables have
been accepted or rejected
Lessons learned documentation: Post-project evaluation provides
historical records
Creates a past performance database to assist in selecting contractors on
future work
Organizes all project lessons learned in the OPA knowledge base
12-60
Unit 12
Other Topics

Non-competitive procurements
Single vs. sole source
Organizing procurement: Centralized or decentralized
Privity of contract
Constructive change
Other contract definitions
Summary of closing processes
12-61
Unit 12
Three Conditions for Non-Competitive Procurement

PMI identifies three conditions in which non-competitive

procurement makes sense:
When a specific contractor has genuinely unique capabilities
When you have methods (such as independent estimating) to ensure
proposed prices are fair and reasonable
When schedule pressure exists:
Competitive procurements use procedures that are time consuming
Competitive procurements do not allow a quick response to a need
12-62
Unit 12
Single vs. Sole Source

Single source: Using a preferred supplier but other sources do exist

Sole source: Only one known supplier is available
Could be a patent limitation
Could be that only one supplier has the technical capability
12-63
Unit 12
Centralized or Decentralized Procurement

Centralized: Procurement specialists all sit together

Essentially a functional stovepipe organizational structure
More economical
Supports specialization of the procurement function
Less responsive to individual project needs
Decentralized: Procurement specialists sit colocated with the project team

Essentially a projectized organizational structure
Procurement more responsive to individual projects, PM has more
control
Higher resource costs; need to staff each project on a full-time basis
12-64
Unit 12
Privity of Contract
Privity of contract defines which parties have legally binding

agreements
A buyer enters into a legally binding agreement with their contractor
However, the buyer has no legal agreement when their contractors do
any further outsourcing with subcontractors:
Example: The National Energy Technology Lab (NETL) enters into
a contract with CGG Corporation
CGG then outsources part of their work to the Synergetics Group
NETL has no legal relationship with Synergetics
In fact, it is improper for NETL to deal directly with Synergetics
without the permission of CGG
12-65
Unit 12
Constructive Change
Changes that originated because of:

Any statement, act, or inaction by an employee who is not legally
authorized to make changes or sign contracts
Such acts sometimes lead to changes which are questionable:

Was the change legally authorized or not?
Should the contractor have acted on the change?
Will the contractor be paid for the work that was done?
12-66
Unit 12
Other Definitions
See the reference manual on pages 12-20 and 21 for other

testable definitions:
Foreign currency exchange
Backcharge
Breach of contract
Force majeure
Liquidated damages
Standard contract clauses
Specification
Undefined work
Warranty
Warranty of Merchantibility
Waiver
12-67
Unit 12
Summary of the Two Processes for Closing Work

See the reference manual on pages 12-21 and 22 for a concise

summary of the closing processes:
Close Procurements
12-68
Unit 12
12-69
Unit 13
STAKEHOLDER MANAGEMENT
13-1
Unit 13
Stakeholder Management Concept

Stakeholder management identifies people, groups, and

organizations that could impact or be impacted by the project
Some stakeholders are likely to impact the project in a positive
way
Others are more likely to impact the project in a negative way
Some stakeholders have more power and influence than others
Managing these issues effectively may make a significant
difference in project success
13-2
Unit 13
Stakeholder Management: Key Points

Key activities in effective stakeholder management:

Identify potential stakeholders
Assess interest, influence, and power of each stakeholder
Understand stakeholder needs and expectations
Develop appropriate management strategies
Manage issues and conflict
Continuously communicate with stakeholders
13-3
Unit 13

Reminder of previous stakeholder management guidelines
from the PMBOK Guide
Stakeholder Management Processes
Other Topics
PMBOK Guide.
Drill Practice
13-4
Unit 13
Reminder of Stakeholder Management Guidelines

A stakeholder is anyone involved in the project, affected by the

project, or who could influence the project:
Project manager and project team
Functional managers
Customers (approve and manage the product) and users (use the product)
Sponsor
PMO
Performing organization (enterprise with the people most directly
involved in the work)
Sellers and business partners
Citizens and communities potentially affected by the project
13-5
Unit 13
Stakeholder Reminders: Management Issues

Stakeholder requirements must be in the project plan

Stakeholder identification must occur early and be updated
Overlooking negative stakeholders can increase risk of failure
If stakeholder expectations come into conflict, the resolution
should generally favor the customer
Sometimes the customer acts as the sponsor, there may not be
a separate internal sponsor
Important stakeholders may be internal (inside your
organization) or external (outside your organization)
13-6
Unit 13
Overview of Stakeholder Management Processes

13.1 Identify Stakeholders (identifying the interests, involvement, and

impact of people, groups, or organizations that could affect or be affected by
the project)
13.2 Plan Stakeholder Management (developing appropriate

management strategies for engaging stakeholders throughout the project)
13.3 Manage Stakeholder Engagement (communicating and working

with stakeholders to meet needs and addressing issues as they occur)
13.4 Control Stakeholder Engagement (monitoring stakeholder

relationships and adjusting strategies as needed)
13-7
Unit 13

Process Groups
Knowledge
Areas
Initiating
Planning
Executing
Controlling
Closing
Integration
Scope
Time
Cost
Quality
HR
Communication
Risk
Procurement
Stakeholder
13-8
Identify
stakeholders
Plan
stakeholder
management
Manage
stakeholder
engagement
Control
stakeholder
engagement
Unit 13
Identify Stakeholders: Introduction

Is part of the initiating process group

Identifies people, groups, and organizations that may impact or
be impacted by the project
It is important to identify stakeholders early and:
Determine level of interest, influence, and power
Maximize positive influences and minimize negative impacts
Project managers often deal with a large number of

stakeholders
Therefore, it is important to prioritize the relative importance of all
stakeholders
13-9
Unit 13
Identify Stakeholders
Inputs
Tools
Project charter
Stakeholder analysis
Expert judgment
EEF
Meetings
Outputs
OPA

13-10
Unit 13
Inputs to Identify Stakeholders

Project charter: Provides information about stakeholders such as

customers, sponsor, PM, team members, and other parties
Procurement documents: When outsourcing, members of the seller

organization are stakeholders
EEF:
Organizational structure
Regulations or standards
Global, regional, or local trends
OPA:
Templates for stakeholder registers and previous stakeholder registers
Lessons learned
13-11
Unit 13
Tools for Identify Stakeholders

Stakeholder analysis: Identifying the stakeholders who should be

managed most carefully
Step 1: Identify potential stakeholders and document their roles,
interests, and expectations
Step 2: Analyze potential impact and use a classification model
Power vs. Interest
Power vs. Influence
Influence vs. Impact
See next slide for an example
Step 3: Assess likely responses (supporter or antagonist)
13-12
Unit 13
Power vs. Interest Grid

13-13
Unit 13
Tools for Identify Stakeholders

Expert judgment: Used to identify and analyze stakeholders

Meetings: Profile analysis meetings are used to exchange information about
stakeholders
13-14
Unit 13
Outputs from Identify Stakeholders

Stakeholder register: Contains all the information on identified

stakeholders
Identification: Name, position, location, role, contact information
Assessment: Expectations and potential influence
Classification: Internal or external, supporter or antagonist
13-15
Unit 13
Plan Stakeholder Management: Introduction


Involves developing strategies for effectively engaging key
stakeholders throughout the project life cycle
Key activities:
Identify stakeholder expectations so they can be managed (makes
gaining stakeholder buy-in easier)
Manage and improve communications
Create and maintain relationships between the project team and other
stakeholders
Continuously review and adjust the levels of stakeholder engagement
13-16
Unit 13
Plan Stakeholder Management

Inputs
Tools
Outputs
Expert judgment
Meetings
EEF
OPA
13-17
Unit 13
Inputs to Plan Stakeholder Management

Project management plan:

Project life cycle: Which processes apply to each project phase
How work will be executed to accomplish objectives
HR requirements: Roles, responsibilities, reporting, and managing
staffing levels
Change management plan
Techniques for communicating among stakeholders
Stakeholder register: Identifies important stakeholders
13-18
Unit 13
Inputs to Plan Stakeholder Management

EEF:
All 13 factors are potentially relevant to managing stakeholders
OPA:
Historical information and lessons learned are of special importance
13-19
Unit 13
Tools for Plan Stakeholder Management

Expert judgment: Helps determine the level of stakeholder engagement

needed at each stage of the project
Example: Project sponsor is more important near the beginning of the
project
Meetings: Provide a forum to discuss stakeholder engagement

Analytical techniques: Comparing planned levels of engagement to actual
levels of engagement
See the next slide for a classification scheme
13-20
Unit 13
Stakeholder Engagement Matrix

13-21
Unit 13
Outputs from Plan Stakeholder Management

Stakeholder management plan: Identifies management strategies for

effectively engaging stakeholders
Desired engagement levels
Stakeholder interrelationships and potential overlaps
Information to be distributed and impact (importance) to the project
Time frame and frequency for required information
Method for updating the stakeholder management plan

Project schedule
13-22
Unit 13
Manage Stakeholder Engagement: Introduction


Involves communicating and working with stakeholders to:
Meet their needs and expectations, handle issues as they occur
Negotiate and communicate to ensure goals are being met
Proactively address concerns before they become issues
Increase support and minimize resistance
PM must be aware that the ability of stakeholders to influence

the project:
Is at its greatest early in the project
Grows progressively lower as the project progresses
PMI: The PM is responsible for managing stakeholders!
13-23
Unit 13
Manage Stakeholder Engagement

Inputs
Tools
Outputs
Issue log
plan
Change requests
Change log
Management skills

updates
OPA

OPA updates
13-24
Unit 13
Inputs to Manage Stakeholder Engagement

Stakeholder management plan: Addresses the following

Methods and technologies for stakeholder communication
The appropriate level of interaction among stakeholders
Strategies on involving stakeholders
Communications management plan: Provides guidance on managing

stakeholder expectations
Communication requirements
Information to be communicated and who needs to receive it
Escalation process
13-25
Unit 13
Inputs to Manage Stakeholder Engagement

Change log: Documents the status and expected impact of all changes
No surprises for important stakeholders!!
OPA:
Organizational communication requirements and procedures
Issue management procedures
Change control procedures
Historical information
13-26
Unit 13
Tools for Manage Stakeholder Engagement

Communication methods: During stakeholder management, the following

methods may be used
Interactive
Push
Pull
Note: PMI states that face-to-face meetings are preferred if possible
Interpersonal skills: The ability to

Build trust
Resolve conflict
Listen actively
Overcome resistance to change
13-27
Unit 13
Tools for Manage Stakeholder Engagement

Management skills:
Facilitate consensus on project objectives
Build support using influencing skills
Negotiate agreements to meet project needs
Gain organizational acceptance of project outcomes
13-28
Unit 13
Outputs from Manage Stakeholder Engagement

Issue log: Used to record new issues and document resolution of previous
issues
Issue logs appear as part of the HR, Communication, and Stakeholder
knowledge areas
Common denominator: People issues
Change requests: Some stakeholder issues lead to changes

Changes in stakeholder requirements
Revisions of any ineffective communication methods
Actions to address stakeholder concerns or issues
Project documents updates: Any changes to the stakeholder register

13-29
Unit 13
Outputs from Manage Stakeholder Engagement

OPA updates:
Stakeholder notifications about resolved issues
Lessons learned from managing stakeholders
13-30
Unit 13
Control Stakeholder Engagement: Introduction


Involves:
Monitoring stakeholder relationships
Adjusting strategies as needed
13-31
Unit 13
Control Stakeholder Engagement

Inputs
Tools
Outputs
Information management
systems
Work performance
information
Issue log
Expert judgment
Change requests
Meetings

updates
Project documents
Project documents
updates
OPA updates
13-32
Unit 13
Inputs to Control Stakeholder Engagement


which provides guidelines for managing stakeholders
Techniques for communicating among stakeholders
HR: Roles, responsibilities, reporting, and staffing guidelines
Change management plan
Which processes are relevant to each project phase
How work should be executed to accomplish project objectives
Issue log: Documentation of new issues and resolution of previous issues
13-33
Unit 13
Inputs to Control Stakeholder Engagement

Work performance data: Documentation of actual outcomes

Actual durations and costs
Actual start and finish dates
Percentage of planned work actually completed
Number of defects and change requests
Project documents: Documents relevant to controlling stakeholder

engagement
Project schedule
Issue and change logs
13-34
Unit 13
Tools for Control Stakeholder Engagement

Information management systems: Standard tools for handling

information. PMI identifies the following distribution formats
Table reports
Spreadsheet analysis
Presentations
Expert judgment: Used to identify new stakeholders and assess

relationships with current stakeholders
Meetings: Used to exchange information about stakeholder relationships
13-35
Unit 13
Outputs from Control Stakeholder Engagement

Work performance information: Interpretation of data previously

collected so that status can be accurately reported to stakeholders
Status of costs, schedules, and deliverables
Status of change requests
Forecasts of future outcomes
Change requests: Performance analysis may lead to changes which

should always be processed using Integrated Change Control
Project management plan updates: Possible revisions to any

subsidiary management plan
Scope, schedule, cost, quality, HR
Communication, risk, procurement, and stakeholder
13-36
Unit 13
Outputs from Control Stakeholder Engagement


Issue log
OPA updates:
Stakeholder notifications about resolved issues
Lessons learned from managing stakeholders
13-37
Unit 13
Other Topics
There are no Other Topics in this Unit!
13-38
Unit 13
13-39
Practice Exam: Concepts, Processes, and Integration Management

1. Which of the following is not an important aspect of configuration management?
a.
b.
c.
d.
use of a CCB (change control board)

establishment of baselines
verifying conformance to requirements
tracking BCWP (budgeted cost of work performed)
2. During which of the following processes is the majority of the project budget usually
spent?
a.
b.
c.
d.
initiation
planning
control
execution
3. Which of the following is not an important purpose of progress measurement?

a.
b.
c.
d.
assist with feasibility analysis

determine whether project performance is on track
identify problems so corrective action can be taken
provide information to facilitate forecasting of future performance
4. The three-step process of establishing clear objectives, measuring their

achievement, and adjusting performance if necessary is known as ______.
a. goal programming
b. management by objectives
c. strategic planning
d. analytical hierarchy process
5. Which of the following is not a common problem of project evaluation?
a.
b.
c.
d.
it can be threatening to the project team

it can be disruptive and time consuming
upper management using an evaluation for political reasons
the process frequently uses observers from outside the project team
2015 CMF Solutions and TwentyEighty Strategy Execution. All Rights Reserved. | PMC:DJ4:EN:000 ver.3.0
Concepts, Processes, Integration
6. Your organization has the opportunity to collaborate with a foreign company to

develop and market a new biomedical product for worldwide sales. You have been
appointed by management to determine whether this project should be initiated. You
should prepare a ______.
a.
b.
c.
d.
feasibility study
project charter
make-or-buy analysis
scope verification analysis
7. Post-project evaluation should be used to ______.

a.
b.
c.
d.
identify and weed out poor performers

determine whether the objectives of a project are still relevant
keep the project management plan up to date
document lessons learned
8. A periodic document covering cost, time, and resource performance is called _____.
a.
b.
c.
d.
a status report
an engineering change proposal (ECP)
mid-project evaluation
the project charter
9. Project management plans are usually developed by ______.

a.
b.
c.
d.
the project manager

the project team
engineering
marketing
10. Developing standard project management methodologies is the direct responsibility

of the _______.
a.
b.
c.
d.
portfolio manager
operations manager
project management office
organizational governance function
11. Your team has completed the project management plan. The plan should be
distributed to ______.
a.
b.
c.
d.
the project team and all project stakeholders

the project team and the customer
the project team
people designated by the communications management plan
PMC:DJ4:EN:000 ver.3.0 | 2015 CMF Solutions and TwentyEighty Strategy Execution. All Rights Reserved.
12. Your project has been officially authorized through the signing of a written project
charter. From an integration management perspective, your next step should be to
______.
a.
b.
c.
d.
assemble members of the project team

develop a project management plan
direct and manage execution of the project
manage any changes suggested by key stakeholders
13. The project manager has just received a change from the customer that does not
affect the project schedule and is easy to complete. What should the project manager
do first?
a.
b.
c.
d.
make the change as soon as possible

inform the project sponsor and ask for permission
go to the change control board
evaluate the effect on the triple constraint
14. During the process to monitor and control the project, which output tracks any
recommendations for corrective actions, preventive actions, and defect repairs?
a.
b.
c.
d.
project management plan updates

project document updates
change requests
expert judgment
15. Approved changes should be reflected in the ______.

a.
b.
c.
d.
project management plan

production readiness review
change management plan
quality assurance plan
16. Integrated change control ______.

a. is concerned entirely with managing actual changes when they occur
b. uses change requests that are not legal unless written
c. uses the project management plan as a baseline against which changes are
controlled
d. has no relationship to the lessons learned process
17. The tools of develop project charter include ______.

a.
b.
c.
d.
expert judgment and facilitation techniques

agreements and statement of work
expert judgment and statement of work
business case and project charter
18. A charter is a key document in the approval process for any project. Which
statements about project charters are true?
A project charter _________.
i. authorizes the project and gives the PM the authority to acquire and expend
resources
ii. identifies work packages and includes resource estimates
iii. identifies the business need and project objectives
iv. provides a definitive cost estimate for the project or phase
a.
b.
c.
d.
i, ii, and iii

i, iii, and iv
i and iii
none of the above statements are true
19. Change control systems sometimes permit automatic approval or approval without
prior review for some types of changes. An example would be ______.
a.
b.
c.
d.
the need to incorporate a necessary design feature

the result of an emergency
a change suggested by the project sponsor
a change identified by the lead engineer
20. Which statement about integrated change control is not true?

a.
b.
c.
d.
The integrity of the performance baseline must be maintained.

The effect of changes across all knowledge areas must be coordinated.
Change requests is an output of integrated change control.
Approved changes often result in updates to the project management plan.
21. Activities such as team building, accomplishing work packages, developing the
project team, and quality assurance typically occur during which phase of the project life
cycle?
a.
b.
c.
d.
initiating
executing
controlling
closing
22. Project variances identify deviations from the project management plan. A variance
is most significant if it ______.
a.
b.
c.
d.
requires corrective action

jeopardizes project objectives
is identified as a project risk
becomes a lesson learned
23. A work authorization system is a ______.

a. work breakdown structure
b. formal procedure for sanctioning work so it is done in the proper sequence
and at the right time
c. method to assign responsibility for specific tasks to team members
d. system to measure work completed versus work planned
24. There are advantages and disadvantages to each of the three major organizational
structures identified by PMI. The tendency to duplicate facilities, job functions, and
resources is a/an ______.
a.
b.
c.
d.
advantage of the functional structure

advantage of the matrix structure
disadvantage of the matrix structure
disadvantage of the projectized structure
25. As project manager, your team members are borrowed from various functional
managers. You usually have no official role in writing performance appraisals and team
members complain that they receive competing task assignments from other project
managers as well as their functional manager. Your organizational structure is a
______.
a.
b.
c.
d.
weak matrix
balanced matrix
strong matrix
tight matrix
26. You are the project manager for a major renovation of the processes for the
ecological disposal of turkey by-products in a well-known city in central Texas. You
have been on-site for development and testing for six months, the local drinking water
smells and tastes suspicious, and you have been ready to go home for about five and
a half months. Testing is almost complete when your nemesis, Annabeth Tyson,
suggests a significant change to the process. The change would probably delay project
completion by at least one month. Your first step should be to ______.
a. take the matter to the project sponsor who you know does not wish to
incorporate any more changes
b. ask your primary customer contact what she thinks
c. suggest that members of your team take Annabeth out for a drink and try to
talk her out of the change
d. refer the request to the change committee and assess the potential impact
27. Which of the following is not accurate with regards to a project change control
system?
a. A change control board should be established.
b. Provisions to handle emergency changes should be established.
c. A change control system should establish the basic requirements for the
project.
d. A change control system should include paperwork, tracking, and approval
procedures.
28. Your PMO recently indicated to all project managers that project closure activities
within the company were being performed inconsistently. The office stated that project
closure should ALWAYS accomplish the following objectives: verify and document all
project deliverables, coordinate and assure the formal acceptance of those deliverables,
and investigate the reasons in the event that any project is terminated before its
completion. The PMO also described the desired outputs of closing any project. Which
of the following is one of those outputs?
a.
b.
c.
d.
accepted deliverables
final product, service, or result transition
organizational process assets
analytical techniques
29. Approved change requests are implemented through which process?

a.
b.
c.
d.

30. You have just been assigned to take over a project that is supposed to be about
half done. You quickly learn that the project is, in fact, far behind schedule and will
probably take over twice as long as originally planned. Worse yet, upper management
has been led to believe that everything is going well. What is the BEST thing to do in
this instance?
a.
b.
c.
d.
try to compress the schedule to bring it back in line with the original plan
try to turn the project over to someone you don't like
immediately report your findings to upper management
proceed as planned and report at the first missed milestone
31. Project management would apply the least to which of the following situations?
a.
b.
c.
d.
when a specific deliverable must be produced by a given deadline

when a team must provide a cross-functional effort to produce a deliverable
when the work is unique
when the work is familiar and repetitive
32. As applied to projects, temporary means _____.

a.
b.
c.
d.
doing something that has not been done before

the project is relatively short in duration
the project has a definite beginning and end
that uncertainty will be a problem
33. Rolling wave planning involves progressive detailing of the work that must be done
for ______.
a.
b.
c.
d.
the current phase of the project

subsequent phases of the project
the current phase and subsequent phases of the project
all phases of the project
34. Which statement about configuration management and change control is true?
a.
b.
c.
d.
Configuration management is a subset of change control.

The chairperson of the CCB is usually the project sponsor.
The CCB audits project results to verify conformance to requirements.
Configuration management identifies characteristics of the product and
establishes baselines.
35. Which of the following is not part of stakeholder management?

a.
b.
c.
d.
Identify the stakeholders

Determine stakeholders needs and expectations
Provide extras for stakeholders
Manage stakeholders expectations
36. In which process group are the project scope and objectives determined?
a.
b.
c.
d.
initiating
planning
executing
closing
37. In which process group are feasibility studies performed?

a.
b.
c.
d.
initiating
planning
executing
closing
38. Integrated change control recognizes that projects always evolve and change. A
system that accommodates but controls these changes must exist, i.e., all changes
must be managed using a consistent process. Change control must also ________.
a. provide effective communication so that stakeholders are aware of all
changes
b. allow baselines to remain flexible
c. allow informal changes to be accommodated
d. operate with one change control board
39. One of the initiating processes for projects, a project charter is a written document
that authorizes a new project. Which of the following statements about the project
charter is true?
i. The charter leads to the assignment of a project manager; the PM should never
be assigned later than the start of project execution.
ii. The charter may be signed by the project manager.
iii. The charter is usually developed and distributed as part of the planning phase.
iv. Expert judgment is an input to developing the project charter.
a.
b.
c.
d.
i and ii
ii and iii
i and iv
all of the statements are false
40. Project management processes are organized into five process groups. They are
the fundamental building blocks for how to conduct project management. Which of the
following statements about process groups is incorrect?
a.
b.
c.
d.
The process groups occur in all phases of a project.

One of the process groups is directing.
One of the process groups is monitoring and controlling.
Process groups may be iterative in that feedback may cause certain process
groups, or portions thereof, to be repeated.
41. The matrix organizational structure ______.

a. is used to manage multiple projects simultaneously when the organization
does not have the resources to staff each project on a full-time basis
b. ensures less conflict when compared to other organizational structures
c. is used when an organization decides to undertake a single, large project
d. allows a stronger focus on cost and schedule objectives than other
organizational structures
42. In which organizational approach is the PM likely to have the most authority?
a.
b.
c.
d.
expeditor
coordinator
strong matrix
projectized
43. You have just been assigned as project manager for the development of a new
pharmaceutical product. Which organizational structure would make managing the
human resources the most difficult?
a.
b.
c.
d.
functional
weak matrix
strong matrix
projectized
44. As a new project manager, Susan has been assigned to a project in a matrix
organization. She can expect communication to be ______.
a.
b.
c.
d.
simple
complex
highly automated
horizontal
45. A project team member complains that too many people are asking him to do
things. If he works in a weak matrix organization, who has more power?
a.
b.
c.
d.
stakeholders
project manager
functional manager
board of directors
46. A major part of closing a project or phase involves reviewing accepted deliverables
to ensure that all the work has been completed and meets requirements. In fact,
accepted deliverables is one of three inputs to Close Project or Phase. Which of the
following processes provides the information for accepted deliverables?
a.
b.
c.
d.

Validate Scope
47. A signed charter is a vital step in successfully initiating a new project. The business
case is among the inputs used in this important process. The business case helps
evaluate whether the project is worth the required investment. Which of the following
choices correctly identifies the components of a business case?
a.
b.
c.
d.
10
historical information and strategic objectives

organizational culture and marketplace conditions
business need and narrative description of products
business need and cost-benefit analysis
Answer Sheet #1
Answer
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
Answer
Notes
26.
27.
28.
29.
30.
31.
32.
33.
34.
35.
36.
37.
38.
39.
40.
41.
42.
43.
44.
45.
46.
47.
48.
49.
50.
Percent Correct?
Pass or Fail?
# Misread ?s
Other Notes:
11
This page intentionally blank
14
Answer Key: Concepts, Processes, Integration Management

No. Answer
Slides
Note
4-41
Choice d is related to earned value (not configuration

management).
2-31
PMI historical question. Reference manual p. 2-10: see life cycle,

bullet #2 and also PMBOK Guide pp. 40 & 56.
3-6
4-9
Feasibility analysis is part of initiating (p. 3-2) rather than

monitoring/controlling (pp. 4-10 to 4-13).
4-54
MBO = 1. Establish clear, realistic objectives, 2. Measure progress,

and 3. Take action/adjust, if necessary.
4-55/56
4-9
See output 1: Charters are not considered complete until

supporting analysis such as a feasibility study has been completed.
Also see reference manual, p. 4-4.
4-56
Documenting lessons learned is a primary objective of post-project

evaluation.
4-31
Status reports identify current performance to date, using

variances, and occur on a periodic basis. See introduction to
monitor and control, bullet 4.
4-13
See introduction to develop project management plan. In most

situations, the project manager would not have the time or full
range of expertise to develop the plan alone.
10
2-15
The PMO (project management office) is most directly responsible

for establishing standard methodologies.
11
4-18
See project management plan, output 1. The communication plan

identifies information needs of key stakeholders and establishes
distribution lists for project documents.
12
3-16
Also see reference manual, p. 3-7. The first integration

management process (develop charter) is complete. The second
process (develop project management plan) is next. Choice a:
assembling (acquiring) the team is an executing step (not
planning).
13
4-27
4-38
You should first evaluate the anticipated effect on the triple

constraint. Small, routine changes may not need to go to the CCB.
14
4-34
Output 1: change requests are always potentially associated with

corrective action, preventive action, and defect repair.
15
4-46
Output #3 for integrated change control is to update the project

management plan (and any subsidiary plans) and project
baselines, as necessary. Choice c: change management plan is
how to approve changes; not what to do after the change is
already approved.
Choice d is simply a fact about the evaluation process; choices a,

b, and c are potential problems.
15

No. Answer
Slides
Note
16
4-15
4-42
See bullet #5 on slide 4-15. Also, the project management plan is

input #1 to integrated change control. This plan provides the
baseline against which changes are made.
17
4-11
You must be familiar with inputs, tools, and outputs for all 47
processes.
18
4-6
4-8/9
4-12
Statement i is true (see slides 4-8/9). Statement ii is false (work

packages are identified by a planning process, Create WBS).
Statement iii is true (slides 4-6 and 9). Statement iv is false
(definitive cost estimates are provided during the latter stages of
planning; the charter would provide an initial, ball-park estimate
known as an order of magnitude estimate).
19
4-40
See bullet #1.
20
4-39
4-43
4-46
Change requests is input #3 (not an output).
21
3-11
See the list of typical activities for executing (slide 3-11) and the list
of processes under the executing column, reference manual p. 3-7.
22
No ref
PMI logic and common sense. Choice a seems logical, however, it

is not unusual for variances to lead to corrective actions. In choice
b, the word jeopardizes implies a more serious situation.
23
2-24
2-27
Work authorization (right work at the right time in the right

sequence) is identified as part of OPA and EEF.
24
2-18
See the disadvantages of the projectized structure in the table,

reference manual, p. 2-6.
25
2-20
Matrix management involves borrowed resources from various

functional silos. In particular, a weak matrix usually means the
project manager has no official role in performance appraisals, has
low spending authority, and competes with other project managers
who are also assigning work to the same team members.
(reference manual, pp. 2-5/6).
26
4-27
4-38
See slide 4-27, last paragraph regarding change requests. Also,

see slide 4-38, bullet #3 on review of change requests.
27
4-38 to
4-41
28
4-48
4-52
Choices a and c are inputs. Choice d is a tool.
29
4-20
4-24
See Direct and Manage Project Work, input #2, approved change
requests.
30
2-6
2-9
Always report accurate, timely information (never hide bad news).
31
2-10
Work that is on-going and repetitive is associated with operations.
16
Choice c: Change control does not establish requirements. Other

processes identify project requirements (e.g., Collect Requirements
and Define Scope).

No. Answer
Slides
2-10
Note
32
Temporary does not refer to short durations but rather to projects

having defined start and finish times.
33
34
4-41
Choice a: the reverse is true. Choice b: the sponsor is not

necessarily (or even usually) the chairperson of the CCB. Choice
c: the CCB deals with changes and does not perform the final
audit required as part of configuration management.
35
2-29
Gold-plating is discouraged.
36
3-6/7
Slightly tricky, this question refers to the initial, high-level scope

(see p. 4-1, project charter) and not the detailed scope that comes
later as part of scope planning.
37
3-6
See initiating activities: purpose of project assessment is to

evaluate project feasibility.
38
4-38
Choice b: the integrity of baselines must be maintained. Choice c:

informal change leads to scope creep and loss of control.
Choice d: more than one CCB is possible (e.g., large program).
39
4-6 to
4-12
The PM should never be assigned later than the start of planning,

the PM should not sign the charter (does not improve authority),
the charter is developed as part of initiating, and expert judgment is
a tool (not an input).
40
3-4/5
See the list of process groups and characteristics.
41
42
2-22
See the description for the projectized structure; it provides the

highest authority for a project manager.
43
2-19
2-22
A PM has little or no authority in a functional organization, and may

not even have a charter.
44
45
2-20
Functional managers have comparatively more power than project

managers in a weak matrix.
46
4-50
Accepted deliverables includes deliverables that have been

accepted as a result of the Validate Scope process.
47
4-10
The business case contains a description of the business need and

a cost-benefit analysis. Choices a-c contain information provided
by the other inputs to the project charter.
Reference manual p. 2-2: see two additional characteristics of

projects. It may appear that choices c and d are both correct.
However, you must choose the better answer. You are looking for
anything that is not complete or represents an exception as a way
to eliminate a choice. With choice d, you never plan backwards.
So, at the beginning of phase 3 of a project, choice c is still true but
choice d might imply re-planning phases 1 and 2 (not realistic).
Reference manual p. 2-6: see the advantages of matrix

management.
Reference manual p. 2-6: see bullet #2, disadvantages for matrix

management.
17
Practice Exam: Scope Management

1. While devising project management plans, project managers must often make
assumptions. Assumptions may pose risk to a project because ______.
a.
b.
c.
d.
they are based on constraints

they involve factors that are believed to be true, real, or certain
they are based on lessons learned
upper management is too optimistic
2. Which of the following is a constraint in developing the project management plan?

a.
b.
c.
d.
a predefined budget
lessons learned from previous projects
cost performance records from a previous project
a list of key resources required for the project
3. The subdivision of project deliverables into smaller and smaller components is called
______.
a.
b.
c.
d.
concept definition
flow charting
decomposition
scope verification
4. Detailed descriptions of work packages are contained in ______.

a.
b.
c.
d.
the statement of work

product specifications
WBS cost accounts
WBS dictionaries
5. Lessons learned are important because they ______.

a.
b.
c.
d.
show why an organization chose specific projects

indicate why specific project managers and team members were selected
show the causes of variances and the reasons for the corrective actions
prove that organizational policies are being followed
6. The document that specifically identifies work that is excluded from the project is the
______.
a.
b.
c.
d.
scope management plan

project scope statement
WBS
scope verification plan
Scope Management
7. As technological complexity increases, the level of uncertainty in defining the work

would ______.
a.
b.
c.
d.
be unaffected
be impossible to predict
decrease
increase
8. Which of the following best represents a project assumption?

a. the equipment for operational testing will arrive, as scheduled, one week
before the start of testing
b. the budget for the annual company picnic is $50,000
c. the organizational structure currently used is a matrix
d. the initial estimate for the Webinator project is $2 million, but you know that
the estimate is a rough guess and that the actual budget will change
9. One objective of scope control is to influence the factors that lead to scope changes
and to control the potential impact of those changes. Which of the following is a tool of
scope control?
a.
b.
c.
d.
work performance data

change requests
expert judgment
variance analysis
10. You have been appointed project manager for the development of the next
generation movie projector for the major U.S. entertainment studios. You decide that
you should prepare a WBS to help show the magnitude and complexity of this highly
visible and important project. No WBS templates are available to help guide this effort.
Your first step should be to ______.
a.
b.
c.
d.
identify the major project deliverables

determine the cost and duration estimates for each project deliverable
identify the components of each project deliverable
determine the procedures for making project changes
11. Scope validation is the process of reviewing work results and obtaining formal
acceptance of the project scope. Which is not an outcome of this process?
a.
b.
c.
d.

change requests
project documents updates
Scope Management
12. You are a project manager for the Environmental Protection Agency located in the
Research Triangle Park near several North Carolina universities. Your current
environmental remediation project is $250,000 over budget and six months behind
schedule. One of your engineers has found a way to reduce costs by incorporating a
technology that was not available at the beginning of the project. Which of the following
techniques is being used?
a.
b.
c.
d.
a force majeure
a value engineering change
life-cycle cost analysis
13. Which of the following processes most directly defines and manages stakeholder
expectations?
a.
b.
c.
d.
Define Scope
Validate Scope
Control Scope
14. The process Define Scope results in a written, detailed scope statement. One of
the tools is called Alternatives Generation. Which of the following is part of generating
alternatives?
a.
b.
c.
d.
value engineering
expert judgment
analysis of alternatives
project charter
15. Your neutron exciter project is off to a good start. You have completed the scope
management plan, collected requirements and have a written scope statement. Your
next scope management step is to _______ and the primary goal is ________.
a. validate scope; to ensure that the buyer and seller agree on project scope
b. control scope; to identify successes and failures for lessons learned purposes
c. consider prototyping; to facilitate design comparisons to choose the most
effective technical approach
d. create a WBS; document tasks within the project scope
Scope Management
16. The lowest level of the WBS is called a/an ___________ and has the following
characteristics: _______ and _______.
a.
b.
c.
d.
task, duration estimate, responsibility assignment

activity, duration estimate, responsibility assignment
work package, responsibility assignment, identified deliverables
work package, duration estimate, primary stakeholder
17. In the WBS, a cost or control account is __________.

a.
b.
c.
d.
a summary of the project budget

the lowest level at which organizational responsibility is assigned
a system which provides a unique numerical identifier for each work package
also referred to as level three of the WBS
18. As defined by PMI, the second scope management activity is known as _____ and
relies on the ______ as an important source of information.
a.
b.
c.
d.
identify stakeholders; interviews

identify stakeholders; stakeholder register
collect requirements; requirements documentation
collect requirements; stakeholder register
19. As one of 47 project management processes identified in the PMBOK Guide,

validate scope is concerned with ________ and belongs to which process group?
a.
b.
c.
d.
agreement; planning
correctness; executing
acceptance; monitoring and controlling
acceptance; closing
20. Your team has created a requirements management plan, a requirements

traceability matrix, and a written scope statement that has been coordinated with the
customer and key stakeholders. The team has also created a WBS that has been
decomposed to the work package level. A chart of accounts has been established for
the WBS and the detailed information for each task has been documented. What is the
next major scope management step that your project team will need to perform?
a.
b.
c.
d.
control scope
validate scope
create the WBS dictionary
respond to change requests
Scope Management
21. Control scope is about all the following except ______.

a.
b.
c.
d.
controlling the impact of cost changes

influencing the factors that create scope changes
managing actual scope changes
assuring that requested changes are handled using integrated change control
22. Features and functions describes what kind of scope?

a.
b.
c.
d.
project scope
product scope
design scope
baseline scope
23. The collect requirements process defines and documents stakeholders needs to
meet project objectives. Which of the following statements about collecting
requirements is true?
a. Context diagrams are a primary output for collecting requirements.
b. Requirements documentation and document analysis are inputs to collecting
requirements.
c. Project requirements can include technical and performance requirements.
d. The use of facilitated workshops is one of the tools and quality function
deployment is one example of such a workshop.
24. Which statement about the WBS numbering system is not true? It ______.
a.
b.
c.
d.
is called apportioned effort

identifies the level at which specific activities are found
allows allocation of costs to individual WBS activities
is sometimes referred to as a code of accounts
25. Which of the following statements about the WBS is not true?
a.
b.
c.
d.
Each item is generally assigned a unique identifier.

Work element descriptions are often collected in a WBS dictionary.
Activities at the lowest level of the WBS are referred to as work packages.
The WBS and the OBS are essentially the same thing.
26. Change control systems include which of the following?

a.
b.
c.
d.
documentation, tracking systems, and approval levels

CCB, provision for emergency changes, and audits to verify conformance
establishment of requirements
decomposition
Scope Management
27. Having completed the requirements collection process, your next step is to define
the scope. Which of the following is not a tool of scope definition?
a.
b.
c.
d.
interviews
facilitated workshops
expert judgment
product analysis
28. Scope management should ensure that a project management plan includes all the
work required but only the work required to complete the project successfully. This
planning must include both product scope (the features and functions embodied in the
product or service) and project scope (the management activities required to deliver the
product or service). Product scope should be measured against the ________ and
project scope should be measured against the ________.
a.
b.
c.
d.
statement of work; WBS

project management plan; product requirements
WBS; project charter
product requirements; project management plan
29. In addition to work performance information and change requests, the outputs of
control scope are ______.
a. scope statement, lessons learned, and WBS templates
b. work results, scope changes, and historical information
c. organizational process assets updates, project management plan updates,
and project documents updates
d. scope changes, product documentation, and performance reports
30. Two weeks ago you were called into your supervisors office and informed that you
had been competitively selected (you were immediately suspicious) for a challenging
technical development project. You were advised that the company needs the most
cost-effective design possible that will also provide the best functionality. At your first
team meeting, your lead engineer described a technique that would analyze the
functions inherent in a design, evaluate whether each function is really needed, and
assess the most cost-effective way to provide the needed functions without sacrificing
quality. Your engineer was describing which tool?
a.
b.
c.
d.
pareto analysis
root cause analysis
value engineering
Scope Management
31. You have been assigned to a small, but important team charged with quickly
defining and documenting the requirements for the renovation of a series of theme
hotels in cities with major casinos around the world. There are obvious geographical
and cultural dimensions to this project. One of the team members suggested using
group creativity techniques. Which of the following is not an example of such a
technique?
a.
b.
c.
d.
brainstorming
focus groups
affinity diagram
nominal group technique
32. The WBS can be used for which of the following?

a.
b.
c.
d.
showing calendar dates for tasks

describing the business need of the project
communicating with the customer
identifying each team members functional manager
33. Your project is almost complete and the customer wants to make a major change to
the scope of work. You should ______.
a.
b.
c.
d.
refuse the change

accept the change
complain to management
inform the customer of the impact of the change
34. Which of the following statements about decomposing work into smaller tasks
known as work packages is inaccurate?
a.
b.
c.
d.
Decompose tasks until they can be realistically estimated.

Decompose tasks until they can be completed by one person.
Different deliverables can have different levels of decomposition.
Excessive decomposition of tasks can result in non-productive management.
35. Which is not a major advantage of using a work breakdown structure?

a.
b.
c.
d.
organizes the work in a logical manner

provides a sound basis for estimating
promotes team buy-in of the project management plan
clearly describes the project work down to the smallest sub-tasks
Scope Management
Scope Management
Answer Sheet #1
Answer
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
Answer
Notes
26.
27.
28.
29.
30.
31.
32.
33.
34.
35.
36.
37.
38.
39.
40.
41.
42.
43.
44.
45.
46.
47.
48.
49.
50.
Percent Correct?
Pass or Fail?
# Misread ?s
Other Notes:
Scope Management
12
Scope Management
Answer Key: Scope Management

No.
Answer
Slides
Note
5-32
Assumptions pose risk because they deal with unknowns and

might be incorrect.
5-32
A limited budget is a classic constraint. Choices b and c are

historical records available from the knowledge base. Choice d is
stated as an estimate. If Choice d indicated that resource
availability was limited to a certain level, it would then be a
constraint.
5-34
5-39
See tool #1, decomposition.
5-37
5-41
WBS dictionary contains detailed descriptions for every work

package.
5-64
See output #5. Lessons learned identify the causes of problems

and the corrective action that solved the problems.
5-24
5-32
Exclusions from the project scope should be listed in the scope

statement.
5-26
See key points, bullet #1. Common sense.
5-32
Choice a: note that assumptions are future oriented. Choice b is

a constraint, c is a fact, and d depends on the wording (as
worded, it states that initial estimates usually change as the
project progresses; progressive elaboration).
5-62
The only tool for control scope is variance analysis.
10
5-38
5-40
Choice a represents the top down approach to a WBS (identify

major deliverables at a high level) and is the best choice (see
input #2). Choice c refers to the bottom up approach (start with
a list of every detailed work package. Choice c would be difficult
for a situation with no templates available and a new technology
involved.
11
5-55
5-56
See the list of outputs for validate scope. Choice a is not an

output.
12
5-63
See output #2 for control scope and note the reference to value
engineering. VE is aimed at incorporating the advantages of
better technologies and also at reducing costs through superior
alternatives.
13
5-13
Note bullet #2 in the introduction for collect requirements. This

process is highly focused on stakeholder expectations.
14
5-28
See tool #3 for define scope, alternatives generation.
15
5-2 & 5
5-34
16
5-36
5-40
The first three scope management processes have been

completed. The next process is Create WBS.
The lowest level in the WBS is the work package. Different
deliverables often have different levels of decomposition.
13
Scope Management
No.
Answer
Slides
17
5-40
See output #1, WBS, control accounts.
18
5-13
5-17
Collect requirements is the second scope management process

and the stakeholder register is a primary input.
19
5-49
5-51
Validate scope is aimed at formal acceptance (signing off on the

work) and is part of monitoring and controlling.
20
5-49
The first four scope processes are complete; the next process is
validate scope.
21
5-57
Control scope does not deal with cost changes (choice a).
22
5-3
Product scope identifies features and functions.
23
5-13 to
5-23
24
5-37
Choice a: there is no such term associated with the WBS. Also

see reference manual p. 5-14.
25
5-37
See key points, bullet #3, definition of OBS.
26
5-57
Choice a: see bullet #3. Choices b, c, and d are all part of

configuration management.
27
5-28
5-29
Interviews is a tool of collect requirements.
28
29
5-63
5-64
See outputs for control scope.
30
5-63
Value engineering evaluates a potential design as to whether

there is a more cost-effective approach for meeting requirements.
31
5-18 to
5-21
32
5-45
See bullet #9 (2nd to last).
33
5-57
Always follow integrated change control procedures. Never

automatically accept or refuse a change.
34
35
14
Note
Choice d is unequivocally true. Choice a is a tool, not an output.

