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Important Points to remember

for PMP Exam


Manager Styles
Coercive
Authoritative
Affiliative
Democratic
Pacesetting
Coaching

Immediate Compliance
Providing Long term direction and Vision
Creating Harmony
Building Commitment & Generating new Ideas
Accomplish tasks to high standards of excellence
Long term professional development of others

Forms of Power
Coercive
Reward
Legitimate

Referent

Expert

Representative
Formal / Position

Punishment - Is based on the idea in the mind of the person being influenced tha
the person having the influence has the ability to inflict punishment or pain.
Reward - Is based on the idea in the mind of the person being influenced that the
person having the influence has the ability to administer some sort of reward.
By Position - Is based on the idea in the mind of the person being influenced tha
the person having the influence has this influence because of the values of the
person being influenced. In other words, the influenced person believes that the
person influencing has the right to do this through formal authority in the
organization.
By Personality - Is based on the idea in the mind of the person being influenced
that the person having the influence has this influence based on the person being
influenced having a strong desire to identify with the person influencing. A
person who leads others by virtue of his or her charisma has this type of power.
Special Knowledge & Ability - Is based on the idea in the mind of the person
being influenced that the person having the influence has this influence based on
special knowledge or ability. This special knowledge or ability is believed to hel
the influenced achieve their goals.

The project manager has been assigned by senior management and is in charge o
the project. Also known as positional power.

Conflict Styles
Avoiding
Accommodating
Competing
Compromising
Collaborating

The person seeks to avoid or postpone having to deal with conflict (often until
more facts can be gathered, or one party has had time to think it through)
The person seeks to maintain the relationship with others by subordinating his
own position
The person seeks to impose his will or solution on others, despite their
misgivings or differing opinions
The persons seeks to find a solution to the conflict by having each of the partie
make concessions
The person seeks to find a solution by involving all parties affected by the
conflict.

Resolving Conflicts
Forcing

Win-Lose -- One way to resolve a conflict is for one party to force the other to
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Smoothing

Compromise

Problem Solving /
Confronting
Withdrawal

agree. This is the kind of conflict resolution that happens when one person has
power over another and exercises it.
Loss Loss -- Temporary Smoothing minimizes the disagreement by making
differences seem less important. This kind of resolution occurs when either one o
the persons disagreeing or another person in the group attempts to make the
differences smaller than they seem.
Loss Loss -- Compromise is similar to smoothing. Using this type of conflict
resolution, each of the parties gives up something to reach a common ground. In
this resolution the parties themselves agree to give up on some points but not
others. In doing this they reach a common agreement that has relatively few
points of disagreement.
Best Solution Win-Win
Yield Lose -- Temporary

Team Decisions
Individual
Minority
Majority
Consensus
Concordance

Very Low Team Involvement One person actually makes the decision
Low Team Involvement A few of those involved in a situation meet to conside
the matter and make a decision, and this decision is binding for all concerned
Low Team Involvement - More than half of those involved in the situation make
decision, and it is binding for all concerned.
Very high Team involvement - Consensus is needed for most important decision
Complete and absolute - Concordance (100% commitment) is needed for
decisions of critical importance.

Influence and Leadership


Coercive Influence
Reward Influence
Position Influence
Expert Influence
Information
Influence
Personal Influence

Is based upon the leaders capability to punish


Is based on the leaders ability to dispense rewards
Is based upon the tendency of people to respond to individuals in higher
positions
Is based upon your skill or experience which others may hold in high regard
Is based upon the information or knowledge you have thats not available to
others
Is based upon your individual personality and charisma, and the relationships
you create

Motivation Models
Needs

People are motivated to satisfy perceived needs


MASLOW
2

CLAYTON ALDERFER
Suggested that needs can be classified into 3 broad categories
Existence
Relatedness
Growth

Expectancy
Equity
Herzbergs Theory

Theory X
Theory Y
Theory Z

Needs include basic survival needs, both


physiological and Safety needs
Needs include all aspects of interpersonal
relationships Social Needs
Needs include self-esteem and achievement
of potential

If a person does not believe it is possible to do something, or that no


consequence of value will occur to the person if that something is done, then the
person will not be motivated to act in the first place.
People wanted to be treated fairly, and will be motivated to restore a feeling of
equity if they are not treated fairly
Hygiene agents These are not motivate people, absence of these will
demotivate performance Job security, Paycheck, clean & safe working
conditions, sense of belonging, civil working relationships etc.,
Motivating Agents These are the elements that motivate the people to
perform Responsibility, appreciation of work, recognition, chance to
excel, education, other opportunities other than financial rewards.
Managers think that, the workers are lazy, and no trust on them, need
micromanagement
Self-led, motivated, and can accomplish new tasks proactively
Participative management style. Workers will be motivated by sense of
commitment, opportunity, and advancement. Workers in this organization learn
the business by moving to through the ranks of the company