Choice b: an output and tool, not inputs. Choice c: is for product
requirements, not project requirements.
See reference manual p. 5-1: bullet #1 on product scope.
Focus groups is a separate tool of its own (not part of group

creativity techniques).
Choice b might be true in some cases but is not a rule. See

reference manual p. 5-13.
5-45
See last bullet.
Practice Exam: Time Management

1. Which of the following is not a type of network logic used in establishing activity
dependencies?
a.
b.
c.
d.
critical logic
hard logic
preferential logic
external logic
2. Your team has agreed on the preferred activity sequences for your South Entrance
Security program. Durations have been estimated and resource availability to support
the schedule has been verified. In displaying the resulting schedule, __________ would
generally illustrate __________ better than network diagrams.
a.
b.
c.
d.
milestone charts; activity sequencing

milestone charts; the critical path
bar charts; resource trade-offs
bar charts; progress or status
3. Fast tracking involves ______.

a.
b.
c.
d.
developing workarounds for problems that have occurred in the past

an increase in schedule risk
meeting schedule objectives by doing the job right the first time
reducing delays through better allocation of resources
4. A team member just informed you that resource availability was just reduced across
the entire organization. Unfortunately, you now have more tasks scheduled for next
week than the resources available can possibly handle. One potential solution for this
predicament is to employ ______. Ideally, this technique would make maximum use of
activities _______.
a.
b.
c.
d.
resource leveling; with positive float

resource leveling; on the critical path
crashing; with negative float
crashing; with zero float
5. If you expect an activity to take three days and it takes two days, the variance is
______.
a.
b.
c.
d.
+5 days
+1 day
-1 day
-5 days
Time Management
6. Tasks A, B, and C have durations of 12 days each and are performed in sequence
using finish-to-start dependencies. Task D has a duration of 10 days and a finish-tofinish dependency with Task A. What is the late finish for Task A and Task D?
a.
b.
c.
d.
Task A = 36 and Task D = 36

7. You have been a project manager for more than twenty years and have noticed that
schedule changes tend to increase project costs. As a result of your experience and
recent project management certification, you know that schedule changes are handled
using the Control Schedule process. Which of the following is not a tool for Control
Schedule?
a.
b.
c.
d.
change requests
resource optimization techniques
leads and lags
performance reviews
8. Which of the following describes an approach to crashing the project?

a.
b.
c.
d.
achieving planned duration by doing the job right the first time
achieving planned duration by getting more cooperation from the stakeholders
reducing project duration by appropriate use of overtime
reducing project duration by doing more work in parallel
9. Scheduling heuristics are ______.

a.
b.
c.
d.
optimal solutions
shortest possible durations
methods for doing more work in parallel
rules of thumb
10. The major difference between a milestone and an activity is that milestones
______.
a.
b.
c.
d.
have zero duration

have zero float
can only be delayed with proper approval
are identified by customers
Time Management
11. The objective of fast tracking a project is to ______.

a.
b.
c.
d.
add resources to critical activities

reduce the project duration
reduce the number of resources needed by the project
provide faster status reporting
12. You are kicking off a complex project that seems to have numerous loops and
conditional branches. A more experienced colleague recommended a technique that is
not used as much as traditional network diagrams but is capable of dealing with your
situation. Which of the following did she recommend?
a.
b.
c.
d.
PERT
GERT
CPM
13. If an activity lies on the critical path, its total float will normally be:
a.
b.
c.
d.
greater than its free float

positive
zero
negative
14. Precedence diagrams are often preferred over arrow diagrams because they ____.
a.
b.
c.
d.
handle a large number of activities better

simplify scheduling by avoiding overlapping activities
do not require dummy activities
allow the project manager to identify the critical path
15. Which of the following items best identifies all the tasks that must be included in the
schedule?
a.
b.
c.
d.
the master schedule

the WBS
the technical baseline
the network diagram
16. The schedule baseline ______.

a.
b.
c.
d.
is less important than the scope baseline

does not consider resource availability
can only be determined accurately with computer analysis
is used to measure project schedule performance
Time Management
17. Your project is facing significant issues with respect to limited resources. You
recently heard about an alternate scheduling technique that is designed for such
situations. Rather than managing float, this technique relies on the use of ______ and
is called ______.
a.
b.
c.
d.
leads and lags; fast tracking

project buffers; simulation
duration buffers; critical chain method
duration buffers; resource smoothing
18. Which of the following statements about float (slack) is true?

a. the project manager may use float as a guide in making resource
assignments
b. the project manager should generally use available float as early in the project
as possible
c. negative float is not of concern if enough activities have positive float
d. negative float can often be reduced by slowing the project expenditure rate
19. In a network logic diagram, the critical path is the ______.
a.
b.
c.
d.
path that contains the most important activities

most expensive path through the network
shortest path through the network
longest path through the network
20. ______________ is an indication of scheduling flexibility.

a.
b.
c.
d.
Early start
Late start
Slack
Near-critical path
21. Activity definition is an essential, early step in building an accurate project

schedule. If the activity list is inaccurate, then the schedule will also be inaccurate.
Which of the following is an output of defining activities?
a.
b.
c.
d.
milestone list
decomposition
activity list updates
activity dependencies
Time Management
22. In the arrow diagramming method, __________ is a constraint that does not require
an expenditure of resources.
a.
b.
c.
d.
a logical dependency
a dummy activity
a successor
the critical path
23. Your project to update the security system for a major bank involves work that is
uncertain and difficult to estimate. You have decided to try using PERT to get a better
idea of the range of possible durations for this work. Accordingly, you have asked
several experts to come up with three estimates (best case, worst case, and most
likely). The estimates they provided were 7 days, 19 days, and 10 days respectively.
Using PERT, what is the expected average duration for this work?
a.
b.
c.
d.
10 days
11 days
12 days
PERT is not used for this type of estimating
24. There are organizations that have performed studies of how long it should take to
perform certain activities. The information is often useful in estimating activity durations.
This technique is known as ______ and is a ______ of estimate activity resources.
a. work analysis; tool
b. work analysis; output
c. published estimating data; tool
d. published estimating data; output
25. Which of the following dependency descriptions is incorrect?
a. Finish-to-start: Initiation of the successor depends on completion of the
predecessor.
b. Finish-to-finish: Completion of the successor depends on completion of the
predecessor.
c. Start-to-start: Initiation of the successor depends on initiation of the
predecessor.
d. Start-to-finish: Initiation of the predecessor depends on completion of the
successor.
26. Resource leveling will generally ______.
a.
b.
c.
d.
require more resources in the long run

delay the end date of the project
reduce total costs for the project
have no effect on the schedule
Time Management
27. Your experience and training have taught you that identifying the critical path is
crucial for establishing accurate expectations about schedule outcomes. Which is the
least correct statement about the critical path?
a.
b.
c.
d.
The critical path is the shortest time in which the project can be completed.
The critical path is the longest path.
The critical path has the least float.
The critical path has zero float.
28. The project activity list should generally ______.

a.
b.
c.
d.
be organized by WBS element

include only those activities on the critical path
include only those activities with confirmed resource assignments
include only those activities with confirmed start dates
29. If the end date of an initial plan is later than the desired date, which of the following
should generally be tried first?
a. start non-critical path activities at their early start dates
b. examine the activity sequences to determine whether more work can be done
in parallel
c. add more resources to critical path activities
d. negotiate a reduced scope for any activities with negative float
30. When compared to scheduling results using CPM and Monte Carlo simulations, the
project duration calculated using PERT will most likely be ______.
a.
b.
c.
d.
more pessimistic than CPM and more optimistic than Monte Carlo simulation
more optimistic than CPM and more pessimistic than Monte Carlo simulation
more pessimistic than either CPM or Monte Carlo simulation
more optimistic than either CPM or Monte Carlo simulation
31. The roof must be built before the roof can be shingled is an example of a/an
______.
a.
b.
c.
d.
external dependency
internal dependency
mandatory dependency
discretionary dependency
32. Lag time is ______.

a.
b.
c.
d.
derived from a forward and backward pass

waiting time
the time a task can be delayed without delaying the project completion
the time a task can be delayed without delaying the successor task
Time Management
33. Which project management tool would show the critical path?
a.
b.
c.
d.
WBS
project charter
milestone chart
network diagram
34. Your most recent project management training class suggested that project
managers should be proficient in all aspects of the use of float. Which of the following
statements about free float is correct? Free float ______.
a. identifies resources assigned to the project that are not actively working on
project tasks
b. identifies how long a task can be delayed without causing a delay in the
project
c. identifies how long a task can be delayed without causing a delay in the start
time of the immediate successor
d. identifies how much time it will take to complete the remaining work on the
project
35. Given the data provided below, which activity should be crashed to reduce the
project duration by one day? All times are in days.
Task
Start
A
B
C
D
End
a.
b.
c.
d.
Predecessor
-Start
A
Start
C
B, D
Normal
Time
-4
5
4
6
--
Crash
Time
-4
3
2
4
--
Crash Cost
per day
-N/A
$20
$50
$35
--
A
B
C
D
36. If you are more constrained by resource availability than by cost or schedule, you
might ______.
a.
b.
c.
d.
employ the concept of crashing to conserve resources

employ resource leveling to make the best use of scarce resources
use Monte Carlo simulation
use fast tracking to conserve resources
Time Management
37. A project with multiple critical paths ______.

a.
b.
c.
d.
will need more resources than usual

is more risky
is not possible (there is only one critical path)
must be analyzed using computerized tools
38. How does standard deviation relate to risk?

a.
b.
c.
d.
Standard deviation indicates how unsure the estimate is.

Standard deviation indicates the extent of management reserve.
Standard deviation has no bearing on risk.
Standard deviation calculates additional resources needed during crashing.
39. You already have limited resources and have been told that increasing resources
on your project is simply not going to happen. However, you have also been told that
you must find a way to stay on schedule. Which of the following is your best option?
a.
b.
c.
d.
resource leveling
crashing
fast tracking
GERT
Use the following information to answer questions 40-42.

You have been hired by the National University of Singapore to manage a facilities
renovation project. The first part of the project, as the University conceived it, consists
of four major tasks and you have collected the information in the following table:
Task
Early Finish
Late Finish
12
15
20
(revised scheduled finish)
15
40. Which task has the most float?

a.
b.
c.
d.
Task A
Task B
Task C
Task D
Time Management
41. Which task has the least float?

a.
b.
c.
d.
Task A
Task B
Task C
Task D
42. Which task most threatens completing the project on time?

a.
b.
c.
d.
Task A
Task B
Task C
Task D
43. Which of the following terms is not associated with a precedence diagram?
a.
b.
c.
d.
critical path
slack
dummy task
lag
44. The default display in many project management software programs is the Gantt
chart, which is also called a bar chart. A distinctive advantage of the Gantt chart is that
it _____.
a.
b.
c.
d.
clearly shows any schedule variances

is the best way to view the critical path
identifies dummy tasks
is the preferred way to show high-level schedule status to customers
45. Which of the following is a key characteristic of an arrow diagram?

a.
b.
c.
d.
lag
dummy task
finish-to-finish dependency
critical chain
Time Management
46. How much free float is on the critical path of the schedule defined by the following
table? All dependencies are finish-to-start except that Task I is finish-to-finish with H.
Task
Start
A
B
C
D
E
F
G
H
I
J
End
a.
b.
c.
d.
Predecessor
-Start
Start
Start
A,B
A,B,C
D,E
C,E
F,G
G,H(Finish-to-Finish)
I
J
Duration (days)
-3
5
5
6
4
3
10
4
2
3
--
26 days
7 days
5 days
0 days
47. You are searching for more effective ways to do management presentations of
schedule status on complex projects with large numbers of interdependent work
packages. Increased use of ______ would be an effective way to display summary
results to upper management.
a.
b.
c.
d.
arrow diagrams
hammock activities
critical chain diagrams
precedence diagrams
48. Your project has fallen behind schedule due to conflict between team members.
You have resolved the conflict. What should you consider to get the project back on
schedule?
a.
b.
c.
d.
10
crashing
resource leveling
resource smoothing
adding lag times along the critical path
Time Management
Answer Sheet #1
Answer
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
Answer
Notes
26.
27.
28.
29.
30.
31.
32.
33.
34.
35.
36.
37.
38.
39.
40.
41.
42.
43.
44.
45.
46.
47.
48.
49.
50.
Percent Correct?
Pass or Fail?
# Misread ?s
Other Notes:
11
Time Management
14
Time Management
Answer Key: Time Management

No. Answer
Slides
Note
6-29
Critical logic is not one of the types of dependencies identified by

PMI.
6-87
See output #2, project schedule. Bar charts are easy to read and
show schedule variances very clearly.
6-76
6-81
See tool #7,schedule compression. One potential effect of fast

tracking is an increase in risk related to resource assignments.
6-74
See tool #4, resource optimization: resource leveling.
6-94
See tool #1, performance reviews. Variance is calculated as plan

minus actual (3-2 in this example).
6-20
6-44 &
45
You must connect task D to end (or you will not have a legitimate
way to determine the late finish for task D). A & D are finish-tofinish but are not both on the critical path.
6-94 to
6-97
Change requests is an output (not a tool).
6-76
Overtime is a form of crashing (more time from the same people).

Choice d is fast tracking.
6-74
See tool #4, resource leveling. Heuristics are guidelines or rules

of thumb.
10
6-17
Milestones are important points in time but have no duration.
11
6-76
Both types of schedule compression (crashing and fast tracking

are aimed at shortening the schedule).
12
6-101
See other topics, GERT.
13
6-71
See tool #2, critical path method.
14
6-28
PDMs do not require dummy tasks.
15
5-44
5-45
6-67
PMI has historically emphasized the WBS as the best way to get
an accurate activity list and therefore produce an accurate
schedule. Define Activities produces the activity list that becomes
an input to Develop Schedule. The WBS is a major input in
defining that activity list.
16
6-86
See output #1, schedule baseline.
17
6-73
Critical chain manages duration buffers rather than float and the
critical path.
18
6-38
6-71
Choice b: as a rule, float is saved until needed. Choice c: an

activity with positive float is non-critical and cannot make up for a
task with negative float (and would also be on a different path).
19
6-71
See tool #2, critical path method.
20
6-71
Slack or float indicates the flexibility to delay work, if needed.
15
Time Management
No. Answer
Slides
Note
21
6-16
6-17
Choice b is a tool. Choice c: associated with sequencing, see

output #2, project documents updates. Choice d: associated with
sequencing, see tool #2.
22
6-32
6-33
Dummy activities are fictitious activities that have no duration,

resources, or actual work. They are used in arrow diagrams
whenever multiple dependencies exist.
23
6-78
PERT average duration = (O + 4M + P) / 6
24
6-51
See tool #3, published estimating data.
25
6-23 to
6-27
26
6-74
See tool #4, resource leveling.
27
6-71
The critical path has zero float unless you are behind schedule
(then you have negative float). Choices a, b, and c are always
true. Choice d has exceptions (when you are behind or ahead of
schedule).
28
6-12
PMI has always centered on the use of the WBS in defining an

accurate activity list. Choices b, c, and d are incorrectly trying to
limit the activity list to include only certain types of activities.
29
6-76
Choice a: would not solve the problem. Choice b: is fast tracking

and is the correct choice. Choice c: is crashing and adds cost (it
may be necessary but is not the preferred first resort). Choice d:
reducing scope would be a last resort.
30
6-99
6-100
See other topics, Monte Carlo analysis.
31
6-29
Mandatory dependencies involve physical or technical limitations

in the nature of the work, i.e., work that cannot be done in parallel.
32
6-29
6-43
See tool #3, applying leads and lags.
33
6-87
See output #2, project schedule.
34
6-39
6-46
Free float is how long you can delay a task and not delay the early
start of the immediate successor task.
35
6-81 to
6-85
You must draw the network and find the critical path (C,D). Task D
is the cheapest, crashable task.
36
6-74
Choice a: crashing usually requires more resources (not less).

Choice c: simulations are used for risky, complex projects of high
cost (it is not aimed at conserving resources). Choice d: aimed at
reducing the schedule (not resources).
37
6-72
See tool #2, critical path method. More than one critical path is
possible and increases risk.
16
Choice d is stated backwards (the predecessor does not depend

on the successor).
Time Management
No. Answer
Slides
Note
38
6-63
Standard deviation provides one way to measure whether an

estimate has a wide or narrow range. Estimates with wide ranges
indicate work that is uncertain or risky (basic knowledge of
statistics).
39
6-76
Crashing requires more resources (which are not available). Fast

tracking allows improvement of the schedule without additional
resources.
40
6-40 to
6-42
Float = Late Finish-Early Finish. Task C has the most float at +3

days.
41
6-40 to
6-42
Task D has the least float at -5 days (it is behind schedule).
42
6-40 to
6-42
Because it is currently behind schedule, task D is the greatest

threat to not completing the work on time.
43
6-32 to
6-34
Dummy tasks are used in arrow diagrams but are not part of
precedence diagrams.
44
6-87
45
6-32 to
6-34
46
6-71
Float and free float on the critical path will be zero; you do not
need to work this complicated diagram.
47
6-87
Hammock activities are summary level activities that show the

total time span between the initial start of the first activity and the
finish of the last activity in a series.
48
6-76
6-81
Choice b: will make the project fall further behind. Choice c: the
rules for smoothing do not allow the schedule to change. Choice
d: adding lags would further delay project completion.
Gantt charts use horizontal bars and a time scale. The empty bar
shows the plan and the darkened portion shows actual work
accomplished. It is visually easy to determine schedule progress
or variances with Gantt charts.
Dummy tasks are used in arrow diagrams but are not part of
17
Practice Exam: Cost Management

Use the following information to answer questions one through four below:
PV = $2,200
EV = $2,000
AC = $2,500
BAC = $10,000
1. Using earned value analysis, what is the schedule variance and status of the project
described above?
a.
b.
c.
d.
-$200 and the project is behind schedule

+$200 and the project is ahead of schedule
-$300 and the project is ahead of schedule
+$8,000 and the project is exactly on schedule
2. What is the CPI for this project and what does it tell us about cost performance thus
far?
a.
b.
c.
d.
.20; actual costs are exactly as planned

.80; actual costs have exceeded planned costs
.80; actual costs are less than planned costs
1.25; actual costs have exceeded planned costs
3. What is the cost variance?

a.
b.
c.
d.
+$300
-$300
+$500
-$500
4. Assuming current variances are typical of future performance, what is the EAC and
what does it represent?
a. $10,000; the original project budget
b. $12,500; the original project budget
c. $10,500; the revised estimate for total project cost (based on performance
thus far)
d. $12,500; the revised estimate for total project cost (based on performance
thus far)
Cost Management
5. Life Cycle Cost (LCC) estimates consider ______.

a. the total life cycle costs of the project (initiating, planning, executing, and
closing)
b. the differential cost of owning and operating a system
c. the total cost of acquisition as well as operations and maintenance
d. the total project cost at the time of customer acceptance
6. Accelerated depreciation allows a company to write capital expenses off their taxes
more quickly. Which of the following is a recognized method of accelerated
depreciation?
a.
b.
c.
d.
straight line
double declining balance
rapid capital deduction
accumulated cash analysis
7. You have completed one year on the troubled Yucky Mountain nuclear waste
disposal project. Numerous concerns have surfaced about the project and you have
been directed to perform analysis and recommend either terminating or continuing the
project. The $2.5 million already spent is referred to by finance experts as _________
and experts contend that these costs should ___________ considered in making the
decision to continue the project or not.
a.
b.
c.
d.
sunk costs; not be

allocated costs; not be
direct costs; be
amortized costs; be
8. The cost of investing in a particular project and therefore giving up the potential
benefits of other projects is known as ______.
a.
b.
c.
d.
variable cost
fixed cost
opportunity cost
indirect cost
9. Which of the following estimates would most closely predict the actual cost of a
project?
a.
b.
c.
d.
Order of magnitude
Budget
Definitive
Parametric
Cost Management
10. Which of the following is one possible approach for developing parametric cost
estimates?
a.
b.
c.
d.
WBS
learning curve analysis
payback period
factor analysis
11. Your project is running behind schedule and you decide to crash the network to
catch up. Which of the following rules should you follow?
a.
b.
c.
d.
Begin noncritical tasks at their early start times.

Use resource leveling to optimize the productivity of project resources.
Crash the tasks that have the longest duration.
Crash critical tasks whose cost of crashing is lowest.
12. Learning curve theory states that in repetitive production of many items ______.
a. production equipment that requires less operator training results in lower unit
costs
b. unit costs decrease as production rates increase
c. unit costs decrease in a regular pattern as more units are produced
d. costs of training increase as the level of automation increases
13. Which of the following is not an example of a direct cost?
a.
b.
c.
d.
Salary of the project manager

Subcontractor expenses
Materials used by the project
Insurance
14. Your project budget was estimated at $2,000,000. The third monthly status report
revealed that $500,000 worth of work was complete and that $750,000 had been spent.
Your team believes that current variances will not be indicative of remaining
performance. What is the EAC?
a.
b.
c.
d.
$3,000,000
$2,000,000
$2,750,000
$2,250,000
Cost Management
Using the following information, answer questions 15 and 16:

Variable costs = $100 per unit
Fixed costs = $2,500
15. What is the cost of producing 20 units?
a.
b.
c.
d.
$4,500
$2,600
$2,500
$2,000
16. What is the cost of producing 10 additional units?

a.
b.
c.
d.
$25,000
$2500
$1000
$600
17. As of the fourth month on the Acme project, cumulative planned expenditures were
$100,000. Actual expenditures totaled $120,000. How is the Acme project doing?
a.
b.
c.
d.
The project is ahead of schedule

The project is in trouble because of a cost overrun
The information available is insufficient
Project costs are within a normal range
18. Present value is the ______.

a.
b.
c.
d.
after-tax value of working capital

value today of future cash flows
total budget as of today
total budget as of today plus management reserve
19. Working capital is defined as ______.

a.
b.
c.
d.
current assets less current liabilities

funds reserved for bid and proposal costs
funds set aside for unforeseen problems
the sum of cost plus profit
Cost Management
20. As the chairman of the project selection committee, you are reporting the findings
after assessing the following four projects:
Project
A
B
C
D
Duration
3 years
2 years
3 years
4 years
Net Present Value

$40,000
$30,000
$35,000
$40,000
What do you plan to report?

a. Projects A and C are the two best choices; Project A is preferred with the
highest NPV
b. Projects A and D are the two best choices; Project A is preferred because the
payback occurs more quickly
c. Project B is preferred because the payback occurs faster than any other
project
d. Projects A and D have equal financial value to your organization
21. Which of the following statements about management reserve is/are true?
i. Management reserve is intended to reduce the chance of a cost overrun
ii. Management reserve funds may be used to fund work not originally
authorized for the project
iii. Management reserve funds may be used to fund unforeseen problems
a.
b.
c.
d.
i and ii
i and iii
ii and iii
i, ii, and iii
22. According to the law of diminishing returns, ______.

a.
b.
c.
d.
short people are best suited to some kinds of work

using fewer resources will result in greater profit
using more resources will result in proportionately less and less output
using more resources will result in the project taking less time
23. Which of the following is a cost reduction tool aimed at: a) analyzing a design, b)
determining the necessary functions, and c) assessing how to provide those functions at
the lowest cost without degrading performance or quality?
a.
b.
c.
d.
Pareto diagram
Kanban
Configuration management
Value analysis
Cost Management
24. Which of the following statements are true regarding benefit cost-ratios (BCR)?
i. A BCR greater than zero indicates a profitable project
ii. A BCR of 2.5 represents a gross payback of $2.50 for each dollar invested
iii. Benefit-cost ratio represents the average rate of return on the money invested
in a project
a.
b.
c.
d.
i
ii
iii
ii and iii
25. Analysis of payback period determines __________.

a.
b.
c.
d.
which project will become profitable most quickly

the future value of money invested today
the ratio of discounted revenues over discounted costs
the first time period in which a financial profit occurs
26. Your project involves inspecting the operating, maintenance, and security
procedures of nuclear energy facilities. The latest status report showed the CPI to be
0.88 and the SPI to be 0.93. What is your cost and schedule status?
a. You have a cost overrun and are behind schedule.
b. You have a cost underrun and are ahead of schedule.
c. You have spent 88 percent of the budget and have completed 93 percent of
the work.
d. There is insufficient information to determine cost and schedule status.
27. Which statement about bottom-up cost estimating is not true? The concept _____.
a. identifies cost estimates for WBS work packages
b. aggregates work package estimates to yield a cost estimate for the entire
project
c. is an example of an order of magnitude estimate
d. is considered a very accurate form of definitive estimating
28. IRR is a quantitative measure of a projects expected profitability and can be
thought of as ______.
a.
b.
c.
d.
after tax profit reported to the IRS

the average rate of return for the project
the estimate at completion minus the budget at completion
the cost variance percentage
Cost Management
29. Given the following information on the XYZ project, what is the expected outcome?
(Assume current variances are typical of future performance)
Original project budget was $400,000

The current BCWP is $200,000
The current BCWS is $180,000
The current ACWP is $250,000
a.
b.
c.
d.
The project will finish with a positive cost variance

The estimate to complete is about $100,000
The project will finish with a cost overrun of $100,000
There is insufficient information to evaluate the project
30. Your projects budget is $500,000. The planned value as of todays reporting
period is $300,000. The project is 50% complete and 60% of the budget has been
spent. The earned value for the project is ______ and the project is ________.
a.
b.
c.
d.
$300,000; behind schedule

$300,000; on schedule
$250,000; ahead of schedule
$250,000; behind schedule
31. EAC is a periodic evaluation of ______.

a.
b.
c.
d.
value of work performed

cost of work completed
what it will cost to finish the job
estimated total cost at project completion
32. Analogous estimating ______.

a.
b.
c.
d.
relies on actual historical costs

is a form of bottom-up estimating
is a form of top-down estimating
is used most often during the implementation phase
33. A CPI of .75 indicates that ______.

a.
b.
c.
d.
you have spent 75% of your budget

you have a cost underrun
you are over budget
your marginal tax is 25%
Cost Management
34. You just completed estimating the cost of a project to renovate an elementary
school and install a security and fire-alarm system that meets current city codes. The
estimate is $100,000 but experience with projects of this type leads you to believe that
the actual costs could range anywhere from $90,000 to as much as $125,000. What
kind of estimate have you created?
a.
b.
c.
d.
order of magnitude estimate

budget estimate
definitive estimate
parametric estimate
35. An order of magnitude estimate would normally be made during which project
management phase?
a.
b.
c.
d.
initiation
planning
executing
closing
36. You are in the second month of clinical trials on the development of a new drug
which your company is planning to call Awake. The target market is professional,
long-haul drivers and college students who procrastinate on their work. You think things
are going pretty well but are about to look at some earned value data to find out for
sure. The data show that the CPI is 0.96 and actual costs are $50,000. Given these
data, what is the earned value?
a.
b.
c.
d.
$48,000
$50,000
$52,083
there is not enough information to determine the earned value
37. The CPI on the Awake project is 0.96 and you have calculated the EAC as
$312,500. What was the original budget (BAC) for the project if you believe that current
variances are typical for the remaining work?
a.
b.
c.
d.
$325,521
$312,500
$300,000
there is not enough information to determine the budget at completion
Cost Management
38. You just assumed the PM role for a virtual team with members in six different
geographical locations. The project is using earned value analysis and the data for the
latest month showed the EV (BCWP) to be $126,000, the PV (BCWS) to be $120,500,
the AC (ACWP) to be $130,000, the BAC to be $600,000, and the percent complete to
be 0.21. What is the earned value at this point?
a.
b.
c.
d.
$600,000
$126,000
$130,000
$120,500
39. Which statement best explains the declining SPI in the graph shown below?
a.
b.
c.
d.
the project started late

insufficient resources are available to the project team
materials cost less than anticipated
a portion of the work was outsourced
CPI
1.0
SPI
40. Most organizations prefer to avoid large changes in spending during any portion of
a fiscal year (for example, a huge spike in spending for the third fiscal quarter). A
technique for reducing such fluctuations is known as ______ and is ______.
a.
b.
c.
d.
funding limit reconciliation; a tool of estimate costs

funding limit reconciliation; a tool of determine budget
reserve analysis; a tool of estimate costs
reserve analysis; a tool of determine budget
41. You are not quite half done with your project to upgrade the companys I.T.
systems. The latest status showed a CPI of 0.90 and you have been asked what your
cost performance must be for the remainder of the project if you are to finish on budget.
What formula should you use?
a.
b.
c.
d.
To-Complete Performance Index; (BAC EV) / (BAC AC)

To-Complete Performance Index; (EV + AC) / BAC
Variance at completion; BAC minus EAC
Variance at completion; BAC / CPI
Cost Management
42. You have received information for your next status report that shows that $80,000
of work has been completed on your $300,000 computer upgrade project. The baseline
called for $86,000 to be completed at this point. You have spent $75,000. Your percent
spent is ______ and the SPI (schedule performance index) is ______.
a.
b.
c.
d.
25%; .93 (ahead of schedule

25%; .93 (behind schedule)
26.67 %; 1.07 (ahead of schedule)
26.67%; 1.07 (behind schedule)
43. You are reviewing the latest earned value data and note that the CPI is 0.83 and
the SPI is 0.89. Your project ______.
a.
b.
c.
d.
has a cost underrun and is behind schedule

has a cost underrun and is ahead of schedule
has a cost overrun and is behind schedule
has a cost overrun and is ahead of schedule
44. Your current status report reveals that the planned value of the work at this point is
$500,000. It further shows that 50% of the $1,000,000 BAC has been completed and
that 55% of the project budget has been spent. The data also show that 2 tasks are
behind schedule. What is the SPI and what does it mean?
a.
b.
c.
d.
SPI = 1.0; the project is exactly on schedule

SPI = 1.0; the project is behind schedule
SPI = .9091; the project is ahead of schedule
SPI = .9091; the project is behind schedule
45. A projects payback period occurs when ______.

a.
b.
c.
d.
10
profit has been maximized

unit profit is reached
monthly revenue exceeds monthly costs
cumulative revenue equals or exceeds cumulative costs
Cost Management
46. You have been tasked to report on the financial advisability of a large (for your
organization) education technology improvement project. Your boss specifically asked
you to use ROI (return on investment) in your analysis. After several meetings with the
best resident experts you could identify, you have gathered the following estimates:
The most likely cost of the project: $250,000
Direct revenues from the project: $410,000
You plan to report that the ROI for this project is ______ and that any ROI above the
value of ______ indicates a likely profit.
a.
b.
c.
d.
1.64 (164%); one

1.64 (164%); zero
0.64 (64%; one
0.64 (64%); zero
11
Cost Management
12
Cost Management
Answer Sheet #1
Answer
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
Answer
Notes
26.
27.
28.
29.
30.
31.
32.
33.
34.
35.
36.
37.
38.
39.
40.
41.
42.
43.
44.
45.
46.
47.
48.
49.
50.
Percent Correct?
Pass or Fail?
# Misread ?s
Other Notes:
13
Cost Management
16
Cost Management
Answer Key: Cost Management

No. Answer
Slides
Note
7-48
EV - PV = 2,000-2,200 = -$200. Negative variances are bad.
7-47
EV/AC = 2,000/2,500 = 0.80. Indexes less than one are also bad.
7-47
EV - AC = 2,000-2,500 = -$500. Cost overrun.
7-50
EAC = BAC / CPI = 10,000/0.80 = $12,500
7-4
Life cycle cost considers project costs, operating costs, maintenance

costs, and potential disposal costs (if relevant).
7-77
Accelerated methods of depreciation include double declining

balance and sum of the years digits.
7-67
Sunk cost is money already spent that cannot be recovered. Sunk

cost should not be considered when deciding whether to finish a
project.
7-67
Opportunity cost is the benefit you give up in deciding not to perform

a specific project.
7-14
The definitive estimate has the most narrow range of accuracy at -5

to +10%.
10
7-76
Learning curve analysis uses a parametric called the rate of learning

to model the reduction in labor hours required to do repetitive tasks.
11
6-81 to
6-85
Choice a: non-critical tasks have no direct bearing on improving the

schedule. Choice b: usually results in a schedule slip. Choice c:
wont help if the tasks are not on the critical path.
12
7-76
Choice c is compatible with the basic definition of learning curve.
13
7-81
Insurance is a typical overhead expense and overhead expenses

are considered indirect costs.
14
7-51
EAC formula #2 is appropriate because you were told that current

variances will not be indicative of future performance. So, EAC = AC
+ (BAC-EV) = 750,000 + (2,000,000-500,000) = $2,250,000.
15
7-80
The total cost of 20 units = Fixed Cost + Variable Cost = 2,500 +

(100 x 20) = $4,500.
16
7-80
The cost of 10 additional units implies that production was already

under way and you now want additional units. The fixed cost (nonrecurring, start-up cost) is not relevant. So, 10 additional units at
$100 per unit will cost $1,000.
17
7-33
The data provide a spending variance, but not a real cost variance.
You are missing EV; you have not measured how much work has
been done (trick question).
18
7-70
Present value is thought of as the value today of a future cash flow.
19
7-82
Working capital is defined as current assets minus current liabilities.
20
7-68
7-71
NPV already takes into account the timing of the cash flows. The
only relevance of project duration is that, of the two best projects,
Project A finishes earlier and is thus preferred.
17
Cost Management
No. Answer
Slides
Note
21
7-21
7-35
Statement i is true: see slide 7-35, bullet #3. Statement ii is false:

see slide 7-35, bullet #4 (reserve is not supposed to be used for
scope changes). Statement iii is true: see slide 7-21. Management
reserve is for unknown unknowns, events that are difficult or
impossible to predict in advance.
22
7-79
The law of diminishing returns is associated with any situation in

which putting more into something yields less return.
23
7-78
The description identifies three of the four classic steps of value

analysis.
24
7-69
Statement i is false: a BCR greater than one indicates a profitable

project. Statement ii is true: the slide uses that exact example.
Statement iii is false: this statement is the classic definition of IRR
(not BCR).
25
7-68
Choice a is the most correct statement. The problem with choice d

(as stated) is that it could represent the situation in slide 7-68 where
time period 1 shows the first profit, but the overall project is still
operating at a loss. You should be looking for key words such as
overall profit, net cumulative profit, and so on.
26
7-47 &
7-48
A CPI less than one indicates a cost overrun. An SPI less than one
indicates that the project is behind schedule.
27
7-14
7-19
Bottom-up estimates are synonymous with definitive estimates.

They require more effort but are much more accurate than order of
magnitude estimates.
28
7-72
One description of IRR is that it represents the average rate of return

on your investment.
29
7-47
7-50
7-55
Choices a and c may both be assessed by calculating the variance

at completion. VAC = BAC - EAC (you are given BAC but must
calculate EAC). EAC = BAC / CPI. Do the math and choice c is
correct. You could quickly make a best guess: current status is cost
overrun (you can see that easily and quickly from the data given to
you). So look for choices that show the project finishing with an
overrun. Again, choice c stands out.
30
7-48
In the reference manual, p. 1-7, the formula is given for %complete

for total project: EV = .5 x 500k. Slide 7-48 gives SV = EV-PV =
250,000-300,000 = -$50,000 (behind schedule).
31
7-50
Choice a is EV. Choice b is AC. Choice c is ETC.
32
7-18
Choice c is the best answer (historical cost must also be adjusted;

so choice a is not as complete or correct as choice c).
33
7-47
A CPI less than one is analogous to a negative variance. They both

indicate bad news; you have a cost overrun.
34
7-14
The range given is -10 to +25% (budget estimate).
35
7-14
Order of magnitude estimates are for go/no-go decisions during

initiating.
18
Cost Management
No. Answer
Slides
Note
36
7-47
CPI = EV / AC. So, .96 = EV / 50,000. EV = .96 x 50,000.
37
7-47
7-50
EAC = BAC / CPI. So, 312,500 = BAC / .96. BAC = .96 x 312,500.
38
Logic
EV is given as $126,000. (RTQ: Read The Question).
39
7-48
Choice a: The project did not start late. The display shows the SPI
at 1.0 (on time) at the start of the project (left edge of the display).
Choice b (insufficient resources) is a logical explanation for being
behind schedule. Choice c explains the CPI but not the SPI. Choice
d does not necessarily explain the SPI or the CPI.
40
7-29
See Tool #5, funding limit reconciliation.
41
7-56
TCPI calculates the CPI needed for a project to finish on budget. It

divides the dollar value of the remaining work by the original budget
still available.
42
7-48
Reference manual, p. 1-7, gives the formula for % spent as AC/BAC

(75k/300k = 25%). Slide 7-48 gives SPI as EV/PV = 80k/86k = .93.
Indexes below one are bad; you are behind schedule.
43
7-47
7-48
Indexes less than one are bad news: cost overrun and behind
schedule.
44
7-48
SPI = EV/PV. PV is given as $500k. You must calculate EV, which

is given as .50 x BAC = .50 x $1,000,000 = $500k. Therefore, SPI =
500,000/500,000 = 1.0. You are exactly on schedule.
45
7-68
Note the contrast in wording compared to question #25. This

wording clearly states that cumulative revenues exceed cumulative
costs and therefore the project is truly profitable.
46
7-75
ROI = (Revenue-Cost)/Cost = ($410k-$250k)/$250k = $160k/$250k

= 0.64. As a percentage (multiply by 100), ROI is 64%. Any ROI
above zero shows a profit.
19
Practice Exam: Quality Management

1. Primary responsibility for quality on a project is vested in the ______.
a.
b.
c.
d.
lead engineer
quality manager
CEO
project manager
2. Given the following information, where would a Pareto Chart suggest that corrective
action be focused?
Source of problem % of problems
Design
Fabrication
Prototype
Test
Installation
a.
b.
c.
d.
78
08
06
04
04
Design
Design and Fabrication
Design, Fabrication, and Prototype
All activities
3. Which quality management process audits quality requirements to ensure that

appropriate quality standards are used and also provides an umbrella for continuous
process improvement?
a.
b.
c.
d.

Conduct Quality Audits
Control Quality
4. Your major information systems project is under pressure to finish as quickly as

possible. Someone from the quality department wants to begin a quality audit of your
project and your team objects. Which statement about quality audits is incorrect?
a.
b.
c.
d.
They may be scheduled or random.

They assess whether the project is following its quality processes.
They identify lessons learned that may improve performance on the project.
They check the accuracy of the cost estimates submitted by the team.
Quality Management
5. An assignable variance indicates that ______.

a.
b.
c.
d.
training is inadequate
production equipment is worn out
implementation of quality circles is paying off
there may be an identifiable problem that must be investigated
6. When would sampling not be preferred over 100% inspection?

a.
b.
c.
d.
when destructive testing is required

when you believe there are many defects
when the cost of inspection is high
when the population is large
7. Some companies today are using six sigma to set upper and lower control limits
rather than the traditional ______ sigma. If your processes are engineered to a quality
standard of six sigma, you will experience defects at a rate of approximately ______.
a.
b.
c.
d.
three; 3 defects per thousand items

three; 3 defects per million items
two; 5 defects per thousand items
square root of n; 1 defect per ten thousand items
8. The primary responsibility for developing design specifications belongs to ______.

a.
b.
c.
d.
purchasing
the project manager
quality control
engineering
9. Quality should generally be of ______.

a.
b.
c.
d.
lower priority than cost and schedule

higher priority than cost and schedule
equal priority with cost and schedule
equal priority with schedule but higher priority than cost
10. Which is not a commonly used quality planning tool?

a.
b.
c.
d.
CSSR report (Cost and Schedule Status Report)

Fishbone diagram
Pareto chart
Control chart
Quality Management
11. A project manager notices that, while all the measurements on a control chart are
within the control limits, several runs in the data show ten or more outcomes in a row
below the midpoint (negative variance). The PM should ______.
a.
b.
c.
d.
take no action as long as all the variances remain within the control band
apply the rule of seven
assume there is a problem since negative variances have occurred
report that the variances are most likely caused by random factors
12. Just-in-time (JIT) relies on the concept of reducing work-in-process inventory to

______.
a.
b.
c.
d.
zero stock
half of previous stock
a two day supply
a one week supply
13. Plan quality management is ______.

a. identifying which quality standards are relevant to the project and
documenting how the project will demonstrate compliance
b. monitoring specific project results to determine whether they comply with
relevant quality standards and identifying ways to eliminate causes of
unsatisfactory performance
c. auditing quality requirements and results from quality control measurements
to ensure appropriate quality standards and operational definitions are used
d. the process of emphasizing prevention over inspection so as to reduce the
total cost of quality
14. Control quality is ______.
a. identifying which quality standards are relevant to the project and
documenting how the project will demonstrate compliance
b. monitoring and recording results of executing quality activities to assess
performance and recommend necessary changes
c. auditing quality requirements and results from quality control measurements
to ensure appropriate quality standards and operational definitions are used
d. the process of emphasizing prevention over inspection so as to reduce the
total cost of quality
15. Quality management involves directing a team of people to achieve stated needs or
goals by providing ______.
a.
b.
c.
d.
a project completed in the shortest possible time

a product or service that conforms to the specification
an award-winning product that brings public recognition to the project
products meeting the highest standards of luxury goods
Quality Management
16. According to current quality management thinking, which of the following

approaches is least likely to produce quality improvements?
a.
b.
c.
d.
increased inspection
employee suggestion programs
quality circles
statistical quality control
17. The concept of quality is based on ______.

a.
b.
c.
d.
meeting luxury goods standards

producing excellent products that are superior to similar items
conforming to the requirements / specifications
maintaining uniformity of design
18. From a high-level perspective, quality ______.

a.
b.
c.
d.
is ensured by having inspectors

cannot be quantitatively measured
is inconsistent with productivity and meeting schedules
is primarily a management problem (i.e., 80-90% of quality issues are the
responsibility of management)
19. Reliability and maintainability are most affected by the ______ of a product or
service.
a.
b.
c.
d.
design
fabrication
production
testing
20. Which of the following is least likely to result in a project team with a strong
commitment to quality?
a.
b.
c.
d.
clear goals
cohesive team commitment to the project
frequent turnover of personnel
use of kick-off meetings
21. Benchmarking is best described as ______.

a.
b.
c.
d.
the measurement of customer satisfaction

comparing planned product performance to the actual product performance
a comparison of cost and quality
comparing planned or current project practices with those of other projects
Quality Management
22. As a tool of Plan Quality Management, what are three specific categories of costs
associated with cost of quality?
a.
b.
c.
d.
prevention, appraisal, and failure

planning, test, and rework
prevention, inspection, and rework
planning, appraisal, and failure
23. Quality attributes ______.

a. are used to determine how effectively the performing organization supports
the project
b. can be objective or subjective in nature
c. are numerically measurable on a continuous scale
d. are best examined using flow charts
24. The quality tool that displays the sources of defects from the most occurrences
(displayed on the left of the diagram) to the fewest occurrences (displayed on the right
of the diagram) is called a ______.
a.
b.
c.
d.
control chart
histogram
checksheet
Pareto chart
25. ISO 9000 is ______.

a.
b.
c.
d.
a process for preparing control charts

a set of guidelines for quality
an international standard that describes a recommended quality system
only applicable to products manufactured in the United States
26. Kaizen is an approach that emphasizes ______.

a.
b.
c.
d.
quality circles
cause and effect diagrams
incremental improvement
technological advances
27. The Kanban technique supports the ______.

a.
b.
c.
d.
use of Pareto diagrams

use of control charts
Just-In-Time inventory system
variance analysis process
Quality Management
28. The cost of quality includes the ______.

a.
b.
c.
d.
cost of inspection and rework

cost of prevention and appraisal
cost of system test and rework
cost of conformance and nonconformance
29. The most likely result of an increase in quality is ______.

a.
b.
c.
d.
increased productivity
decreased cost effectiveness
increased technological advance
increased amount of rework
30. Inspections are also referred to as ______.

a.
b.
c.
d.
sampling
system tests
status reports
audits
31. The optimal quality level is reached at the point where the incremental revenue
equals the incremental cost refers to what concept?
a.
b.
c.
d.
incremental analysis
conformance analysis
total quality analysis
marginal analysis
32. During a meeting, the project team determines that the customer would benefit from
a specific area of extra work and they add it to the project. This is called ______.
a.
b.
c.
d.
a change order
gold-plating
customer delight
rapid prototyping
33. Although they are definitely related, quality assurance differs from quality control in
several ways. Quality assurance is used during ______ and is focused on ______.
a. executing and closing; providing confidence that future work will meet
requirements
b. planning and controlling; ensuring that actual results met requirements
c. planning and executing; providing confidence that future work will meet
requirements
d. planning and closing; ensuring that actual results met requirements
Quality Management
34. A quality standard of Plus/Minus three sigma would result in what approximate
percentage of items that conform to requirements?
a.
b.
c.
d.
68.3%
95.5%
99.7%
99.9997%
35. Which of the following is an example of quality assurance?

a.
b.
c.
d.
quality audits
control charts
Pareto diagrams
fishbone diagrams
36. Which of the following graphs contains a dependent as well as an independent

variable?
a.
b.
c.
d.
Ishikawa diagram
Scatter diagram
Pareto diagram
Control chart
37. You are using a control chart to track production of 60 watt light bulbs. The mean is
60 and the UCL/LCL are 64 watts and 56 watts respectively. Which set of outcomes
shows a process under control?
a.
b.
c.
d.
61, 60, 58, 59, 60, 63, 65, 66, 64, 60

63, 65, 62, 59, 61, 64, 65, 66, 58, 61
61, 58, 59, 63, 65, 64, 66, 63, 59, 61
60, 59, 57, 62, 63, 61, 58, 59, 62, 58
38. The cost of quality (COQ) tracks costs of conformance in which of the following
formal categories?
a.
b.
c.
d.
prevention, appraisal, and failure costs

prevention and appraisal costs
inspection and rework costs
training and warranty costs
Quality Management
39. You are reviewing a diagram that shows vertical bars. The tallest bar is on the left
and identifies the number of defects caused by a specific problem. Other shorter bars
also identify defects originating from specific causes. This diagram is called a ______
and may be used to ______.
a.
b.
c.
d.
Cause and Effect Diagram; determine the causes of a specific problem

Cause and Effect Diagram; determine whether your process is under control
Pareto Chart; determine whether your process is under control
Pareto Chart; guide corrective action to the most productive areas
40. You are attempting to stimulate discussion to solve a persistent, recurring problem
on your telecommunications project. Which of the following techniques is specifically
designed for that purpose?
a.
b.
c.
d.
Ishikawa Diagram
Pareto Chart
Control Chart
Run Chart
Quality Management
Answer Sheet #1
Answer
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
Answer
Notes
26.
27.
28.
29.
30.
31.
32.
33.
34.
35.
36.
37.
38.
39.
40.
41.
42.
43.
44.
45.
46.
47.
48.
49.
50.
Percent Correct?
Pass or Fail?
# Misread ?s
Other Notes:
Quality Management
12
Quality Management
Answer Key: Quality Management

No. Answer
Slides
Note
8-37
Responsibility for the project is the PM and for a task is the employee
doing the work.
8-16
8-19
See tool #3d, Pareto diagram/chart. The 80/20 rule is a guideline

and not an absolute requirement. Even though its not quite 80%,
there is a huge break in the data (from 78% down to 8% for
fabrication).
8-31
Definitions are especially important in the quality chapter.
8-33
See tool #2, quality audits.
8-22
See tool #3f, control charts.
8-43
See tool #2, statistical sampling. Conditions under which sampling is

preferred: large population, cost of inspection is high, destructive test
is required, and you know the defect rate is low.
8-53
Know the distinction between 3 sigma and 6 sigma.
8-49
Engineers are the experts with the knowledge to develop design

specifications.
8-49
Quality should share equal priority with cost and schedule.
10
8-10
8-13 to
8-26
11
8-23
See rule of seven.
12
8-50
Just-in-Time (JIT) works off of the idea of zero work-in-process safety

stock.
13
8-9
See introduction to Plan Quality Management (definitions are

especially important in this chapter).
14
8-38
See introduction to Control Quality.
15
8-3 to
8-5
See customer satisfaction (conformance to specifications is one of

the possible definitions of quality management).
16
8-5
8-9
17
8-3 to
8-5
Quality is focused on the idea of meeting established requirements.
18
8-5
8-14
8-14: See the note below the table (one of Demings major points
was the role of management in achieving quality).
19
8-49
Fits the notion of designing in quality on the front end.
20
8-51
Frequent turnover erodes the connection (or sense of responsibility)

to the end result of someones work.
21
8-25
Benchmarking compares what you do to other approaches.
A CSSR report has nothing to do with quality (its a form of earned

value reporting used by some government organizations).
8-5: See the bullet prevention over inspection. 8-9: Last bullet: Any
suggestion that inspection is the best path to high quality is incorrect
for purposes of the certification exam. A strong, historical PMI belief.
13
Quality Management
No. Answer
Slides
Note
22
8-13
8-14
See tool #2, cost of quality. Costs of conformance and

nonconformance break into three additional categories: prevention,
appraisal, and failure.
23
8-53
Attributes are simple quality characteristics: the result conforms or

not. PMI says attributes may be objective or subjective.
24
8-16
8-19
See tool #3d, Pareto diagram (for the exam may also be called
Pareto chart).
25
8-54
ISO 9000 is an international quality standard.
26
8-48
Kaizen is a Japanese concept meaning incremental improvement.
27
8-50
Kanban is a communication system that works in conjunction with the

JIT inventory method.
28
8-13
8-14
Cost of quality includes costs of conformance and nonconformance.

In addition, conformance breaks down into prevention and appraisal
and nonconformance is also known as failure.
29
8-13
See tool #1, cost-benefit analysis. There are 4 benefits of meeting

quality requirements.
30
8-44
See tool #3, inspection.
31
8-51
Marginal analysis defines optimal quality as the point at which

incremental revenue equals incremental cost.
32
8-4
Gold-plating involves the project team unilaterally adding extras

without using the change control process. PMI discourages this
practice.
33
8-40
PMI says QA is used primarily during planning and executing to build

confidence that future work will meet requirements. QC is used
during executing and closing to ensure that actual outcomes met
requirements.
34
8-53
A standard of three sigma means that 99.7% of outcomes meet

requirements where a standard of six sigma means that 99.9997% of
outcomes will meet requirements.
35
8-30 to
8-34
36
8-24
The independent variable is displayed on the horizontal (X) axis and

represents the factor which may affect the dependent variable on the
Y-axis.
37
8-20 to
8-23
Choices a, b, and c all have outcomes above the UCL (upper control
limit). Choice d: The outcomes are all within the control limits.
38
8-13
8-14
Tricky question. The question mentioned only costs of conformance,

not the overall cost of quality. Therefore, the correct answer is just
prevention and appraisal and does not include failure.
39
8-16
8-19
A Pareto chart is a histogram (vertical bars). It often reveals that only

a few issues are causing most of the defects (80:20 rule). Helps
guide corrective action toward the most productive improvements.
14
Choices b, c, and d are associated with quality control (not quality

assurance). Quality audits belong uniquely to QA.
Quality Management
No. Answer
40
Slides
8-18
Note
The Ishikawa diagram is also called Cause-and-effect diagram or
fishbone diagram. It is used as a group method to investigate root
causes of specific problems.
15
Practice Exam: Human Resource Management

1. According to McGregors Theory X, ______.
a.
b.
c.
d.
group consensus is the most effective route to management improvements

quality circles are the most important factor in reducing the cost of quality
poor working conditions are the most important reason for absenteeism
workers are inherently unmotivated and need strong guidance
2. As an interpersonal skill, negotiation has been defined as ______.

a.
b.
c.
d.
the exchange of information to reach a decision

the ability to get things done
conferring with others to reach an agreement
problem definition and timely decision making
3. The objectives of develop project team include the following except ______.
a.
b.
c.
d.
enhance project performance

get the right people on the project team
improve team members skills and abilities to complete project tasks
improve trust and cohesiveness among team members
4. According to Abraham Maslow, human beings have a variety of potential needs.

Maslow contended that the ______ need for a worker is ______, which means that
_________.
a. lowest-level; self-actualization; workers are motivated by a desire for personal
growth and challenging work
b. lowest-level; self-esteem; workers are motivated by respect and recognition
c. highest-level; self-actualization; workers are motivated by a desire for
personal growth and challenging work
d. highest-level; self-esteem; workers are motivated by respect and recognition
5. The tendency to rate high or low on all factors due to the impression of a high or low
rating on some specific factor is called ______.
a.
b.
c.
d.
relativity error
halo error
nepotism
heteroscedasticity
Human Resource Management
6. The planning tool used to show how human resources are allocated over time is
called ______.
a.
b.
c.
d.
resource histogram
responsibility matrix
resource leveling
strong matrix
7. At a recent luncheon, a question arose about fringe benefits and perquisites. The
HR Director correctly pointed out that __________.
a. they are essentially the same thing
b. fringe benefits are standard items such as health insurance whereas
perquisites are special awards such as access to the executive dining room
c. a corner office is a fringe benefit whereas access to training is a perquisite
d. an executive membership at a golf resort is a fringe benefit whereas a day off
to participate in a company golf outing is a perquisite
8. You are collaborating with another company in the development of satellite
technology to achieve easier and faster communication processes. Today you reached
an impasse regarding a technical issue (one group favors round pegs and the other is
adamantly committed to virtual pegs). While this disagreement is significant, many
areas of common agreement exist. Which conflict resolution method might work best in
this situation?
a.
b.
c.
d.
smoothing
withdrawing
compromising
problem solving
9. Autocratic project managers ______.

a.
b.
c.
d.
often have abrasive personalities

work closely with their team members
make decisions without input from others
usually have excellent management information systems
10. Which of the following is not part of problem solving as an interpersonal skill?
a.
b.
c.
d.
defining the problem

identifying alternatives
getting things done
making a timely decision
11. You are performing the work associated with acquiring the project team. If some of
the staff that you need to complete the project are not available in house, which tool
would you use to resolve the situation?
a.
b.
c.
d.
acquisition
pre-assignment
negotiation
virtual teams
12. An important tool for identifying when people are allocated to tasks is called
______.
a.
b.
c.
d.
resource leveling
WBS
resource Gantt chart
13. The resource management tool that focuses on who is to do what is called
______.
a.
b.
c.
d.
resource leveling
fast tracking
PERT (Personnel Enhancement Reliability Tool)
14. Which of the following conflict management approaches is least likely to produce
lasting results?
a.
b.
c.
d.
smoothing/accommodating
withdrawing/avoiding
confronting/problem solving
compromising
15. Which of the following is an obstacle to team building in a matrix organizational

structure?
a.
b.
c.
d.
Teams are too large.

There are too many technical geeks on the teams.
Large salary differences cause resentment.
Team members are borrowed and can be hard to motivate.
16. The kick-off meeting should ______.

a.
b.
c.
d.
identify team goals

undertake detailed planning of tasks
occur periodically during the life of the project
always include the customer
17. A project manager can best create a sense of identity among team members by
______.
a.
b.
c.
d.
mandating the frequent use of e-mail

reading the project mission statement at the start of all meetings
getting and using a project war room
implementing the use of name tags
18. You have been dismayed at recent behavior within your team. Sub-groups have
formed (you are worried about cliques affecting long-term behavior) and seem to be
competing to gain control of the project. There are so many differing ideas and such
competition for specific jobs that you have become quite worried. What stage of the
Tuckman model do you believe the team is experiencing? What would the next stage
be?
a.
b.
c.
d.
forming; storming
joining; performing
storming; norming
norming; performing
19. Legitimate power is also known as ________ authority.

a.
b.
c.
d.
reward (or purse string)

bureaucratic
technical
formal
20. If both parties in a conflict employ forcing, the most likely result is ______.
a.
b.
c.
d.
stalemate
compromise
win-win
a busy pizza delivery person
21. Which of the following statements about conflict is true?

a.
b.
c.
d.
conflict should be resolved by first separating the parties

conflict should be avoided
conflict is bad
conflict can be positive
22. Concurrent engineering involves ______.

a. crashing the project schedule
b. multi-functional teams and overlapping of project phases
c. managing the work force by scheduling all design activities during the same
timeframe
d. eliminating the need for a separate production division
23. A responsibility matrix does not show ______.
a.
b.
c.
d.
who is doing what

a list of project tasks
functional resources
the timing of specific tasks
24. Employees who believe their efforts will lead to effective performance and who
also believe they will be rewarded for their accomplishments will stay productive as long
as the rewards meet their expectations. This statement illustrates ______.
a.
b.
c.
d.
Theory Z
expectancy theory
requirements-rewards matrix
hygiene factors
25. Education, medical benefits, insurance, and profit sharing are examples of ______.
a.
b.
c.
d.
overhead
entitlements
direct costs
fringe benefits
26. Parking spaces, corner offices, and access to the executive dining room are
examples of ______.
a.
b.
c.
d.
perquisites (perks)
overhead
self-actualization
fringe benefits
27. As a rule, engineering staff are often responsive to ______.

a.
b.
c.
d.
referent authority
formal authority
technical authority
purse string authority
28. Which approach to resolving conflict is most likely to provide a lasting solution?
a.
b.
c.
d.
smoothing
compromise
forcing
problem solving
29. One of your team members is fond of name dropping and, in particular, is
constantly mentioning what the project sponsor wants the team to do. Which source of
power is this team member using?
a.
b.
c.
d.
charisma
formal
expert
referent
30. The hearing and resolution of a labor dispute by a neutral third party is called
______.
a.
b.
c.
d.
two-step collective bargaining

force majeure
arbitration
bi-modal negotiation process
31. Managers who ascribe to McGregors Theory Y generally believe that employees
______.
a.
b.
c.
d.
dislike their work

are inherently motivated and ambitious
respond primarily to penalty power
need perquisites as a form of motivation
32. You need to make an important decision quickly and you are reasonably confident
that you already have the information needed to make a good decision. Which
leadership style is appropriate?
a.
b.
c.
d.
autocratic
democratic
laissez-faire
ready-fire-aim
33. Which of the following is not a form of power derived from a project managers
position?
a.
b.
c.
d.
penalty
reward
expert
formal
34. What are the most common causes of conflict on a project?

a.
b.
c.
d.
schedules, project priorities, personalities

schedules, project priorities, resources
schedules, project priorities, cost
schedules, personalities, project priorities
35. Which of the following is not a typical objective of a kick-off meeting?

a.
b.
c.
d.
identify and review project goals

present the detailed project management plan
achieve team commitment and buy-in
introduce the key players
36. Dan D. Mann is the Director of Project Management Services for an explosives
manufacturing conglomerate owned by Kennedy, Andersen, Burton, Oliver, Osteen, and
Millwood (KABOOM, Inc.). Dans desk is positioned next to the main entrance to the
office suite and he arrives early every morning. He observes when employees arrive,
monitors how long they are gone at lunch, and frequently patrols the office area to
prevent personal conversations and computer solitaire from hampering productivity.
Dan believes he is a beloved boss but is, in fact, not well liked. As a boss, which of the
following motivation theories does Dan seem to follow most closely?
a.
b.
c.
d.
Theory X
Theory Y
Hygiene factors
Expectancy theory
37. The design team is late in delivering their work to the test and evaluation team on a
rather important and costly project. The project manager is aware of the problem but, in
typical fashion, has done nothing. At breakfast this morning, Annika Valikangas (head
of test and evaluation) reluctantly concluded that the project manager would probably
not handle the problem. Realizing that she would have to handle the problem herself,
which of the following actions should she take FIRST?
a.
b.
c.
d.
go directly to the project sponsor

go to the project manager and the sponsor
go to the manager of the design team and the PM
go to the change control board
38. You are the lead negotiator for the government team in an endeavor to reach an
agreement with a large company in Orlando, Florida. The company, Helicopter
Universal Gyration Equippers (HUGE,) has a dozen representatives on their team from
the areas of finance, engineering, production, procurement, and project management.
You are trying to start an initiative to jointly fund improvements in manufacturing
processes and then share the resulting cost savings. On the second morning of
negotiations, the procurement representative from HUGE misunderstood a comment
you made and has begun to act in a belligerent and insulting manner. Among other
angry remarks, he questioned whether a fence post is smarter than you. You realize
that he thinks you have questioned his integrity. Which of the following conflict
resolution techniques might be most appropriate at this point?
a.
b.
c.
d.
problem solving
compromise
smoothing
withdrawing
39. On the RACI chart shown below, which of the tasks is entered correctly?
Task
Liisa
Saburo
Raymond
R = Responsible
a.
b.
c.
d.
A = Accountable
C = Consult
I = Inform
Task A
Task B
Task C
Task D
40. As an experienced project manager, you personally believe that managing the
human side of projects is crucial to your overall success. You are aware that the project
management process for manage project team involves tracking team performance,
providing feedback, and resolving issues. Which of the following is not a tool of
manage project team?
a.
b.
c.
d.
observation and conversation

performance appraisals
conflict management
ground rules
41. You were provided with a graph that was inadvertently unlabeled. The graph
contains vertical bars. The vertical axis tracks how many hours are needed for specific
resources and the horizontal axis contains time frames. You instruct your assistant to
have the graph labeled as a ______ with the primary purpose of ______.
a. responsibility assignment matrix; identifying time frames when team members
will perform assigned tasks
b. responsibility assignment matrix; identifying time frames when team members
will attend training
c. resource histogram; identifying time frames when team members are needed
d. resource histogram; identifying time frames when training is needed
42. The graph identified in question 41 above is part of the ______ management plan.
a.
b.
c.
d.
training
staffing
acquisition
teaming
43. Your dynamic but troublesome duo, team members Patricia Norman and Dawn
Carlson, are at it again. At your last meeting of key project team members, they got into
a loud but entertaining argument. Patricia vehemently contended that, above all,
communication must be truthful. Dawn countered that tact is also an absolute
requirement and stated that Patricia should try it some time. They are discussing which
classic theory?
a.
b.
c.
d.
Blake and Mouton: Concern for Production vs. Concern for People
Herzbergs Hygiene Factors
Myers-Briggs: Thinking vs. Feeling
Maslows Hierarchy of Needs: Social vs. Self-Esteem
44. While accomplishing human resource management activities, you find that you
must build an effective team with people in multiple locations. Which tool should you
use?
a.
b.
c.
d.
virtual team
acquisition
multi-criteria decision analysis
pre-assignment
45. Earl is a high-performing engineer who does outstanding work. The only issue is
that he needs to be recognized and appreciated for his efforts. Earls behavior is
described by ______.
a.
b.
c.
d.
McGregors Theory Y
Maslows Hierarchy of Needs for self-esteem
Blake and Moutons Concern for People
46. You have several people on your team who seem to be very concerned about
being liked and accepted by others. The problem is that they also tend to shy away
from conflict instead of dealing with it. These people are motivated by _______.
a.
b.
c.
d.
10
Maslows social needs level in the hierarchy of needs

Blake and Moutons theory on concern for people
Vrooms expectancy theory
McClellands theory on need for affiliation
Answer Sheet #1
Answer
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
Answer
Notes
26.
27.
28.
29.
30.
31.
32.
33.
34.
35.
36.
37.
38.
39.
40.
41.
42.
43.
44.
45.
46.
47.
48.
49.
50.
Percent Correct?
Pass or Fail?
# Misread ?s
Other Notes:
11
14
Answer Key: Human Resource Management

No. Answer
Slides
Note
9-48
McGregors Theory X cautions that people are basically lazy and

need strong guidance and controls to force them to work.
9-28
See tool #1, interpersonal skills. Know the definitions of all six terms
(PLINCM).
9-26
Choice b (get the right people on the team) is associated with

acquiring the team, not developing the team.
9-47
In Maslows Hierarchy of Needs, the highest level need is selfactualization.
9-59
Halo error is rating someone consistently high or low based on

preconceived notions.
9-14
9-15
A resource histogram, also called a resource loading chart, depicts

how many resources are needed during each time period. The chart
is part of the staffing management plan.
9-60
Fringe benefits are standard items available to all employees and

perquisites are special awards available only to selected people.
9-41
Smoothing builds on areas of agreement while steering around

difficult issues that threaten an agreement. The downside of
smoothing is always that the real problem may re-emerge later and
the deal will fall through anyway. Temporary solution
9-54
See leadership styles: Autocratic leaders make decisions without

input from others.
10
9-28
Choice c, getting things done, is part of influencing (not problem

solving).
11
9-20
See tool #3, acquisition. Used when resources are not available inhouse.
12
9-57
Resource Gantt chart shows who is doing which task at what time.
13
9-12
See tool #1, organization charts and position descriptions. A

responsibility matrix shows who is to do what, but does not address
timing.
14
9-41
Smoothing fails to address the difficult issues and almost always

results in a temporary solution. Compromise could result in failure to
support an agreement in the long term (according to Thomas and
Kilmann) and is a possible answer. However, historically PMI has
thought of smoothing as temporary.
15
RM
See RM (reference manual), p. 2-6, disadvantages of the matrix.
16
9-58
Kick-off meetings do not usually involve detailed planning. They

occur at the end of planning to announce the start of project
execution (i.e., do not occur periodically). Some organizations hold
an internal kick-off meeting that does not include the customer to get
the project team on the same page before any discussions are held
in the presence of the customer.
15

No. Answer
Slides
Note
17
9-31
In developing the team, colocation is a major advantage. If

colocation is not possible, a war room is highly recommended and is
believed to create a better sense of identity with the project.
18
9-29
9-30
Be familiar with the stages of the Tuckman model.
19
9-46
Legitimate or formal power/authority is the power that comes with a

particular job title. For many project managers, formal power is
limited.
20
9-42
Problems associated with the forcing technique include: making

enemies and stalemate.
21
9-39
Be familiar with the potential positive and negative effects of conflict.

Conflict may produce the analysis and discussion necessary to solve
an important problem.
22
9-59
Concurrent engineering overlaps work and uses a multi-disciplinary

team from the early stages of a project.
23
9-12
9-57
A responsibility matrix shows who does what but does not address
timing.
24
9-50
Expectancy theory states that people are likely to be motivated and

productive if there is feasible and they expect to be rewarded for a
successful outcome.
25
9-60
Know the examples of fringe benefits, which are standard items

available to all employees.
26
9-60
Know the examples of perks, which are special awards available

only to certain people.
27
9-46
Many engineers have difficulty with project managers who lack

technical understanding.
28
9-40
Problem solving is used when the issues are important to both parties
and the solution is likely to last because the end result is a win for
both parties.
29
9-46
Referent power is using the power of name dropping, borrowing

someone elses power.
30
9-60
Arbitration uses a neutral third party to hear and resolve disputes.
31
9-48
Theory Y asserts that employees are naturally motivated and want to

do good work.
32
9-54
See leadership styles, autocratic. Making decisions without input is

considered safe if you have all the relevant information.
33
9-46
Also see RM, p. 9-18, power and authority, bullet #2. Expert power is
attained through education and experience.
34
9-39
See sources of conflict. Remember the acronym SPoRT (schedules,

priorities, resources, technical issues).
35
9-58
See objectives of a kick-off meeting, which do not include detailed

planning.
16

No. Answer
Slides
Note
36
9-48
See McGregors Theory X.
37
9-40
Do not immediately escalate as the first response to a problem.

Handle conflict in a direct, collaborative manner.
38
9-42
Withdrawing is recommended when someone has become angry,

belligerent, and/or insulting. Withdraw, calm down, re-engage in
discussions.
39
9-12
To avoid confusion, a RACI chart should show only one person

accountable for a given task.
40
9-35
9-38 to
9-43
Ground rules is associated with developing the team, not managing

the team.
41
9-15 &
16
A resource histogram identifies time frames when resources are

needed.
42
9-14 &
15
The staffing management plan includes the resource histogram under

the heading resource calendar.
43
9-53
See Myers-Briggs Type Indicator. The question focuses on the

thinking vs. feeling dimension. Thinkers believe that it is far more
important to be truthful than tactful. Feelers believe that tact is also
an essential part of human interaction.
44
9-21
One advantage of virtual teaming is the ability to accomplish a project

with resources in multiple locations (domestic or international).
45
9-47
In Maslows Hierarchy of Needs, self-esteem is the second highest

level of need. It involves people needing recognition and
appreciation for the value they add to their work. McClellands Need
for Achievement is similar but was not a choice in this particular
question.
46
9-51
In McClellands Theory on Need for Affiliation describes people who

need to be liked and accepted. They support other team members
quite well but they dont like to deal with conflict.
17
Practice Exam: Communication Management

1. Surveys have shown that project managers typically spend as much as __________
percent of their time communicating and acquiring information.
a.
b.
c.
d.
50
67
75
90
2. Which of the following is not a typical communication barrier?

a.
b.
c.
d.
lack of clear communication channels

personal antagonisms
cultural differences
a democratic leadership style
3. The project managers formal communications are best handled ______.

a.
b.
c.
d.
in writing
verbally, face to face
through personal contacts
according to established reporting procedures
4. A project team is experiencing problems with personal issues. This situation would
be best handled through __________ communication.
a.
b.
c.
d.
formal, written
formal, oral
informal, written
informal, oral
5. When the project objectives include meeting an external, competitive challenge, the
project team tends to ______.
a.
b.
c.
d.
lose cohesiveness
gain cohesiveness
enter the storming phase of the Tuckman team development model
enter the norming phase of the Tuckman team development model
Communication Management
6. Which of the following would be least likely to improve project communications?

a.
b.
c.
d.
Define policies that force people to communicate.

Use available information distribution systems appropriately.
Improve the communications skills of the project management team.
Identify and deal with conflict.
7. Active listening involves paraphrasing what someone says to you. It is often used to
______.
a.
b.
c.
d.
interrupt the speaker if you disagree with him or her

check to see if you understand the speaker
let the speaker know that you are really listening
gain credibility with the rest of the audience
8. Effective listening includes all but which of the following ______.

a.
b.
c.
d.
watching the speaker to pick up physical gestures and facial expressions

limiting the amount of eye contact
providing feedback, e.g., paraphrasing the speakers message
considering what you want to say before responding
9. As projects grow larger, the amount of documentation and communication will

______.
a.
b.
c.
d.
grow at a linear rate

grow at greater than a linear rate
decrease at a linear rate
decrease at greater than a linear rate
10. You have a total of 12 team members during the executing phase of your work.
Five were just removed and a new stakeholder has just raised an important issue. How
many communication channels are you dealing with at this point?
a.
b.
c.
d.
28
13
12
8
11. Customer acceptance of major project deliverables should be confirmed by ______.

a.
b.
c.
d.
written documentation
verbal communication
formal, written documentation
formal, verbal communication
12. Four months ago, you were assigned the honor of project manager for the redesign
of information technology systems at Texas A&M University in the metropolis of College
Station. You began the project with a team of five people and, despite the occasional
tension caused by personality conflicts, good progress has been made. You just
received approval to continue to the second phase of the project and now have five
additional team members (you are now a group of ten). How many additional
communication channels do you have to maintain?
a. 5
b. 10
c. 35
d. 45
13. Project managers would be involved the least in ______.
a.
b.
c.
d.
making oral presentations

understanding the details of shareholder reporting
explaining technical issues
14. Project progress reports are ______.

a.
b.
c.
d.
descriptions of what the team has accomplished

required on a weekly basis for almost all projects
primarily used to predict future project outcomes
of use primarily to the project sponsor
15. Barriers to effective communication include cultural differences, differing time

zones, technical language, and uncooperative attitudes. The existence of
communication barriers is likely to produce ______.
a.
b.
c.
d.
timely project decisions

higher levels of trust and cooperation
higher levels of conflict
enhanced project performance
16. Which of the following statements about Plan Communications Management is

true?
a.
b.
c.
d.
A primary tool is the information distribution system.

A primary tool is communication requirements analysis.
A major output is project records.
An input is the communications management plan.
17. Which statement about information is true?

a.
b.
c.
d.
Work performance data is an output to Control Communications.

Work performance reports is an output to Manage Communications.
Effective communication means providing only the information that is needed.
Effective communication means providing information in the right format at the
right time to the right audience.
18. The primary reason for variance analysis and reporting performance is to ______.
a.
b.
c.
d.
protect the team from second guessing by other stakeholders

reduce the required frequency and duration of status review meetings
identify variances and take corrective action
keep the project management plan up to date
19. Project status review meetings should do all of the following except ______.
a.
b.
c.
d.
have a clearly defined purpose

follow a published agenda
be planned for a defined duration
be held on a weekly basis
20. Which of the following is true when controlling communications?

a. Work performance reports is an input and information management systems
is a tool.
b. Work performance reports is an output and information management systems
is a tool.
c. Work performance data is an input and work performance information is an
output.
d. Work performance data is an output and work performance information is an
input.
21. Which of the following is a tool of plan communications management?
a.
b.
c.
d.
communications management plan

information management systems
communication technology
communication strategy
22. You have just completed a performance report and your assistant asked who
should get a copy. Your guidance is ________.
a.
b.
c.
d.
key stakeholders
follow the communications management plan
follow the project management plan
all project stakeholders
23. Communication is improved when the sender __________ the receiver.

a.
b.
c.
d.
sends an email so there is a written record for

actively listens to
emotes as much as
shows concern for the perspective of
24. What is a tight matrix?

a. ensuring that team members never work more than two projects at a time
b. physically collocating the team in a single area
c. an environment where the balance of power is shifted in favor of functional
managers
d. an environment where the balance of power is shifted in favor of the project
manager
25. Using both formal and informal project communication is likely to enhance ______.
a.
b.
c.
d.
keeping the boss informed

project integration
project teams that do not have access to electronic mail
creating a healthy level of conflict
26. Which of the following is an input to Manage Communications?

a.
b.
c.
d.
work performance reports

performance reporting
expert judgment
project communications
27. The chairperson of a meeting should ______.

a.
b.
c.
d.
discourage participation
hold meetings on holidays to raise productivity
hold meetings every day to increase communication and awareness
help the group decide how to handle differences of opinion
28. Which PMI recommendation for more effective communication helps teams have a
better sense of identity?
a.
b.
c.
d.
Make meetings effective.

Use a tight matrix.
Get a project war room.
Hold weekly social gatherings.
29. If the project is experiencing increasing levels of conflict due to poor

communication, which of the following is most likely to improve the situation?
a.
b.
c.
d.
encouraging the team to socialize outside of work

scheduling project status meetings early in the morning
installing the latest version of an automated scheduling tool
scheduling an off-site team building workshop
30. A benefit of documenting and disseminating the project management plan is to

______.
a.
b.
c.
d.
reduce uncertainty in project execution

communicate with the project stakeholders
improve cost controls
evaluate other technical solutions
31. Your global project has 7 team members in the USA, 8 team members in Europe,
and 10 communication channels in Asia. How many total people are involved?
a.
b.
c.
d.
59
28
25
20
32. Project meetings are generally more effective when they ______.
a.
b.
c.
d.
leave the agenda flexible

exclude troublesome people who always identify problems
have an explicitly defined purpose
require that attendees stand throughout the entire meeting
33. The PMBOK Guide describes three methods for sharing information. These
methods include ______, ______, and ______. Communication methods is a ______
of Plan Communications Management and Manage Communications.
a.
b.
c.
d.
interactive, push, pull; input

interactive, push, pull; tool
meetings, technology, reports; input
meetings, technology, reports; tool
Answer Sheet #1
Answer
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
Answer
Notes
26.
27.
28.
29.
30.
31.
32.
33.
34.
35.
36.
37.
38.
39.
40.
41.
42.
43.
44.
45.
46.
47.
48.
49.
50.
Percent Correct?
Pass or Fail?
# Misread ?s
Other Notes:
10
Answer Key: Communication Management

No.
Answer
Slides
Note
10-16
See special note: project managers spend up to 90% of their time

communicating and handling information.
10-38
See barriers to communication. Reverse the question: Finding the

three things that ARE barriers is usually easier.
10-17
Formal communication is best handled in writing. For example, if a

formal presentation is delivered, you should have a hard copy in your
files to prove what was said at a later date.
10-44
Many people are reluctant to handle personal conflict in writing and

are slow to make such interactions formal (until absolutely
necessary).
None
PMI historical question and logic. When challenged by outsiders,

most groups bond together in response.
None
Another PMI historical question based on logic with no specific

reference. Try reversing the question: Which statements would most
likely improve communication. Also, PMI does not generally favor the
use of bad words such as penalizing or forcing.
10-4
10-17
See receiver responsibilities, active listening.
10-18
Effective listening guidelines include maintaining eye contact.
10-12
See tool #1, communication requirements analysis. As project teams

grow larger, the number of communication channels increases at
greater than a linear rate.
10
10-12
to
10-14
You started with 12 people, lost 5, and gained 1. Therefore, you are
now operating with 8 people. Using the formula for communication
channels: (N x (N-1))/2 = (8 x 7)/2 = 28 channels.
11
10-44
Important, official information should usually be handled through

formal, written documentation.
12
10-13
You must know how to calculate communication channels and you

must note the key word additional in the last sentence of the
question. With 5 people, there are 10 communication channels: [n
(n-1)] / 2 = (5x4)/2. With 10 people, there are 45 channels: (10x9)/2.
Therefore, there are 35 additional channels when the team grows
from 5 to 10 people.
13
10-27
10-44
PM not responsible for stock prices or reporting to shareholders

(some people misread that word as stakeholders).
14
10-27
See tool #5, performance reporting. Three major types of reports are
identified by PMI.
15
10-38
See barriers to communication. PMI says the presence of these

barriers will make conflict more likely.
11
No.
Answer
Slides
16
10-12
to
10-19
See tool #1, communications requirements analysis.
17
10-9
Choices a and b: Are inputs, not outputs. Choice c: States the

definition of efficient communication, not effective communication.
18
10-27
See tool #5, performance reporting. As stated in numerous places in

the PMBOK Guide, analyzing variances is aimed at identifying the
need for corrective or preventive action.
19
10-40
See action #6, effective team communication. It is not a universal

guideline that meetings should be held on a weekly basis (they may
be weekly or not).
20
10-31
10-33
10-35
Choices a and b: work performance reports is an input to manage

communications. Choice d: backwards (choice c is correct).
21
10-10
10-15
Choice a: an output, not a tool. Choice b: part of manage (not plan)

communication. Choice d: No such formal PMI terminology (but
doesnt it sound logical?).
22
4-18
Also see reference manual, p. 4-6. PMI has indicated that official
documents (e.g. project management plan and others) are distributed
according to the communications management plan. Planning
communications is centered around the information needs of key
stakeholders.
23
10-39
See effective team communication: Be an effective communicator.
24
10-40
See effective team communication: Use a tight matrix.
25
10-39
See effective team communication: Be a communication expeditor.
26
10-25
Choice b: a tool, not an input. Choice c: part of manage (not plan)

communication. Choice d: an output, not input.
27
10-41
See roles of a meeting chairperson.
28
10-40
See effective team communication: Get a project war room.
29
9-29
See tool #3, team-building activities. Team-building is a PMI historical

theme. Also, there has always been some overlap in exam content
between HR, communication, and stakeholder management.
30
10-42
Developing the project management plan involves analysis which

reduces uncertainty and distribution of the plan keeps people
informed.
31
10-14
Determine the number of stakeholders involved.
32
10-40
Effective meetings have: Purpose, agenda, logistics, and minutes.
33
10-19
10-26
PMI identifies three methods for sharing information: interactive, push,

and pull. These choices are classified as a tool called
Communication Methods and its a tool for two processes: Plan
Communications Management and Manage Communications.
12
Note
Practice Exam: Risk Management

1. Identifying, analyzing, and responding to risk factors throughout the life of a project is
risk ______.
a.
b.
c.
d.
mitigation
response planning
management
identification
2. As a subset of response planning, deflection includes all of the following except

______.
a.
b.
c.
d.
transferring risk to another party by outsourcing (subcontract)

performing reserve analysis
purchasing insurance against specific losses
purchase of a warranty
3. Which of the following scheduling techniques explicitly incorporates risk

assessment?
a.
b.
c.
d.
PERT
Activity-on-Arrow diagrams
CPM
Gantt chart
4. Which statement best describes risk reassessment? It is ______.

a. an output of control risks that regularly checks for new risks and monitors
previously identified risks
b. an output of plan risk responses that assesses the likely effect of change
requests on project risk exposure
c. a tool of plan risk responses that compares remaining reserves to remaining
risk
d. a tool of control risks that regularly checks for new risks and monitors
previously identified risks
5. Which of the following factors does not characterize risk?
a.
b.
c.
d.
The risk portfolio

The risk event
The risk probability
The amount at stake
Risk Management
6. A lack of information that makes it difficult to estimate the likelihood of an event

describes which of the following concepts?
a.
b.
c.
d.
risk aversion
dating
uncertainty
amount at stake
7. The most important time for project risk assessment is ______.

a. as soon as the project cost and schedule baselines have been established
b. as soon as a problem surfaces
c. during the planning phase
d. during the close-out phase
8. Projects that require new technology are inherently high risk because ______.
a. there is a larger base of similar projects to provide historical results
b. performing personnel probably have considerable experience with the new
technology
c. of the additional uncertainty in the design activity
d. the customer has a full understanding of the actual requirements
9. The Delphi method uses ________.
a.
b.
c.
d.
expert opinion and group creativity techniques

expert opinion and consensus
linear regression
lessons learned
10. Which risk response strategy applies to both positive and negative risks?
a.
b.
c.
d.
accept
mitigate
enhance
insure
11. Which tool would help you assess the potential impact of highly uncertain variables
on the rest of the project?
a.
b.
c.
d.
Decision Tree
Tornado Diagram
Probability and Impact Matrix
Path Convergence
Risk Management
12. The ______ is useful in risk analysis because it permits a structured evaluation of
the work.
a.
b.
c.
d.
WBS
network diagram
project charter
design specification
13. If the probabilities for events A and B are 50% and 60% respectively and the events
are independent, what is the likelihood that both events will occur?
a.
b.
c.
d.
30%
55%
60%
110%
14. After a risk assessment has identified, prioritized, and planned responses for the
projects concerns, risk management is then ______.
a.
b.
c.
d.
concerned with changes in the risk factors during the project

concerned primarily with lessons learned after the project is finished
readdressed only if the customer becomes concerned
complete
15. Schedule risk can be most accurately assessed by ______.

a.
b.
c.
d.
identifying the critical path

employing the PERT methodology
treating it as a function of technical risk
a simulation that captures the effects of both duration estimate distributions
and path convergence
16. If an identified risk event has a 20% chance of happening in any given month, and if
the project is expected to last 5 months, the probability that this risk event will not occur
during the third month of the project is ______.
a.
b.
c.
d.
20%
40%
60%
80%
17. Including a cost reserve in the project budget is intended to ______.

a.
b.
c.
d.
reduce the probability of scope changes

increase the probability of scope changes
reduce the probability of a cost overrun
increase the probability of a cost overrun
Risk Management
18. Risk analysis is most effective if it is organized according to the projects ______.
a.
b.
c.
d.
work breakdown structure

resource breakdown structure
strategic plan
baseline schedule
19. Which of the following diagramming techniques provides the best insight into the
risk event interdependencies of a project?
a.
b.
c.
d.
Influence diagrams
Decision trees
Precedence diagrams
Affinity diagrams
20. The results of Monte Carlo simulation will be most affected by your choice of
______.
a.
b.
c.
d.
computer program
statistical distribution
network diagramming technique
21. A tool of perform quantitative risk analysis is ______.

a.
b.
c.
d.
risk register
risk data quality assessment
risk urgency assessment
simulation
22. If a project has a 60% chance of a $100,000 profit and a 40% chance of a $100,000
loss, the expected monetary value for the project is a ______.
a.
b.
c.
d.
$100,000 profit
$ 60,000 profit
$ 20,000 profit
$ 40,000 loss
Risk Management
23. Given the following information, what is the expected value of this risk event?
Probability
.5
.2
.2
.1
a.
b.
c.
d.
Result
- 10,000
- 7,000
- 5,000
- 2,000
- 24,000
- 10,000
- 7,600
insufficient information to answer the question
24. Which of the following is not a concern of risk management?

a.
b.
c.
d.
adverse consequences
legal issues arising from project activities
pursuing the opportunities presented by taking risks
verifying correctness of the work
25. Response planning is the process of formulating suitable management strategies to

deal with identified risk events. Which of the following is not associated with response
planning?
a.
b.
c.
d.
mitigation
contracting
contingent strategies
modeling and simulation
26. Which of the following estimates involve the least risk?

a.
b.
c.
d.
30 days plus or minus 5 days

25 to 30 days
optimistic = 26 days, most likely = 30 days, pessimistic = 33 days
25 days give or take 4 days
27. Your team has been tracking approximately a dozen risks and you have
accomplished about 2/3 of the tasks identified in the WBS. A team member suggested
that one of the risks was no longer very likely and should be closed. Two weeks later,
the closed risk actually did occur. ______, which is a tool of ______ should have been
used to track this situation.
a.
b.
c.
d.
Risk audits; control risks

Risk audits; plan risk responses
Risk reassessment; control risks
Risk reassessment; plan risk responses
Risk Management
28. The process of determining what risk events may affect a project is called risk
______.
a.
b.
c.
d.
quantification
identification
deflection
mitigation
29. Which one of the risk management processes may not be performed on every
project?
a.
b.
c.
d.
monitor and control risks

plan risk management
perform quantitative risk analysis
perform qualitative risk analysis
30. Developing alternative activity sequences (i.e. workarounds) is an example of

______.
a.
b.
c.
d.
identify risks
perform quantitative risk analysis
contingency planning
control risks
31. Which of the following is not a likely result of risk management?

a.
b.
c.
d.
the project management plan is changed

the communication plan is modified
contract terms & conditions are modified or added
the project charter is changed
32. Purchasing insurance is an example of ______.

a.
b.
c.
d.
risk identification
risk transfer (deflection)
risk acceptance
risk avoidance
33. The customer requests a change to the project that would increase your risk. What
would you do first?
a.
b.
c.
d.
analyze the impact of the change with the project team

change the risk management plan
talk to the customer about the impact of the change
analyze the expected monetary value of the risk
Risk Management
34. A contingency plan is devised at the time a potential risk event is identified. This
plan is used later if the risk event actually occurs. By comparison, a __________ is
devised after a risk event already occurred and is used as part of which process?
a.
b.
c.
d.
reassessment; analyze risks

reassessment; plan risk responses
workaround; plan risk responses
workaround; control risks
35. Risks should be identified during which phase of the project management life
cycle?
a.
b.
c.
d.
all phases
initiation
planning
executing
36. Which of the following is a tool of Identify Risks?

a.
b.
c.
d.
SWOT Analysis
Risk Categorization
Analytical Techniques
Risk Data Quality Assessment
37. You are prioritizing the potential damage from several risk events. Which risk event
represents the greatest threat to the project?
Risk Event
A
B
C
D
a.
b.
c.
d.
Probability
80%
20%
50%
70%
Amount of Loss
$100,000
$320,000
$220,000
$180,000
A
B
C
D
38. An appropriate sequence for risk management activities is ______.

a.
b.
c.
d.
identification, analysis, and response planning

planning, assessment, and control
factor identification, management, and elimination
identification, deflection, and mitigation
Risk Management
Risk Management
Answer Sheet #1
Answer
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
Answer
Notes
26.
27.
28.
29.
30.
31.
32.
33.
34.
35.
36.
37.
38.
39.
40.
41.
42.
43.
44.
45.
46.
47.
48.
49.
50.
Percent Correct?
Pass or Fail?
# Misread ?s
Other Notes:
Risk Management
12
Risk Management
Answer Key: Risk Management

No. Answer
Slides
Note
11-3
PMI defines risk management in a very simple way: Identifying,

analyzing, and responding to project risks.
11-52
See tool #1, strategies for negative risks. Transferring risk has also
been called deflecting risk. It involves insurance, warranties,
outsourcing, and the use of fixed price contracts.
6-80
11-37
PERT explicitly incorporates the idea of variation or range into the

estimating by using optimistic, most likely, and pessimistic estimates.
Wider ranges in the data indicate more uncertainty in the work being
performed.
11-59
See tool #1, risk reassessment. Reassessment considers new risks,

the effectiveness of risk responses, and whether to retire outdated
risks.
11-4
PMI defines risk factors as the event that might happen, the
probability, and the amount at stake.
11-4
The technical definition of uncertainty is lacking the information

needed to assign a probability to an event.
Logic
Five of the six risk processes are associated with planning. PMI
states that risk assessment is iterative but it is primarily a planning
function.
11-25
See input #2, scope baseline. New technology tends to be naturally

high risk.
11-19
See tool #2, information-gathering techniques. The Delphi method

involves experts seeking consensus about specific questions.
10
11-52
The accept response may be used for a low risk (handle it later if
the risk actually occurs) or for a low opportunity (an unexciting
opportunity compared to other choices).
11
11-37
See tool #2, quantitative analysis and modeling. Tornado diagrams

explore the impact of uncertain variables on project outcomes.
12
11-17
See input #6, scope baseline. The scope baseline includes the WBS,
which allows a way to consider the risk in each work package.
13
11-65
The probability of two independent events happening is the product

of the probabilities for each event (multiply the two probabilities).
14
11-56
Controlling risks is fundamentally about watching for any changes in

the project (a new risk emerges, an identified risk event actually
occurs, and so on).
15
11-38
11-46
11-48
See tool #2, quantitative analysis and modeling techniques.