Negotiations
Persuading
Bridging
Disengaging
Asserting
Attractive
Avoiding

Based on logic or fact; can be measured objectively


Offering of support; disclosing vulnerability
Legitimate tactic; use to buy time or de-fuse tense situations
Based on personal beliefs, values and attitudes; very subjective
Making others share positive feelings, envision desirable outcomes
Not legitimate; used when we are not comfortable about negotiating the issues

Team Development Stages


3

Forming
Storming
Norming

Performing

Adjourning /
Mourning

When first formed, a team is just a group of individuals who have been assigned
to work together. Individuals tend to focus on their own goals
As teams begin actual work, they often go through a period of conflict. This is
natural: members are sorting out their roles and differences in opinion on work
issues
In the Norming Stage, the group starts to function as a team. Group norms are
established and peer pressure tends to keep individual behaviors within
expectations. Team member roles are clear and the team agrees on the right
decision-making technique for a given situation. Real work tasks are attacked
and the group agrees on approaches and processes. Things get done in a more
definable, repeatable, predictable way.
Successful teams move on to the Performing Stage when their effort becomes
focused. Members are dedicated to achieving team goals. The team responds to
opportunities quickly. Leadership, responsibility and recognition are typically
shared among team members. Members leverage the diversity of their team
mates, and play to their individual strengths. A high level of trust and
trustworthiness abounds.
Some teams, such as project teams and parallel teams, have a scheduled end.
When the team has realized its goal, it is disbanded. This final phase is called the
Adjourning or Mourning Stage. When a team's work is finished, members may
feel a sense of loss or disillusionment that affects their ability to be effective in
their next assignment.

Benefit Measurement Methods


Murder Boards

Scoring Models
(Weighted scoring
models)

Benefit/Cost
Ratios

Payback Period

Discounted Cash
Flow

Murder boards are committees full of folks that ask every conceivable negative
question about the proposed project. Their goal is to expose strengths and
weakness of the projectand kill the project if its deemed worthless for the
organization to commit to. Not a pleasant decision-making process.
Scoring models (sometimes called weighted scoring models) are models that use
a common set of values for all of the projects up for selection. For example,
values can be profitability, complexity, customer demand, and so on. Each of
these values has a weight assigned to themvalues of high importance have a
high weight, while values of lesser importance have a lesser weight. The projects
are measured against these values and assigned scores by how well they match to
the predefined values. The projects with high scores take priority over projects
will lesser scores.
Just like they sound, benefit/cost ratio (BCR) models examine the cost-to-benefit
ratio. For example, a typical measure is the cost to complete the project, the cost
of ongoing operations of the project product, compared against the expected
benefits of the project. For example, consider a project that will cost $575,000 to
create a new product, market the product, and provide ongoing support for the
product for one year. The expected gross return on the product, however, is
$980,000 in year one. The benefit of completing the project is greater than the
cost to create the product.
How long does it take the project to pay back the costs of the project? For
example, the AXZ Project will cost the organization $500,000 to create over five
years. The expected cash inflow (income) on the project deliverable, however, is
$40,000 per quarter. From here its simple math: 500,000 divided by $40,000 is
12.5 quarters, or a little over three years to recoup the expenses.
Discounted cash flow accounts for the time value of money. If you were to
borrow $100,000 for five years from your uncle youd be paying interest on the
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Net Present Value

Internal Rate of
Return

money, yes? (If not, youve got a great uncle.) If the $100,000 were invested for
five years and managed to earn a whopping six percent interest per year,
compounded annually itd be worth $133,822.60 at the end of five years. This is
the future value of the money in todays terms.
The net present value (NPV) is a somewhat complicated formula, but allows a
more precise prediction of project value than the lump sum approach found with
the PV formula. NPV evaluates the monies returned on a project for each time
period the project lasts. In other words, a project may last five years, but there
may be a return of investment in each of the five years the project is in existence,
not just at the end of the project.
Time Period

Cash
Flow

Present
Value

15,000.00

14,150.94

25,000.00

22,249.91

17,000.00

14,273.53

25,000.00

19,802.34

18,000.00

13,450.65

Totals

$100,000.00

83,927.37

Investment

78,000.00

NPV

$5,927.37

The last benefit measurement method is the internal rate of return (IRR). The IRR
is a complex formula to calculate when the present value of the cash inflow
equals the original investment. Dont get too lost in this formulaits a tricky
business and you wont need to know how to calculate the IRR for the exam. You
will need to know, however, that when comparing multiple projects IRRs,
projects with high IRRs are better choices than projects with low IRRs. This
makes sense. Would you like an investment with a high rate of return or a lower
rate of return?