Simulations involve more effort, analysis, and expense but they
usually yield the most rigorous, detailed, and accurate information.
16
11-65
The probability of the event not happening is 80% (1-Probability

Event Happens). Each month is an independent trial.
13
Risk Management
No. Answer
Slides
17
7-35
11-33
The use of reserve is intended to reduce the chance of cost and

schedule overruns.
18
5-45
11-17
See input #6, scope baseline. PMI has always believed that one of
the most valuable techniques for any project is the WBS. The WBS
would help relate the risk to the right part of the work and, by
extension, the expected timing of the risk.
19
11-45
Decision trees evaluate multiple possible risk events and how they
might interact.
20
11-38
See key points about simulation: The results of any simulation are
significantly affected by the statistical distribution that is applied to the
analysis.
21
11-38
A simulation is part of tool #2, quantitative analysis and modeling

techniques.
22
11-39
to
11-41
(.60 x 100,000) + (.40 x -100,000) = 60,000-40,000 = +$20,000
23
11-39
to
11-41
Each outcome should be multiplied by its probability. Then, all

resulting outcomes should added. (.5 x -10,000) + (.2 x -7,000) + (.2
x -5,000) + (.1 x -2,000) = (-5,000) + (-1,400) +
( -1,000) + (-200) = -7,600.
24
All
Choice d is associated with validate scope (correctness of the work).

It is not about risk. Choices a, b, and c are examples of various
aspects of risk management.
25
11-38
Choice d (modeling and simulation) is associated with quantitative

analysis (not response planning).
26
11-66
Least risk equals most narrow range.
27
11-59
Risk reassessment identifies new risks, evaluates the effectiveness

of response plans, and determines whether specific risks should be
closed.
28
11-14
Risk identification creates a list of risk events that might affect the
project.
29
11-31
Quantitative risk analysis is more time consuming and expensive

than other methods and may not be needed.
30
11-61
See output #2, change requests. Know the difference between

contingency plans and workarounds.
31
11-61
11-62
Among the outputs, notice that the lists for updates to the project
management plan and project documents never mention the project
charter. Modifying various plans, contract terms, and baselines is
likely. Also, updates to the risk register are mentioned consistently;
however, changing the charter is unlikely.
32
11-52
See tool #1, strategies for negative risks.
14
Note
Risk Management
No. Answer
Slides
Note
33
4-27
The first response is always to follow integrated change control

procedures.
34
11-61
See output #2, change requests. Workarounds are devised after a

risk has already occurred. Contingency plans are developed before
the risk occurs.
35
11-14
Risk identification is an on-going, periodic activity. New risks could

emerge at any time.
36
11-21
SWOT (Strengths, Weaknesses, Opportunities, Threats) evaluates

both negative and positive aspects of a project.
37
11-40
You must calculate the EMV for each risk event by multiplying the
probability by the estimated loss in dollars. Risk D has the largest
EMV.
38
11-7
Choice a is the correct sequence: Identify, analyze, plan responses.

The other choices uses names that are incorrect.
15
Practice Exam: Procurement Management

1. A make-or-buy analysis should consider ______.
a.
b.
c.
d.
design to cost modeling

value engineering
producibility
direct and indirect costs
2. Which tools are used to evaluate prospective contractors?

a.
b.
c.
d.
written and oral proposals

weighting and screening systems
performance reports
contract change control system
3. Which of the following contract types poses the highest cost risk for the buyer?
a.
b.
c.
d.
cost plus fixed fee

cost plus incentive fee
fixed price incentive fee
firm fixed price
4. Which of the following contract types poses the highest cost risk for the contractor?
a.
b.
c.
d.
cost plus fixed fee

firm fixed price
5. Which factor would least influence the type of contract to be used?

a.
b.
c.
d.
how well defined the scope is

the buyers willingness to make changes after the project has started
the amount of risk in completing the work and in estimating costs accurately
whether a lessons learned process will be used
6. Incentive clauses in a contract are designed to ______.

a.
b.
c.
d.
reduce risk for the contractor by shifting it to the buyer

reduce risk for the buyer by shifting it to the contractor
bring the contractors objectives in line with those of the buyer
achieve the lowest possible cost
Procurement Management
7. One of your major contractors, ABC Electronics, just made a complaint that a
member of your team had visited one of ABCs subcontractors without permission.
Your team member may have violated the concept of _________.
a.
b.
c.
d.
undefined work
liquidated damages
single source
privity of contract
8. Which statement about the statement of work is inaccurate? The SOW is ______.
a.
b.
c.
d.
a description of a product or service to be procured

also known as a statement of requirements in some application areas
a description of collateral services such as performance reporting
used to expand the pool of potential sellers
9. Which of the following statements regarding change control is correct?

a. A fixed price contract will minimize the need for change control.
b. Contracts should include procedures to accommodate changes.
c . A Design Review Committee (DRC) is responsible for reviewing change
requests.
d. Detailed specifications will eliminate the most common causes of change.
10. Which statement about type of contract is correct?
a. Cost Plus Fixed Fee contracts are illegal in many jurisdictions.
b. A fixed price contract shifts most of the risk to the buyer.
c. Firm Fixed Price (Lump sum) contracts offer sellers the greatest profit
potential.
d . Cost reimbursable contracts offer sellers the highest profit potential.
11. In which type of contract is it most essential for the contractor to control any
changes in scope?
a.
b.
c.
d.
fixed price
cost plus fixed fee
cost plus percentage of costs
12. A make-or-buy analysis is usually conducted as part of ______.

a.
b.
c.
d.
plan procurement management

conduct procurements
control procurements
close procurements
13. Which of the following statements about contract negotiations is most correct?
a. Every negotiation has a winner and a loser.
b. Successful negotiations preserve working relationships by satisfying the
needs of both parties.
c. Determine your bottom-line but dont reveal it to the other side.
d. Define your objectives in advance and stick with them.
14. Once signed, a contract is legally binding unless ______.
a.
b.
c.
d.
it violates public law

the consideration is deemed inequitable
one party is unable to finance their part of the work
one party changes their mind and declares the agreement void
15. Control procurements should ______.

a.
b.
c.
d.
be performed by contract attorneys

manage the interfaces among the various providers on larger projects
be the primary responsibility of the project manager
utilize tools such as independent estimates and screening systems
16. A contract for undefined work ______.

a.
b.
c.
d.
is usually priced at the time of award

is legally reserved for small and disadvantaged firms
should only be awarded to firms with a reputation for honesty
is illegal and should never be used
17. With respect to monitoring and surveillance of contractor performance, buyers

should ______.
a. conduct surveillance only on technically complicated projects
b. conduct minimal surveillance so the contractor can stay on schedule
c. conduct extremely close surveillance so that contractors cannot take
advantage
d. conduct sufficient surveillance to ensure the work is being performed properly
18. Which of the following is not an advantage of decentralized contracting?
a.
b.
c.
d.
The contracting staff will be more familiar with specific project needs.
The cost of the contracting function will be reduced.
The project manager will have more control.
A decentralized approach is more flexible and adaptable.
19. Post-contract evaluations are important because ______.

a.
b.
c.
d.
fees may be tied to contractor performance

most contracts require them
they help establish a historical database for future contractor selection
they are mandatory in many cases
20. A buyer decides they want to expand the project scope and change from a cost
reimbursable to a fixed price contract. The contractors may ______.
a. complete the original work; reject the additional work
b. negotiate a fixed price contract that includes both the additional work and the
remaining work
c. complete the original work on a cost reimbursable basis; negotiate a contract
for the additional work
d. follow any of the strategies cited above
21. A contract is awarded with a clearly specified statement of work. The contractor
completes the work as specified, but the buyer is not pleased with the results. Under
normal circumstances, the contract is considered to be ______.
a.
b.
c.
d.
incomplete because the buyer is not pleased

incomplete because the specifications were incorrect
complete because the contractor is satisfied
complete because the contractor met the terms and conditions of the contract
22. You are developing and testing a new product. The potential for this technology to
work successfully has been evaluated through lab research and it looks promising. You
want to enter into a development contract that has financial incentives for the contractor
to keep costs under control. However, the potential contractors are adamant that there
should be a guaranteed minimum fee because of the risk involved. You should enter
into a ______ contract.
a.
b.
c.
d.
CPIF (Cost Plus Incentive Fee)

CPMF (Cost Plus Minimum Fee)
CPFF (Cost Plus Fixed Fee)
CPAF (Cost Plus Award Fee)
23. A contract is ______.

a.
b.
c.
d.
a legal relationship subject to remedy in the courts

legally enforceable only if it is written
generally not needed for readily available goods and services
a legal document used to describe project products & services
24. Contractor selection without competition makes sense when ______.

a.
b.
c.
d.
there is no schedule pressure

other mechanisms exist to ensure that contractor prices are reasonable
no particular contractor has unique qualifications
the target marketplace is an oligopoly
25. Contract incentives aimed at improving cost or schedule performance ______.

a.
b.
c.
d.
are usually not cost effective in the real world

are not needed for well managed projects
have an excellent track record in improving performance
are only advantageous for buyers
26. Which of the following is not a criterion typically used to evaluate prospective
contractors?
a.
b.
c.
d.
technical capability
management approach
cost
type of procurement document
27. Which of the following statements about procurement are true?

i. Standard contract clauses are more costly to develop.
ii. A unilateral contract may be originated using an RFP.
iii. Sellers are paid a preset amount per unit of service in time and material
contracts.
a.
b.
c.
d.
i
ii
iii
i, ii, and iii
28. You are purchasing 150 laptop computers for the engineering school at Imperial
College, London, UK. You are attempting to compare various factors such as delivery
schedule, price, and technical specifications. Which procurement document would be
most appropriate for this situation
a.
b.
c.
d.
IFB
RFI
RFP
RFQ
29. You have been tasked to recommend the appropriate type of contract for a major
development project in the field of cryo-telekinesis. The work involves a newly
emerging technology and the company has no prior experience. Several colleagues
have agreed that the work is highly uncertain and estimating schedules and required
budgets is expected to be difficult. Last night, you went into the attic and retrieved
information from your graduate studies at IMD (International Institute for Management
Development, Lausanne, Switzerland). You now recall that the most appropriate type of
contract in this situation is ______.
a.
b.
c.
d.
fixed price
time and material
oral agreement with award fee
cost reimbursable
30. The primary purpose of contract negotiations is to ______.

a.
b.
c.
d.
avoid competitive bidding

reach an acceptable agreement between the buyer and seller
ensure the buyer receives the lowest price
ensure the seller receives the highest price
31. Bidder conferences are part of ______.

a.
b.
c.
d.

close procurements
32. Which of the following must be present to have a binding contract?

a.
b.
c.
d.
a platter of shrimp and two attorneys

the business addresses of the primary parties
acceptance
signatures of authorized agents
33. Stating that you have to catch an airplane in one hour represents what negotiating
tactic?
a.
b.
c.
d.
good guy, bad guy

deadline
missing man
fait accompli
34. A screening system establishes requirements that must, at a minimum, be met by

the contractor. These systems are usually applied during the _______ phase of the
procurement process.
a.
b.
c.
d.

negotiation
35. A Request for Proposal (RFP) is prepared during which step of the procurement
process?
a.
b.
c.
d.
develop source selection criteria
36. An RFP is used to ______.

a. solicit bids from contractors when the work is a complex development for a
relatively high monetary amount
b. solicit bids from contractors when conducting a best value search for existing
commodity items in the marketplace
c. solicit bids from contractors when you are looking for the best price for routine
items readily available in the marketplace
d. solicit expressions of interest from contractors
37. Which of the following is a narrative description of products and/or services to be
supplied under contract?
a.
b.
c.
d.
the chart of accounts

the specification
the project management plan
38. Which of the following provides a precise description of a physical item, service, or
result for the purpose of purchase and/or implementation of an item or service?
a.
b.
c.
d.
a statement of work
a specification
a WBS dictionary
an RFP
39. A buyer is most likely to award a cost plus incentive fee contract under which of the
following conditions ______.
a.
b.
c.
d.
scope is not well defined and there is significant cost risk

scope is not well defined and there is very little cost risk
scope is well defined and there is significant cost risk
scope is well defined and there is very little cost risk
40. You are the project manager for a major renovation of a Las Vegas hotel called the
Kats Meow. After two weeks of grueling one hour per day negotiating sessions, you
have agreed on the following contract terms: the contract will be a fixed price incentive
fee (FPIF), the target cost will be $120 million, the target profit will be $30 million, the
share ratio will be .80/.20, and the ceiling price will be $190 million. You know that there
is a point at which the contract incentive stops and all additional costs come entirely
from the contractors profit. This concept is known as the point of total assumption
(PTA). What is the PTA for this contract?
a.
b.
c.
d.
$150 million
$170 million
$190 million
PTA does not apply to an FPIF contract
41. If the final, actual cost of the Kats Meow project from question #40 was $100
million, what contract price would the customer pay? Assume that no changes were
made to the agreement described above.
a.
b.
c.
d.
$120 million
$130 million
$134 million
There is insufficient information to calculate the result
42. If the final, actual cost of the Kats Meow project from question #40 was $140
million, what contract price would the customer pay and what would the sellers profit
be? Assume that no changes were made to the agreement described above.
a.
b.
c.
d.
$150 million, $30 million

There is insufficient information to calculate the result
43. You are developing a technology that will be the first true virtual video program in
the world. Customers can have experiences as world class athletes, famous explorers,
or take the dream vacation of a life time. The project is still hush-hush and is known to
those working on it as the Imaginator Project. You are operating under a CPIF (cost
plus incentive fee) contract with the following terms: target cost is $90 million, target
profit is $30 million, the share ratio is .50/.50, the maximum fee is $40 million, and the
minimum fee is $20 million.
If the final cost is $96 million, what price will the customer pay?
a.
b.
c.
d.
$ 96 million
$110 million
$120 million
$123 million
44. You are entering into a multi-year technical development program and have already
been warned about potential price increases for certain supplies and materials. These
potential price increases represent uncertainties over the time span envisioned and are,
unfortunately, beyond your control. You should consider which type of contract?
a.
b.
c.
d.

Fixed Price Incentive Fee
Cost Plus Award Fee
Time and Material
45. The project cost estimates are of greatest interest to the contractors project
manager when performing __________ contracts.
a.
b.
c.
d.
cost plus fixed fee

fixed price incentive
firm fixed price
46. Changing a contracts scope is usually easier with a ______.

a.
b.
c.
d.
letter agreement
joint venture
fixed price contract
cost plus contract
47. Negotiating the ceiling price of a cost reimbursable contract to a lower figure
______.
a.
b.
c.
d.
is generally advisable because it saves money

does not ensure delivery of the required product for the negotiated price
will ensure buyer satisfaction because the contract scope can be changed
should never be done in a competitive environment
48. As a buyer, a primary objective of a contract negotiation is ______.

a.
b.
c.
d.
10
obtaining products and services of the highest possible grade

obtaining the lowest possible price
ensuring that the contract is done on a fixed price basis
obtaining a fair and reasonable price
Answer Sheet #1
Answer
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
Answer
Notes
26.
27.
28.
29.
30.
31.
32.
33.
34.
35.
36.
37.
38.
39.
40.
41.
42.
43.
44.
45.
46.
47.
48.
49.
50.
Percent Correct?
Pass or Fail?
# Misread ?s
Other Notes:
11
14
Answer Key: Procurement Management

No.
Answer
Slides
Note
12-31
See tool #1, make-or-buy analysis. Indirect costs include the cost of
managing a contractor (monitoring, evaluating status reports, site
visits, and so on).
12-39
See introduction to Conduct Procurements. Screening systems help

narrow proposals down to the most competitive ones. Also, note that
weighted evaluation scores are used to establish a preferred
negotiating sequence for the best proposals (short list).
12-15
12-26
Cost reimbursement contracts place most of the risk on the buyer

whereas fixed price contracts place most of the risk on the
seller/contractor.
12-15
12-26
Cost reimbursement contracts place most of the risk on the buyer

whereas fixed price contracts place most of the risk on the
seller/contractor.
12-16
The use of a lessons learned process would easily be the factor of

least interest in choosing the type of contract. See course slide #1216 with respect to choices a and c. Choice b: If a buyer is known to
firmly resist changes, a contractor would be at even more risk than
usual if they signed a fixed price (especially firm fixed price) contract.
12-30
Contract incentives are designed to align the objectives of both

parties, create a win-win zone.
12-65
Under the rules of privity of contract, you may not interfere with
someone elses contractor.
12-33
12-44
Choice d is about advertising, not the SOW.
12-52
A basic logic question. Choice a: Change control is especially

important with fixed price agreements. Unlike cost reimbursement, if
costs change in a fixed price contract, the contractor might not be
reimbursed.
10
12-13
to
12-26
Choice a: CPFF is legal; CPPC is illegal in the federal sector.

Choice b: fixed price shifts risk to the seller, not the buyer. Choice c:
correct, see bullet #3, slide #12-25. Choice d: incorrect, highest
profit potential is with fixed price rather than cost reimbursable
contracts.
11
12:25
Logic: costs are covered in cost reimbursement but not in fixed price.
So, scope changes must be handled more carefully by a seller under
a fixed price contract.
12
12-8
12-31
See tool #1, make-or-buy analysis.
13
12-44
See tool #7, procurement negotiations. This is a PMI historical belief

(negotiations should strive to satisfy the needs of both parties).
15
No.
Answer
Slides
Note
14
12-46
There are four characteristics required for a contract to be legally

enforceable. One of them is that the agreement must not violate any
laws.
15
12-48
At this point in a procurement, the contract has been awarded and

the work must actually be managed. One of the management issues
is the possibility of multiple providers.
16
12-67
See the definition of undefined work in the reference manual on p.

12-20. Starting work without agreed terms and conditions requires a
certain amount of trust.
17
12-48
Logic. PMI states that buyers and sellers both perform the amount of
monitoring and surveillance necessary to ensure that each party
meets its obligations.
18
12-64
If contracting is decentralized, costs will probably increase because it

will take more people to fully staff each individual project.
19
12-60
See output #2, bullet #3. Post contract evaluations create a past
performance database for use in selecting contractors for future work.
20
No ref
A basic logic question.
21
No ref
PMI has asked several basic logic questions about contracts.
22
12-15
12-16
12-19
CPIF is the appropriate arrangement. The clues are: the project is a

risky developmental effort, the contractor feels a need for incentives
and wants a guaranteed minimum fee. The only contract with that
exact set of factors is CPIF.
23
12-2
12-46
See output #2. An agreement, also called a contract, is a legal

relationship subject to remedy in the courts and is binding to both
parties.
24
12-62
In the absence of competition, one concern is whether you have a

way to ensure that prices are fair and reasonable.
25
12-30
Ample real world evidence shows that contract incentives really work.
26
12-35
Cost, management approach, and technical capability are classic

criteria for evaluating prospective contractors.
27
12-67
12-33
12-13
Statement i: Standard clauses are less costly (p. 12-20 in the

reference manual), Statement ii: Unilateral contracts are initiated
using purchase orders (slide 12-33), Statement iii: Time & materials
contracts establish a preset amount of money for each unit of service
(slide 12-13).
28
12-34
You are looking for an item generally available in the marketplace

and you wish to get the best value by considering multiple criteria
(schedule, price, and technical). RFQ is the appropriate document.
29
12-16
Examining the factors influencing the type of contract shows that cost
reimbursement is appropriate when the work is uncertain (emerging
technology) and cost estimates are difficult.
16
No.
Answer
Slides
Note
30
12-44
See tool #7, objectives of negotiating a contract (fair and reasonable

price; develop/preserve a good working relationship by achieving a
win-win outcome).
31
12-43
See tool #1, bidder conferences.
32
12-46
See output #2: For a contract to be binding, there must be an offer

and acceptance.
33
12-45
See common negotiation tactics.
34
12-43
See tool #2, proposal evaluation techniques. Screening systems

help narrow the proposals to the most promising ones (referred to as
the short list).
35
12-34
An RFP is developed as part of Plan Procurement Management.
36
12-33
12-34
An RFP is used for complex, nonstandard development involving

relatively high monetary amounts.
37
12-33
Classic definition of the SOW.
38
12-67
See p. 12-20 in the reference manual for the definition of a

specification. Also, see PMBOK Guide glossary, p. 563.
39
12-16
12-19
See factors influencing the type of contract. Cost reimbursement is

appropriate when risk is high and the scope is hard to define.
40
12-21
12-22
PTA = [(Ceiling price-Target price)/Buyer share] + Target cost =

[(190-150)/.80] + 120 = (40/.80) + 120 = $170 mil. Note: Target
price is 150 mil (not 120 mil).
41
12-21
to
12-23
This type of question is worked most easily as a series of 3 steps: 1.

Calculate fee adjustment = (Target cost-Actual cost) x Seller share =
(120-100) x .20 = +$4 mil. 2. Calculate actual fee = Target fee + Fee
adjustment = 30 + 4 = $34 mil. 3. Calculate contract price = Actual
cost + Actual Fee = 100 + 34 = $134 mil.
42
12-21
to
12-23
Same 3 steps: 1. Fee adjustment = (120-140) x .20 = -$4 mil. 2.

Actual fee = 30-4 = $26 mil. 3. Price = 140 + 26 = $166 mil. Step 2
calculated the sellers profit at $26 mil.
43
12-19
12-20
Price = Cost + Fee. Cost given as 96 mil. Fee adjust = (TC - AC) x
SSR = (90-96) x .50 = -3 mil. So, fee is 30 - 3 = 27. Price = 96 + 27
= $123 mil.
44
12-28
Fixed Price with Economic Price Adjustment contracts protect buyers

and sellers from external conditions beyond their control, e.g., price
increases for supplies and materials over an extended time frame.
45
12-25
12-26
In a firm fixed price agreement, there is no share ratio. Every dollar

spent by the contractor comes 100% from their potential profit.
46
12-15
12-16
With cost reimbursement contracts, all valid costs are reimbursed

and some level of profit is guaranteed. Therefore, contractors have
less risk that an unexpected aspect of a change will penalize them
financially.
17
No.
Answer
Slides
Note
47
12-15
The contractor is not required to deliver a final product in a cost

reimbursement contract (only required to deliver best effort). If you
set the ceiling price too low, you could possibly ensure that the
contractor cannot finish the work within the available budget. You
would then spend the entire ceiling price and not get a finished result.
48
12-44
PMI identifies two primary objectives for a contract negotiation. One

of them is to obtain a fair and reasonable price. This is actually the
objective for both parties, buyer and seller.
18
Practice Exam: Stakeholder Management

1. Stakeholder management is usually the responsibility of the ________ and the most
effective means for communicating with stakeholders is _________.
a.
b.
c.
d.
project sponsor; electronic mail

project sponsor; face-to-face meetings
project manager; electronic mail
project manager; face-to-face meetings
2. Which of the following statements about identifying stakeholders is the most correct?
a.
b.
c.
d.
Identifying stakeholders usually occurs as part of planning.

A power/interest grid may be of use during stakeholder analysis.
All stakeholders should be treated in a fair and equal manner.
The stakeholder register is an input to the process.
3. Which of the following is a tool of identify stakeholders?

a.
b.
c.
d.
stakeholder analysis
stakeholder register
stakeholder management strategy
analytical techniques
4. Which of the following is an input to control stakeholder engagement?

a.
b.
c.
d.
issue log
organizational process assets updates
interpersonal tools
change requests
5. An output of manage stakeholder engagement is ______.

a.
b.
c.
d.

change log
stakeholder management plan
interpersonal tools
6. The actions associated with Identify Stakeholders are associated with which process
group?
a.
b.
c.
d.
Identifying
Initiating
Planning
Controlling
Stakeholder Management
7. Which process group aligns stakeholders expectations with the purpose of the
project and which stakeholder process belongs to that group?
a.
b.
c.
d.
Planning; Identify Stakeholders

Planning; Plan Stakeholder Management
Initiating; Identify Stakeholders
Initiating; Plan Stakeholder Management
8. With respect to the role of stakeholders, the planning process is aimed primarily at
______.
a.
b.
c.
d.
effectively managing stakeholders expectations

gaining stakeholder buy-in
controlling changes and recommending corrective actions
obtaining acceptance by the customer or sponsor
9. With respect to the role of stakeholders, the executing process is aimed primarily at
______.
a.
b.
c.
d.
effectively managing stakeholders expectations

gaining stakeholder buy-in
controlling changes and recommending corrective actions
obtaining acceptance by the customer or sponsor
10. Which of the following is the least likely to be an advantage of involving

stakeholders during project initiation?
a.
b.
c.
d.
Create a shared understanding of project success criteria.

Improve deliverable acceptance.
Improve stakeholder satisfaction.
Improve the change control process.
11. Which of the following statements about stakeholders is most true?

a. The primary concern of the project team should be external, negative
stakeholders.
b. Stakeholder identification is only of concern during initiating.
c. It is primarily the responsibility of the stakeholder to make him or herself
known to the project team.
d. Overlooking negative stakeholder interests can increase the likelihood of
failure.
12. Which statement about stakeholders is incorrect?

a.
b.
c.
d.
On some projects, the customer provides the functions of a sponsor.

Stakeholder requirements must be incorporated into the project plan.
The most important stakeholders are usually internal to your organization.
Stakeholder identification is a continuous process.
13. Which statement about customers and users is not true?

a. Customers are the persons or organizations who will use the product, service,
or result.
b. If stakeholder expectations come into conflict, the resolution should generally
favor the customer.
c. Users are the persons or organizations who will use the product, service, or
result.
d. Customers are the persons or organizations who will approve and manage
the product, service, or result.
14. Your team has identified a stakeholder who has very high power within your
organization but a fairly low interest in the details of your project. This stakeholder
should be ______.
a.
b.
c.
d.
managed very closely

monitored but not managed extensively
managed sufficiently to keep him or her satisfied
managed sufficiently to keep him or her informed
15. Which of the following is not an input to Identify Stakeholders?

a.
b.
c.
d.
enterprise environmental factors

procurement documents
project charter
16. Which of the following is an output of Identify Stakeholders?

a.
b.
c.
d.
stakeholder identification
stakeholder communications
17. Which of the following is not one of the important activities associated with Plan
Stakeholder Management?
a. Create and maintain relationships between the project team and other
stakeholders.
b. Manage and improve communications.
c. Review the level of stakeholder engagement.
d. Classify stakeholders as positive or negative.
18. Identify Stakeholders is part of ______ and Manage Stakeholder Engagement is
part of ______.
a.
b.
c.
d.
initiating; planning
initiating; executing
planning; executing
planning; controlling
19. Which of the following is an input to Plan Stakeholder Management?

a.
b.
c.
d.
Meetings
Project charter
20. Which of the following is not a level of engagement for stakeholders?

a.
b.
c.
d.
Uninformed
Unaware
Neutral
Leading
21. Stakeholder influence is at its greatest potential ______.

a.
b.
c.
d.
at the time project baselines are being formed

early in the project life cycle
during execution of the project management plan
whenever changes are requested
22. Which of the following are recommended interpersonal skills when managing
stakeholder engagements?
a.
b.
c.
d.
Negotiating agreements and facilitating consensus

Active listening and negotiating agreements
Building trust and resolving conflict
Resolving conflict and facilitating consensus
23. The outputs to Manage Stakeholder Engagement include ______.

a.
b.
c.
d.
change logs and OPA updates

project documents updates and work performance information
issue logs and change requests
change requests and communication methods
24. Control Stakeholder Engagement includes ______.

a. identifying and classifying stakeholders
b. the use of face-to-face meetings as a preferred communication method for
handling stakeholder issues
c. devising a stakeholder management plan
d. monitoring stakeholder relationships and adjusting strategies as necessary
25. Stakeholder management can potentially have an effect on any project
management process the team or other stakeholders might perform. Which listed
process has a direct, formal connection to stakeholder management?
a.
b.
c.
d.
Create WBS
Estimate activity durations
Control quality
26. Which statement about the initiating process group is true?

a. Develop Project Charter occurs before Identify Stakeholders.
b. Identify Stakeholders occurs before Develop Project Charter.
c. The project sponsor is most important to project success in the latter stages of
the project.
d. The initiating process group monitors the status of work packages.
Answer Sheet #1
Answer
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
Answer
Notes
26.
27.
28.
29.
30.
31.
32.
33.
34.
35.
36.
37.
38.
39.
40.
41.
42.
43.
44.
45.
46.
47.
48.
49.
50.
Percent Correct?
Pass or Fail?
# Misread ?s
Other Notes:
10
Answer Key: Stakeholder Management

No. Answer
Slides
Note
13-23
13-27
PMI has always recommended that the PM must personally handle

(and not delegate) certain sensitive, important tasks. Managing
stakeholders is one of those important items. Also, when dealing with
important stakeholders, face-to-face meetings are preferred.
13-12
13-13
See tool #1, stakeholder analysis, step 2: Analyze impact and use a
classification model. Choice a: identifying stakeholders is part of
initiating. Choice c: the importance of various stakeholders must be
prioritized (they are all not of equal importance). Choice d: is an
output, not an input.
13-10
13-12
Choice b is an output. Choices c and d are associated with plan

stakeholder management, not identify stakeholders.
13-32
13-33
Choices b and d are outputs, not inputs. Choice c is a tool of manage

stakeholder engagement, not control the engagement.
13-24
13-29
Choices b and c are inputs, not outputs. Choice d is a tool.
13-8
Identify stakeholders is one of two initiating processes (Develop project

charter is the other). Also see reference manual p. 3-7.
13-8
See PMBOK Guide, p. 54. A major goal of initiating is to align

stakeholders expectations with the purpose and goals of the project.
Identify stakeholders is an initiating process.
13-16
See PMBOK Guide, p. 55. Stakeholder buy-in is one of the goals of

the planning process. While buy-in is always of interest, the primary
work on making it happen is in planning.
13-23
See PMBOK Guide, p. 56. Executing is aimed at the on-going

management of expectations.
10
13-9
See PMBOK Guide, p. 55. Initiating is aimed more at overall project

vision, buy-in, and setting the stage for satisfied stakeholders. It is not
aimed at reviewing and improving management procedures such as
change control.
11
13-6
See PMBOK Guide, pp. 30-33. Also mentioned in the introduction to

the risk chapter, failure to consider negative stakeholders may
increase the chances of project failure.
12
13-6
13-15
See PMBOK Guide, pp. 30-33. Important stakeholders may be

internal or external, positive or negative, and performing or advising.
13
13-5
See PMBOK Guide, pp. 30-33. Customers approve and manage the
product, service, or result; users are the persons or organizations who
will use the product, service, or result.
14
13-13
See the Power/Interest Grid. High power but low interest are managed
by keeping them satisfied.
15
13-10
13-11
Stakeholder analysis is a tool, not an input.
11
No. Answer
Slides
16
13-10
13-15
The stakeholder register is the only output for Identify Stakeholders.
17
13-12
13-16
Choice d (Classifying stakeholders) is part of Identify Stakeholders.

Choices a, b, and c are all part of Plan Stakeholder Management.
18
13-8
The 4 stakeholder processes cover initiating, planning, executing, and

controlling, respectively.
19
13-17
The charter is an input to Identify Stakeholders (not planning); choices

a & b are tools, not inputs.
20
13-20
13-21
See tool #3, analytical techniques. Also see reference manual p. 13-5.
21
13-23
See the introduction to Manage Stakeholder Engagement. This point

is emphasized in several places in the body of knowledge.
Stakeholders have the greatest influence over outcomes early in the
project life cycle.
22
13-27
See tool #2, interpersonal skills. Choices a, b, and d each contain

management skills, tool 3, different skills than those in tool 2.
23
13-24
13-29
13-30
Choice a: the change log is an input, not an output. Choice b: work

performance information is an output for a different process (control
stakeholder engagement). Choice d: communication methods is a
tool, not an output.
24
13-31
Choice d is correct: Control stakeholder engagement involves

monitoring relationships and adjusting strategies. Choice a: Is part of
identify stakeholders. Choice b: Is tool #1 for manage stakeholder
engagements. Choice c: Is output #1 for plan stakeholder
management.
25
5-13
5-14
The stakeholder register is an input to collect requirements. There is

no such formal connection to the other 3 processes.
26
4-9
13-10
13-20
The project charter is an input to Identify Stakeholders. Conversely,

the stakeholder register is not an input to Develop Project Charter.
The influence of project sponsors tends to be most important earlier in
the project.
12
Note
Comprehensive Exam #1
1. Which of the following is least likely to lead to a scope change?
a.
b.
c.
d.
customers who change their minds about project deliverables

a change in government regulations
a desire to incorporate a newly emerged technology into the project
bottom-up cost estimating
2. Configuration management is ______.

a.
b.
c.
d.
monitoring and controlling emerging project scope against the scope baseline
the production of a scope statement
the creation of the work breakdown structure
the set of procedures developed to ensure that project design criteria are met
3. Recently, many of your team members were clashing over how to proceed and
challenging each other for control of certain tasks. You are now noticing that most team
members are beginning to trust each other and are sharing information. The team has
moved into which stage of team development on the Tuckman ladder?
a.
b.
c.
d.
performing
storming
forming
norming
4. A key rule for achieving customer satisfaction is ______.

a.
b.
c.
d.
do not spare expenses in product/service development

conduct a needs analysis
always do what the customer suggests
conduct a life cycle cost analysis
5. Which of the following are the most common categories of project reports?
a.
b.
c.
d.
status, progress, and forecast

profitability, status, and exception
status, variance, and stock price
progress, status, and trend
6. Which of the following statements is correct?

a.
b.
c.
d.
The project manager should be assigned no later than the start of planning.
The project manager should be assigned when the WBS is finalized.
The project charter is often updated as a result of change requests.
Validate scope is a planning process.
Comprehensive Exam 1
7. Your team has been tracking approximately a dozen risks and you have
accomplished about 2/3 of the tasks identified in the WBS. A team member suggested
that one of the risks was no longer very likely and should be closed. Two weeks later,
the closed risk actually did occur. ______, which is a tool of ______ should have been
used to track this situation.
a.
b.
c.
d.
Risk audits; control risks

Risk audits; plan risk responses
Risk reassessment; control risks
Risk reassessment; plan risk responses
8. Most projects begin in response to a business need or market demand, but are not
usually formally initiated until completion of ______.
a.
b.
c.
d.
a project management plan

goals and objectives
a make-or-buy analysis
a project charter
9. You are searching for more effective ways to do management presentations of

schedule status on complex projects with large numbers of interdependent work
packages. Increased use of ______ would be an effective way to display summary
results to upper management.
a.
b.
c.
d.
arrow diagrams
hammock activities
critical chain diagrams
precedence diagrams
10. A work package is ______.

a.
b.
c.
d.
a required level of reporting

a daily work sheet (list of tasks for that day)
a deliverable found at the lowest level of the WBS
an activity that can be assigned to more than one organizational unit
11. Which of the following contract types offers the maximum profit potential to the
contractor?
a.
b.
c.
d.
cost plus fixed fee

fixed price incentive
firm fixed price
12. What is the business case and when is it created?

a. a description of the business need and cost-benefit analysis; a tool of Develop
Project Charter
b. a description of the business need and cost-benefit analysis; an input to
c. a description of products and services to be delivered; a tool of Develop
Project Management Plan
d. a description of products and services to be delivered; an input to Develop
Project Management Plan
13. A cost account is ______.
a. also called a code of accounts and provides a numbering system for all work
packages
b. also called a code of accounts and is a management control point that
contains one or more work packages
c. also called a control account and is the lowest level at which organizational
responsibility is assigned
d. also called a control account and provides a numbering system for all work
packages
14. You are reviewing the latest earned value data and note that the CPI is 0.83 and
the SPI is 1.13. Your project ______.
a.
b.
c.
d.
has a cost underrun and is behind schedule

has a cost underrun and is ahead of schedule
has a cost overrun and is behind schedule
has a cost overrun and is ahead of schedule
15. You just changed companies and your new manager has asked you to develop a
project management methodology. You were instrumental in developing such a
methodology in your previous company and you happen to have an unofficial copy.
You should ______.
a.
b.
c.
d.
tell your manager that you cannot participate because of your previous work
use the unofficial copy as the basis for the requested methodology
consult your new manager about whether it is okay to use your unofficial copy
use your knowledge and experience to create the methodology
16. If the level of quality conformance increases as a result of new processes or

changed methods, the required cost of monitoring is likely to ______.
a.
b.
c.
d.
decrease
increase
decrease initially, then increase slightly
increase, then tend to level off
17. Quality Function Deployment is used to ______.

a.
b.
c.
d.
enhance the just-in-time inventory procedure

improve product distribution systems
provide better product definition
provide a benchmarking process for quality improvements
18. You have just noticed that most of your process outputs are trending below the
centerline of your control chart. You should ______.
a.
b.
c.
d.
apply the Rule of 7

extend the lower control limit as necessary
create and analyze a Pareto diagram
use a Scatter diagram to determine the greatest cause of defects
19. A fundamental tenet of modern quality management holds that quality is most likely
to be achieved by ______.
a.
b.
c.
d.
planning it into the project

developing careful mechanisms to inspect for quality
developing prestigious products and processes
implementing effective quality circle meetings
20. The cost of quality (COQ) tracks costs of conformance in which of the following
formal categories?
a.
b.
c.
d.
prevention, appraisal, and failure costs

prevention and appraisal costs
inspection and rework costs
training and warranty costs
21. A common human resource management implication of fast tracking is ______.

a.
b.
c.
d.
job enrichment
demotivation
need for increased coordination among the work force
need for increased pay
22. A key component of MBO is that ______.

a.
b.
c.
d.
management and workers identify objectives jointly

the subjective component of creating objectives can be included
customers are involved in the evaluation process
objectives are reviewed quarterly
23. You have several people on your team who seem to be very concerned about
being liked and accepted by others. The problem is that they also tend to shy away
from conflict instead of dealing with it. These people are motivated by _______.
a.
b.
c.
d.
Maslows social needs level in the hierarchy of needs

Blake and Moutons theory on concern for people
McClellands theory on need for affiliation
24. Output per person-hour of input describes ______.

a.
b.
c.
d.
economies of scale
value marginal product
productivity
the learning curve
25. You are reviewing a diagram that shows vertical bars. The tallest bar is on the left
and identifies the number of defects caused by a specific problem. Other shorter bars
also identify defects originating from specific causes. This diagram is called a ______
and may be used to ______.
a.
b.
c.
d.
Cause and Effect Diagram; determine the causes of a specific problem

Cause and Effect Diagram; determine whether your process is under control
Pareto Chart; determine whether your process is under control
Pareto Chart; guide corrective action to the most productive areas
26. Project managers would be involved the least in ______.