Constrained Optimization Methods


Linear Programming
Nonlinear Programming
Integer Algorithms
Dynamic Programming
Multi objective Programming
EAC Formulas
EAC = BAC / CPI
EAC = AC + ETC
EAC = AC + (BAC EV)
EAC = AC + ((BAC EV) / CPI)

Used if no variance from BAC or you will continue at the same r


of spending
Used when original estimate is flawed
Used when current variances are atypical of the future
Used when variances are thought to be typical of the future

Sources of Power
5

Legitimate
Coercive
Reward
Expert
Referent

Formal, position
Punishment
Reward
Expert
Well Respected Person

Contingency Reserve Calculation


Risk

Probability

Impact: Cost Is Negative;


Benefits Are Positive

Ex$V

20%

$4000

$800

45%

$3000

$1350

10%

65%

$2100
$2500

$210
$1625

Contingency Reserve Fund

$865

Reasons for Conflict


1
2
3
4
5
6
7

Schedules
Priorities
Resources
Technical Beliefs
Administrative Policies & Procedures
Project Costs
Personalities

Project Endings
Addition
Starvation
Integration
Extinction

Projects becomes Operations


Resources and Budget cuts
Resources reassigned or redeployed to other projects
Successful end of the project

Quality Gurus
Crosby
Juran
Deming
Kaizen

Zero Defect, Prevention or rework results


Fitness for use, conformance
Quality is a management problem (85%)
Continuous improvement

Utility Theory A technique that characterizes an individuals willingness to take risk


Autocratic Project Manager Makes decisions without team input
Spending Plan - The project's spending plan is the plan for the flow of money to pay for
the project.
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Sum of years digits calculation depreciation 1+2+3+4+5 => 5+4+3+2+1 => 15


o After 2 years = 4/25 * Item Value
o This is a accelerated depreciation method

Learning Curve Average unit cost decreases as much units are produced
Mores Different standards of conduct in cultures
Frederick Taylor believed that work should be broken down into smaller pieces, and
procedures written to perform it.
Halo effect Assuming that a person can do other things well because he or she is
currently exhibiting excellent performance
Referent Well respected person
Process A series of actions that brings about a result
Project Management process map A diagram that shows the usual location of
knowledge areas with in the processes
Privity Describes contractual relationships (Contractual, confidential information
between customer and vendor)
Liquidated damages An agreed-to penalty for missing a project milestone
Constructive change One party assumes that the other has the authority to make
changes
Types of dispute resolutions Negotiation, Mediation, Arbitration, Litigation
Variance Square of Standard Deviation
Gold Plating Including enhancements that are not necessary to accomplish the objective
of the project.
Constrained Optimization Linear Programming
MBO Management by objectives
Attribute Sampling Determining if a product conforms to a specification or does not
(GO NO-GO).
Force Majeure External risks like Earthquakes, Floods etc.,
SWOT Strengths, Weaknesses, Opportunities, Threats.
Ordinal Scales Low, High, Very high etc.,
Cardinal Scales 0.1, 0.3, 0.5, 0.9 etc.,
Distribution Types Uniform, Normal, Triangular, beta and log normal
Triangular Distribution Optimistic, Most Likely and Pessimistic.
Normal & Log Distribution Mean and Standard deviation
Sensitivity Analysis Which risks have the most potential impact on the project?
Risk Response Strategies Avoidance, Transfer, Mitigation, Acceptance
Risk Premium Company pays to third party for transferring the risk
Active acceptance Developing a Contingency plan to execute, should a risk occur
Passive acceptance no action, leaving the project team to deal with the risk as they
occur

Fallback plan if the risk has a high impact, or if the selected strategy may not fully
effective (or is an additional contingency plan to use in the event that the first
contingency plan fails).
Contingency allowances Amounts of time, money, or resources to account for know
risks.
Risk response Plan Also called Risk Register
Reports used to monitor and control the risks Issue Logs, Action-Item Lists, Jeopardy
Warnings and Escalation Notices.
Project Closing Project postmortem
Project Portfolio management Is the process of choosing and prioritizing projects within
an organization
Business Risk The risk of financial gain or loss
Pure Risk Risks that could threaten the safety of the individuals on the project
JIT Just in Time Decreases the inventory investments
Kaizen Technologies Small process and product improvements that are carried out on a
continuous basis
Optimal quality when revenue from improvements equals the incremental costs to
achieve the quality
Parkinsons Law Work expands so as to fill the time available for its completion.
Resource Leveling Smoothes out the project schedule so resources are not overallocated. A result of this is that projects are often scheduled to last longer than initial
estimates.
Sapir-Whorf Hypothesis An understanding of the local language, its implied meaning,
and colloquialisms allow individuals to have a deeper understanding of the people, their
values and actions.
Culture Shock Initial disorientation a person first experiences when visiting a country
other than his own.
Ethnocentrism Happens when individuals measure and compare a foreigners actions
against their own local culture. The locals typically believe their own culture is superior
to the foreigners culture.
Sixth domain (Professional Responsibilities) Ensure Integrity, Contribute to the
knowledge base, Apply professional knowledge, Balance stakeholder interests, Respect
differences.
Personal Literacy Understanding and valuing yourself
Social Literacy Engaging and challenging others
Business Literacy Focusing and Mobilizing your organization
Cultural Literacy Valuing and leveraging cultural difference
Paralingual Used to describe the pitch and tone on ones voice
Exception Report When variance exceed a given limit
Bulls eye Used to trigger communication needs to management when EVM results fall
within the identified ranges
Unilateral Contract Purchase Order.
Single source seller Only one seller the company wants to do the business with.
Letter of intent An organization intended to buy from a seller
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Proposal Does not list the price to complete the work, but instead offers solutions to the
buyer for completing the project needs.
IFB Invitation for Bid Typically a request for sealed document that lists the sellers
firm price to complete the detailed work.
RFP Request for Proposal Documents from Buyer to seller requesting information on
completing the work
RFI Request for Information Documents from Buyer to seller requesting information
on completing the work
Letter Contract Use this for immediate work
NPV Net Present Value NPV assumes reinvestment at the cost of capital (Sum of
Discounted Initial Investment)
IRR Internal Rate of return Discounted rate when NPV = 0 Reinvestment at the IRR
rate
Common source of conflict during early phases of the project Priorities
Common source of conflict during Execution phase of the project Schedule
Time and Material (T & M) Unit price contracts
Depreciation Types Straight Line depreciation, Accelerated Depreciation (Sum of
Years digit and Double declining balances)
Sunk Costs These are all costs incurred prior to a decision point / Monies that have been
spent on the project.
Opportunity Costs - Based on net present value, this is what you give up because you did
not select an alternate use for the money you are going to spend. Suppose you have your
money invested at 6 percent in a money market fund. If an alternate opportunity comes
along that promises a higher yield, then the opportunity cost of the new investment is 6
percent. After all of the calculations to justify the project, it still has to beat 6 percent to
be viable. If it seems a little simplistic, that's because it is!
PERT Program Evaluation and Review Technique Used where uncertainty in the
duration of the activities.
SD (Pessimistic Optimistic) / 6
EV Expected Value = (O + 4M + P) / 6
Variance (SD)2
1 SD 68.26
2 SD 95.44
3 SD 99.73
6 SD 99.99
Free Float - This is the total time a single activity can be delayed without delaying the
early start of any successor activities.
Total Float - This is the total time an activity can be delayed without delaying project
completion.
Project Float - This is the total time the project can be delayed without passing the
customer-expected completion date.
Steps to find the SD for a total project
o Find EV for each activity and Sum all
o Find the SD by (P O) 6 formula
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o Square the SD calculated in the previous step - Variance