a.
b.
c.
d.
making oral presentations

understanding the details of shareholder reporting
explaining technical issues
27. Extensive use of __________ is most likely to aid in solving complex problems.
a.
b.
c.
d.
verbal communications
written communications
project management software
a management information system
28. Which of the following is a tool of Collect Requirements?

a.
b.
c.
d.
Benchmarking
Expert judgment
29. Project meetings are generally more effective when they ______.
a.
b.
c.
d.
leave the agenda flexible

exclude troublesome people who always identify problems
require that attendees stand throughout the entire meeting
have an explicitly defined purpose
30. Which of the following is most likely to improve the effectiveness of project
communications?
a.
b.
c.
d.
developing a project procedures handbook

scheduling project status meetings during lunch
managers who are careful to confirm the accuracy of messages sent
hiring a graphic artist to design the slides for project presentations
31. If an identified risk event has a 20% chance of happening in any given month and if
the project is expected to last 5 months, the probability that this risk event will occur
during the last month of the project is ______.
a.
b.
c.
d.
20%
40%
60%
80%
32. The tornado diagram in your risk management approach is aimed at _______.
a.
b.
c.
d.
depicting the interactions of multiple possible events

probabilistic analysis of the project
transferring high risks where possible
assessing the impact of highly uncertain variables on the rest of the project
33. Which of the following is not a factor in the assessment of project risk?
a.
b.
c.
d.
risk event
risk probability
amount at stake
insurance premiums
34. Which task in the RACI chart shown below was entered incorrectly?
Task A
Task B
Task C
Task D
a.
b.
c.
d.
Dan
R
I
A
A
Sunil
A
R
R
R
Shinobu
R
A
C
C
Arturo
I
C
A
I
Task A
Task B
Task C
Task D
35. An appropriate sequence for risk management activities is ______.

a.
b.
c.
d.
plan, identify, and analyze

plan, identify, and mitigate
identify, mitigate, and control
identify, deflect, and mitigate
36. Which of the following is associated with procurement management?

a. control procurements which results in handling early termination if there is a
default
b. manage procurements which results in resolving disputed changes
c. conduct procurements which results in handling progress payments
d. conduct procurements which results in a legally binding contract
37. You are developing a new technology for an actual product (voice commands
through blue tooth in a golf cart to order food at the country club grill). There is still
some risk in making this technology work successfully. The contractor is asking for
some guarantees about profit or at least not losing money on the development work.
An appropriate type of contract would be ________.
a.
b.
c.
d.
Fixed price with economic price adjustment, FP-EPA

Time and material, T&M
Cost plus guaranteed fee, CPGF
Cost plus incentive fee, CPIF
38. The Shandong Electric Power Company (SEPCO) located in Jinan, China is
considering which of two projects is more attractive financially. One of their employees
suggested they could use ROI as a financial evaluation tool if they simply substituted
the cost savings generated by a project for revenues. In comparing the two projects,
Project 1 is expected to generate cost savings of 1.6 million yuan at an overall cost of
1.1 million yuan. Project 2 is expected to generate cost savings of 1.95 million yuan at
an overall cost of 1.5 million yuan. Which project has a better return on investment?
a.
b.
c.
d.
Project 1 because it costs less

Project 1 with a superior ROI of 45.5%
Project 2 because it saves more money
Project 2 with a superior ROI of 30%
39. Standard contract clauses are desirable because they ______.

a.
b.
c.
d.
cover all situations for all contracts

are legally sufficient and cost less to produce in most cases
take less space than customized contracts and clauses
eliminate the need for professional legal advice
40. As a buyer, a primary objective of a contract negotiation is ______.

a.
b.
c.
d.
obtaining products and services of the highest possible grade

obtaining the lowest possible price
ensuring that the contract is done on a fixed price basis
obtaining a fair and reasonable price
41. Integration management includes which of the following processes?

a. develop charter, develop project management plan, and perform integrated
change control
b. develop charter, develop project management plan, and control scope
c. develop project management plan, direct project work, and collect
requirements
d. develop project management plan, direct project work, and create WBS
42. You have been chosen as the project sponsor for the Brazos Development Project
in the sprawling metropolis of Waco, Texas. The project is expected to last two years,
is hoping to attract key businesses, and finally aims to provide 10,000 new jobs in the
community. You have multiple demands on your time and have begun to think about
when the project may need your involvement the most. During which of the following
phases will you most likely have the greatest influence on the scope, time, cost, and
quality of the project?
a.
b.
c.
d.
initiating phase
planning phase
executing phase
closing phase
43. Which of the following is not part of administration closure?

a. activities needed to ensure the exit criteria for the phase or project have been
met
b. activities needed to transfer the product, service, or result to the next
appropriate step (phase, production, operations)
c. activities to identify that changes are needed
d. activities to collect records, document lessons learned, and archive
information for future use
44. A projects payback period occurs when ______.
a.
b.
c.
d.
profit has been maximized

unit profit is reached
monthly revenue exceeds monthly costs
cumulative revenue equals or exceeds cumulative costs
45. A scope statement ______.

a.
b.
c.
d.
constitutes an agreement between the project team and the customer

provides the format for documenting lessons learned
approves the project for the stakeholders
provides criteria for measuring project cost
46. A project manager can compare earned value performance data to all of the
following except ______.
a.
b.
c.
d.
critical path analysis

technical performance metrics
funding required to complete the project
forecasted cost and schedule estimates
47. During the project scope management process, the work breakdown structure
should be developed to ______.
a.
b.
c.
d.
the sub-project level

the cost center level
a level allowing for adequate estimates
the level established by the project office
48. Decomposition is used to construct a ______.

a.
b.
c.
d.
variance analysis
precedence diagram
CPM diagram
49. You are attempting to stimulate discussion to solve a persistent, recurring problem
on your telecommunications project. Which of the following techniques is specifically
designed for that purpose?
a.
b.
c.
d.
Ishikawa Diagram
Pareto Chart
Control Chart
Run Chart
50. Your current status report reveals that the planned value of the work at this point is
$500,000. It further shows that 50% of the $1,000,000 BAC has been completed and
that 55% of the project budget has been spent. The data also show that 2 tasks are
behind schedule. What is the SPI and what does it mean?
a.
b.
c.
d.
SPI = 1.0; the project is exactly on schedule

SPI = 1.0; the project is behind schedule
SPI = .9091; the project is ahead of schedule
SPI = .9091; the project is behind schedule
51. A matrix organization attempts to combine some of the advantages of both

functional and projectized organizations. The success of a matrix organization depends
on ______.
a. teamwork between project managers and functional managers to effectively
resolve project conflicts
b. the ability of the project team to develop a detailed scope of work
c. project and functional managers sharing equal authority
d. a Manager of Project Managers who resolves conflict across all projects
10
52. Risk management involves _______, ______, and ______ uncertainties during a
project.
a.
b.
c.
d.
quantifying, evaluating, and directing

identifying, planning, and monitoring
schedule, cost, and quality
identifying, analyzing, and responding to
53. You are currently managing 8 members on your project team. You just gained one
engineering specialist and transitioned three other people off the project. How many
communication channels do you need to maintain?
a.
b.
c.
d.
6
7
18
21
54. Reynaldo has recently observed that many of the tasks on his project are falling
between the cracks and important things are sometimes not getting done. Which of the
following tools would provide the most benefit to Reynaldo in this situation?
a.
b.
c.
d.

pareto chart
organization chart
55. A schedule completion date is most likely to change if ______.

a.
b.
c.
d.
the critical path is reduced

management reserve is removed from the plan
no float time is available
project resources are reduced
56. Your project has fallen behind schedule due to conflict between team members.
You have resolved the conflict. What should you consider to get the project back on
schedule?
a.
b.
c.
d.
crashing
resource leveling
resource smoothing
adding lag times along the critical path
11
57. Risk analysis includes ______.

a.
b.
c.
d.
identifying potential risk events and impacts

enumerating sources of internal vs. external risks
evaluating probability and impact
developing contingency plans
58. Which risk response tool is used only when triggered by a specific prior event?
a.
b.
c.
d.
contingent response strategy

mitigate
enhance
insure
59. A precise physical description of a deliverable is called a ______.

a.
b.
c.
d.
specification
baseline
work package
WBS dictionary
60. The purpose of fast tracking a project is to ______.

a.
b.
c.
d.
reduce project risks

reduce project duration
increase schedule tracking controls
increase productivity
61. A purchase order represents a ________ and is used for _________.

a.
b.
c.
d.
unilateral contract; routine items

unilateral contract; complex items
bilateral contract; routine items
bilateral contract; complex items
62. Which of the following are tools used in plan procurement management?
a.
b.
c.
d.
12
make-or-buy analysis, expert judgment, and market research

contract types, bidder conferences, and expert judgment
expert judgment, audits, and bidder conferences
make-or-buy analysis, contract types, and weighting system
63. Which rule for using a RACI chart is correct?

a.
b.
c.
d.
There should never be more than one person informed for a single task.
There should never be more than one person accountable for a single task.
There should never be more than one person responsible for a single task.
There should never be more than one person consulted for a single task.
64. Which of the following conflict management approaches is believed to lead to the
least enduring results?
a.
b.
c.
d.
problem solving
smoothing
withdrawing
forcing
65. During the project planning process it is sometimes necessary to make

assumptions when data are unavailable or uncertain. Which statement best describes
assumptions for the purpose of project management?
a. assumptions are considered to be true, real, or certain without proof or
documentation
b. making assumptions reduces project risks
c. assumptions are based primarily upon historical data
d. assumptions are derived from stakeholder analysis
66. Purchasing insurance is an example of risk ______.
a.
b.
c.
d.
acceptance
transfer or deflection
avoidance
mitigation
67. From a suppliers perspective, which form of contract entails the most risk?
a.
b.
c.
d.
cost plus fixed fee

fixed price
time and material
unilateral
68. A Purchase Order becomes an enforceable contract ______.

a.
b.
c.
d.
upon shipment of the order by the seller

when the buyer acknowledges receipt of the item
when the delivery vehicle accepts the item from the seller
when final payment is made to the seller
13
69. Complex projects involving cross-functional efforts are most effectively managed by
a ______.
a.
b.
c.
d.
functional organization
project coordinator
strong matrix organization
projectized organization
70. Which of the following measures is used to forecast the project cost at completion?
a.
b.
c.
d.
CPI
SPI
BCWP
ACWP
71. You are managing the renovation of the security system at a large hotel in Sydney,
Australia. You have decided to use a more proven technology as one facet of your risk
management approach. This is an example of risk _______.
a.
b.
c.
d.
sharing
acceptance
mitigation
avoidance
72. Conflict resolution techniques include which of the following?

a.
b.
c.
d.
withdrawing, compromising, controlling, and forcing

controlling, forcing, smoothing, and withdrawing
confronting, compromising, smoothing, and directing
smoothing, confronting, forcing, and withdrawing
73. It is critical for your company to offer its products on the Internet to maintain its
competitive position. The company has little experience in this area but believes it is
important to move quickly. As one of the resident PMPs , you have been asked to start
planning for this project. What is the first step you should take?
a.
b.
c.
d.
14
identify the risks

plan the scope
establish a resource plan
complete a cost and schedule estimate
74. Stakeholder management includes which of the following?

a.
b.
c.
d.
using tornado diagrams to identify and prioritize stakeholder requirements

using the scope statement to identify and prioritize key stakeholders
providing frequent cost and schedule status reports
incorporation of stakeholder requirements into the project management plan
75. A possible result of using compromise to resolve a conflict is ______.

a.
b.
c.
d.
lose-lose
win-lose
win-win
lose-win
76. Which statement about delegating is true?

a.
b.
c.
d.
You should delegate sufficient responsibility to get the job done.

Delegation tends to lower morale.
Delegation improves efficiency and productivity.
Delegation improves quality.
77. A generally accepted method to confirm accuracy of task progress is through

______.
a.
b.
c.
d.
earned value
expected monetary value
maximum ceiling
78. Which of the following is used to control the project schedule?

a.
b.
c.
d.
Pareto diagram
work performance information
parametric modeling
statistical sampling
79. The _________ scope is measured against the requirements whereas the
_________ scope is measured against the project management plan.
a.
b.
c.
d.
project, product
product, project
program, project
project, program
15
80. During which project phase is the amount at stake the lowest?
a.
b.
c.
d.
initiate
plan
execute
close
81. If a contract is not completed as a result of contractor bankruptcy, failure to comply

with contract requirements, or some other reason, such a circumstance is referred to as
a ______.
a.
b.
c.
d.
force majeure
broken promise
tort
breach of contract
82. Your project progressed exactly as planned until two days ago when you
experienced a completely unexpected risk event. You quickly devised a response plan
to deal with the situation. Your response is called a ______.
a.
b.
c.
d.
contingency plan
corrective action
workaround
lesson learned
83. You have decided to identify and correct problems that are causing the most
defects. You should use a ______.
a.
b.
c.
d.
Pareto chart
run chart
cause and effect diagram
scatter diagram
84. Changing the project schedule should be done in accordance with the ______ and
________ processes.
a.
b.
c.
d.
monitor/control project work; control costs

monitor/control project work; control schedule
integrated change control; control costs
integrated change control; control schedule
85. An individuals willingness to take a risk can be affected by ______.

a.
b.
c.
d.
16
decision tree modeling

Monte Carlo simulation
sensitivity analysis
utility function
86. All of the following assist in determining the impact of a scope change except
______.
a.
b.
c.
d.
project charter
baseline
87. A project was estimated to cost $1.5 million and scheduled to last six months. After
three months, the earned value analysis shows the following:
BCWP = $650,000
BCWS = $750,000
ACWP = $800,000
What are the schedule and cost variances?
a.
b.
c.
d.
SV = +$100,000 and CV = +$150,000

SV = +$150,000 and CV = -$100,000
SV = -$50,000 and CV = +$150,000
SV = -$100,000 and CV = -$150,000
88. Configuration management is most closely related to ______.

a.
b.
c.
d.
integrated change control

validating scope
defining scope
analyzing quantitative risks
89. You have been assigned as a portfolio manager. Portfolios contain which of the
following?
a.
b.
c.
d.
organizational project management

operations management
projects and programs
organizational governance
90. Reviewing work products and results to ensure that all were completed
satisfactorily and formally accepted is part of ______.
a.
b.
c.
d.
risk management
quality control
change control management
validate scope
17
91. Risk response planning is intended to ______.

a.
b.
c.
d.
create steps to identify project risks

formulate strategies for dealing with adverse events
construct a list of previous project risks
develop measurements to quantify project risks
92. Your Transcontinental Super-Collider Project, based in Tokyo, is in deep trouble. A

prominent stakeholder is visiting tomorrow for a briefing on the status and everyone
knows that project termination is a serious possibility. You have negative slack on
multiple paths and your cost variance is negative, as well. If the project is terminated,
the scope validation process should ______.
a. be delayed in case the project is re-instated after the board of directors
completes its quarterly resource reallocation
b. determine the correctness of the work results
c. establish and document the level and extent of completion
d. be canceled because there will be no further work to be evaluated
93. You are a project manager in a strong matrix organization. Which of the following
is the most important skill you could have in such an environment?
a.
b.
c.
d.
ability to organize
ability to communicate
ability to plan
ability to negotiate
94. Which of the following is true for a company that is certified under ISO 9001?
a. Company products and services must meet the specified standard of quality
set forth in ISO 9001.
b. The companys quality system must conform to the criteria set forth in ISO
9001.
c. The companys cost of quality must not exceed the threshold set forth in ISO
9001.
d. Work processes must be measured using approved statistical quality control
techniques.
95. Which of the following contract types places the greatest risk on the buyer?
a.
b.
c.
d.
18
cost plus percentage of cost

cost plus fixed fee
fixed price plus incentive fee
96. You are the project manager of a large, two-year construction project and one of
your most valuable team members has suggested a change during the last fiscal
quarter of the execution phase. The team member is adamant that the change will
greatly benefit the project, however, meeting the schedule has consistently been
emphasized by your most important stakeholder. You should ______.
a.
b.
c.
d.
ask the project sponsor to take the change to the CCB

call a meeting of major stakeholders to discuss the change
reject the change because it is so late in the project
evaluate the change in accordance with the project change control system
97. What is the most important consideration when using a fixed price contract?
a.
b.
c.
d.
a realistic schedule
accurate development of the scope
availability of resources
availability of funds
98. Administrative closure is associated with the ______ process and addresses
______.
a.
b.
c.
d.
close project or phase; archives that comply with regulatory requirements

close project or phase; monitoring and controlling of risks
validate scope; formal acceptance of work results
close procurements; deliverable acceptance
99. Task A has a 90% chance of finishing on time (based on historical experience)
whereas Task B has only a 60% chance of finishing on time. You really need both
tasks to finish promptly on this project. What is the chance that both tasks will be on
time?
a.
b.
c.
d.
75%
60%
54%
30%
100. During contract closeout, the project manager needs to document ______.
a.
b.
c.
d.
formal acceptance
the payment schedule
the change control procedure
19
101. You are nearing completion of the final phase of a successful biomedical project.
Earned value calculations currently indicate that the project will be completed on time
and under budget by $500,000. At the completion of the project, the project manager
will document and archive all project information. This information may be used for
future projects in all areas except ______.
a.
b.
c.
d.
estimating durations
estimating costs
resolving conflicts
allocating resources
102. Which procurement concept establishes a required level of quality and a remedy
for failure to meet those standards?
a.
b.
c.
d.
warranty of merchantability
warranty
backcharge
quality control
103. You are a native of Switzerland and have been a project manager for 15 years.
You were just sent with no notice to handle a problem that arose in Shenyang, China.
You have never been in an Asian country and, upon arrival at the airport, you find
yourself to be confused. Finding transportation to the hotel was unusually difficult. At
the hotel you also experience difficulty with door locks and turning on the lights. You
struggle to find foods that you recognize. You are probably experiencing a
phenomenon known as _______.
a.
b.
c.
d.
ethnocentricity
time lag
sociological distress
culture shock
104. Which project management process provides a means of settling unresolved

claims?
a.
b.
c.
d.
Close Procurements
105. A key activity for achieving customer satisfaction is to accurately define ______.
a.
b.
c.
d.
20
the expected business use

requirements
the change control process
the project managers authority
106. You are the project manager for a research and development project and find that
a design error may interfere with meeting technical performance requirements. Your
preferred response would be to ______.
a. reduce the overall technical complexity of the project
b. develop alternative solutions to the problem
c. reduce the performance component of the triple constraint until it equals the
revised performance output
d. increase performance in some other aspect of the product to compensate
107. The ______ process provides formal documentation showing completion of the
project or phase and transfer of completed deliverables to others, whereas the ______
process includes of copy of the closed contract and an indexed set of contract
documentation.
a.
b.
c.
d.
close project or phase; close procurements

close procurements; close project or phase
close project or phase; validate scope
monitor and control project work; validate scope
108. You recently had a discussion with your customer about the difference between
quality and grade. You pointed out that grade is essentially _______. You further
pointed out that low grade ________ and that low quality is ________.
a. fitness for use; may be acceptable to save money; never acceptable because
it means you are not meeting requirements
b. features and functions; may be acceptable to save money; never acceptable
because it means you are not meeting requirements
c. features and functions; is not acceptable because of the cost; acceptable if
the sponsor approves the change
d. conformance to requirements; may be acceptable if the customer agrees;
acceptable if the sponsor agrees
109. Which quality management process audits quality requirements and quality control
measurements to ensure appropriate quality standards are met?
a.
b.
c.
d.

Control quality
Plan quality management
Validate scope
21
110. The planning technique which progressively details the work as more information
becomes known is referred to as ______.
a.
b.
c.
d.
critical path planning

just-in-time planning
rolling wave planning
strategic planning
111. Using earned value, which of the following work completion rules is the most
conservative?
a.
b.
c.
d.
percent complete
0/100
20/80
50/50
112. Herzberg is most known for a motivation theory that deals primarily with ______.
a.
b.
c.
d.
Theory X
expectancy theory
hygiene factors
participative management
113. Which of the following statements about the risk management plan is not true?
a. The risk management plan is an output of the Plan Risk Management
process.
b. The risk management plan includes a description of the responses to
identified risks and triggers.
c. The risk management plan includes budgets, scoring and interpretation
methods, thresholds, and responsible parties.
d. The risk management plan is an input to all the remaining risk planning
processes.
114. Work authorization ______.
a.
b.
c.
d.
22
is a process for sanctioning project work

is necessary for scope management
is tied to the individual tasks that are included in a work package
includes procedures for work orders, contracts, and purchase orders
115. You changed employers about a year ago and have been very pleased that your
new organization provides strong emphasis and support for project teams. You are the
project manager for one of several important research projects. Although your team
members are borrowed from various functional areas, you write their performance
appraisals and exercise considerable control over the expenditure of project funds.
What type of organizational structure are you using and what might be one of your
biggest potential problems?
a.
b.
c.
d.
projectized structure; duplication of resources

functional structure; communication with project team members
strong matrix structure; conflict with functional managers
weak matrix structure; communication with project team members
116. Which of the following is one of the major components of the communication
model?
a.
b.
c.
d.
urgency
environment
medium
dimension
117. The cost estimator for a highway construction project used the historical cost per
mile data for a similar highway that was recently built. This is an example of ______.
a.
b.
c.
d.
budget estimating
parametric estimating
bottom-up estimating
top-down estimating
118. Both the CPM and PERT network analysis methods assume that estimated
activity durations are ______.
a.
b.
c.
d.
mean distributed
variance distributed
statistically dependent
statistically independent
23
119. You are part of a revolutionary project to prove that traffic safety will be improved
and related accident-response costs will be reduced if drivers are only allowed to make
right turns. Dubbed as the Right Stuff project, the latest status report included a Gantt
chart showing that three consecutive activities have each been completed a week early.
The lead engineer is on vacation and therefore not available for comment. Based on
this information, the project is ______.
a.
b.
c.
d.
ahead of schedule
three weeks ahead of schedule
behind schedule
indeterminate from the information given
120. Duration estimates indicate ______.

a.
b.
c.
d.
how many hours a resource will work on an activity

how many work periods an activity will take
when an activity is likely to start
when an activity is likely to finish
121. Which stakeholder management process provides a classification scheme for

comparing desired levels of stakeholder engagement to actual levels of engagement?
a.
b.
c.
d.
Control Stakeholder Engagement

122. Which of the following are potential sources of power for project managers?
a.
b.
c.
d.
expert, referent, charisma

compromise, coercive, reward
formal, bureaucratic, influencing
referent, compromise, bureaucratic
123. Which conflict resolution method is preferred when one of the parties has become
angry or belligerent?
a.
b.
c.
d.
24
problem solving
withdrawing
forcing
compromising
124. A buyer is most likely to award a Cost Plus Incentive Fee contract to a seller under
which of the following conditions ______.
a.
b.
c.
d.
scope is well defined and you are entering into stable production
scope is well defined and you are entering into limited production
scope is not well defined and you are conducting exploratory research
scope is not well defined and you are conducting applied research
125. Which of the following is not a component of Abraham Maslows Hierarchy of

Needs?
a.
b.
c.
d.
expectancy
social
self-esteem
self-actualization
126. The most common causes of conflict in a project environment include ______.
a.
b.
c.
d.
personalities, project priorities, quality

personalities, schedules, project priorities
schedules, project priorities, resources
cost, personalities, schedules
127. J & M Electronics has been selected to install an updated security system that
complies with current legal requirements. The customer is a care-provider called Rest
Easy Elderly People (REEP). The contract includes a provision that requires J & M to
pay a penalty of $3,000 per day for every day beyond the agreed completion date of
June 30th. This contractual provision is an example of ______.
a.
b.
c.
d.
liquidated damages
implied warranty
backcharge
constructive change
128. Calculating the expected monetary value of a specific project risk is done by
______.
a.
b.
c.
d.
using decision analysis

subtracting the risk impact from the amount of management reserve
multiplying the risk probability by the risk impact
estimating the value of the associated workaround plan
25
129. Sensitivity analysis is one of many possible methods to identify potential risks.
Which of the following is an advantage of sensitivity analysis?
a.
b.
c.
d.
It makes the team feel involved and therefore promotes buy-in.

It provides statistically independent choices.
It provides a range of possible outcomes.
It provides a qualitative dimension to the risk assessment.
130. Administrative closure for the feasibility phase of a project requires that ______.
a.
b.
c.
d.
the phase has satisfied all requirements

lessons learned are implemented
phase results are verified and documented
project feasibility has been established
131. You have been assigned to an especially important medical research project in
the southwestern region of your hospital consortium. The project is tackling a rather
uncertain and developing technology. The project is large in size and is quite important
in the ten-year strategy for your consortium. Your key sponsor recently expressed
concern that the team needed to be really committed to the success of this effort. Which
organizational structure would best meet the needs of this project?
a.
b.
c.
d.
technical
functional
matrix
projectized
132. Who is responsible for making sure the message is clear, unambiguous, and
complete?
a.
b.
c.
d.
project manager
sender
receiver
both sender and receiver
133. When the issues are extremely important to both parties, the most effective
method for conflict resolution is ______.
a.
b.
c.
d.
26
forcing
compromise
smoothing
problem solving/confronting
134. The literature on leadership styles refers to which three basic approaches?
a.
b.
c.
d.
formal, directive, and laissez-faire

autocratic, expert, bureaucratic
integrated, directive, and democratic
autocratic, laissez-faire, and democratic
135. You are working on a new project in your organization. Your companys staff can
easily meet some of the project requirements but do not have the expertise to handle
several of the key requirements. You are aware of other companies that specialize in
some of the areas where you lack internal capability. As part of plan procurement
management, your first step should be to ______.
a.
b.
c.
d.
conduct a market survey

conduct a make-or-buy analysis
solicit proposals from prospective suppliers using an RFP
consult your qualified seller list and send an RFP to appropriate suppliers
136. For the past several weeks, two of your team members have been arguing about
which software development program will meet the needs of your project. You need to
make a decision and you are also sick and tired of listening to them. You decide to hold
a meeting to seek consensus by emphasizing any common points of agreement to
come to a fair resolution. You are using which form of conflict resolution?
a.
b.
c.
d.
problem solving
smoothing
withdrawing
compromising
137. You have a large volume of information that may be needed by different parties at
different times. Which communication method is most suited to this situation?
a.
b.
c.
d.
interpersonal
push
efficient
pull
27
138. Research at your company has finally caught up with futuristic concepts portrayed
in the greatest science fiction epic of our time, Star Trek. Yes, you are actually
achieving success with human transporter devices. At the last project meeting, held at
a secret location, a representative from the marketing department indicated that reliable
intelligence data indicate that a competitor is near completion of a similar product.
Suddenly the schedule has become of paramount importance. Worse yet, you are
forced to remind the team that because of resource limitations at the outset, the project
was planned using resource leveling. Now that you need to race a competitor to
market, you desperately need to bring the resource leveled schedule back in line with
the original schedule, if possible. Which of the following tools will help you in this
endeavor?
a.
b.
c.
d.
a reward and recognition system

resource manipulation
reverse resource allocation
crashing
139. Your team is working on a highly dangerous infrastructure rehabilitation project in

an undisclosed country that has experienced significant violence between rival political
factions. During the fifth month of your project, civil conflict erupts over the murders of
key people on both sides of the countrys internal conflict. The violence begins to
escalate and a decision is made to stop the project and send your team home
immediately. How should you handle a risk of this type?
a. intense up-front risk management planning with continual reviews throughout
the projects life cycle
b. periodic risk reviews or audits
c. disaster recovery actions rather than risk management
d. a risk repository that serves as the basis for the risk portion of a lessons
learned database
140. Your experience has been primarily with federal government projects and you
have noticed that additional funds tend to become available near the end of each fiscal
year. These funds have proven useful in handling desired changes in project
requirements. However, you also have learned that a cost change control system is
needed to handle these situations effectively. The purpose of this cost change control
system is to ______.
a.
b.
c.
d.
28
determine whether a budget update is required

determine why a cost variance has occurred
define the procedures by which the cost baseline may be changed
define when contingency funds should be used
141. Your company is hiring a project engineer. Yesterday, your boss intervened in the
evaluation process and influenced the committee to hire a candidate that turned out to
be his nephew. No further consideration was given to equally qualified candidates.
This action violates standards of conduct associated with ________.
a.
b.
c.
d.
honesty
respect
fairness
responsibility
142. Which of the following statements about a responsibility assignment matrix (RAM)
is true?
a.
b.
c.
d.
Also called a RACI chart, only one person should be responsible.

Also called a RACI chart, only one person should be accountable.
A RAM shows the timing of the identified tasks.
A RAM is created as part of Acquire Project Team.
143. Which of the following statements about management reserve are true?
i. Management reserve is intended to reduce the chance of a cost overrun.
ii. Management reserve funds may be used to fund work not originally
authorized for the project.
iii. Management reserve funds may be used to fund unforeseen problems.
a.
b.
c.
d.
i & ii
i & iii
ii & iii
i, ii, & iii
144. If a project has a 70% chance of a $100,000 profit and a 30% chance of an
$80,000 profit, the expected monetary value for the project is a ______.
a.
b.
c.
d.
$180,000 profit
$ 100,000 profit
$ 94,000 profit
there is insufficient information to answer the question
29
145. Sigmund Ford is having a heated debate with Frederick Young about the best
method for displaying a schedule network diagram. Frederick has indicated that arrow
diagrams are the best way to show a schedule. Sigmund maintains that precedence
diagrams allow flexibility in the choice of dependencies and are able to deal more
effectively with lag times in the schedule. Sigmund also challenged Frederick to name a
software program that uses arrow diagrams. Another reason that many project
managers prefer precedence diagrams over arrow diagrams is that they ______.
a.
b.
c.
d.
handle a large number of activities better

simplify scheduling by avoiding overlapping activities
do not require dummy activities
allow the project manager to identify the critical path
146. Which of the following are the obligations for professional conduct as stated by the
PMI Code of Ethics and Professional Conduct?
a.
b.
c.
d.
loyalty, sensitivity, fairness, and teamwork

responsibility, respect, fairness, and honesty
fairness, honesty, cooperation, loyalty
respect, fairness, honesty, cooperation
147. According to current quality management thinking, which of the following

approaches is least likely to produce quality improvements?
a.
b.
c.
d.
increased inspection
quality audits
process improvement plans
statistical quality control
148. Which process and tool provide a means to rank the importance of each
stakeholder?
a.
b.
c.
d.
Identify Stakeholders; Stakeholder Analysis

Identify Stakeholders; Expert Judgment
Manage Stakeholder Engagement; Analytical Techniques
Manage Stakeholder Engagement; Stakeholder Analysis
149. Employees who believe their efforts will lead to effective performance and who
also believe they will be rewarded for their accomplishments will stay productive as long
as the rewards meet their expectations. This statement illustrates ______.
a.
b.
c.
d.
30
Theory Z
expectancy theory
requirements-rewards matrix
hygiene factors
150. If the project is experiencing increasing levels of conflict due to poor

communication, which of the following is most likely to improve the situation?
a.
b.
c.
d.
encouraging the team to socialize outside of work

scheduling project status meetings early in the morning
installing the latest version of the automated scheduling tool used by the team
scheduling an off-site team building workshop
Note: Use the following figure to answer questions 151 through 156!
Figure 1: Schedule
A
4d
E
4d
C
3d
G
6d
Start
B
7d
End
D
5d
F
4d
C. Michael Farr
151. Using the schedule in Figure 1, what is the expected duration for the project?
a.
b.
c.
d.
17 days
18 days
20 days
22 days
152. Which tasks are on the critical path?

a.
b.
c.
d.
A, C, E, G
B, C, E, G
B, D, G
B, D, F, G
31
153. What is the float at task D?

a.
b.
c.
d.
zero days
two days
five days
minus four days
154. Which of the following tasks has free float?

a.
b.
c.
d.
Task A
Task B
Task D
Task G
155. What is the early finish for task F?

a.
b.
c.
d.
8 days
10 days
12 days
16 days
156. You have just been told that you must reduce the total project duration by three
days. Your boss is a PMP and says she wants you to use crashing to achieve the
schedule reductions. Using Figure 1 and the data provided below, which tasks would
you need to crash in order to achieve the required schedule reduction?
Task
Normal Time
Crash Time
A
B
C
D
E
F
G
4 days
7 days
3 days
5 days
4 days
4 days
6 days
3 days
6 days
3 days
3 days
3 days
2 days
3 days
a.
b.
c.
d.
32
Crash Cost per

Day
$25
$40
N/A
$50
$75
$25
$100
A, F
G
B, D
B, E, G
157. Robbie, Charlie, and Allison are project managers at a major petrochemical
company and they have formed a study group to help prepare for the PMI certification
exam. At their last lunch meeting, Robbie and Charlie were not sure what free float
meant. Allison indicated that free float is ______.
a. how long a task can be delayed without causing the project to be late
b. how long a task can be delayed without delaying the start of any immediate
successor tasks
c. allowing critical resources to float where needed to smooth out the critical path
d. moving tasks into other time periods to resolve resource limitations
Note: Use Figure 1 above and the data provided below to answer questions 158
through 162.
Task
A
B
C
D
E
F
G
Total
Planned
Value
$200
$300
$500
$400
$1000
$500
$800
Planned Value
After 14 Days
Earned Value
Actual Cost
$200
$300
$500
$400
$1000
$500
$0
$200
$300
$400
$300
$800
$500
$0
$250
$300
$400
$350
$800
$600
$0
158. Fourteen work days have elapsed for the project shown above in Figure 1. Using
Figure 1 and the data given above, use earned value analysis to calculate the cost
variance for the overall project. All data are based on what has happened after the first
fourteen days.
a.
b.
c.
d.
CV = - $200
CV = +$200
CV = $1200
CV = - $400
159. Using the same data as above, interpret the cost and schedule status of the
project at this point.
a.
b.
c.
d.
cost underrun and behind schedule

cost overrun and ahead of schedule
cost underrun and ahead of schedule
cost overrun and behind schedule
33
160. Given the status thus far, what is the total cost of the project expected to be when
it is completed (assume current variances will be typical of remaining performance)?
a.
b.
c.
d.
approximately $3425
exactly $3700
approximately $4000
approximately $4300
161. If your organization believes a project is within acceptable boundaries as long as

cost and schedule performance are within plus or minus 10 percent of the plan, how is
this project doing?
a.
b.
c.
d.
Cost performance is acceptable but schedule is out of prescribed limits.

Cost performance is outside of limits but schedule performance is okay.
Both cost and schedule performance are outside of normal limits.
Both cost and schedule performance are acceptable.
162. What percent of the original budget has been spent thus far?
a.
b.
c.
d.
approximately 68% of the budget has been spent

163. Using the data given below, which task has the least float?
Task
A
B
C
D
a.
b.
c.
d.
Early Finish
5
5
8
10
Late Finish
5
8
12
5
A
B
C
D
164. Using the same data given in question #163, which task has the most float?
a.
b.
c.
d.
34
A
B
C
D
165. Using the data again from question #163, which task is most likely on the critical
path?
a.
b.
c.
d.
A
B
C
D
166. You are convinced that effective delegating of project tasks will improve
productivity and team morale. However, you also believe that ________ should not be
delegated.
a.
b.
c.
d.
monitoring the work of your most crucial subcontractor

performance of tasks on the critical path
pay and hiring
risk identification
167. The company is taking a vote to see if the contracting department should be split
up and reassigned to many projects or remain intact. A contract professional might not
want this to occur because they would lose _________ in a decentralized contracting
environment.
a.
b.
c.
d.
standardized company project management practices

loyalty to the project
a clearly defined career path
expertise
168. Which type of organization is least suited for managing complex projects involving
cross-disciplinary efforts?
a.
b.
c.
d.
projectized
matrix
line
functional
169. Which step in your approach to human resource management should first
consider training needs?
a.
b.
c.
d.
staffing management plan

organization chart
acquisition
interpersonal skills
35
170. Which of the following is a tool for Plan Procurement Management?

a.
b.
c.
d.
make-or-buy decisions
bidder conferences
statement of work
171. The lowest level of the WBS is called a ___________ and has the following
characteristics: _______ and _______.
a.
b.
c.
d.
task, duration estimate, responsibility assignment

activity, duration estimate, responsibility assignment
work package, responsibility assignment, assignment to a cost account
work package, duration estimate, primary stakeholder
172. Which of the following accurately describes a project charter?

a.
b.
c.
d.
provides a project schedule and budget

authorizes funding to begin work on the project
describes the company vision and names the team members of a project
authorizes the project manager to expend resources to accomplish a
particular business objective
173. You just received the latest deliverable on the in-store, real-time inventory
upgrade project. Project completion is scheduled in three weeks. A quick test revealed
that the deliverable is defective and does not perform as needed. If you fail to demand
a correction in a timely manner, you have effectively provided a ________.
a.
b.
c.
d.
breach of contract
warranty
waiver
backcharge
174. The matrix organizational structure ______.

a. is used to manage multiple projects simultaneously when the organization
does not have the resources to staff each individual project on a full-time
basis
b. ensures less conflict when compared to other organizational structures
c. is used when an organization decides to undertake a single, large project
d. allows a stronger focus on cost and schedule objectives than other
organizational structures
36
175. You are managing a team consisting of some of the best technical experts in the
world. Which management style may be most appropriate for this high-knowledge
group?
a.
b.
c.
d.
directive
laissez-faire
autocratic
democratic
176. The Tuckman ladder of team development identifies the stages that teams
experience as they are formed and work together. Those stages are ______.
a.
b.
c.
d.
forming, storming, norming, performing, and adjourning

forming, norming, adjusting, performing, and adjourning
forming, planning, performing, and adjourning
forming, norming, performing, and adjourning
177. As a program manager for numerous European water improvement projects, you
have noticed lately that certain problems have begun to plague your efforts. You decide
to choose a technique that will help a strategically chosen group of experts stimulate
their thinking and discussion of the likely causes for these problems. You should use
a/an ______.
a.
b.
c.
d.
Tornado Diagram
Decision Tree
Ishikawa Diagram
Pareto Chart
178. You have been assigned as the lead negotiator for a rather urgent situation. The
other party shares an equal power base and is committed to a different solution. The
issues involved are complex and leaders in both organizations have expressed the
need for some expedient solution, even if it is only temporary. You have decided that
_________ is the most appropriate conflict resolution technique, however, you are
concerned that the long-term result might be a __________ outcome.
a.
b.
c.
d.
forcing; win-lose
withdrawal; lose-win
smoothing; lose-win
compromise; lose-lose
179. The risk register is an input to which of the following processes?

a.
b.
c.
d.

Control Quality
37
180. As an experienced project manager, you personally believe that managing the
human side of projects is crucial to your overall success. You are aware that the project
management process for manage project team involves tracking team performance,
providing feedback, and resolving issues. Which of the following is not a tool of
manage project team?
a.
b.
c.
d.
observation and conversation

performance appraisals
conflict management
ground rules
181. You are the project manager for a major renovation of the Las Vegas Oasis hotel.
After several intense negotiating sessions, you have agreed on the following contract
terms: the contract will be a fixed price incentive fee (FPIF), the target cost will be $100
million, the target profit will be $20 million, the share ratio will be .75/.25, and the ceiling
price will be $150 million. You know that there is a point at which the contract incentive
stops and all additional costs come entirely from the contractors profit. This concept is
known as the point of total assumption (PTA). What is the PTA for this contract?
a.
b.
c.
d.
$120 million
$140 million
$150 million
PTA does not apply to an FPIF contract
182. If the final, actual cost of the Oasis project from question #181 was $80 million,
what contract price would the customer pay? Assume that no changes were made to
the agreement described above.
a.
b.
c.
d.
$ 95 million
$100 million
$105 million
$120 million
183. If the final, actual cost of the Oasis project from question #181 was $120 million,
what contract price would the customer pay and what would the sellers profit be?
Assume that no changes were made to the agreement described above.
a.
b.
c.
d.
38

184. You are leading a multinational project involving your country (Germany) and five
other countries on three continents. The current phase, for validating the key
technology, is operating under a CPIF (cost plus incentive fee) contract with the
following terms: target cost is $100 million, target profit is $25 million, the share ratio is
.50/.50, the maximum fee is $35 million, and the minimum fee is $15 million.
If the final cost of the phase is $116 million, what price will the customer pay?
a.
b.
c.
d.
$116 million
$120 million
$125 million
$133 million
185. You are just finishing the first month of the contract to supply new uniforms for all
basketball referees throughout the NCAA (National Collegiate Athletic Association).
You are about to review earned value data to verify whether, as the contractor claims,
the project is on track. The data show that the CPI is 0.94 and actual costs are
$50,000. Given these data, what is the earned value?
a.
b.
c.
d.
$47,000
$50,000
$53,191
there is not enough information to determine the earned value
186. The CPI on the NCAA uniform project is 0.94 and you have calculated the EAC as
$319,148.94 (you assumed current variances will be representative of future
performance). What was the original budget (BAC) for the project?
a.
b.
c.
d.
$339,520.14
$319,148.94
$300,000
there is not enough information to determine the budget at completion
187. You just assumed the PM role for a project with numerous potential risk variables.
The project includes international partners and the steering committee has tasked you
to examine and compare the relative importance and impact of variables that may have
high uncertainty versus those that may be more stable. You have decided to use a
______.
a.
b.
c.
d.
Ishikawa Diagram
Tornado Diagram
Decision Tree
Log-Normal Distribution Diagram
39
188. You are a brand new project manager with a total of six months of experience in
the information technology industry. You were given your first project to run on your
own (no mentor or coach) and the project is somewhat risky. You are concerned about
accurate planning data for the schedule and budget and you expressed your concerns
to an experienced colleague yesterday. She mentioned that you might consider using
PERT. You were too embarrassed to ask her what PERT stands for but, after looking it
up, you now know that PERT stands for ______.
a.
b.
c.
d.
Program Evaluation Review Technique

Procurement Evaluation Review Technique
Project Evaluation Requirements Tool
Proposal Evaluation Risk Tool
189. Shinobu Sugiyama is the project manager for the design and installation of three
fire and safety alarm systems in Nagasaki, Japan. Shinobu can either rent or lease a
key piece of equipment needed for the job. Given the following information, how many
days would the equipment need to be used before the costs of the two choices would
be the same?
Maintenance costs
Daily operating costs
Rental costs
a.
b.
c.
d.
Rent
$0
$0
$160 per day
Lease
$3200 per year
$80 per day
$0
30 days
35 days
40 days
45 days
190. Arnold Terminator Schwartz has the reputation for being hard on project
managers who present status reports to him during weekly meetings. Arnold just
completed a one-day seminar sponsored by the Project Management Institute and now
thinks he is an expert on the PMBOK Guide. Yesterday, he quizzed you about which
of the following was an output of control procurements. You answered ______.
a.
b.
c.
d.
40
contract change control system

inspections and audits
191. You are so new to project management that you are still referred to as Rookie.
You need to know more about the product your project is supposed to deliver. An
experienced colleague told you that there is a document that describes the precise
requirements, design, behavior, and other characteristics of a system, component,
product, result, or service. The document you need is a _______.
a.
b.
c.
d.
Request for Proposal (RFP)

Specification
Statement of Work (SOW)
Statement of Objectives (SOO)
192. You are leading a new project to develop a breakfast cereal that will be less filling,
have outstanding taste, and improve memory function in the average human being by
15%. The cost estimate for the next phase came in at $100,000 with the caveat that
actual outcomes could range from $90,000 to $125,000. What kind of estimate is this?
a.
b.
c.
d.
Rough Order of Magnitude (ROM)

Order of Magnitude
Budget
Definitive
193. Tasks A, B, and C have durations of 8, 5, and 7 days respectively and are
performed in sequence using finish-to-start dependencies. Task D has a duration of 8
days and a finish-to-finish dependency with Task A. Task E has a duration of 14 days
and has a finish-to-start dependency with Task D. What is the late finish for Task A and
Task D?
a.
b.
c.
d.
Task A = 22 & Task D = 22

194. You are leading the effort to submit a proposal on a production contract for a
revolutionary device that is intended to improve the productivity and morale of workers
in a variety of industries who drive long distances, make long international flights, or just
simply work long hours in uncomfortable seats. You are concerned that your labor rates
may be too high and you have been asked to identify ways to reduce costs. Which
recommendation would be the best to present to management at your next meeting?
a. Use existing labor rates combined with a value engineering program to lower
overall costs.
b. Reduce labor rates so they match the competition and pay any extra costs
from another project budget.
c. Substitute newly hired staff with lower labor rates if you win the bid.
d. Use a technique you recently learned about called crashing the project.
41
195. You are kicking off a complex project that seems to have numerous loops and
conditional branches. A more experienced colleague recommended a technique that is
not used as much as traditional network diagrams but is capable of dealing with your
situation. Which of the following did he recommend?
a.
b.
c.
d.
PERT
GERT
VERT
QWERT
196. Your division Vice President has placed you in charge of preparing a ballpark
guesstimate for an upcoming project. You have been given 36 hours to be ready with
the estimate which will then be used to support a project go or no-go decision. Which of
the following techniques should you consider and what approximate range of accuracy
do you expect?
a.
b.
c.
d.
Order of Magnitude estimate with - 25 to + 25 percent accuracy

Analogous estimate with - 50 to + 50 percent accuracy
Order of Magnitude estimate with - 25 to + 75 percent accuracy
Budget estimate with - 10 to + 25 percent accuracy
197. You have been a project manager for 10 years, a program manager for 3 years,
and were just assigned to a portfolio management team. Such a team would be most
involved in which of the following activities?
a.
b.
c.
d.
Portfolio managers monitor and control work results.