o Sum all the SD squared
o Find Square root of the previous steps value This is the SD for the Project
CPM & PERT Not considers the resource availability, that is why resource leveling
heuristics will come into picture
Risk Mitigation Is an effort to reduce the probability or impact of the risk to a point
where the risk can be accepted.
Contingency Budget This money is not assigned to specific project tasks and is set aside
and available to fund the work that must be done if and when a risk occurs Required the
Project manager approval
Management reserve Is similar to the contingency budget in that it is made available to
fund unknown risks when they occur. In order to prevent the inappropriate use of this
budget, a person at a level above the project manager level must approve the use of these
funds.
Risk Analogy If rain is the risk
o Avoidance Dont go outside, so that we never become wet
o Transfer Hire another party, so that he will go wet instead of you
o Mitigation Take an Umbrella
o Acceptance Go wet
Expected Value = Risk Probability x Risk Impact
Least conflict in Implementation Phase Conflict over personality Issues
Chart of Accounts Any numbering system that is used to monitor project costs by
category such as labor, supplies, or materials etc.,
Net Cash Flow = Cash Flow In Cash Flow Out
Blanket Order The price is based on the goods or services that will be sold over the
period of the blanket order. The seller has a long-term order from the buyer and can invest
in the means of production. The buyer has a stable price for the period of the blanket
order. If the buyer does not buy all the goods or services that were promised, the price per
unit is adjusted at the end of the contract. Since the inventory is delivered as needed, the
inventory carrying cost is of no consequence to the buyer.
Forward Buying The amount of goods required for a long period of time is purchased
and delivered at one time. There is a quantity discount for this type of purchase, but it has
no effect on capital investment unless it would be to build a place to store the goods. It
will decrease transportation cost, increase inventory, prevent the risk of future price
increases, and increase the cost associated with obsolescence.
RFB Request for Bid used when source selection will be price driven
RFP Request for Proposal Solution Driven
Staffing Plan The functional manager must have a staffing plan that allows him or her
to know where the people in the functional organization are committed.
Theory X Type X managers think that all people are basically lazy and that unless they
are threatened or in some way forced to do work, they will not do any work. These
managers direct work to be done and do not allow very much participation in any
decision making, because they feel that the participation by the workers would only lead
to less work being done. Useful for Extremely difficult project like in military etc.,
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Theory Y Type Y managers believe that people will do a good job for the sake of doing
it. They believe in participative management and sharing information with the workers.
These managers will also listen to problems that are brought up by their staff.
Ouchis Theory Z Stats that workers need to be involved with the management process.
General Management Skill Leading, Communicating, Negotiating, Problem Solving,
Influencing
Marginal Analysis Marginal analysis studies the cost of the incremental improvements
to a process or product and compares it against the increase in revenue made from the
improvements. For example, the price of the added feature may cost the company $7.50
per unit, but the amount of gained sales per year because of the improvement will meet or
exceed the cost of the improvement.
Attribute Sampling Measure conformance to quality on a per unit basis
Variable Sampling Measure conformance to quality as a whole
Random Causes Determine expected variances of quality
Special Causes Determine anomalies to quality
Goldratts Critical Chain Theory Add buffer to the critical chains
Product scope measured against the Requirements
Project scope measured against the Project Plan
Law of diminishing returns At some point in the work, the duration to effort ratio
becomes saturated, and adding additional laborers will actually become
counterproductive.
Informal Communication Ad hoc conversations, Memos
Bulls eye Communication between PM to Management when variance crosses some
level
Code of Accounts Any numbering system to uniquely identify each component of the
WBS
Claim A request, demand, or assertion of rights by a seller against a buyer, or vice
versa, for consideration, compensation, or payment under the terms of a legally binding
contract, such as for a disputed change.
Process Groups Initiation, Planning, Executing, Controlling and Closing
Knowledge Areas
Common Cause Random Cause A source of variation that is inherent in the system
and predictable. On the control chart, it appears as part of the random process variation
(i.e., variation from a process that would be considered normal or not unusual), and is
indicated by a random pattern of points within the control limits.
Special Cause A source of variation that is not inherent in the system, is nor predictable,
and is intermittent. It can be assigned to a defect in the system. On a control chart, points
beyond the control limits, or non-random patterns within the control limits, indicate it.
Control Comparing actual performance with planned performance, analyze variance,
assessing trends to effect process improvements, evaluating possible alternatives, and
recommending appropriate corrective action as needed.
Control Account Where scope, budget, actual cost, schedule are integrated and
compared to earned value for performance measurement.
CAP Cost Account Plan All the work to be done for Control Account.
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COQ Cost of Quality


o Prevention & Appraisal
Quality Planning
Quality Control
Quality Assurance (Training etc.,)
o Failure costs
Rework
Components
Cost of warranty
Wastage
Loss of reputation etc.,

CPI = EV / AC
CPF / CPPC Cost-plus-Fee / Cost-plus-percentage-cost Cost and a fee (% of costs),
which varies from With respect to Actual Cost.
CPFF Cost-plus-fixed-fee Cost and a Fixed fee
CPIF Cost-plus-incentive-fee Cost and a incentive fee (seller earns profit, if it meets
the performance)
Direct Costs Costs incurred for exclusive benefit of the project
o Salaries of full time project staff
Indirect Costs Generally calculated as % of direct costs
o Overhead costs
o General and administrative costs
o Cost of doing business
Salaries of mgmt indirectly involved in the project
Utilities

CV = EV AC
Critical Activity Any activity on the Critical Path
Critical Chain Method A schedule network analysis technique that modifies the project
schedule to account for limited resources
Data Date As-of date or time-now date
Develop Project Team The process of improving the competencies and interactions of
team members to enhance project performance.
EVM Earned Value Management Integrate the Scope, Schedule and Resources for
performance measurement
Effort Number of labor units required to complete a schedule activity or WBS
component.
Duration Number of work periods required to complete a scheduled activity or WBS
component.
Exception Report Document that includes only major variations from the plan.
FMEA Failure Mode and Effect Analysis An analytical procedure in which each
potential failure mode in every component of a product is analyzed to determine its
effects on the reliability of that component and, by itself or in combination with other
possible failure modes, on the reliability of the product for all ways that a failure may
occur. For each potential failure, an estimate is made of its effects on the total system and
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of its impact. In addition, a review is undertaken of the action planned to minimize the
probability of failure and to minimize its effects.
FFP Firm-fixed-price Firm Fixed amount
FPIF Fixed-price-incentive-fee Fixed price + Fee (if seller meets the project
objectives)
Fixed Price or Lump-Sum Contract Fixed Fee. It may also include incentives for
meeting or exceeding the project objectives
Ground Rules A list of acceptable and unacceptable behaviors adopted by a project
team to improve working relationships, effectiveness, and communication.
Imposed Dates
o Start no earlier than
o Finish no later than
Lag Plus (+)
Lead Minus (-)
Lowest Qualified Bidder A contracting process in which the lowest bid is accepted
after meeting the minimum qualifications
Management by Exception A management technique that emphasizes attention to
performance behavior that falls outside of some predetermined range of normal or
expected outcomes. This technique is characterized by containment and conservatism.
Master Schedule A summary-level project schedule that identifies the major
deliverables and WBS components and key schedule milestones.
Methodology A system of practices, techniques, procedures, and rules used by those
work in a discipline.
Milestone Schedule A summary level schedule that identifies the major schedule
milestones.
Near Critical Activity A schedule activity with low total float.
Network Open end A schedule activity with out any predecessor or successor activities.
Objective
o A strategic position to be attained
o Purpose to be achieved
o A result to be obtained
o A product to be produced
o A service to be performed
Path Convergence Merging of parallel schedule network paths into the same node in the
project schedule network diagram. Many predecessors for an Activity
Path Divergence Many successors for an activity. Opposite to Path convergence
PMB Performance Measurement Baseline An approved integrated scope-schedulecost plan for the project work against which project execution is compared to measure
and manage performance. Technical and Quality may also be included
Performance Reporting
o Status Reporting
o Progress Measurement
o Forecasting
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Plan Contracting The process of documenting the products, services, and results
requirements and identifying potential sellers.
Planning Package A WBS component below the Control account with known work
content but without detailed schedule activities.
Portfolio Collection of Projects/Programs grouped together to facilitate effective mgmt
of that work to meet the strategic business objectives.
Mitigation Preventive Action
Procedure A series of steps followed in a regular definitive order to accomplish
something
Process A set of interrelated actions and activities performed to achieve a specified set
of products, results or services
Procurement Documents
o IFB
o Invitation for negotiations
o RFI Request for various pieces of information related project
o RFQ Price quotations for standard products/items
o RFP
o Seller responses
Project life cycle is a subset of Product life cycle
Product scope The features and functions that characterize a product, service or result
Project A temporary endeavor undertaken to create a unique product, service, or result
Project Life Cycle Sequence of Phases
Project Phases Collection of logically related project activities
o Generally Completed in sequence, may overlap
o Project phase is not a Project management Process group
Project Scope
o Major deliverables
o Project objectives
o Project assumptions
o Project Constraints
o Statement of Work
o Justification
Punchlist The items remaining to be completed after a final inspection
Quantitative Risk Analysis The process of numerically analyzing the effect on overall
project objectives of identified risks
Total Float in Resource-Limited Schedule Late Finish Date of CPM Resource-limited
finish date
Retainage A portion of contract payment that is withheld until contract completion to
ensure full performance of the contract terms
Rolling Wave Planning A form of progressive elaboration planning where work to be
accomplished in the near term is planned in detail at a low level of the work breakdown
structure, while the work far in the future is planned at a relatively high level of WBS
Schedule compression Shortening the project schedule duration without reducing the
scope
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SPI = EV/PV
Scope changes A scope change almost always requires an adjustment to Project Cost or
schedule.
Scope Creep Adding features and functionality without addressing the effects on time,
costs and resources, or without customer approval
Sensitivity Analysis Used to help determine which risks have the most potential impact
on the project by keeping all other uncertain elements at their baseline value.
Should-Cost Estimate An estimate of the cost of a product or service used to provide an
assessment of the reasonableness of a prospective sellers proposed cost.
SMCI Standardize, Measure, Control, and Improve
Solo source A type of procurement where only one supplier is asked to bid.
Specification Limits These are on either side of the mean, of the data plotted on a
control chart meets the customers requirements for a product or service. This area may
be greater than or less than the area defined by the control limits
___________________________________

Upper Specification Limit

-----------------------------------------------------

Upper Control Limit

================================

Mean

----------------------------------------------------____________________________________