Portfolio managers manage programs and project managers.
Portfolio managers measure success by extent of customer satisfaction.
Portfolio managers ensure that project objectives align with the strategic goals
of the organization.
198. You are looking for some insights that would help you understand and manage
team members more effectively. Specifically, you want to know more about peoples
varying needs for success and power. You should read up on which of the following?
a.
b.
c.
d.
42
Maslows Hierarchy of Needs

McClellands Needs-Achievement Index
Myers-Briggs Needs Indicator
Ishikawa Needs Chart
199. Two of your best team members are experiencing some interpersonal issues. Ted
is very task and schedule driven. He uses a daily to-do list and becomes upset when
deadlines are missed. He expects others to engage in serious planning meetings.
Kristen is the very definition of flexible and spontaneous. She has a lot of excellent
ideas and love to initiate action on those ideas. She has a tendency to get distracted
and not meet previously agreed deadlines. You are reminded of the Myers-Briggs
model and decide to use it as a guide to understanding the issues. Ted is characterized
by the preference known as ________ and Kristen is characterized by ________.
a.
b.
c.
d.
Judging; Intuitive
Sensing; Perceiving
Judging; Perceiving
Sensing; Intuitive
200. The latest hurry up and wait project in your company is in its third month and you
are calmly at the helm as the second project manager for this doomed endeavor. Your
team is working feverishly to acquire accurate and timely performance data and you
think that you are close to understanding the real status of the work. The latest earned
value data just arrived and show that the CPI is .88, the SPI is .82, the percent complete
is approximately 40%, and the ETC is $2.5 million. Which is the most likely explanation
for this status?
a.
b.
c.
d.
A key resource went out on emergency sick leave two weeks ago.
The cost of fuel dropped by 10 percent.
It took three days for concrete to cure.
New York Stock Exchange values rose by 5 percent last month.
43
44
Answer Sheet #1
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
33.
34.
35.
36.
37.
38.
39.
40.
41.
42.
43.
44.
45.
46.
47.
48.
49.
50.
51.
52.
53.
54.
55.
56.
57.
58.
59.
60.
61.
62.
63.
64.
65.
66.
67.
68.
69.
70.
71.
72.
73.
74.
75.
76.
77.
78.
79.
80.
81.
82.
83.
84.
85.
86.
87.
88.
89.
90.
91.
92.
93.
94.
95.
96.
97.
98.
99.
100.
101.
102.
103.
104.
105.
106.
107.
108.
109.
110.
111.
112.
113.
114.
115.
116.
117.
118.
119.
120.
121.
122.
123.
124.
125.
126.
127.
128.
129.
130.
131.
132.
133.
134.
135.
136.
137.
138.
139.
140.
141.
142.
143.
144.
145.
146.
147.
148.
149.
150.
151.
152.
153.
154.
155.
156.
157.
158.
159.
160.
161.
162.
163.
164.
165.
166.
167.
168.
169.
170.
171.
172.
173.
174.
175.
176.
177.
178.
179.
180.
181.
182.
183.
184.
185.
186.
187.
188.
189.
190.
191.
192.
193.
194.
195.
196.
197.
198.
199.
200.
45
48
Simple Answer Key: Comprehensive Exam #1
Answer
1. d
2. a
3. d
4. b
5. a
6. a
7. c
8. d
9. b
10. c
11. d
12. b
13. c
14. d
15. d
16. a
17. c
18. a
19. a
20. b
21. c
22. a
23. d
24. c
25. d
26. b
27. a
28. a
29. d
30. c
31. a
32. d
33. d
34. c
35. a
36. d
37. d
38. b
39. b
40. d
41. a
42. a
43. c
44. d
45. a
46. b
47. c
48. d
49. a
50. a
Answer
51. a
52. d
53. d
54. c
55. a
56. a
57. c
58. a
59. a
60. b
61. a
62. a
63. b
64. b
65. a
66. b
67. b
68. a
69. c
70. a
71. d
72. d
73. b
74. d
75. a
76. c
77. a
78. b
79. b
80. a
81. d
82. c
83. a
84. d
85. d
86. a
87. d
88. a
89. c
90. d
91. b
92. c
93. b
94. b
95. a
96. d
97. b
98. a
99. c
100. a
Answer
101. c
102. b
103. d
104. a
105. b
106. b
107. a
108. b
109. a
110. c
111. b
112. c
113. b
114. a
115. c
116. c
117. b
118. d
119. d
120. b
121. c
122. a
123. b
124. d
125. a
126. c
127. a
128. c
129. c
130. c
131. d
132. b
133. d
134. d
135. b
136. b
137. d
138. d
139. c
140. c
141. c
142. b
143. b
144. c
145. c
146. b
147. a
148. a
149. b
150. d
Answer
151. c
152. b
153. b
154. a
155. c
156. d
157. b
158. a
159. d
160. c
161. a
162. d
163. d
164. c
165. d
166. c
167. d
168. d
169. a
170. c
171. c
172. d
173. c
174. a
175. b
176. a
177. c
178. d
179. a
180. d
181. b
182. c
183. b
184. d
185. a
186. c
187. b
188. a
189. c
190. d
191. b
192. c
193. d
194. a
195. b
196. c
197. d
198. b
199. c
200. a
49
50
Detailed Answer Key: Comprehensive Exam #1

No.
Answer
Slides
Note
5-63
See output #2, Change Requests. Bottom-up cost estimating is part

of cost management (not scope).
4-41
See the note at the bottom of slide 4-41.
9-30
The team has just moved from storming to norming.
4-57
See customer satisfaction: Needs analysis precedes requirements

definition. If the needs assessment is faulty, the requirements will
also be faulty.
4-31
10-27
PMI recognizes three major types of reports: status, progress, and

forecasts (covered in the integration and communication units).
4-8
The PM should be assigned as early as is feasible but not later than

the start of planning.
11-59
As a tool of Control Risks, risk reassessment tracks whether new

risks have emerged and also tracks the disposition of identified risks
(did they actually occur or not).
4-8
4-12
A project charter is used to formally authorize a new project or the

next phase of a project.
6-87
See output #2, project schedule. Hammock activities are often used
as part of bar charts (Gantt charts) to summarize a series of
interdependent work packages.
10
5-36
Work packages are tasks at the lowest level displayed in the WBS.
11
12-25
12-26
FFP places the greatest cost risk on the contractor (seller) but also
offers the maximum profit potential. Its classic utility theory:
maximum reward for maximum risk incurred.
12
4-10
The business case is an input to Develop Project Charter. It includes

a description of the business need and the cost-benefit analysis that
justifies the investment.
13
5-40
See output #1 scope baseline, WBS, bullet #2. Cost accounts are
also called control accounts. They are categories of work in a WBS,
are the lowest level at which organizational responsibility is assigned,
and represent management control points.
14
7-47
to
7-49
See tool #1, earned value management. Indexes less than one
indicate bad news (cost overrun and behind schedule) and indexes
greater than one are good news (cost underrun and ahead of
schedule).
15
2-7
2-8
See guidelines for ethical conduct. Under the rules for fairness: Do
not allow conflicts of interest to harm anyone's legitimate business
interests. However, you have the right to use your knowledge and
experience.
51
No.
Answer
Slides
16
8-43
See tool #2, statistical sampling. With greater conformance (fewer

defects), sampling could be employed more aggressively and,
therefore, reduce the cost of quality control.
17
5-18
Also see p. 5-6 in the reference manual. See tool #3, facilitated
workshops, bullet #2, quality function deployment.
18
8-23
The Rule of 7 provides a heuristic-style guideline for investigating

possible problems whenever a control chart shows specific trends
even though the outcomes are within the control limits.
19
8-9
PMI provides high emphasis on the idea that quality must be planned
in, not inspected in. Similarly, money spent on costs of conformance
is preferred over money spent on costs of non-conformance (fixing
defects)
20
8-14
Prevention and appraisal costs are associated with costs of

conformance (preventing defects). Failure costs are part of the cost
of nonconformance.
21
6-76
6-81
See tool #7, schedule compression. Fast tracking moves more work
into parallel which means some of the work must be performed in
different time periods. In turn, this requires reassignment of people
into different time periods.
22
4-54
See MBO (objectives identified jointly with management and

employees working together).
23
9-51
See motivation theory #5, McClellands Trichotomy of Needs, Need

for Affiliation.
24
9-60
See item #4, productivity (output produced per unit of input, such as
hours of labor).
25
8-19
Pareto Charts are vertical bar charts with the tallest bar on the left.
Other bars decline in descending order to the right. The bars identify
the number of defects attributed to a specific cause. Typically, 80%
of defects are caused by only a few sources and this knowledge
guides corrective actions to the most productive areas.
26
N/A
General knowledge and logic. PMI has sometimes asked questions

with no specific reference; just basic logic. Notice that choice b refers
to shareholders, not stakeholders.
27
10-17
See other notes for the exam, item #2: verbal communication is the
best way to conduct brainstorming when working on a complex
problem.
28
5-14
Choice b: an input, not a tool. Choice c: not a tool for Collect

Requirements. Choice d: an output, not a tool.
29
10-40
See effective team communication: make meetings effective.
30
10-17
See sender responsibilities: ensure information is clear and

complete, and confirm receivers understanding.
31
11-64
11-65
See basic principles of probability theory.
52
Note
No.
Answer
Slides
Note
32
11-37
See the description of a tornado diagram under the heading of

sensitivity analysis.
33
11-4
See risk factors (event, probability, amount at stake).
34
9-12
Never more than one person should be assigned accountability for a

single task. This avoids confusion.
35
11-7
The sequence laid out by PMI is planning, identification, qualitative

and quantitative analysis, response planning, and controlling (choice
a).
36
12-5
Choice a: Early termination is handled as part of close procurements.

Choice b: Disputed changes are handled as part of control
procurements (also there is no procurement process called manage
procurements). Choice c: Progress payments are handled during
control procurements. Choice d: Is correct; conduct procurements is
aimed at awarding a legally binding contract.
37
12-19
12-26
CPIF contracts are for applied research to develop a new product.

However, the work is still risky and might not work out as hoped.
CPIF also provides a guaranteed fee of a certain amount (called
minimum fee).
38
7-74
7-75
The formula for ROI is (Revenue-Cost)/Cost. It is an accepted

practice to substitute cost savings for revenue if the project is aimed
at cost savings from an improved process or product. Using that
logic: Project 1 ROI = (Cost savings-Cost)/Cost = (1.6 mil-1.1 mil)/1.1
mil = .5 / 1.1 = .4545 or 45.5%. Project 2 ROI = (1.95 mil-1.5 mil)/1.5
mil = .45 / 1.5 = .30 or 30%. Conclusion: Project 1 has a better ROI.
Both projects save more than they cost but the return on Project 1 is
better.
39
12-67
See p. 12-20 in the reference manual. Standard contract clauses are

less costly to develop and they reduce the chance of legal disputes.
40
12-44
See tool #7, a major objective of a contract negotiation is to get a fair

and reasonable price.
41
4-2
Choice b: Control Scope is incorrect. Choice c: Collect Requirements

is incorrect. Choice d: Create WBS is incorrect. The integration
management processes are: develop project charter, develop project
management plan, direct and manage project work, monitor and
control project work, perform integrated change control, and close
project or phase.
42
2-32
13-20
13-23
The greatest opportunity for any stakeholder to influence project

outcomes is during the earliest stages of the project. The role of the
sponsor is especially important in getting the project off to a
successful start.
43
4-49
Identifying that changes are needed is a different process (integrated

change control).
44
7-68
See other topics, payback period.
53
No.
Answer
Slides
45
5-24
5-30
The scope statement is an agreement that documents what is

contractually within scope. It also provides a foundation for future
project decisions (slide 5-30).
46
7-42
to
7-57
See tool #1, earned value management. EVM does not directly
address technical performance, however, it does provide information
for choices a, c, and d.
47
5-36
5-39
See tool #1, decomposition. One guide is to decompose work to a

level at which it can be accurately estimated.
48
5-36
5-39
5-40
See tool #1, decomposition. Decomposition improves ability to plan,

manage, and control the project. One important use of the WBS is to
improve estimates (slide 5-45).
49
8-18
See tool #3a, cause and effect diagram. You must be aware that a
cause and effect diagram is also called an Ishikawa Diagram.
50
7-48
SPI = EV / PV. EV is 50% of $1,000,000 or $500,000. PV was given

as $500,000. Therefore, the SPI is 1.0, indicating that you are
exactly on schedule.
51
2-18
Also see the table in the reference manual on p. 2-6. The matrix
structure provides more authority for project managers and, for its
success, depends on the interaction between functional and project
managers. This question relies a bit on common sense and basic
logic.
52
11-3
Risk management involves identifying, analyzing, and responding to

risk.
53
10-13
10-14
The headcount on the team changed as follows: started with eight,

added one, and subtracted three. You ended up with 8+1-3 = 6 team
members. The last wrinkle is whether you need to count yourself for
communication purposes. PMI has asked questions where you had
to add yourself to the numbers. Read the wording carefully and if you
are unsure, try the numbers with you added and without you added
and see which answers are there. In this case, if you add yourself,
the total number of people is 7. Therefore, the number of channels is
(7x6)/2 = 21 channels.
54
9-12
See tool #1, organization charts and position descriptions. The

responsibility assignment matrix (also called simply responsibility
matrix) identifies who is to do what. Also see p. 9-4 in the reference
manual. The purpose of a responsibility matrix is to make sure work
packages have owners and work does not fall between the cracks.
55
6-71
6-72
Basic logic. Reducing the critical path (the longest path) will always
result in an earlier finish date.
56
6-76
See tool #7. The classic techniques for schedule compression are
crashing and fast tracking.
57
11-23
11-31
The fundamental activity in qualitative or quantitative risk analysis is

to estimate probability and impact for each potential risk event.
54
Note
No.
Answer
Slides
Note
58
11-54
Contingent response strategies are response plans used only when

specific events occur first.
59
12-67
Also see p. 12-20 in the reference manual: definition of specification.
60
6-76
See tool #7, schedule compression. Crashing and fast tracking are
tools for reducing project duration.
61
12-33
See output #3, procurement documents.
62
12-31
See tools for Plan Procurement Management (make-or-buy analysis,

expert judgment, market research, meetings).
63
9-12
See tool #1: To avoid confusion, a RACI chart should never show
more than one person accountable for a given task.
64
9-41
The problem with smoothing is that the real issue is not solved and it
re-emerges. The initial solution is only temporary.
65
5-32
Documented as part of the scope statement, assumptions are factors

believed to be true (without any actual proof) so that planning can be
completed.
66
11-52
See tool #1, strategies for negative risks.
67
12-13
12-15
Fixed price contracts require the seller/supplier to complete the work

for the agreed amount of money, even if they lose money.
68
12-33
See output #3, procurement documents. Also see p. 12-7 in the

reference manual. Purchase orders become enforceable
agreements when the seller ships the item requested by the buyer.
69
2-18
See p. 2-6 in the reference manual: the strong matrix is the

organizational structure with the unique advantages to meet the
demands of complex projects with the need to involve people across
multiple functions. Those words (complex with cross-functional
effort) have been in the PMI history about matrix structures.
70
7-47
7-50
The CPI establishes the trend in project performance. That trend is

then assumed to be true for the remaining work.
71
11-52
See tool #1, risk avoidance, adopt proven technical approaches.
72
9-40 to
9-42
Conflict resolution techniques include: problem solving/collaborating

(confronting), compromising, smoothing, withdrawing, and forcing.
73
5-30
Estimating durations, developing the schedule, estimating costs, and

identifying risks all have the scope statement and/or scope baseline
as an input. While the HR plan does not have the scope statement
as an input, you cannot plan for resources until you know what the
work entails.
74
13-6
See important issues in stakeholder management, bullet #1.
75
9-41
See compromise. Thomas and Kilmann indicated that a possible

outcome of compromise is a lose-lose stalemate if members of both
parties see the compromise as a sell-out in which neither party got
what they needed.
76
9-55
Delegating increases productivity and efficiency.
55
No.
Answer
Slides
77
7-42
7-45
See tool #1, earned value management.
78
6-96
See output #1, work performance information. Choices a and d: Are

about quality, not schedules. Choice c: Is used in estimating and
planning, not in controlling.
79
5-3
Also see p. 5-1 in the reference manual. Bullets #1 and #2 address

how product and project scope are measured (against the product
requirements for the product scope and the project management plan
for project scope).
80
2-31
Amount at stake is like the concept of sunk cost: The farther you
have progressed into the project life cycle, the greater the cumulative
investment will be at that point.
81
12-67
Also see p. 12-20 in the reference manual: Breach of contract.
82
11-61
See output #2, change requests, workaround.
83
8-16
8-19
See tool #3d, Pareto chart.
84
6-90
All changes follow the basic guidelines established by Perform

Integrated Change Control. Schedule changes in particular would
also follow Control Schedule guidelines.
85
11-4
Utility theory/function addresses an individual or organizations

willingness to take risk in light of the reward that is available.
86
5-58
Scope changes are controlled through the process called Control

Scope. See input #1, project management plan. The scope baseline
is referenced here and includes choice b and choice d (the WBS is a
major component of the scope baseline). Choice c is output #1, work
performance information. The charter is not directly involved in
controlling scope changes.
87
7-47
7-48
Schedule variance = BCWP-BCWS = 650,000-750,000 =

-$100,000. Cost variance = BCWP-ACWP =
650,000-800,000 = -$150,000.
88
4-41
Change control operates as a subset of configuration management.
89
2-13
Portfolios contain programs and projects chosen to help attain

organizational goals. Organizational governance and organizational
project management are overall frameworks within which portfolios
exist.
90
5-49
Validate Scope is concerned with reviewing work results, checking for

correctness, and obtaining formal acceptance.
91
11-7
11-49
Risk response planning is aimed at reducing the downside threats or

adverse events and enhancing the positive opportunities.
92
5-51
Validate scope determines whether work was completed correctly

and should be accepted. Early termination is always a possibility and
the extent of the work completed must be documented.
56
Note
No.
Answer
Slides
Note
93
2-18
Also see p. 2-6 in the reference manual. Communication stands out

as the primary issue. The matrix is believed to be the organizational
structure with the most complex information flows. In a matrix, the
project manager must work extensively with functional managers to
get things done. Communication skills are paramount.
94
8-54
See ISO 9000/9001: Requires that an organizations quality system

conform to criteria established by the ISO 9000/9001 standards.
95
12-26
Under a CPPC contract, the buyer is required to cover valid costs

and the sellers fee actually increases as more money is expended.
It is the worst contract arrangement for a buyer (from a cost and risk
perspective).
96
4-27
See output #3, change requests. See the last bullet, which warns
about such questions. Change requests should never be
automatically accepted or rejected. You also never speak with other
stakeholders before the integrated change control system has been
followed. You must understand the potential impact of the change
before discussing with other stakeholders.
97
12-16
If the scope cannot be described accurately and in some detail, fixed

price contracts are dangerous and risky for a seller.
98
4-49
Administrative closure is a major part of closing a project or phase of

a project. It requires disciplined archiving of important project
records.
99
11-65
The probability that 2 independent events will both occur is

determined by multiplying the two probabilities.
100
12-60
Both outputs to close procurements address the issue of ensuring

that the work is complete and has been signed off/documented.
101
4-52
Also see pp. 4-19 & 20 in the reference manual. Historical data are
used for estimating and planning future work that is similar in nature.
Conflict resolution is the least likely of such information.
102
12-67
Also see p. 12-20 in the reference manual: warranty.
103
2-34
Also see p. 2-25 in the reference manual (Appendix II on international

project management): The definition of culture shock. These
questions have become less likely than they once were.
104
12-59
See tool #2, procurement negotiations: Provides a means to settle

outstanding issues, claims, and disputes. This tool is part of Close
Procurements.
105
8-3 to
8-6
Quality involves meeting project requirements. Customer satisfaction

occurs when requirements are met and the product works properly in
meeting the customers needs.
106
11-52
See tool #1. Developing an alternative solution is a form of avoiding

risk. It is preferred over choices a and c which are ways to reduce
scope (not a first resort). Choice d may not make sense or be
acceptable to the customer.
57
No.
Answer
Slides
107
12-68
Also see pp. 12-21 & 22 in the reference manual. Close Project or
Phase documents completion of a project or phase and transfer of
deliverables to customers/users. Close Procurements documents
contract records and creates a complete, indexed set of contract
documentation.
108
8-3
Grade is features and functions. Choosing a lower grade to save

money is a perfectly acceptable decision. Low quality is never okay
because it means you are not meeting requirements.
109
8-7
The question describes the exact definition of quality assurance.
110
2-10
Also see p. 2-2 in the reference manual. An additional characteristic

of a project involves progressive elaboration which is also called
rolling wave planning.
111
7-58
The 0:100 rule provides no credit for work completed until it is

completely finished. Therefore, when reporting status, it is possible
to get zero credit for a task that is actually 90% complete.
112
9-49
See Herzbergs motivation model on hygiene factors.
113
11-22
Choice b: risks and triggers are not identified until after the risk
management plan has already been completed.
114
2-27
As part of enterprise environmental factors, work authorization

systems ensure the right work is done at the right time and in the
right sequence. PMI has also used the word sanctioning the work
(an alternate way of saying the work has been authorized).
115
2-20
See strong matrix. You have a lot of authority so you are either
operating in a strong matrix or a projectized structure. It is strong
matrix because your team members are borrowed from functional
managers elsewhere in the organization.
116
10-16
In the basic communication model, information is transmitted using

an appropriate medium.
117
7-19
Parametric estimates use a multiplier factor based on historical data.

Examples are almost limitless: Cost per mile, dollars per square foot,
dollars per pound, etc.
118
6-54
Also see p. 6-15, output #1, activity duration estimates. The

estimates are assumed to be statistically independent (one estimate
does not affect or determine the estimate for a different task).
119
6-71
See tool #2, critical path method. This question is about evaluating
performance. You must know the status of the critical path and you
must know the status of other project activities to draw any valid
conclusions.
120
6-53
Duration estimates are basically how many time periods an activity

will take (how many hours, days, etc).
121
13-20
13-21
See Plan Stakeholder Management, tool #3: Analytical techniques

provides a classification model to monitor desired vs. current levels of
stakeholder engagement.
58
Note
No.
Answer
Slides
Note
122
9-46
Compromise and influencing are not sources of power. They are

associated with conflict resolution and interpersonal skills,
respectively.
123
9-42
See withdrawing (used when someone has become angry and you
are concerned about damaging working relationships; take a break,
calm down, and re-engage when everyone is ready.)
124
12-16
12-26
Cost reimbursement contracts are appropriate when the scope is

difficult to define, risk is high, and costs are difficult to estimate
accurately.
125
9-47
Choices b, c, and d are levels in Maslows Hierarchy of Needs.

Expectancy is associated with a different theory: Vrooms
Expectancy Theory.
126
9-39
The top 4 sources of conflict, according to a PMI survey, are

(SPoRT) schedules, priorities, resource, and technical issues.
127
12-67
Also see p. 12-20 in the reference manual. Liquidated damages are

included as a contractual clause that provides a specific penalty if
certain conditions are not met. Often a dollars per day penalty for
being late.
128
11-38
See expected monetary value. EMV is determined by multiplying the

probability of an event by its estimated amount at stake.
129
11-37
11-38
Sensitivity analysis is often performed by employing a computer

simulation. One possible advantage is to produce a distribution or
range of possible outcomes.
130
4-49
Administrative closure must verify that the work is complete for that
phase.
131
2-21
Also see p. 2-6 in the reference manual. The projectized structure is

perfectly suited to a large, important project in which it is vital for the
team to be highly focused and committed to the success of the
project.
132
10-17
See sender responsibilities: information is clear and complete and

confirm receivers understanding.
133
9-40
See problem solving/collaborating (confronting). PMI has historically

endorsed problem solving/confronting as the preferred, most effective
way to handle conflict.
134
9-54
See leadership styles: autocratic, laissez-faire, democratic.
135
12-31
See tool #1, make-or-buy analysis.
136
9-41
See smoothing: emphasizing and building upon areas of agreement;

de-emphasizing areas of contention.
137
10-19
The pull form of communication allows people to access a large

volume of information whenever they need it.
138
6-76
Crashing and fast tracking are the two classic methods suggested by
PMI for getting the project done faster.
59
No.
Answer
Slides
139
N/A
General knowledge.
140
4-43
See input #4, OPA, cost control procedures and guidelines.

Integrated change control establishes the master plan for handling
changes of any type.
141
2-8
Under the standards for fairness, you should never hire or fire on the
basis of favoritism or nepotism.
142
9-12
Part of Plan Human Resource Management, a RACI chart should

only designate one person as accountable for a task (to avoid
confusion) and does not show timing of the work.
143
7-35
Statement ii is false, reserve is not intended for scope changes (work

not originally authorized.)
144
11-38
11-41
See tool #2, expected monetary value. (.70x100,000) + (.30x80,000)

= 70,000+24,000 = $94,000 profit.
145
6-28
Dummy tasks are required for arrow diagrams, but not for
146
2-5
The 4 obligations of the PMI Code of Ethics and Professional

Conduct are responsibility, respect, fairness, and honesty.
147
8-5
8-9
PMI has always endorsed up-front prevention and planning over

inspection. Inspection does not improve quality, it simply stops
defects from getting to the customer (hopefully).
148
13-12
13-13
The first tool in the process Identify Stakeholders is stakeholder

analysis. It provides three steps to identify and prioritize the
importance of various stakeholders.
149
9-50
See Victor Vrooms motivation theory on expectancy.
150
9-39
Also see p. 9-15 in the reference manual: Bullet #3 at the top of the
page states a PMI preference for the use of team building exercises
to address conflict.
151
6-36
6-38
The forward pass yields a total duration of 20 based on the longest

path: BCEG.
152
6-36
6-38
The longest path is BCEG, 20 days. It also has zero float.
153
6-38
Task D: early finish is 12 and late finish is 14. Float = LF-EF = 2

days.
154
6-39
6-46
EF for task A is 4 and ES for task C is 7. Therefore, task A can be

delayed 3 days with no impact upon task C.
155
6-44
EF for task F is 12 because it is finish-to-finish with task D.
60
Note
No.
Answer
Slides
Note
156
6-81 to
6-85
You must reduce the critical path by 3 days (and ensure that no other
path emerges as the critical path). Task B is the cheapest crash cost
and can be reduced by one day. Task C cannot be crashed. Task E
is the next cheapest crash cost and can be crashed by one day.
Finally, Task G is the most expensive crash cost and, while it can be
crashed by 3 days, you only need 1 to meet the new schedule. So,
you crash BEG and the new schedule becomes 17 days.
157
6-39
6-46
Free float is how long you can delay a task without delaying the start
of the immediate successor task.
158
7-47
You must add the total for the PV, EV, and AC columns. Cost
variance = EV-AC = 2500-2700 = -$200.
159
7-47
7-48
CV = -200 and SV = -400 (2500-2900). Negative variances are bad

news. Cost overrun and behind schedule.
160
7-50
EAC (variances typical) = BAC/CPI. BAC = $3700 (add total PV

column). CPI = EV/AC = 25/27 = .92592593. So, EAC =
3700/.92592593 = $3,996 (approximately $4,000).
161
7-47
7-48
CPI = .93 and SPI = EV/PV = 25/29 = .86. Cost is -7% on the low
side (CPI of 1.0 would be exactly on track). However, SPI is .86
which is 14% off track and is outside the prescribed limit.
162
N/A
See p. 1-7 in the reference manual. The percent of the budget spent
is given by AC/BAC = 2700/3700 = .73. The formula for percent
spent is also on the color coded Formula and Process Guide.
163
6-40
6-41
Float = LF-EF. Task D has float of -5 (it is behind schedule.)
164
6-40
Task C has float of 4 and is the most float available.
165
6-38
The task with the least float is on the critical path (assuming there are
no other paths with even less float.)
166
9-56
PMI recommends not delegating sensitive things like pay and hiring.
167
12-64
Decentralized procurement puts the procurement people on the

individual project teams. This gives better responsiveness to project
needs but makes it harder for procurement specialists to support
each other and share knowledge.
168
2-19 to
2-22
Also see pp. 2-5 & 6 in the reference manual: Functional silos are
the least appropriate style for managing multiple projects, especially if
they involve cross-functional expertise. Matrix management works
much better for projects requiring cross-disciplinary cooperation,
which is exactly where functional stovepipes run into trouble.
169
9-15
Training needs are first mentioned as part of the staffing

management plan.
170
12-31
See tool #1, make-or-buy analysis. Choice a: an output, not a tool.

Choice b: a tool for conduct procurements. Choice d: an output, not
a tool.
61
No.
Answer
Slides
Note
171
5-40
5-41
See Create WBS. Only choices c and d are possible answers

(lowest level is work package.) Choice c is correct; choice d (primary
stakeholder is not a formal characteristic.)
172
4-8
4-9
Choices a through c are all accomplished later in the planning

process.
173
12-67
See p. 12-20 in the reference manual. If a project manager accepts

defective work and fails to demand correction, the concept of waiver
excuses the contractor from meeting standards of performance.
174
2-20
Also see p. 2-6 in the reference manual. An advantage of the matrix

structure is the opportunity for time sharing of critical resources.
Therefore, it is possible to more easily handle multiple projects
without tying anyone up full-time on a single project. Choices b and d
are not necessarily true in any given situation. Choice c is referring
to the projectized structure.
175
9-54
See leadership styles, laissez-faire. This approach is a natural fit

when working with high-knowledge experts who do not need or
appreciate being closely managed (micromanaged).
176
9-30
The Tuckman model identifies stages that teams experience as they

begin working together.
177
8-15
8-18
See tool #3a. Ishikawa Diagram is another name for a cause and
effect diagram.
178
9-41
Also see p. 9-15 in the reference manual. Compromise represents a

back-up approach if powerful parties need some sort of solution
quickly. Thomas and Kilmann warned that this can, in some cases,
result in a lose-lose outcome.
179
8-11
See input #3.
180
9-25
9-35
Ground rules is a tool for develop the team, not manage the team.
181
12-22
PTA = [(Ceiling price-Target price)/Buyer share] + Target cost =

[(150-120)/.75] + 100 = (30/.75) + 100 = $140 mil. Note: Target price
is 120 mil (not 100 mil).
182
12-23
This type of question is worked most easily as a series of 3 steps: 1.

Calculate fee adjustment = (Target cost-Actual cost) x Seller share =
(100-80) x .25 = +$5 mil. 2. Calculate actual fee = Target fee + Fee
adjustment = 20 + 5 = $25 mil. 3. Calculate contract price = Actual
cost + Actual Fee = 80 + 25 = $105 mil.
183
12-23

Actual fee = 20 5 = $15 mil. 3. Price = 120 + 15 = $135 mil. Step
2 calculated the sellers profit at $15 mil.
184
12-20

Actual fee = 25 8 = $17 mil. 3. Price = 116 + 17 = $133 mil.
185
7-47
CPI = EV/AC. So, .94 = EV/50,000. EV = .94 x 50,000 = $47,000.

Questions 185 and 186 are algebra tricks.
62
No.
Answer
Slides
Note
186
7-50
EAC = BAC/CPI. So, $319,148.94 = BAC/.94. BAC = .94 x

319,148.94 = $300,000.
187
11-37
Tool #2, bullet #1, sensitivity analysis, tornado diagram.
188
6-80
PERT stands for Program Evaluation and Review Technique. Used

when work is uncertain and a range of estimates is better than a
single estimate.
189
7-11
Also see Unit 15 in the reference manual: Contains various

exercises on potential math questions. One of those is how to
evaluate lease vs. rent scenarios. In this case: 160 X = 3200 + 80 X,
where X = days. 80 X = 3200. X = 40 days.
190
12-54
Choices a and b are tools. Choice c is an input.
191
12-67
Also see p. 12-20 in the reference manual for the definition of

specification.
192
7-14
See range of accuracy for a budget estimate. The range provided in

the question is -10% to +25%.
193
6-36
6-37
The critical path is ADE with a duration of 22 days. Late finishes

(backward pass) are: A = 8, B = 15, C = 22, D = 8, and E = 22.
194
7-78
See value engineering (a legitimate technique for reducing costs).

Choice b is questionable if not unethical and/or illegal. Choice c
could backfire and would be unethical if you promised experienced
staff in your proposal. Choice d would actually increase costs.
195
6-101
See other topics, GERT.
196
7-14
See order of magnitude estimates.
197
2-13
See portfolios. Portfolio management links the objectives of projects

and programs to the strategic objectives of the organization.
198
9-51
See the motivation theory on McClellands Trichotomy of Needs (also

called Needs-Achievement Index.)
199
9-53
Judging people are planned and orderly. They take deadlines very
seriously. What matters is finishing tasks. Perceiving people are
spontaneous and flexible. They love to start new tasks but often let
deadlines slip and change.
200
7-47
7-48
You have a cost overrun (CPI less than one) and are behind
schedule (SPI less than one.) Choice a: logical explanation for being
behind schedule. Choice b: you have a cost overrun (the cost of fuel
decreasing would not cause that result.) Choice c: you have no
reference for how long it was supposed to take for the concrete to
cure (therefore, you cannot interpret this choice accurately.) Choice
d: has no direct link to performance on a specific project.
63
Comprehensive Exam #2
1. A fellow project manager just suggested that you do some reading on the use of
PERT as one possible way to evaluate the uncertainty in the risk on your upcoming
development project. Which of the following is an advantage of PERT?
a.
b.
c.
d.
It tends to produce more optimistic schedules.

It can evaluate the effect of loops and conditional branches in the work.
It allows the use of dummy tasks.
It can help identify schedule risk.
2. Which of the following is not a tool of Close Procurements?

a.
b.
c.
d.
Procurement audits
Expert judgment
3. You were just placed in charge of a sub-project consisting of five tasks. Tasks A, B,
and C are to be performed in sequence with finish-to-start dependencies. They have
durations of 4, 6, and 2 days respectively. Task D has a finish-to-finish dependency
with Task A (Task A is the predecessor), and Task D has a duration of four days. Task
E has a finish-to-start dependency with D. Task E has a duration of seven days. You
were also informed that resource estimates for all five tasks have been completed and
confirmed. What is the next step that must be completed to establish a schedule
baseline?
a.
b.
c.
d.
develop schedule
resource leveling
what-if scenario analysis
control schedule
4. You were recently contrasting the behavior of two key team members with a
colleague. One person prefers to work alone and seems to need breaks from large
groups to recover his energy. The other prefers to work in groups and seems to draw
enthusiasm and energy from being with others. Your colleague commented that this
situation is in line with research on the ______.
a.
b.
c.
d.
Vroom Expectancy Theory

Maslow Hierarchy of Needs Model
Herzberg Hygiene-Motivator Model
5. You are sharing project management responsibilities with the designated project
managers from five other countries. The project is developing remediation processes
for the improved quality of public drinking water. Water quality is a growing concern and
the PMs are meeting next week in Geneva to negotiate an agreement about key
technological approaches for the next phase of the project. The United States and one
European country favor the use of electro-hyperstasis as the cornerstone technology.
However, another European country as well as countries in Africa and Asia favor a
different approach. There have already been heated disagreements that threaten to
disrupt the partnership. Your boss has suggested that you do your best to focus on
areas in which there is general agreement, and try to de-emphasize the contentious
subjects. Which conflict management technique is your boss suggesting?
a.
b.
c.
d.
problem solving
smoothing
compromise
withdrawal
6. Risk has been defined as an uncertain event that, should it actually occur, may have
a positive or a negative effect on the project outcome. Which of the following concepts
describes the amount of risk that an organization is willing to accept when evaluated
against the potential reward?
a.
b.
c.
d.
utility function
expected monetary value
contingent value analysis
sensitivity analysis
7. Supporting the Close Project process, Close Procurements verifies that all work and
deliverables were acceptable. It also involves administrative record-keeping activities.
Which of the following are inputs to Close Procurements?
a.
b.
c.
d.
project management plan and procurement documents

procurement audits and procurement documentation
closed procurements and organizational process assets updates
contract file and lessons learned documentation
8. The initiating steps of the City Center Renovation project were completed last week
and approval to enter the planning phase has been received. The core project team
has, accordingly, grown from 10 members to 15 members. As the newly appointed
project manager, how many communication channels must be managed?
a.
b.
c.
d.
10
15
60
105
9. One process on your Shopping Mall Update project must produce bulbs for neon
signs with illumination of 1100 lumens. The customer has specified that the lumens
may vary from 1060 lumens (LSL) to 1140 lumens (USL). Your process has historically
produced output varying from 1050 lumens (LCL) to 1150 lumens (UCL). The first 500
bulbs were measured as follows:
Number of Bulbs
2
30
30
50
53
100
65
95
60
10
5
Lumens
1160
1145
1140
1120
1110
1100
1095
1080
1060
1055
1050
Which of the following statements is not true?

a. The data show 2 special causes which should be investigated.
b. You have produced 45 outcomes that do not meet customer requirements but
are considered normal for your current process.
c. Your process typically produces outcomes that result in rework or scrap.
d. Your process meets customer requirements.
10. You are compiling this months status report. The CPI is 0.80, the actual costs are
$1,250, and the budget at completion is $5,000. What percent of the work is complete?
a.
b.
c.
d.
80%
25%
20%
cannot be determined from the information given
11. You have negotiated a fixed price incentive fee contract with the following terms.
The ceiling price is set at $200,000; the share ratio is 80 / 20, the target cost is
$120,000, and the target profit is $40,000. What is the point of total assumption?
a.
b.
c.
d.
$320,000
$220,000
$200,000
$170,000
12. Using the data from question #11, if the contractors actual final cost was $150,000,
what price would the customer pay?
a.
b.
c.
d.
$190,000
$184,000
$166,000
13. You have decided to rank project stakeholders using a power/interest grid. For
stakeholders who are rated as high in power and high in interest, you should handle
them by ______.
a.
b.
c.
d.
keeping them informed

monitoring them
keeping them satisfied
managing them closely
14. You are negotiating an agreement that has become a bit contentious and have
discussed the possibility of using the conflict method of forcing to handle the situation.
However, one of your trusted advisors has warned you that the other party may have
more power than you thought. You have accordingly become concerned that your
negotiation could run into the problem of ________.
a.
b.
c.
d.
a stalemate
negative publicity
not adequately thinking of all of the relevant issues
failure to consider lessons learned
15. You are making an annual purchase of pencils, paper, and notebooks for
employees at your company and price is the primary concern. Which procurement
document would be most appropriate for this purchase?
a.
b.
c.
d.
RFP
Unilateral purchase order
IFB
RFQ
16. Tasks A, B, and C have durations of 12, 8, and 10 days respectively. They are
performed in sequence (A, then B, and then C) and have float of zero days. Tasks A
and D have a finish-to-finish dependency. Task D has a duration of 6 days. What is the
float, early finish, and late finish for Task D?
a.
b.
c.
d.
float = 0, early finish = 6, late finish = 6

17. You are in the planning phase of a project to improve traffic flow and safety for the
city of Austin, Texas. You have established ballpark cost and schedule estimates and
are now considering risk issues. Your team has identified its initial concerns and
analyzed the probability and impact of these potential risk events. As you determine
possible risk response strategies, which of the following is not a strategy for negative
risks?
a.
b.
c.
d.
exploit
avoid
accept
transfer
18. Which of the types of contracts has a ceiling price, share ratio, target cost, target
fee, and point of total assumption?
a.
b.
c.
d.
FPIF
CPIF
FPFF
CPFF
19. You have decided to employ the risk response strategy of transferring or deflecting
the risk. Which of the following choices is a method for transferring the risk (having
another party handle the problem)?
a.
b.
c.
d.
adopting a less complex approach

insurance
change project objectives
conduct more tests
20. You must arrange for specialized engineering support services for your project.
You know that professional services are often provided at a specified monetary rate per
hour, however, you are not sure how many hours of support will be needed. Which type
of contract is appropriate for this situation?
a.
b.
c.
d.
Cost plus award fee