Lower Control Limit


Lower Specification Limit

Subnet / Fragment A subdivision of a project schedule network diagram, usually


representing a subproject or a work package
Three-Point Estimate Estimate using Optimistic, Most Likely and Pessimistic
Threshold A cost, time, quality, technical, or resource value used as a parameter, and
which may be included in product specifications. Crossing the threshold should trigger
some action, such as generating an exception report.
Tight Matrix A system in which each project has an assigned work area, and employees
sit together in that area while they are working on the project, even through they do not
report to the same supervisor
Time & Material It is a hybrid of Fixed price and Cost reimbursement
o Cost Reimbursement Because full value of the contract is not known at the time
of award and have no definitive end
o Fixed price Unit rates are preset by the buyer and seller
TCPI To complete performance index
o (BAC EV) / (BAC AC)
o Remaining work / Remaining Budget
Toolbox meeting A regular meeting of field supervisors and workers to review
important work issues; particularly those pertaining to safety
TQM Total quality management A common approach to implementing a quality
improvement program within an organization.
Trait A distinguishing feature of the persons character
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Triggers Risk symptoms Warning signs


Triple Constraint Scope, Cost and Time
Two-Envelop system It has two phases
o Firms qualification
o Pricing
Value Engineering A creative approach used to optimize project life cycle costs, save
time, increase profits, improve quality, expand market share, solve problems, and/or use
resources more effectively
VAC = BAC EAC
Variance Threshold A predetermined range of normal outcomes that is determined
during the planning process and sets the boundaries within which the team the team
practices management by exception
Voice of customer A planning technique used to provide products, services, and results
that truly reflect customer requirements by translating those customer requirements into
appropriate technical requirements for each phase of the project product development
War Room A room used for project conferences and planning, often displaying charts of
cost, schedule status, and other key project data
WBS
o A deliverable-oriented hierarchical decomposition of the work to be executed by
the project team to accomplish the project objectives
o Total Scope of the project
o Each descending level will provide the detailed information
o Decompose till Work Packages
o Both Internal deliverables and External Deliverables
WBS Directory A document that describes each component of WBS and include for
each WBS component
o Brief description of the scope / SOW
o Defined deliverables
o List of associated activities
o List of Milestones
o Responsible organization
o Start and End Dates
o Resources Required
o Estimate of Cost
o Charge Number
o Contract information
o Quality Requirements
o Technical references
Reassignment Plan A reassignment plan improves morale because resources know their
next assignment prior to the conclusion of their activity or scheduled end date on the
project.
Crosby Zero Defect
Juran Fit for use
Deming 85% of cost of quality is management problem
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Distribution Represents the Probability and Impact of the risk to the project objectives
Performing Stage Self actualization Stage
Fait accompli tactics One party claims the issue under discussion has already been
decided and cant be changed.
Budget updates leads to cost rebaselining
Scope change Any changes to the agreed-upon WBS
Product scope change leads to Project scope change
Scope changes leads to Schedule Revisions, but not always
Schedule variance of critical path activities will affect the project schedule and need
corrective action.
When revisions are necessary establish a new schedule baseline
Budget Updates The cost baseline is changed as a result of budget updates to reflect the
new cost estimates. Significant updates to budget leads to rebaselining
Contract Closeout Do the following
o Completing and settling the terms of the contract
o Work described in the contract was completed accurately and satisfactorily
o Product Verification
o Formal acceptance notice to seller
Procurement audit
o used for lessons learned
o It examines the procurement process for areas of improvements (from
Procurement Planning to Contract Administration)
o Used by buyer & seller, as an opportunity for improvements
Contract file
o Indexed for easy reference
o Which in turn store in project archives (Administrative Closure)
Administrative Closure
o At the end of each phase / At the end of the project
o Verifies and documents the project outcome
Product Documentation
o Requirement documents
o Specifications
o Plans
o Technical documents
o Electronic files
o Drawings etc.,
Project Archives (Administrative Closure)
o Performance Management Documentation
o Product Documentation
o Other Documents
o Contract documents (contract file, which is output from Contract Closure)
o Electronic Database
o Electronic Documents
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o Should be Indexed
Project Closure & Formal acceptance
o Verifying the product of the project that meets all the requirements
o Obtain formal acceptance
o Kicks off the warranty period
Post-implementation audits Examine the project from beginning to end and look at
what went right and what went wrong
Decomposition Steps
o Identify Major Deliverables
o Decide if adequate cost and duration estimates can be developed
o Identify constituent components of the deliverables
o Verify the correctness of decomposition
WBS Updates also called refinements
Learning Curve The cost per unit decreases the more units workers complete, this is
because workers learn as they complete the required work.
Variable Costs Costs that vary depending on the conditions within the project
Fixed Costs Costs that remain the same throughout the project
Communication Channels N(N-1) / 2
Marginal Analysis The cost of the incremental improvements to a process or product
and compares it against the increase in revenues made from the improvements.
Assignable Cause - When a value is out of control (in control charts).
Project Records
o Memos
o Correspondence
o E-mails
o Other project relevant information
Project Reports Formal communications on
o project activities
o Status
o Conditions
o Management
o Customers
o Policies
Project Presentation Useful in providing information to
o Customers
o Management
o The project Team
o Other stakeholders
Project life cycle Collectively the project phases Serves to define beginning and end
of the project
Project phase Dividing the project to improve management control and provide for
links to ongoing operations
Strategic Plan
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o Program
Project

Phase Conclusion marked by a review of key deliverables and


project performance to date. These reviews are called phase exits,
stage gates, or kill points
o Deliverable
Phase sequencing Generally involves some form of technology transfer or handoff
o Requirements Design
o Construction Operations
o Design Manufacturing etc.,
Product Life Cycle
o Project Life Cycle subset of Product life cycle
Subproject Life Cycle
Managing stakeholder expectations may be difficult because stakeholders often have very
different objectives that may come into conflict. Differences between stakeholders will be
resolved in favor of customer.
High Risk taking organizations Aggressive, Entrepreneurial
PMO Providing support functions to project managers in the form of training, software,
templates etc., to actually being responsible for the results of the project.
General Management skills
o Finance & accounting
o Sales & Marketing
o Research & Development
o Manufacturing & Distribution
o Strategic Planning
o Tactical Planning
o Operational Planning
o Organizational Structures
o Organizational behavior
o Personnel administration
o Compensation
o Benefits
o Career Paths
o Motivation
o Delegation
o Supervision
o Team Building
o Conflict Management
o Personal Time Management
o Stress Management
Leadership
o Project
o Technical
o Team
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Negotiating
o Arbitration
o Mediation
Internationalization
o Time zones differences
o National & regional Holidays
o Travel Requirements
o Face-to-Face meetings
o Logistics of teleconferencing
o Volatile Political differences
Processes A series of actions bringing about a result
o Project management processes
o Product oriented processes
Project Management Software
o Aids integration within a project
Project management Methodology
o Hard tools Project Management Software
o Soft tools Meetings etc.,
Project Selection Methods Decision Models, Calculation method
Charter
o Business Need
o Product Description
Product Analysis
o Product breakdown analysis
o Systems Engineering
o Value Engineering
o Value Analysis
o Function Analysis
o Quality function deployment
Alternative Identification
o Brainstorming
o Lateral Thinking
Project Objectives Quantifiable criteria that must be met for the project to be considered
success. Must include
o Cost
o Schedule
o Quality
Scope Management Plan Include the following
o Expected Stability
o Identification & Classification
Decomposing the deliverables will give the following advantages Critical to project
success
o Improve accuracy of coat, duration, and resource estimate
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o Define baseline for performance measurement and control


o Clear responsibility assignment
Product Documentation
o Plans
o Specifications
o Technical documentation
o Drawings etc.,
Inspections
o Reviews
o Product reviews
o Audits
o Walk-throughs
Mandatory Dependencies That are inherent in the nature of the work being done
(Physical Limitations) Hard Logic
Discretionary Dependencies Best Practices Preferred Logic, Preferential logic, Soft
logic
CPM Deterministic
GERT Probabilistic
PERT Weighted average Use when there is a uncertainty in the activity duration also
called Method of moment analysis
Supporting Details (Schedule development output) includes
o Resource Histograms
o Alternative Schedules
o Schedule contingency reserves
Revisions Changes to the schedule start and end dates
Cost budgeting It includes cost of financing
Spending Plan Cash-flow forecast to measure disbursements
Quality Management
o Proprietary Approaches
Deming
Juran
Crosby etc.,
o Non proprietary
TQM
Continuous Improvement etc.,
Quality management plan provides
o Input to Overall Project plan
o Quality Control
o Quality Assurance
o Quality Improvement
Operational Definitions Also called Metrics
In an even distribution any date in the distribution will have the same probability as any
other date in the distribution
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Human Resources Management Effective use of stakeholders including sponsors,


customers, partners, individual contributors, and others
Organizational planning done as part of earliest project phases, but should review
regularly throughout the project to ensure continued applicability
Technical Interfaces
o Within the Phases
o Between the phases
Constraints (Organizational Planning inputs)
o Organizational Structure
o Collective bargaining agreements Contractual agreements with unions or
employee groups may require certain roles or reporting relationships
o Preferences of the project management Team if the members of project
management team have had success with certain structures in the past, then they
are likely to advocate similar structure in the future
o Expected staff assignments How the project is organized is often influenced by
the competencies of specific individuals
Templates (Organizational Planning T&T) Use the following from earlier projects
o Roles and responsibility definitions
o Reporting Relationships
Staffing management Plan