Cost plus incentive fee
Time and material
Cost plus percentage of cost
21. You are planning the communication processes for a new product development
project that begins in two weeks. Which of the following would not be a tool of Plan
Communications Management?
a.
b.
c.
d.
information management systems
communication methods
meetings
22. During a meeting with key stakeholders, you discuss quality requirements for an
upcoming project. One participant suggests a strategy that calls for providing a solution
that surpasses the customers requirements. This practice is called _____ and is
considered _____.
a. quality improvement; a good practice because it positions your organization
as a better value than the competition
b. quality improvement; a bad practice because it needlessly increases costs
c. goldplating; a good practice because it positions your organization as a better
value than the competition
d. goldplating; a bad practice because it needlessly increases costs
23. You recently began a six-month upgrade project for the communication system at
the Mirage Hotel in Las Vegas. The status report at the end of the third month revealed
the following data: the original budget was $2 million, the current earned value is
$800,000, the money spent thus far is $1 million, and the planned amount of work after
three months was $1.1 million. What is the cost variance and its meaning?
a.
b.
c.
d.
-$300,000; cost underrun

-$300,000; cost overrun
-$200,000; cost underrun
-$200,000; cost overrun
24. Using the data from question #23, what is the estimate at completion? Previous
experience has shown that cost performance does not change significantly after the first
15 to 20 percent of the work is completed.
a.
b.
c.
d.
$1,600,000
$2,500,000
$2,750,000
cannot be determined from the data given
25. Your team has created a requirements management plan and a written scope
statement that has been coordinated with the customer and key stakeholders. What is
the next major scope management step that your project team must perform?
a.
b.
c.
d.
Create WBS
Validate scope
Control scope
26. You have completed the cost estimating process using the bottom-up method.
What is the next major cost management step and what is the primary output for that
step?
a.
b.
c.
d.
determine budget; cost performance baseline

control costs; cost baseline updates
performance measurement analysis; corrective action
project funding requirements; cost aggregation
27. Your project has numerous repetitive processes and you are monitoring process
outcomes using control charts. In looking at the latest report, you find that three
outcomes were above your upper control limit (UCL). This outcome is called ________
and must be ________?
a.
b.
c.
d.
a rule of seven incident; reported

a violation of the USL; corrected
a special or assignable cause; investigated
a special or assignable cause; documented as a lesson learned
28. Your team of six experts is evaluating the advisability of a particular

communications technology project. Other teams are evaluating alternative projects.
Your team has agreed that there is a 60% chance of earning a $10 million profit, a 20%
chance of earning a $5 million profit, and a 20% chance of incurring a $2 million profit.
What is the expected monetary value of this project?
a.
b.
c.
d.
$17,000,000 profit
$10,000,000 profit
$7,400,000 profit
cannot be determined from the data given
29. Managing the project team includes tracking team performance, providing
feedback, resolving issues, and coordinating changes. Which of the following is a tool
of managing the project team?
a.
b.
c.
d.
project staff assignments

human resource management plan
conflict management
30. Which human resource concept suggests that people are basically lazy and must
be managed with strong controls or they will surf the internet all day?
a.
b.
c.
d.
McGregors Theory X
Ouchis Theory Z
Goldratts Theory of Constraints
31. The PMBOK Guide includes two processes for closing out work. Close project is
part of integration management and close procurements is part of procurement
management. Which of the following is an output that is common to both close project
and close procurements?
a.
b.
c.
d.
procurement audits
closed procurements
final product transition
32. A portion of the work on your project to update the security system for a major bank
involves work that is uncertain and difficult to estimate. You have decided to try the use
of PERT to get a better idea of the range of possible durations for this work.
Accordingly, you have asked several experts to come up with three estimates (best
case, worst case, and most likely). The estimates they provided were 7 days, 19 days,
and 10 days respectively. Using PERT, what is the expected average duration for this
work?
a.
b.
c.
d.
10 days
11 days
12 days
PERT is not used for this type of estimating
33. Which of the following is not a tool of Control Quality?

a.
b.
c.
d.
control charts
scatter diagram
inspection
deliverables
34. Which of the following would not be an activity performed during the closing of a
project?
a.
b.
c.
d.
ensure that the right work is done at the right time

document project deliverables
formalize acceptance of project deliverables
document the reasons if a project is terminated before completion
35. Organizational structures do not always confer sufficient power and authority on
project managers. Which of the following are considered potential sources of power for
a project manager?
a.
b.
c.
d.
formal, reward, and laissez-faire

self-esteem, reward, and penalty
expert, reward, and referent
laissez-faire, expert, and referent
36. You have produced a written, detailed scope statement and have started the next
step, which is to create a WBS. Which of the following is a tool for creating the WBS?
a.
b.
c.
d.
requirements documentation
scope baseline
scope statement updates
decomposition
Note: Use the following figure to answer questions 37 through 40.
Figure 1: Schedule
A
4d
E
3d
C
3d
G
6d
Start
B
9d
End
D
5d
F
7d
C. Michael Farr
37. What are the late finish times for Tasks B and D?
a.
b.
c.
d.
10 and 16
10 and 14
9 and 14
9 and 16
38. What is the expected duration of the project and which tasks are on the critical
path?
a.
b.
c.
d.
27 days; B, D, F, G
21 days; B, C, E, G
21 days; A, C, E, G
22 days; B, D, F, G
39. Which activity has free float?

a.
b.
c.
d.
10
C
A
G
B
40. What is the float for Task A?

a.
b.
c.
d.
one day
six days
zero days
five days
41. Communications planning should be done early in the project life cycle and should
be reviewed on a regular basis. What is one of the most important factors in the Plan
Communications Management process?
a.
b.
c.
d.
stakeholder information needs

SWOT analysis
communication skills
42. Project management processes are organized into five process groups. They are
fundamental building blocks in the conduct of project management. Which of the
following statements about process groups is incorrect?
a. The process groups occur in all phases of a project.
b. Process groups may be iterative in that feedback may cause certain process
groups, or portions thereof, to be repeated.
c. One of the process groups is monitoring and controlling.
d. One of the process groups is directing.
43. Having completed the requirements management plan and published the
requirements documentation, your next step is Define Scope. What are the four tools of
Define Scope?
a. expert judgment, product analysis, alternatives generation, facilitated
workshops
b. organizational process assets, project charter, product analysis, expert
judgment
c. expert judgment, WBS, scope validation, scope management plan updates
d. product analysis, scope validation, scope management plan updates,
recommended corrective actions
11
44. Your team is identifying potential risks for your pharmaceutical development
project. Because of the large investment in this project, you have also involved a few
outside experts. Which technique will ensure that no particular expert will dominate the
thinking of the group?
a.
b.
c.
d.
brainstorming
root cause analysis
Delphi technique
SWOT analysis
45. You are in the process of choosing quality control tools for the next phase of your
project. One tool is a chart with vertical bars showing the various sources of defects.
The tallest bar is displayed on the left and the height of the bars descends in order
toward the right side of the chart. This tool is called a ___________ and is used to
__________.
a. run chart; plot data points as they occur and discover any trends that might be
present
b. control chart; display process results and determine whether the process is
under control
c. cause and effect diagram; determine the possible causes for specific
problems
d. Pareto chart; guide corrective action to the most productive areas for
improvement
46. One of your team members, a veteran project warrior, noted in a recent
conversation that he believes people are motivated when they believe that success is
both feasible and rewarded. What motivation theory was he describing?
a.
b.
c.
d.

Herzbergs hygiene factors
Maslows hierarchy of needs
No formal theory exists for this common sense notion
47. Communication and the management of information is believed to consume as

much as 90% of a project managers time. Which of the following statements about
communication is true?
i. The presence of communication barriers may increase the chance of conflict.
ii. Formal communication is more important than informal communication.
iii. Listening, feedback, and building consensus are legitimate aspects of
communication.
a.
b.
c.
d.
12
i and ii
ii and iii
i and iii
i, ii, and iii
48. Based on the data provided below, which activity should you crash first? Tasks A,
C, and E are on the critical path.
Task
A
B
C
D
E
a.
b.
c.
d.
Normal Time
4 days
6 days
3 days
5 days
4 days
Crash Time
2 days
5 days
3 days
3 days
2 days
Crash Cost per Day

$200
$150
$100
$160
$175
Task C
Task E
Task B
Task D
49. As one of the tools for Control Risks, reserve analysis _____.
a. considers whether a sufficient amount of reserve is left to cover the remaining
risk
b. determines whether reserve should be incorporated in the baseline or held as
a separate amount
c. evaluates the requests of project teams to use portions of the existing reserve
d. is used as an input to trend analysis
50. While it has a negative connotation to some people, whistle-blowing is one way to
report perceived violations of the code of conduct. Whistle-blowing may be necessary
when others are reluctant to deal with a serious violation. For example, two workers on
a facilities project accidentally uncovered several barrels containing hazardous waste
materials on a Friday afternoon. They did not recognize the material until they had
opened the barrels and spilled some of the materials on themselves. They replaced the
barrels, cleaned themselves up using faucets at a nearby picnic area, but did not share
the information with anyone else until the following Monday morning. During the
weekend, a troop of girl scouts used the picnic area for a campsite. You just heard this
information and you know that no one in upper management is aware of the incident.
You should _____.
a.
b.
c.
d.
leak the report to the local newspapers

secretly record a meeting held to discuss the matter
do nothing; there will probably be no harm to anyone
report the incident to management
13
51. During a project selection session, your group of experts has determined the
following information for two potential projects. Which project is better from a financial
perspective?
Benefit cost ratio
Net present value
Internal rate of return
Project A
1.5
$500,000
15%
Project B
2.0
$450,000
22%
Note: The company hurdle rate for IRR is 20%.

a.
b.
c.
d.
Project A
Project B
Either project is okay
You cannot adequately compare the projects with this data
52. Based on the planned schedule reflected by the data in the table below, how much
free float is on the critical path?
Task
Predecessor
Dependency
Duration
A
B
C
D
E
F
G
Start
A
Start
C
B
D
E, F
FS
SS
FS
FF
FF
FS
FS
5 days
4 days
5 days
6 days
3 days
5 days
7 days
a.
b.
c.
d.
zero days
one day
two days
insufficient information to answer the question
53. One of two initiating processes for projects, a project charter is a written document
that authorizes a new project. Which of the following statements about the project
charter is true?
i. The charter leads to the assignment of a project manager; the PM should
never be assigned later than the start of project execution.
ii. The charter is usually developed and distributed as part of the planning phase.
iii. Expert judgment is an input to developing the project charter.
a.
b.
c.
d.
14
i and ii
ii and iii
i and iii
none of the above statements are true
54. Insurance is a risk ______ strategy?

a.
b.
c.
d.
mitigation
enhancing
transfer
avoidance
55. Activity definition is an essential first step in building an accurate project schedule.
If the activity list is inaccurate, then the schedule will also be inaccurate. Which of the
following is an output of Define Activities?
a.
b.
c.
d.
milestone list
decomposition
activity list updates
activity dependencies
56. A fundamental principle of modern quality management holds that prevention of

defects is more important than inspection. Therefore, high quality is most likely to be
achieved by _______.
a.
b.
c.
d.
careful control of the costs of non-conformance

effective quality planning
developing prestigious products
effective use of benchmarking
57. You have awarded a contract to Digitizer, Inc. to develop a key component of a new
electronic product. Digitizer has, in turn, awarded a contract to Collectimizer, Inc. for a
portion of Digitizers scope of work. Problems have arisen with the quality of
Collectimizers work. In accordance with the concept of privity, you should ______.
a.
b.
c.
d.
work directly with Collectimizer; your privity with Digitizer applies

work with both organizations; you have privity with both
work with Digitizer to solve the problem; you have no privity with Collectimizer
you have no legal recourse in this matter
58. The cost of quality (COQ) includes which of the following?

a.
b.
c.
d.
conformance and nonconformance

inspection and rework
administrative and project performance
productive and nonproductive
15
59. Recalls, warranty work, and lost business are examples of ______ costs.
a.
b.
c.
d.
internal failure
external failure
appraisal
prevention
60. You are working on the highly touted Star Gazer III program. Now in its second
year, the 50-person project team has been unusually diligent about risk management
because of the enormous investment and the inherent uncertainty of the project.
Murphys Law (anything that can go wrong will go wrong) has just struck again in that
one of your initially rated low risks has actually occurred. Your initial response strategy
for that risk was to accept it and so no response plan was created. Now that the risk
has occurred, you analyzed the situation and have created a plan for dealing with the
risk. The plan you created is called a ________.
a.
b.
c.
d.
contingency plan
contingent response plan
secondary risk plan
workaround
61. Incentive contracts are designed to bring the objectives of contractors in line with
the objectives of the customers. For instance, in a Fixed Price Incentive Fee contract,
the contractors profit goes up if they can perform below the target cost. The buyers
overall price also goes down and both parties are better off. Which characteristic is not
common to both FPIF and CPIF contracts?
a.
b.
c.
d.
point of total assumption

share ratio
ceiling price
target cost
62. You are have entered the early stages of planning and have asked for a cost
estimate to help establish the proper level of funding. This type of estimate is referred
to as a ______ and has a range of accuracy of ______.
a.
b.
c.
d.
16
order of magnitude estimate; -25 to +25 percent

analogous estimate; -50 to +75 percent
budget estimate; -10 to +25 percent
definitive estimate; -5 to +10 percent
63. Maslows Hierarchy of Needs contends that if certain lower-level needs are not
satisfied, then people will not be as concerned about the higher-level needs. According
to Maslow, what is the highest-level need that a human being can aspire to?
a.
b.
c.
d.
self-esteem
expectancy
early promotion
self-actualization
64. A major milestone in your international project requires that you deliver an oral
presentation to the project steering committee in Vienna on March 15th. As part of the
project plan, failure to deliver this presentation on time was assumed to mean that
performance was not as required. Therefore, a financial penalty of $150,000 would be
imposed. Volcanic ash caused cancellation of all flights beginning 3 days before the
meeting and extending through 2 days after the meeting. Your absence is ________.
a.
b.
c.
d.
not excused because the contractual requirement take precedence

excused because of the concept of privity
excused because of the concept of force majeure
excused because of the concept of liquidated damages
65. In one portion of your project schedule, Tasks A, B, and C are performed in parallel
and are also all predecessors of Task D. The schedule for this part of the work is
uncertain and you decided to develop some probability data to support a simulation of
the project. Your experts agree that the respective probabilities that Tasks A, B, and C
will each finish on time are 50%, 80%, and 70%. What is the probability that Task D will
start on time?
a.
b.
c.
d.
80%
50%
28%
66. Which of the following is not an advantage of verbal communication?

a.
b.
c.
d.
It is relatively fast.
An audit trail is available for your records.
It supports the brainstorming needed to solve complex problems.
An immediate opportunity exists for feedback and clarification.
17
67. Your experience and training have taught you that identifying the critical path is
crucial for establishing accurate expectations about schedule outcomes. Which is the
most correct statement about the critical path?
a.
b.
c.
d.
The critical path is the shortest path through the project network.
The critical path marks activities of greatest importance to stakeholders.
The critical path has zero float.
The critical path has the least float available.
68. As an experienced and respected staff member at a small university, you have
been selected to negotiate an agreement with a disorderly fraternity. The fraternity is
currently on double-secret academic probation and has caused a multitude of problems
for the school. However, your boss wishes to avoid problems with the large and wellregarded national chapter. Accordingly, she has asked you to work through any hard
feelings and build commitment for a consensus solution. The conflict resolution
technique that must be employed here is __________.
a.
b.
c.
d.
forcing
compromise
smoothing
problem solving
69. You wish to establish a management system for auditing quality requirements,
reviewing organizational processes, and capturing quality results. You are performing
actions associated with ________.
a.
b.
c.
d.
quality planning
quality assurance
quality improvement
quality control
70. You want to become more statistically sophisticated in the quality management
area. One capability you would like to add is to use statistical data to predict (and
improve) various quality metrics such as defect rate. A colleague told you about a
technique that plots data on a diagram with a dependent variable on the vertical axis
and an independent variable on the horizontal axis. This technique is called a ______
and is part of ________.
a.
b.
c.
d.
18
scatter diagram; plan quality management

control chart; plan quality management
run chart; control quality
pareto chart; control quality
71. Disagreements and conflict have become an increasing problem among the
stakeholders involved in your array of electronic communication projects. You are trying
to understand the source and cause of these conflicts. One of the stakeholders insists
that disagreements about cost are always a top four problem. According to PMI data
on that subject, what are the top four most likely sources of conflict?
a.
b.
c.
d.
Schedules, priorities, resources, and technical opinions

Personalities, technical opinions, resources, and costs
Costs, personalities, priorities, and resources
Resources, priorities, schedules, and technical opinions
72. You are involved in a highly secret research project about the effect of sound on
human performance. Some original conceptual development was funded by
government agencies such as No Such Agency (NSA) and Characters In Action (CIA).
At the last project meeting, held at a secret location, reliable information was presented
warning that a competitor was nearing completion of similar work. Suddenly, the
schedule has become of paramount importance. You were forced to remind the team
that the project was originally planned using limited resources (controlling costs as well
as limiting how many people knew about the project). Now that you are racing toward a
faster completion, you desperately need to compress the original resource-leveled
schedule. You are told by upper management that, at this point, cost is not an issue.
You must get the work completed first. Which of the following tools would you use to
aggressively compress the schedule?
a.
b.
c.
d.
fast tracking
crashing and fast tracking
resource reallocation
reward and recognition system
73. Scope management should ensure that a project management plan includes all the
work required, but only the work required to complete the project successfully. This
planning must include both product scope (the features and functions embodied in the
product or service) and project scope (the management activities required to deliver the
product or service). Product scope should be measured against the ________ and
project scope should be measured against the ________.
a.
b.
c.
d.
statement of work; WBS

project management plan; product requirements
WBS; project charter
product requirements; project management plan
19
74. Your most important stakeholders have emphasized control of cost overruns. You
wish to know the magnitude of any expected final cost overrun. Which earned value
formula would provide such information?
a.
b.
c.
d.
Estimate at Completion
Variance at Completion
Estimate to Complete
Cost Performance Index
75. Conflict management is one of the important tools used by the process called
Manage Project Team. A certain amount of conflict may be helpful in identifying and
resolving important issues. However, conflict may also get out of control and do
substantial harm to a project. Which of the following are conflict resolution techniques?
a.
b.
c.
d.
negotiate, compromise, withdraw, force

negotiate, command, compromise, smooth
confront, compromise, smooth, and force
compromise, smooth, reward, and force
76. As part of scope management, Create WBS helps to organize and define the total
scope of a project. Most experienced project managers have learned that the WBS is
the foundation of an accurate, comprehensive project management plan. The WBS
_________.
a. decomposes work to a level at which accurate estimates can be established
b. breaks work into smaller, more manageable components using a tool called
subdivision
c. shows the lowest level of detail needed for an accurate plan using planning
packages
d. uses a numbering system based on the hierarchy of accounts
77. One output of risk identification is the development of appropriate risk triggers. A
risk trigger is ________.
a.
b.
c.
d.
20
the primary cause of a potential risk event

a warning sign that a risk is about to occur
a mitigation plan
a secondary or residual risk
78. Integrated change control recognizes that projects always evolve and change.
There must be a system that accommodates but controls these changes, i.e., all
changes must be managed using a consistent process. Change control must
________.
a. allow informal changes to be accommodated
b. allow baselines to remain flexible
c. provide effective communication so that stakeholders are aware of all
changes
d. operate with one change control board
79. When selecting the appropriate type of contract, an important issue is which party
will bear most of the risk. If you are the buyer, which contract places the most risk on
your contractor?
a.
b.
c.
d.
cost plus fixed fee

firm fixed price
80. Quality assurance is a classic quality management process that involves ______.
a. identifying which quality standards are relevant to the project and determining
how to satisfy them
b. auditing quality requirements and results from quality control measurements
to ensure appropriate quality standards are used
c. monitoring specific project results to determine whether they comply with
relevant quality standards and eliminating unsatisfactory results
d. determining whether project processes are under control
81. After creating your communication management plan, your next step is Manage
Communications. Which of the following is an output of Manage Communications?
a.
b.
c.
d.
project communications
21
82. A contractor is building a temporary classroom that will add 5,000 square feet of
usable teaching space. The contractor estimated that each 500 square feet would
require 20 hours of work. The contractor is paid $85 per hour, has completed 2,000
square feet of the work, and has spent $8,000. The original plan required 2,500 square
feet to be completed at this point. Using earned value analysis, what is the current cost
variance?
a.
b.
c.
d.
minus $1,200
plus $1,200
minus $1,700
83. You are preparing for a $50 million project that will develop a new technology and
involve numerous contractors. Which procurement document would be most
appropriate in this situation?
a.
b.
c.
d.
request for quotation

request for proposal
request for information
invitation for bid
84. Successful quality management often involves intricate trade-offs regarding issues
such as grade, goldplating, and defining how quality will be measured. Which
statement about quality management is correct?
a. Quality is measured by the features and functions inherent in the product.
b. A successful project requires high quality and high grade.
c. Quality is defined as the extent to which characteristics inherent in a product
exceed requirements.
d. Low quality is always a problem, but low grade may not be.
85. One suggestion for improving communication on a project team is the use of a tight
matrix. A tight matrix involves physical colocation of the team. Which is not an
advantage of a tight matrix?
a.
b.
c.
d.
22
enhances working relationships

speeds communication and improves decision making
makes meetings more effective
minimizes distractions
86. A project management colleague is asking advice about a risk tool that she just
heard about. She shows you a diagram with a square box on the far left and two lines
branching out to the right. Each line leads to a circle and there are multiple branches to
the right from each circle. This tool is a ________ and is used when ________.
a. SWOT chart; you need to show the relationships and trade-offs between
strengths and weaknesses on a project
b. risk breakdown structure; you need to search for possible patterns in the risk
events
c. path convergence; you need to show the risks in various work flows
d. decision tree; you need to evaluate potential risk event interdependencies
87. Validate Scope is the process of obtaining formal acceptance of project work. It
involves reviewing work results and must still be accomplished even if a project is
terminated early. Scope validation is considered part of the ________ process group.
a.
b.
c.
d.
planning
executing
monitoring and controlling
closing
88. Quality control involves monitoring specific project results to determine whether
they conform to requirements. Control charts are often used to help accomplish this
task. With respect to control charts, what does the term tolerance refer to?
a. A tolerance is specified by the customer and represents the range of variation
that the customer will accept.
b. A tolerance is an unusual event that may indicate that something is wrong
with the process being evaluated.
c. A tolerance measures how much variation the process normally produces.
d. A tolerance is a method for determining where most of your defects are
coming from.
89. Performance reporting involves collecting, analyzing, and disseminating
performance information to appropriate stakeholders. This reporting is often done on an
exception basis to focus attention on the most important information. Which of the
following is not a type of performance report?
a.
b.
c.
d.
status report
progress report
forecast
23
90. You are four months into a project to develop an emerging technology. There was
some dissent when this particular approach was chosen and, unfortunately, it is now
time for some of the companys managers to say I told you so. The technology is not
performing well and the costs are higher than expected. The company has already
spent $5 million on the effort that was scheduled to take a year. The money that has
already been spent is called ________ and should ________ when deciding whether to
continue the project or terminate it.
a.
b.
c.
d.
sunk cost; be ignored

sunk cost; be considered
allocated cost; be ignored
allocated cost; be considered
91. Your company just successfully completed exploratory research on the potential
use of eye drops as a substitute for contact lenses. You now wish to move forward with
applied research to actually develop this product for the marketplace. Which type of
contract would be most appropriate?
a.
b.
c.
d.
CPFF
CPIF
FPIF
FP-EPA
92. Many successful companies (including General Electric, Motorola, and Johnson &
Johnson) manage quality using the concept of standard deviation. Many of these
companies provide green belt and black belt training for carefully chosen employees.
This modern concept attempts to engineer processes to limit defects to a low rate. The
concept is called ________ and attempts to create outcomes that meet requirements
________ percent of the time.
a.
b.
c.
d.
two sigma; 95.5

three sigma; 99.7
six sigma; 99.97
six sigma; 99.9997
93. Thus far, your risk management activities have produced a list of potential risk
events, an overall risk ranking for the project, a list of individually prioritized risk events,
and a watch list for low risks. Your next step should be to ________.
a.
b.
c.
d.
24
consider whether modeling or simulation techniques are appropriate

identify risk triggers
create appropriate fallback plans
identify appropriate response strategies
94. Quality assurance tends to focus on ________ whereas quality control tends to
focus on ________.
a. executing and controlling to provide confidence that stakeholders
requirements will be met; controlling and closing to document that acceptance
criteria have been met
b. planning and executing to provide confidence that stakeholders requirements
will be met; executing and closing to document that acceptance criteria have
been met
c. planning and executing to document that acceptance criteria have been met;
executing and closing to provide confidence that stakeholders requirements
will be met
d. initiating and planning to provide confidence that stakeholders requirements
will be met; executing and controlling to document that acceptance criteria
have been met
95. Which of the following is a disadvantage of the matrix organizational structure?
a.
b.
c.
d.
Team members are borrowed and getting commitment may be difficult.

The project manager has more control over resources.
The flow of information is comparatively simple.
Team members have one clear boss; accountability is simplified.
96. You just received an input from your supervisor to help you complete the
proposed budget for the newest project. Upon review, you realize that the monetary
amount for management reserve has been included in the baseline. Before formal
submission of this budget, you should _______.
a. leave the amount as shown; the supervisor has handled the management
reserve correctly
b. include a footnote highlighting the amount intended for management reserve
c. remove the management reserve and show it as a separate amount
d. remove this amount completely, management reserve is not a legitimate
budgeting approach
97. Which of the following statements about effective meetings is incorrect?
a.
b.
c.
d.
An important role for a meeting chairperson is to prevent drift and disruption.

Effective meetings require a clear purpose and agenda.
Cultural differences may lead to increased conflict during a meeting.
Team building would tend to be a distraction and prolong the duration of most
project team meetings.
25
98. Which of the following statements about quality control is true?

a. Inspection will keep defects from getting to customers and will also improve
your processes.
b. If process results are random, your process is not under control and should be
investigated.
c. Ten consecutive outcomes are all below the center line in your control chart.
You should investigate your process as if a special cause had occurred.
d. A Pareto chart is a horizontal bar chart that is useful in detecting trends in
process outcomes.
99. You just finished establishing roles and responsibilities, publishing an organization
chart, and creating the staffing management plan for your project. Your next step in
human resource management is to ________ and the primary output will be ________.
a.
b.
c.
d.
acquire a project team; acquisition

acquire a project team; project staff assignments
develop a project team; team performance improvements
develop a project team; project performance appraisals
100. Which of the following steps are you most likely to perform first?
a.
b.
c.
d.

Create WBS
Define Scope
101. You are a project manager for the Laboratory of Advanced Future Energy
Reinventers (LOAFER). Your current solar energy project is $400,000 over budget and
is also behind schedule. The good news is that one of your engineers has found a way
to reduce costs by incorporating the advantages of a superior technology that was not
available at the beginning of the project. Which of the following techniques is being
used?
a.
b.
c.
d.
value engineering
product analysis
quality function deployment
102. Which of the following is an input to Develop Project Management Plan?

a.
b.
c.
d.
26
expert judgment
facilitation techniques
change requests
project charter
103. You are near the end of the third phase of a multi-million dollar environmental
remediation project in Nevada. The execution of all major project deliverables is
complete and all change requests have been handled. The next integration
management step at this point is ______.
a.
b.
c.
d.
close project or phase

direct and manage project work
scope validation
integrated change control
104. Which of the following statements about the critical path is/are true?
i. The critical path identifies activities that have finish dates imposed by
stakeholders.
ii. Activities on the critical path always have zero float.
iii. By definition, there can only be one critical path at any given time.
a.
b.
c.
d.
i
ii
ii and iii
none of the statements is correct
105. The statement of work (SOW) is an input when developing the project charter.
Which statement about the SOW is not correct?
a. The SOW describes the business need and provides a cost-benefit analysis.
b. The SOW provides a narrative description of products, services, or results to
be delivered.
c. For internal projects the sponsor provides the SOW based on business needs.
d. For external projects the customer provides the SOW as part of a proposal or
bid document.
106. Effective communication management is among THE most important things any
successful project manager must do. Which of the following statements about
communication is correct?
a.
b.
c.
d.
Active listening is a communication barrier.

The preferred method of communication with stakeholders is e-mail.
Cultural differences may be a barrier to effective communication.
Change requests is an input to Control Communications.
27
107. Which of the following is a correct definition within the area of risk management?
a. Risk is an uncertain event that may have a negative effect on a project.
b. Risk factors include cost, schedule, scope, and quality.
c. Uncertainty is a lack of information that makes it difficult to estimate the
likelihood of an event.
d. Risk analysis determines an appropriate response for a particular situation.
108. Which of the following is a process in the initiating process group?
a.
b.
c.
d.
define scope
identify stakeholders
expert judgment
estimate costs
109. There are six processes in the knowledge area for managing risks. Which one is
not always used on every project?
a.
b.
c.
d.
Plan Risk Responses

Perform Qualitative Risk Analysis
Control Risks
Perform Quantitative Risk Analysis
110. A detailed cost estimate has been completed using painstaking definitive cost
estimating methods. What is the next cost management step that should be taken?
a.
b.
c.
d.
Ensure that the estimate provided has a range of accuracy of -10 to +25%.
Estimate required resources.
Establish a cost baseline.
There is insufficient information to answer the question.
111. You are part of a team negotiating a contract for final testing of a prototype. The
parties have agreed on a fixed price incentive fee (FPIF) contract with the following
terms. The target cost is $1,000,000 and the associated target fee is $300,000. The
ceiling price is $1,700,000 and the share ratio is 80:20. Your boss wants to know the
level of cost at which the incentive stops and the contract converts to a firm fixed price
equivalent to the ceiling price. You do the calculation for PTA and report that the point
of total assumption is ______.
a.
b.
c.
d.
28
$1,300,000
$1,500,000
$1,875,000
there is not enough information to determine the answer
112. Which of the following problems is a likely result of failure to effectively delegate
tasks within the project team?
a.
b.
c.
d.
Morale is low and you frequently work late hours.

Hiring decisions are slow and lag behind project needs.
Decision making is usually democratic.
Meetings are taking too long.
113. As part of your quality control program, you are using a chart that resembles the
skeleton of a fish. What is the name of this tool and what are you using it for?
a. Run Chart; tracks performance and identifies trends.
b. Ishikawa Diagram; identifies factors possibly causing or influencing a specific
problem.
c. Control Chart; determines whether a given process is under control.
d. Scatter Diagram; determines the greatest causes of defects.
114. Which of the following is not an input to directing and managing project work?
a.
b.
c.
d.
the project management plan

approved change requests
change requests
115. Which of the following is an output of control scope?

a.
b.
c.
d.
performance reports
variance analysis
requirements traceability matrix
WBS updates
116. A simple sub-project has been planned as follows. Tasks A, B, and C are to be
performed in sequence with finish-to-start dependencies and durations of 8, 7, and 4
days respectively. On a second path, tasks D and E are to be performed in sequence
with finish-to-start dependencies and durations of 5 and 10 days respectively.
Additionally, task D has task A as a predecessor (finish-to-start). What is the expected
duration of this sub-project?
a.
b.
c.
d.
15 days
19 days
23 days
29
117. A simple sub-project has been planned as follows. Tasks A, B, and C are to be
performed in sequence with finish-to-start dependencies and durations of 8, 7, and 4
days respectively. On a second path, tasks D and E are to be performed in sequence
with finish-to-start dependencies and durations of 5 and 10 days respectively.
Additionally, task D has task A as a predecessor (finish-to-start). What is the float for
task B?
a.
b.
c.
d.
0 days
4 days
7 days
118. A key stakeholder has raised concerns about a task that introduces significant risk
with respect to the likelihood of meeting the published schedule. You decide to use
PERT analysis to get a more realistic duration estimate. Using the assistance of
several experts, you are told that the best case is 10 days, a worst case of 20 days, and
a most likely of 12 days. What is the expected average duration using PERT analysis?
a.
b.
c.
d.
12 days
13 days
14 days
20 days
119. You are using control charts to track performance of several crucial processes.
Which of the following statements is correct?
a. Specification limits are established by the seller and show the variance
inherent in your process.
b. An assignable cause means that a process outcome is outside the
specification limits.
c. Random variations indicate that your process is out of control.
d. Control limits reflect the natural variation inherent in your process.
120. Which of the following tools is common to both quality planning and quality
assurance?
a.
b.
c.
d.
quality audits
quality checklists
benchmarking
quality metrics
121. Which of the following is used to guide execution and control of a project?
a.
b.
c.
d.
30

configuration management system
122. The project charter was just signed by the project sponsor and you have been
officially assigned as the project manager. What integration management step should
you take next?
a.
b.
c.
d.
conduct integrated change control

create the work breakdown structure
develop the project management plan
acquire appropriate staff for the next phase
123. Which of the following belongs to the monitoring and controlling process group?
a.
b.
c.
d.
perform integrated change control

perform quality assurance
develop project charter
direct and manage project work
124. Which of the following is not a process group identified by PMI?

a.
b.
c.
d.
initiating
analyzing
planning
closing
125. Approval for a multi-million dollar environmental remediation project in North

Dakota is pending. Approval and funding for this project will be handled ______.
a.
b.
c.
d.
by the project manager

by the project management team
internal to the project boundaries
external to the project boundaries
126. Which of the following prioritizes the needs of key stakeholders?

a.
b.
c.
d.
identify stakeholders
collect requirements
manage stakeholder expectations
define scope
127. Collect requirements is part of the _____ process group?

a.
b.
c.
d.
initiating
planning
executing
closing
31
128. The requirements management plan, requirements documentation, and a detailed,

written scope statement have been completed. Which major scope management output
should be produced next?
a.
b.
c.
d.
the WBS
project documents updates
inspection
129. Which statement about the WBS is not true?

a.
b.
c.
d.
Each item is generally assigned a unique numerical identifier.

Activities at the lowest level of the WBS are referred to as work packages.
The WBS provides the same information as the OBS.
The WBS is part of the scope baseline.
130. The process of creating a detailed, written scope statement is part of which
process and which process group?
a.
b.
c.
d.
define scope; initiating

define scope; planning
create WBS; planning
create WBS; executing
131. You have chosen the appropriate tools to conduct scope management. In other
words, you have decided how you intend to define the scope, identify the tasks
required, inspect and accept completed work, and control scope changes. What scope
management step comes next?
a.
b.
c.
d.
define scope
create WBS
validate scope
collect requirements
132. One objective of scope control is to influence factors that lead to scope changes
and to control the potential impact of those changes. Which of the following is an output
of Control Scope?
a.
b.
c.
d.
32
change control system

variance analysis
scope creep
133. Your organization is interested in developing a highly exploratory idea that would
extend the previous boundaries of artificial intelligence. The research question is
whether it is possible to repel or kill the common, and annoying, house fly using the
power of intense, focused mental thought processes. You wish to engage a university
research lab to explore the idea as a proof of concept type of project. Which contract
type is best suited for this work?
a.
b.
c.
d.
CPPC
CPFF
CPIF
CPAF
134. Controlling changes to the schedule is part of which process group?

a.
b.
c.
d.
planning
executing
closing
135. Which of the following statements about the critical path is false?
a.
b.
c.
d.
Activities on the critical path have zero float.

It is possible for critical path activities to have negative float.
Critical activities are those which are important to key stakeholders.
The critical path is the longest path.
136. In modern usage, precedence diagrams are preferred over arrow diagrams.
Which of the following statements is not true as to why precedence diagrams are
preferred?
a.
b.
c.
d.
They allow flexibility through the use of various types of dependencies.

They make more effective use of dummy activities.
They handle lag more effectively.
They are supported by modern project management software.
137. A contractor has submitted work that is incomplete. If the project manager
accepts the work and does not demand that it be completed, the contractor may be
excused from meeting the requirements based on the concept of ________.
a.
b.
c.
d.
waiver
warranty
offers that cannot be refused
undefined work
33
138. The schedule baseline is determined as part of which process group?

a.
b.
c.
d.
initiating
planning
executing
139. Your organization began using a methodology benchmarked to the PMBOK

Guide approximately one year ago. You just completed the process of estimating
durations. Which schedule management process should you complete next?
a.
b.
c.
d.
develop schedule
estimate activity resources
control schedule
perform integrated change control
140. You just completed the cost estimate to install a fire alarm and security system in
an elementary school. The estimate is $100,000 but your experience suggests that the
actual outcome could range from $95,000 to $110,000. What kind of estimate have you
created?
a.
b.
c.
d.
rough order of magnitude

order of magnitude
budget
definitive
141. Which of the following is not a tool of control costs?

a.
b.
c.
d.
earned value management

project management software
performance reviews
project funding requirements
142. The initial cost estimate to support a go/no-go decision has been completed using
a combination of analogous and parametric methods. What is the next cost
management step that should be taken?
a.
b.
c.
d.
34
ensure that the estimate provided has a range of accuracy of -10% to +25%
estimate required resources
establish a cost baseline
There is insufficient information to answer the question.
143. Many organizations place extra money in the cost estimates and the budget to
account for uncertainty. As a tool in cost management, this practice is known as _____
and is associated with ______.
a.
b.
c.
d.
alternatives generation; estimate costs

reserve analysis; estimate costs
reserve analysis; estimate costs and determine budget
cost baseline; determine budget
144. You have produced a definitive estimate using the bottom-up method. You are
about ready to take this estimate to upper management and ask to establish a firm cost
baseline. You should brief your audience that the range of accuracy on this estimate is
approximately ______.
a.
b.
c.
d.
-5% to +10%
-10% to +25%
-25% to +75%
-50% to +100%
145. The total budget for your project, known as the BAC (budget at completion), is
$750,000. The work is 20% complete and you have spent 24% of the budget. What is
the CPI and what does it tell you about current cost performance?
a.
b.
c.
d.
0.20; cost underrun

0.20; cost overrun
0.83; cost underrun
0.83; cost overrun
146. Which of the following statements is false?

a.
b.
c.
d.
The scope baseline is an input to cost estimating.

Basis of estimates is an input to cost estimating.
Project documents updates is an output of cost estimating.
Parametric estimating relies on accurate historical information.
147. _____ and _____ are related to cost estimating.

a.
b.
c.
d.
Project management estimating software; funding limit reconciliation

Expert judgment; cost aggregation
Cost aggregation; reserve analysis
Vendor bid analysis; reserve analysis
35
148. Which of the following is associated with all three quality management processes?
a.
b.
c.
d.

quality audits
quality metrics
process improvement plan
149. Which of the following statements about quality management is true?

a. Low grade usually indicates a problem.
b. The scope baseline is an input to plan quality management.
c. As defined by PMI, quality management applies to product requirements
rather than project measures.
d. Costs of conformance includes warranty work.
150. Your project is experiencing significant process problems. Which of the following
would best help you understand the steps that comprise the existing processes?
a.
b.
c.
d.
flowcharting
statistical sampling
brainstorming
benchmarking
151. Control charts are used to determine whether a process is under control, i.e.,
whether the results are stable and predictable. Which of the following statements about
control charts is false?
a. Upper and lower control limits are often set at 3 (especially for repetitive
processes).
b. Specification limits establish the range of outcomes that are acceptable to the
customer.
c. The only quality management process that uses control charts is Control
Quality.
d. A process is considered out of control if any outcome is outside the control
limits or if seven consecutive outcomes fall below or above the mean.
152. Which of the following is not a conflict resolution technique identified by the
PMBOK Guide?
a.
b.
c.
d.
36
Teaming
Withdraw
Confront/problem solve
Smooth/accommodate
153. You are preparing for an important briefing for your most important stakeholders
and, among other things, you need a good way to show an integrated picture of who is
performing which tasks at which time. You should consider using a ______.
a.
b.
c.
d.
resource scheduling diagram

resource histogram
resource milestone chart
resource Gantt chart
154. Which of the following is not a process of procurement management?

a.
b.
c.
d.

155. Which of the following are outputs of plan quality management?

a.
b.
c.
d.
benchmarking and requirements documentation

quality metrics and meetings
cost of quality and process improvement plan
quality metrics and quality checklists
156. The contract for your traffic light synchronization project has a clause that provides
for a $200,000 bonus if the project is completed within four months. The contract was
FFP for a price of $1,000,000. A Monte Carlo simulation completed yesterday puts your
probability of meeting the 4-month schedule at 80%. What is the expected monetary
value of the bonus?
a.
b.
c.
d.
zero; you may take no credit for a tentative bonus

$160,000
$1,000,000
$1,160,000
157. As a newly appointed program manager, you are considering team assignments
for several project managers who work for you. One of the managers tends toward
micromanagement and a highly directive style. What kind of team would be the best fit
for him?
a.
b.
c.
d.
a team with Theory Y tendencies

a team with very high-knowledge experts
a team with Theory X tendencies
a high-performing team with a history of working together
37
158. Your project has a total budget of $500,000. As of the status report at the end of
the third month, you have completed half of the work and have spent 60% of the total
budget. What earned value information do you now have?
a.
b.
c.
d.
budget at completion, planned value, and actual costs

budget at completion, earned value, and actual costs
planned value, earned value, and actual costs
estimate at completion, earned value, and planned value
159. Using the data provided in question 158 above, what is the variance at completion
if you believe that current variances are not expected to be typical for the remaining
work?
a.
b.
c.
d.
-$50,000
-$100,000
$550,000
$600,000
160. Using the data provided in question 158 above, what is the TCPI for finishing at
the current EAC?
a.
b.
c.
d.
1.0
1.20
1.25
.83
161. What is the correct earned value formula for schedule variance?
a.
b.
c.
d.
(EV-PV) x SPI
EV+PV
EV-PV
PV-EV
162. Obtaining a formal, written sign-off by the customer is a crucial aspect of what
project management process?
a.
b.
c.
d.
38
Close Procurements
Negotiated Settlements
Records Management System
163. You are in the process of controlling the procurement of an information system
upgrade program. One of your outputs is ______.
a.
b.
c.
d.

inspections and audits
164. The Plan Procurement Management process includes which of the following?
a. make-or-buy analysis, selecting appropriate types of contracts, and drafting
statements of work
b. source selection criteria, drafting statements of work, and bidder conferences
c. make-or-buy analysis, source selection criteria, and advertising
d. bidder conferences, source selection criteria, and advertising
165. The primary deliverable for the initiating phase of a project is a signed _______.
a.
b.
c.
d.
draft statement of work

contract
requirements management plan
project charter
166. According to Herzberg, when hygiene factors such as fair pay and adequate
working conditions are not satisfied, employees will ______.
a.
b.
c.
d.
become angry and quit their jobs

experience low motivation and dissatisfaction with their work
not care because these factors have no bearing on motivation
create an organized response such as an employee union
167. You are part of a project selection committee that has decided to use net present
value to evaluate financial opportunity. Using this technique, a project would be
minimally acceptable as long as the ______.
a.
b.
c.
d.
NPV is greater than one

NPV is greater than zero
NPV is greater than the EPV
payback period is not longer than one year
168. Ideally, a project manager should be chosen and assigned to a project ______.
a.
b.
c.
d.
at the beginning of the planning process

at the beginning of the executing process
during the initiating process
None of these statements is correct.
39
169. You are the project manager for a team of 7 specialists with Ph.D.s in several
technical fields. They are collaborating on the development of a new curriculum for a
corporate Center of Excellence. You have clearly established objectives. The best
leadership style in this case is ______.
a.
b.
c.
d.
laissez-faire
democratic
autocratic
Theory X
170. Project processes describe ______ and product processes describe ______.
a.
b.
c.
d.
scope management; statements of work

business requirements; delivery requirements
management activities; delivery requirements
management activities needed to accomplish the project; features and
functions required by the customer
171. You are the project manager for a new cereal product that aids digestion, boosts
energy, and makes you look younger (unless you are under the age of 17, in which
case it makes you look older). You are reviewing the product description, which is
called a ______, for one of your subcontracts. This product description is prepared as
part of the ______ process.
a.
b.
c.
d.
scope statement; plan procurement management

scope statement; conduct procurements
statement of work; plan procurement management
statement of work; conduct procurements
172. You are responsible for a sub-project with two paths: Tasks are to be performed
as given in the table. If Task B is actually completed in only 4 days instead of 6, how
does the float for Task D change?
Task
Start
A
B
C
D
E
End
a.
b.
c.
d.
40
Predecessor
-Start
A
B
B
D
C, E
Duration
4d
6d
5d
7d
4d
The float on Task D changes to -2 days.

The float on Task D remains 7 days.
Task D is on the critical path so the float remains zero
The float on Task D was originally zero and changes to +2 days.
173. You are pleased with the performance of your project team. They are functioning
as a cohesive, well organized unit. Issues are being handled smoothly and in a timely
manner. Which stage of the Tuckman ladder are they at?
a.
b.
c.
d.
Performing
Norming
Forming
Conjoining
174. Several of your team members work with a functional counterpart who constantly
mentions what a highly placed stakeholder wants. The functional counterpart is
attempting to use ______ power.
a.
b.
c.
d.
coercive
formal
referent
interpersonal
175. You are in the process of preparing a quality management plan. Concerns have
been expressed about needing a way to track variances and identify trends. You
should use a ______.
a.
b.
c.
d.
Pareto chart
flowchart
control chart
run chart
176. A major program is coming to an end after six exciting years, and you have
dozens of contracts to close. Which of the following is not a tool you will use as part of
the Close Procurements process?
a.
b.
c.
d.
Procurement audits
Change control system
41
177. You are devising risk management strategies and are specifically considering
ways to transfer risks in the most effective manner. Which of the following identifies
PMI-approved ways to transfer risk?
a.
b.
c.
d.
teaming
insurance
collaborating
contingency reserves
178. Which procurement management process results in the award of a legally binding
contract?
a.
b.
c.
d.

close procurements
179. Which of the following is not a process of scope management?

a.
b.
c.
d.
Close scope
Define scope
Validate scope
Control scope
180. You are analyzing a situation with numerous relevant factors. You are worried
about how these factors might interact and what the cost implications might be. Which
of the following tools would help in this situation?
a.
b.
c.
d.
simulation
cause and effect diagram
decision tree
earned value analysis
181. In the current reporting period, you are tracking the status of five tasks. Each task
is valued at $500 and the status is as follows: task 1 is 100% complete, task 2 is 80%
complete, task 3 is 60% complete, task 4 is 30% complete, and task 5 has not started.
Using earned value, would the percent complete rule or the 50:50 rule provide a larger
earned value?
a.
b.
c.
d.
42
50:50 rule with an EV of $1,000

50:50 rule with an EV of $1,250
percent complete rule with an EV of $1,000
percent complete rule with an EV of $1,350
182. If a performance appraisal becomes appropriate for a team member, which project
management process addresses the handling of appraisals?
a.
b.
c.
d.

Manage Project Team
183. What is the formula for Cost Performance Index in the earned value management
system?
a.
b.
c.
d.
EV / AC
EV / PV
EV / BAC
AC / BAC
184. The Plan Communication Management process determines the information needs
of key stakeholders. Which of the following is an output of that process?
a.
b.
c.
d.

communication models
communications management plan
185. Two of your team members were reassigned to a project in trouble. Trying to find
something positive about this revolting turn of events, you mused that at least you dont
have as many communication channels to manage. How many fewer channels do you
now have in your remaining group of five?
a.
b.
c.
d.
21
11
10
2
186. Which of the following statements about risk management is false?

a. Utility function is a concept that considers the best way to achieve business
opportunities.
b. Project risk is always in the future.
c. Projects without a proactive focus on risk management have an increased
chance of failure.
d. SWOT analysis is a tool for the Identify Risks process.
43
187. Which procurement management process uses advertising?

a.
b.
c.
d.

Close Procurements
188. As part of the Close Procurements process, the primary purpose of procurement
audits is to ______.
a.
b.
c.
d.
provide a structured review of all important procurement documents

provide an external, unbiased review of procurement procedures
identify and settle all outstanding issues, claims, and disputes
identify successes and failures that warrant recognition in the management of
other procurements
189. Which of the following is an input of the Close Procurements process?

a.
b.
c.
d.
procurement management plan

records management system
190. In light of the data provided below, how much free float is on the critical path?
Task
Start
A
B
C
D
E
F
End
a.
b.
c.
d.
44
Duration
-6 days
8 days
7 days
5 days
8 days
5 days
--
Predecessor
-Start
Start
A, B
A, B
C, D
D, E
F
two days
one day
zero days
cannot be determined from the data provided
191. You just received data to construct your next status report. You are confused,
however, because your earned value analysis says the project is on schedule and your
critical path analysis indicates that the project is three days behind schedule. Is this
possible?
a. No, something is wrong with the data.
b. Yes, earned value totals the status of all tasks, so it is possible for the critical
path to be behind schedule while numerous non-critical tasks are ahead or on
schedule.
c. It depends on which earned value reporting rule is being used.
d. There is insufficient information to answer the question
192. With respect to the circumstances presented in the previous question, what should
you do?
a. Ask that the data be re-evaluated because there is something definitely
wrong.
b. Trust the critical path analysis. For scheduling purposes, it is more reliable
and provides more information anyway (float, early times, and late times).
c. Re-evaluate the earned value reporting rules.
d. There is insufficient information to answer the question.
193. If you experience a dispute with respect to a change request, which procurement
management process provides the means to handle such a problem?
a.
b.
c.
d.
Plan procurements (expert judgment)

Conduct procurements (change requests)
Control procurements (claims administration)
Control procurements (claims administration) and Close procurements
(procurement negotiations)
194. Aside from developing the project charter, which project management process is
part of initiating?
a.
b.
c.
d.
Identify risks
Estimate costs
Identify stakeholders
195. You are installing security systems for an entire school district in the state of
Minnesota. The client has directed that you must work at night and return the rooms to
a usable condition for class each day. This requirement represents ______.
a.
b.
c.
d.
a constraint
an assumption
an intervention
an input to the statement of work
45
196. You are performing risk response planning and are looking for strategies to
increase the likelihood of achieving positive opportunities. Which approach should you
adopt?
a.
b.
c.
d.
avoid
transfer
exploit
mitigate
197. Which of the following statements about risk management is incorrect?

a. A probability and impact matrix is part of quantitative risk analysis.
b. Quantitative analysis includes statistical techniques such as simulations and
analysis of expected monetary value.
c. The risk management plan is an input to Plan Risk Responses.
d. Controlling risks may involve modifying the project management plan.
198. Which of the following is not a form of contract termination?
a.
b.
c.
d.
termination for default

termination for convenience
termination for risk
termination by mutual agreement
199. You are concerned about the lengthy period of time for your next contract. The
economy is uncertain, and you are worried about inflation and fluctuating materials
prices. Which type of contract is specifically designed to address those worries?
a.
b.
c.
d.

Fixed Price Incentive Fee
Time and Materials
Cost Plus Award Fee
200. Which of the following are methods for acquiring members of your project team?
a.
b.
c.
d.
46
pre-assignment, negotiation, and sharing

negotiation, sharing, and acquisition
pre-assignment, negotiation, and acquisition
negotiation, virtual team, and collaborating
Answer Sheet #1
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
33.
34.
35.
36.
37.
38.
39.
40.
41.
42.
43.
44.
45.
46.
47.
48.
49.
50.
51.
52.
53.
54.
55.
56.
57.
58.
59.
60.
61.
62.
63.
64.
65.
66.
67.
68.
69.
70.
71.
72.
73.
74.
75.
76.
77.
78.
79.
80.
81.
82.
83.
84.
85.
86.
87.
88.
89.
90.
91.
92.
93.
94.
95.
96.
97.
98.
99.
100.
101.
102.
103.
104.
105.
106.
107.
108.
109.
110.
111.
112.
113.
114.
115.
116.
117.
118.
119.
120.
121.
122.
123.
124.
125.
126.
127.
128.
129.
130.
131.
132.
133.
134.
135.
136.
137.
138.
139.
140.
141.
142.
143.
144.
145.
146.
147.
148.
149.
150.
151.
152.
153.
154.
155.
156.
157.
158.
159.
160.
161.
162.
163.
164.
165.
166.
167.
168.
169.
170.
171.
172.
173.
174.
175.
176.
177.
178.
179.
180.
181.
182.
183.
184.
185.
186.
187.
188.
189.
190.
191.
192.
193.
194.
195.
196.
197.
198.
199.
200.
47
Answer
1. d
2. b
3. a
4. c
5. b
6. a
7. a
8. d
9. d
10. c
11. d
12. b
13. d
14. a
15. c
16. c
17. a
18. a
19. b
20. c
21. b
22. d
23. d
24. b
25. b
26. a
27. c
28. c
29. d
30. a
31. b
32. b
33. d
34. a
35. c
36. d
37. c
38. d
39. b
40. b
41. a
42. d
43. a
44. c
45. d
46. a
47. c
48. b
49. a
50. d
50
Simple Answer Key: Comprehensive Exam #2

Answer
51. b
52. a
53. d
54. c
55. a
56. b
57. c
58. a
59. b
60. d
61. a
62. c
63. d
64. c
65. c
66. b
67. d
68. d
69. b
70. a
71. a
72. b
73. d
74. b
75. c
76. a
77. b
78. c
79. d
80. b
81. a
82. a
83. b
84. d
85. c
86. d
87. c
88. a
89. c
90. a
91. b
92. d
93. a
94. b
95. a
96. c
97. d
98. c
99. b
100. d
Answer
101. a
102. d
103. a
104. d
105. a
106. c
107. c
108. b
109. d
110. c
111. b
112. a
113. b
114. d
115. d
116. c
117. b
118. b
119. d
120. c
121. a
122. c
123. a
124. b
125. d
126. a
127. b
128. a
129. c
130. b
131. d
132. d
133. b
134. c
135. c
136. b
137. a
138. b
139. a
140. d
141. d
142. c
143. c
144. a
145. d
146. b
147. d
148. c
149. b
150. a
Answer
151. c
152. a
153. d
154. c
155. d
156. b
157. c
158. b
159. a
160. a
161. c
162. b
163. a
164. a
165. d
166. b
167. b
168. c
169. a
170. d
171. c
172. d
173. a
174. c
175. d
176. b
177. b
178. b
179. a
180. c
181. d
182. d
183. a
184. c
185. b
186. a
187. b
188. d
189. d
190. c
191. b
192. b
193. d
194. d
195. a
196. c
197. a
198. c
199. a
200. c
Detailed Answer Key: Comprehensive Exam #2

No.
Answer
Slides
Note
6-80
PERT gives insights into schedule risk because of the ranges

inherent in the best case vs. worst case estimates. Wider ranges
indicate work that is more uncertain.
12-59
See tools, Close Procurements. Expert judgment is often a tool, but

not in this case.
6-5
Beware: you are given data to build the schedule but the question
does not ask you to do so. Resource and duration estimates are
done; the next step (process) is develop the schedule.
9-53
The Myers-Briggs Type Indicator identifies 4 dimensions of human

behavior. The question refers to the dimension that addresses the
extravert vs. introvert difference among various people.
9-41
Smoothing often involves steering around a serious disagreement by

focusing on areas of agreement. The problem is that solutions
reached in this fashion are often temporary (the problem recurs).
11-4
Utility function involves the amount of risk that an individual or

organization is willing to accept in light of the potential reward.
12-58
In choice b, procurement audits is a tool. In choice c, closed

procurements and OPA updates are outputs. In choice d, the
contract file is part of OPA updates.
10-13
10-14
With a team of 15, there are 105 communication channels. (15 x 14)
/ 2 = 7 x 15 = 105
8-20 to
8-22
Choice a is true; the only 2 outcomes outside the control limits are
the 2 bulbs at 1160 lumens. Choice b is true; the 30 bulbs at 1145
lumens are outside the customer spec limits (above the USL of 1140)
and the 15 bulbs at 1055 and 1050 lumens are also outside the
customer spec limits but all 45 outcomes are inside the control limits
and are therefore normal for the process. Choice c is true; there are
a total of 47 outcomes that do not meet customer requirements (even
though 45 are within the control limits). Note: this is the type of
question that should be skipped on the first or even second pass
through the exam. It is too time consuming and is only worth one
point.
10
7-47
Also see p. 1-7 in the reference manual. Two steps:

1) EV = CPI x AC = .80 x 1250 = $1,000.
2) % complete = EV / BAC = 1,000 / 5,000 = .20
11
12-22
[(200k 160k)/.80] + 120k = (40k/.80) + 120k = 50k +120k =

$170,000
51
No.
Answer
Slides
Note
12
12-23
Price = Cost + Fee. The cost was given as 150k. Therefore, you
must calculate the fee adjustment and actual final fee that is due.
Fee adjust = (Target cost-Actual cost) x Seller share = (120k-150k) x
.20 = - $6k. Final fee due = Target fee + Fee Adjust = 40k-6k = 34k.
Therefore, the price = 150k + 34k = $184,000.
13
13-12
13-13
PMI suggests that high power, high interest stakeholders be

managed closely.
14
9-42
Choices b, c, and d all sound somewhat plausible. However, choice

a (stalemate) is one of the two explicit and classic problems with the
use of forcing.
15
12-34
IFB (also called a sealed bid) is appropriate when you are looking for
the best price for routine items readily available in the marketplace.
A purchase order could possibly be relevant if you have a preexisting arrangement with a supplier but IFB is the more likely
situation.
16
6-36
6-37
Task D must be connected to the project end or the network would

violate diagramming rules. Overall project duration is 30 days (A, B,
C) and the late finish for D is, therefore, 30. Early finish for D is 12
(because of the finish-to-finish with A).
17
11-52
11-53
Choice a is a strategy for maximizing positive opportunities.
18
12-21
See characteristics of FPIF. It is the only type that has a point of total
assumption.
19
11-52
Choices a and d are examples of risk mitigation. Choice c is an

example of avoiding a risk. Choice b (insurance) is one of several
ways to transfer risk.
20
12-13
Time and material contracts are aimed at exactly this kind of

scenario: there is a specific rate per hour for services but the number
of hours needed is not known up front and is left open.
21
10-10
See tools for Plan Communications Management. Information

management systems is a tool for both Manage and Control
Communications but not for planning.
22
8-4
Simple definition coupled with the PMI belief that gold-plating will
tend to raise costs needlessly.
23
7-47
CV = EV-AC = 800k-1mil = -$200,000. A negative cost variance

signifies a cost overrun.
24
7-50
EAC (variance typical) = BAC / CPI = 2mil / .80 = $2,500,000
25
5-5
5-34
This is a what next question. Process 3 (Define Scope) is

complete. The next scope management process is Create WBS.
26
7-6
7-30
Process 2 (Estimate Costs) is complete. The next process is

Determine Budget and the primary output is the cost performance
baseline.
52
No.
Answer
Slides
Note
27
8-22
An outcome outside of the control limits is called a special or

assignable cause. Such outcomes must be investigated to determine
whether there is a problem that must be corrected. The situation may
or may not be of any interest as a lesson learned.
28
11-38
to
11-41
Calculate EMV by multiplying each potential dollar outcome by its

probability. Then, add the resulting numbers. (.6 x 10mil) + (.2 x
5mil) + (.2 x 2mil) = 6 + 1 +.4 = $7,400,000
29
9-35
Choices a, b, and c are all inputs.
30
9-48
See McGregors Theory X.
31
12-68
Also see p. 12-22 in the reference manual. Choice a: is a tool (not

an output). Choice c: applies only to close procurements. Choice d:
applies only to close project.
32
6-78
(O + 4M + P) / 6 = (7+4x10+19)/6 = 66/6 = 11 days
33
8-39
Choice d (deliverables) is an input. Choices a and b are among the

seven basic quality tools.
34
2-27
Choice a describes the work authorization system (not part of

closing).
35
9-46
Laissez-faire (choices a and d) is a leadership style (not a source of

power). Self-esteem (choice b) is one of the needs in Maslows
hierarchy.
36
5-35
Decomposition and expert judgment are the only 2 tools for Create
WBS.
37
6-36
6-37
You must perform a forward and backward pass. Note that Task C
has 2 predecessors (must use largest number for the early start) and
that F is start-to-start with D.
38
6-38
The longest path is 22 days through B-D-F-G.
39
6-39
Free float is how long you can delay a task without delaying the start
of the immediate successor task.
40
6-38
Float = LF-EF = 10-4 = 6 days
41
10-8
Choices b through d are all important, but communications planning

is totally centered around information needs of key stakeholders.
42
3-4
3-5
Directing is not a process group. IPECC (Initiating, Planning,

Executing, Controlling [Monitor/Control], and Closing).
43
5-25
See 4 key tools.
44
11-19
Delphi is a tool of Identify Risks (part of information gathering

techniques). One of its features is that experts participate
anonymously so that no one can dominate the outcome.
45
8-16
8-19
See tool #3d, Pareto Chart (included as part of 7QC). There have
been questions in which a diagram is described and you must be
able to name that diagram and know what it is used for.
46
9-50
See the motivation theory by Vroom: Expectancy theory.
53
No.
Answer
Slides
47
10-37
to
10-39
Statement ii is incorrect. Informal communication taps you into the

network of communication that often alerts you to existing or
developing problems. Waiting on formal communication may make
you late in responding to such problems. See effective team
communication, action #2.
48
6-82
to
6-85
Task C is the cheapest and is on the critical path. However, it is not

crashable. You would pay for adding a resource but gain no
improvement (a scenario that sometimes mistakenly happens in the
real world). Task E is the cheapest, crashable task on the critical
path.
49
11-60
See tool #5, reserve analysis, which determines whether the

remaining reserves are sufficient to cover the remaining risk.
50
2-6
Report violations of the code of conduct and always provide accurate,

truthful information. You are also responsible to act in the best
interests of public safety and the environment.
51
7-69
to
7-72
Project B is financially better by BCR and IRR measures. Project B

also meets the hurdle rate and A does not (A hurdle rate is a required
minimum standard established by an organization. In this example,
the standard requires that a project should have an IRR of at least
20% or better.).
52
6-38
You do not need to draw the schedule to answer the question. The
question says that the schedule is a planned schedule. Float and
free float for a planned schedule is zero.
53
4-6 to
4-12
All statements are false. Statement i: The PM should not be

assigned later than the start of planning. Statement ii: The charter is
developed as part of initiating. Statement iii: Expert judgment is a
tool and is never an input or output.
54
11-52
Insurance is one of four possible risk transfer strategies suggested by

PMI.
55
6-16
6-17
See output #3, milestone list. Choice b: Decomposition is a tool.

Choices c and d: dependency determination and activity list updates
are part of sequencing.
56
8-3 to
8-5
8-9
Choice a: conformance is more important than non-conformance.

Choice c: low grade may be acceptable (customer does not always
need a luxury item). Choice d: possible but choice b (effective
planning) is better.
57
12-65
You have privity of contract (a legal contract) with Digitizer but not
Collectimizer. You must work through Digitizer and/or get their
permission to work directly with Collectimizer. You are not legally
permitted to work directly with Collectimizer unless Digitizer gives
permission. However, as always, a contractor is responsible for their
subcontractors (Digitizer is responsible for any problems).
58
8-13
8-14
COQ includes the cost of conformance and nonconformance which

subdivides into prevention, appraisal, and failure.
54
Note
No.
Answer
Slides
Note
59
8-14
See external failure costs in the table.
60
11-61
See output #2, change requests, and note the distinction between
contingency plans and workarounds.
61
12-24
The PTA is part of an FPIF contract and is not part of CPIF.
62
7-14
Budget estimates are done early in planning to establish required

levels of funding.
63
9-47
See motivation theory #1, Maslows hierarchy of needs. Selfactualization is the highest level need in the model.
64
12-67
Also see p. 12-20 in the reference manual: Force majeure is a

procurement concept that holds that failure to perform as prescribed
is forgiven as a result of an Act of Nature (e.g. volcano, earthquake,
blizzard, fire).
65
11-46
Path convergence: the chance that D will start on time depends on

whether A, B, and C all finish on time. .50 x .80 x .70 = .28
66
10-17
Choice b (an audit trail) depends upon written communication.
67
6-71
6-72
The critical path is always the path with the least float available.
Choice c: If you are behind schedule, float will be negative. If you
are ahead of schedule, float will be positive. Therefore, choice c has
exceptions.
68
9-40
Problem solving is appropriate when the issues are important and

compromise is not acceptable.
69
8-31
Quality audits and process analysis are tools of Perform Quality

Assurance. The definition provided is the definition for quality
assurance used by PMI.
70
8-24
Scatter diagrams determine whether one variable (called the

independent variable) can help predict another variable (called the
dependent variable).
71
9-39
A PMI survey found that the top seven sources of conflict were (in
order of likelihood): Schedules, priorities, resources, technical
opinions, administrative procedures, costs, and personalities.
72
6-76
The two classic methods for compressing the schedule are crashing
and fast tracking. An aggressive approach would use both
techniques.
73
5-3
Also see the 2 bullets on p. 5-1 in the reference manual, product and
project scope. They are measured against the product requirements
and the project management plan respectively.
74
7-55
Variance at completion is a forecasting formula that estimates any

expected cost variances when the project has been completed.
75
9-40
to
9-42
Negotiating, commanding, and reward are not among the conflict

resolution techniques identified by PMI. Also, note that the term
confront is an alternative terminology for problem
solving/collaborating.
55
No.
Answer
Slides
Note
76
5-36
5-39
Choice b: decomposition (not subdivision). Choice c: work

packages (not planning packages). Choice d: code of accounts (not
hierarchy of accounts).
77
11-22
See output #1, risk register (which also identifies the use of risk
triggers).
78
4-38 to
4-41
Choice a: informal changes should be resisted. Choice b: the

integrity of baselines must be maintained. Choice d: more than one
CCB is possible.
79
12-25
12-26
The contractor (seller) can possibly lose money on fixed price

contracts. Further, with FFP, the contractor bears the entire effect of
costs that are higher than expected (there is no share ratio).
80
8-7
8-29
The definitions are especially important in the quality chapter. The

definition in choice b describes Perform Quality Assurance.
81
10-28
10-29
See outputs, Manage Communications: Project communications,

project management plan updates, project documents updates, and
opa updates.
82
7-47
You must determine EV, as follows: four 500 square foot sections
have been completed at 20 hours each. So, 80 hours of work are
complete at $85 per hour. EV is $6800 and AC was given as $8,000.
Cost variance is EV-AC = 6800-8000 = -$1200.
83
12-33
12-34
See output #3, procurement documents. An RFP is appropriate for

complex, non-routine (e.g., development of new technologies) items
of relatively high dollar value.
84
8-3
to
8-5
Choice a: grade is features and functions (not quality). Choice b:

low grade may be acceptable to the customer in some
circumstances. Choice c: quality is meeting requirements (not
necessarily exceeding them, which would constitute gold-plating).
85
10-40
See effective team communication, action #4, use a tight matrix. It

does not necessarily follow that a tight matrix will lead to more
effective meetings.
86
11-43
The diagram described is a decision tree. PMI has been known to

ask about diagrams by first describing them (no visual illustration
provided).
87
5-49
You will need to know the relevant process group for each process.
Validate scope is part of monitoring and controlling.
88
8-21
Control charts are part of the seven basic quality tools, which are
included in plan quality management and in control quality. A
detailed description of tolerances is provided on pp. 8-6 & 7 in the
reference manual. Tolerances are defined by the customer. They
are usually implemented through the designation of upper and lower
specification limits (USL and LSL). Tolerances define the range of
variation in product outcomes that is acceptable to the customer.
89
10-27
See tool #5, performance reporting.
56
No.
Answer
Slides
Note
90
7-67
See sunk cost, money already spent that cannot be recovered. Sunk
costs should be ignored when deciding to terminate or continue a
project.
91
12-26
CPIF is often used for applied research and development of a new

idea as an actual new product.
92
8-53
See standard deviation, 6 sigma. A common quality approach uses

six sigma as the standard for meeting requirements, which means
that 99.9997% of outcomes meet requirements.
93
11-7
11-31
See Perform Quantitative Risk Analysis. You have identified

potential risks and performed qualitative analysis. The next step is
quantitative analysis, which uses techniques such as modeling and
simulation.
94
8-40
Choice b correctly states PMIs distinction: QA is to provide

confidence that requirements will be met and QC is to document that
acceptance criteria have, in fact, been met.
95
2-20
2-23
Also see p. 2-6 in the reference manual, disadvantages of the matrix.

Choice b: more control is an advantage, not a disadvantage. Choice
c: information flows in a matrix are more complex. Choice d: team
members have multiples bosses, not one clear boss.
96
7-29
7-34
7-35
Management reserve is not included in the cost baseline. It is an

amount managed separately and intended for unforeseen events
called unknown unknowns.
97
10-40
See effective team communication, action #6. PMI actually

recommends the use of team building during meetings (especially
kick-off meetings).
98
8-23
Choice a: inspection does not improve processes. Choice b: a

pattern of random outcomes is a positive sign that your process is
operating normally. Choice d: a Pareto chart is a vertical bar chart
and identifies the greatest causes of defects (trends are identified
using a run chart).
99
9-6
9-14
9-15
The first HR process is complete (the HR plan establishes roles and

responsibilities, creates an organization chart, and creates a staffing
management plan). The next process is to acquire the team
members and output #1 is staff assignments (p. 7-8).
100
3-16
5-6
Also see p. 3-7 in the reference manual. Define Scope clearly

precedes the WBS and Plan Procurement Management. See p. 2-15
and note that Acquire Project Team is an executing step and would
not occur before the planning steps.
101
7-78
Value engineering is a technique that reduces costs and/or improves

technology by finding better ways to provide the desired function or
performance.
57
No.
Answer
Slides
Note
102
4-16
Choices a and b are tools, not inputs. Choice c: change requests is

always an output except when used as an input to integrated change
control.
103
4-4
4-47
Choices b and d have already been completed. Choice c: is a scope

management process. Close project is the only remaining process
within integration management.
104
6-71
6-72
See tool #2, critical path method. Statement i: imposed dates are
called constraints. Statement ii: float on the critical path will be
positive if you are ahead of schedule and negative if you are behind
schedule. Statement iii: it is possible to have more than one critical
path (same durations).
105
4-10
Choice a: Describes the business case, not the SOW. The other
three choices are all correct.
106
13-27
10-17
10-38
Choice a: active listening promotes good communication. Choice b:

preferred method with stakeholders is face-to-face. Choice c:
cultural differences are a potential barrier to good communication.
Choice d: change requests is an output, and is never a tool for any
process.
107
11-3
11-4
11-7
Choice a: Risk may also have a positive effect. Choice b: Risk

factors (p. 9-2) include the potential event, the likelihood, and the
amount at stake. Choice d: Risk analysis prioritizes the potential
effect of each risk event.
108
3-16
Also see p. 3-7 in the reference manual. The initiating process group
has 2 processes: Develop Project Charter and Identify Stakeholders.
109
11-31
PMI states that not all projects need the rigorous and sophisticated
approaches that come with quantitative risk analysis. Some projects
are both low cost and low risk. They do not need Monte Carlo
simulations or decision trees.
110
7-6
7-14
7-25
Determining the budget is the next step after estimating costs.

Choice c (the cost baseline) is the primary output of determining the
budget. Choice a: range of accuracy on a definitive estimate is -5 to
+10%. Choice b: the next process is determine budget, which does
not produce resource estimates as an output. Choice d: there is
enough information to answer.
111
12-22
PTA = [(1,700,000 1,300,000)/.80] + 1,000,000 = $1,500,000
112
9-55
Failure to delegate causes work to stack up awaiting your attention.

Morale will often suffer when employees are not trusted and allowed
to do their job.
113
8-15
8-18
See tool #3, seven basic quality tools. An Ishikawa Diagram

resembles the appearance of the skeleton of a fish. Employed in a
group process, it is used to find actionable root causes for a specific
problem or concern.
114
4-27
Choice d (change requests) is always an output with one exception (it

is an input for integrated change control).
58
No.
Answer
Slides
Note
115
5-58
5-64
See output #3, project plan updates (the scope baseline may be
updated as a result of scope changes and the scope baseline
includes the WBS). Choice a: performance reports is not part of
scope control. Choice b: variance analysis is always a tool. Choice
c: requirements traceability matrix is an input.
116
6-36 to
6-38
You must draw the network. Path ADE totals 23 days and is the
longest path (and, therefore, the critical path).
117
6-38
The forward and backward pass reveals EF and LF of 15 and 19

respectively for Task B. Therefore, float is 4 days (19-15).
118
6-78
6-79
PERT e(t) = (O + 4M + P) / 6 = 78/6 = 13 days.
119
8-17
8-20 to
8-23
See tool #3, seven basic quality tools (control charts). Choice a:
spec limits are established by the buyer. Choice b: an assignable
cause is an outcome outside the control limits. Choice c: a random
pattern tends to show a process that is operating normally.
120
8-10
8-30
Choice a: quality audits are used only in quality assurance. Choice

b: quality checklists is an output, not a tool. Choice d: quality
metrics is an input or an output, not a tool. Note that for quality
assurance, benchmarking falls under tool #1 (quality management
and control tools).
121
4-15
4-18
The project management plan is used to guide execution and control

of the project.
122
4-4
Process 1 is complete. Process 2 (project management plan) is next.
123
4-5
Also see p. 3-7 in the reference manual. Any form of change control
is part of monitoring and control. Choices b and d: quality assurance
and directing and managing project work are part of executing.
Choice c: The charter is part of initiating.
124
3-4
The process groups are initiating, planning, executing, monitoring

and controlling, and closing (IPECC: monitoring and controlling is
often shortened to controlling).
125
4-8
4-9
Also see p. 4-2 in the reference manual. Approval of a project and its
funding occur external to project boundaries, but are documented by
a project document known as the project charter.
126
13-9
13-13
127
5-6
Collect requirements is part of planning.
128
5-6
5-40
What is next: scope management processes 1 through 3 are

complete (plan scope management, collect requirements, and define
scope). Process 4 (Create WBS) is next. See output #1, scope
baseline, which includes the WBS.
The introduction to Identify Stakeholders indicates that project

managers have limited time and must prioritize the importance of
various stakeholders. The first tool (stakeholder analysis) also
provides a grid for prioritizing relative importance.
59
No.
Answer
Slides
129
5-37
The WBS displays deliverables and work packages that must be

performed. The OBS links tasks in the WBS to resources on the
organization chart that will perform the work.
130
5-6
5-24
Define Scope produces the detailed scope statement and is part of

planning.
131
5-5
After the scope management plan is complete (scope process #1),

the next process is Collect Requirements.
132
5-58
5-64
See output #5, OPA updates. Choice a: as part of the project plan,
the change management plan (change control system) is an input.
Choice b: variance analysis is a tool (analysis is always a tool and
never an input/output). Choice c: scope creep is an undesirable,
unintended effect of failure to manage changes effectively.
133
12-26
Cost plus fixed fee contracts are often used for exploratory research
and proof of concept efforts.
134
3-12
6-6
Any act of change control is part of the monitor and control process
group.
135
6-71
6-72
Activities on the critical path are determined by the results of

sequencing and duration estimating. Stakeholders do not directly
designate activities as belonging to the critical path.
136
6-28
Precedence diagrams do not use dummy tasks.
137
10-20
See the definition of waiver.
138
6-64
6-86
See output #1. The schedule baseline is an output of schedule

development, which is a planning step.
139
6-5
6-64
Estimating durations is process #4 in time management. Process #5

is to develop the schedule.
140
7-14
See accuracy of estimates. A definitive estimate has a -5 to +10%

range.
141
7-39
Choice d (project funding requirements) is an input, not a tool.
142
7-6
7-30
The next process is determining the budget and the primary output is
the cost baseline.
143
7-15
7-25
Reserve analysis is tool #6 for estimate costs and tool #2 for

determine budget.
144
7-14
See accuracy of estimates (definitive). You should be familiar with

the types of estimates and associated accuracy.
145
7-47
CPI = EV / AC. EV = .20 x 750,000 = $150,000. AC = .24 x 750,000

= $180,000. CPI = 150 / 180 = .833 and a CPI less than one
indicates a cost overrun.
146
7-15
Choice b (basis of estimates) is an output, not an input.
147
7-15
Choice a: funding limit reconciliation is associated with determine

budget. Choices b and c: cost aggregation is associated with
determine budget.
60
Note
No.
Answer
Slides
Note
148
8-10
8-30
8-39
Metrics is an output of plan quality and an input to quality assurance

and quality control. Choice a: project management plan is only
associated with quality assurance and quality control. Choice b:
quality audits are only associated with quality assurance. Choice d:
process improvement plan is only associated with plan quality and
quality assurance.
149
8-3
8-11
8-14
8-31
Choice a: low grade is not necessarily a problem. Choice b: true, as

part of the project management plan the scope baseline is an input to
planning quality. Choice c: Q.A. also looks at processes. Choice d:
warranty work is part of the costs of non-conformance.
150
8-15
See flowcharts as part of tool #3 (seven basic quality tools).
151
8-10
8-30
8-39
Choice c: control charts are part of all 3 quality processes.
152
9-40 to
9-42
153
9-57
See resource Gantt chart which shows who is doing what and at what
time.
154
12-5
Also see p. 3-7 in the reference manual. Identify stakeholders is part

of stakeholder management.
155
8-10
See list of outputs. Choices a, b, and c contain items which are

either inputs or tools, not outputs.
156
11-38
to
11-41
EMV = probability x amount at stake = .80 x 200,000 = $160,000.
157
9-48
See motivation theory for McGregors Theory X-Theory Y. If

employees are believed to be basically lazy, theory X suggests a
highly directive and controlling management style.
158
7-46
Choices a, c, and d: planned value is not revealed in the data.
159
7-51
7-55
1. VAC = BAC-EAC. BAC is given as $500,000. EAC must be

calculated. 2. EAC (variance not typical) = AC + (BAC-EV) =
300,000 + 500,000 - 250,000 = $550,000. So, VAC = 500k-550k =
-$50,000.
160
7-57
TCPI (EAC) = (BAC-EV)/(EAC-AC) = (500k-250k)/(550k-300k) = 1.0
161
7-48
SV = EV-PV
162
12-60
See output #1, closed procurements.
163
12-49
Choices b and c are tools, not outputs. Choice d: an input.
164
12-9
12-38
Bidder conferences and advertising (choices b, c, and d) are

associated with conduct procurements, not plan procurements.
Teaming is not part of the Thomas and Kilmann conflict model.
61
No.
Answer
Slides
Note
165
3-7
Also see p. 3-7 in the reference manual. Choice a: draft SOW

comes from plan procurements (planning).Choice b: contract comes
from conduct procurements (executing). Choice c: requirements
management plan comes from collect requirements (planning).
166
9-49
See the motivation theory on Herzbergs Hygiene Factors. When not

cared for, hygiene factors may cause low motivation and
dissatisfaction.
167
7-71
NPV > 0 indicates a profitable project.
168
4-8
Ideally, the project manager should be assigned during initiating and

participate in development of the charter. The PM should never be
assigned later than the start of planning.
169
9-54
See leadership styles. Laissez-faire would be the best fit for a highknowledge group of experts (especially when clear objectives are
established).
170
5-3
See product scope (describes features and functions in the desired

product or service) and project scope (identifies management
activities required to deliver the product or service).
171
12-33
The scope statement and SOW both describe the product but the
SOW is part of the procurement process whereas the scope
statement is created as part of scope management.
172
6-36 to
6-38
The critical path is ABDE with a duration of 21 days. When Task B

finishes in 4 days instead of 6, the new finishes for B, D, and E
become 8, 15, and 19 respectively. Therefore, the float for Tasks D
and E changes from zero to +2. The project is now ahead of
schedule.
173
9-30
You have a professional obligation to protect sensitive information

belonging to others, and you should not immediately escalate an
issue. In this case, you should speak directly with the administrative
assistant before raising the issue with anyone else.
174
9-46
Referent power is exercised by referring to powerful figures in an

attempt to make someone cooperate either because they respect or,
conversely, are afraid of the powerful figure.
175
8-54
Run charts are used to identify and track trends and variances.
176
12-49
12-57
Choice b (contract change control system) is part of Control

Procurements (not Close Procurements).
177
11-52
See tool #1, strategies for negative risks: Methods to transfer risk
include insurance, warranties, outsourcing, fixed price contracts.
178
12-5
12-46
See output #2, agreements (part of conduct procurements). PMI now

also refers to contracts as agreements.
179
5-5
Scope management processes include: plan scope management,

collect requirements, define scope, create WBS, validate scope, and
control scope. There is no process called close scope.
62
No.
Answer
Slides
Note
180
11-45
See EMV. Decision trees help identify the possible interactions (risk
event interdependencies) in a given situation and also factors in cost
effects through the use of expected monetary value.
181
7-58
The 50:50 rule gives half credit for any task started but not completed
(tasks 2-4), 100% credit for tasks completed (task 1), and no credit
for tasks that have not started (task 5). EV using the 50:50 rule totals
$1,250. The % complete rule gives credit by multiplying PV by the
reported % complete. This rule totals $1,350 in this case.
182
9-38
See manage project team, tool #2, performance appraisals.
183
7-48
Choice b = SPI. Choice c = % completed. Choice d = % spent.
184
10-10
See output #1, communications management plan. Choices a and d:

Project plan updates and OPA updates are not part of plan
communications. Choice b: Communication models is a tool.
185
10-13
10-14
With 7 members, you had 21 channels: (7x6)/2. With 5 members,

you have 10 channels: (5x4)/2. You have decreased from 21 to 10,
11 fewer channels.
186
11-3
11-4
Utility function addresses how much risk one is willing to accept in

light of the potential reward (does not evaluate how to achieve
business opportunities).
187
12-38
Advertising is Tool #5 of Conduct Procurements.
188
12-59
See tool #1, procurement audits. Procurement audits identify lessons

learned (successes and failures that may help in managing future
projects).
189
12-57
Procurement documents is input #2.
190
6-36 to
6-38
Trick question that has been used on the real exam. You do not
need to build or analyze the schedule. Float and free float on the
critical path is zero.
191
N/A
This is a logic question. Earned value totals the status of all tasks
and does not focus only on the critical path. Therefore, it is
conceivable that the critical path could be behind schedule while
many non-critical tasks could be ahead of schedule. Choice c, the
EV rule being used, may have some bearing but choice b is a better
answer.
192
N/A
Earned value was created primarily for the cost information. For
accurate schedule data, critical path analysis would be superior.
193
12-53
12-59
Slide 12-53: See Tool #6, Claims administration. Slide 12-59: Also
see Procurement negotiations. Choice c is correct but choice d is
more complete in that the dispute may extend past the official closing
of the procurement (procurement negotiations).
194
3-16
Also see p. 3-7 in the reference manual. The initiating processes are
Develop Project Charter (integration management) and Identify
Stakeholders (stakeholder management).
63
No.
Answer
Slides
195
5-32
See output #1, scope statement: Constraints are restrictions

imposed by others.
196
11-52
11-53
Choices a, b, and d are strategies for dealing with negative risks (see
tool #1). Choice c, exploit, is one of the strategies for achieving
positive opportunities (see tool #2)
197
11-24
A probability and impact matrix is part of qualitative analysis, not

quantitative analysis (see tool #2).
198
12-56
See close procurements, introduction. Termination may occur for

default, convenience of the buyer, or by mutual agreement.
199
12-28
See fixed price with economic price adjustment.
200
9-18
See the 4 tools for acquiring a team. Sharing and collaborating are
not among these tools (choices a, b, and d).
64
Note

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PMP Exam Power Prep

PMP Exam Power Prep

Copyright CMF Solutions and TwentyEighty Strategy Execution

Reduces and structures required study time:

Provides a comprehensive review of testable topics:

PMBOK Guide, 5th edition, 2013

Typical Daily Agenda: 5-day Boot Camp

Lecture and Review:

Introduction, PMI Concepts, Processes, Integration, Scope

Human Resource, Communication, Risk

Facilitated Study, Review, and Practice Exams:

Beware personal experience and real world

Normal meeting etiquette:

Computerized at Prometric (Sylvan Learning Center)

66% is a safe guide for passing score!!!

- 25 pre-test or control questions; do not count in score

Test bank, random selection (more diverse than ever)

Test-Taking Tips and Strategies

The day before: normal sleep, dining, beverages

Processes, Inputs, Tools, Outputs

EEF = Enterprise Environmental Factors

Preparing for the Math

Testable math formulas are listed in the following 2 places:

There are approximately 39 formulas that have actually been

First Two Chapters of the PMBOK Guide

PMBOK Guide, Chapter 1: Introduction

PMI Code of Ethics and Professional Conduct

PMI Code of Ethics and Professional Conduct

The code of ethics rests on 4 standards of conduct:

This material is no longer tested as much as it once was.

First Key Value: Responsibility

Make decisions based on the best interests of society,

Second Key Value: Respect

Listen to others; respect the norms and customs of

Third Key Value: Fairness

Be transparent, impartial, and objective when making

Disclose real or potential conflicts of interest

Fourth Key Value: Honesty

Never make misleading or false statements

Project and Project Management

Temporary: the project has a defined start and finish

Unique: the product or service is different in a distinguishable

In contrast, operations are on-going and repetitive

Cost, schedule, and scope are called the triple constraint

Program and Program Management

Programs are larger in scope than projects

It is not as clear when a program should end

Programs have elements of on-going, cyclical operations

Programs always contain related projects

However, projects may exist separately from programs

Portfolio and OPM

One outcome of portfolio management would be the selection and

New projects and programs should always align with strategic

OPM (Organizational Project Management):

Projects, programs, and portfolios exist within this framework

Board of Directors or Board of Regents at a university

Ensures value is added to the organization before approving new

Project Management Office (PMO)

May operate with differing levels of control:

1. Supportive PMO: Consults and suggests best practices. PMO

Role of the Project Manager (PM)

PMBOK Guide, Chapter 2: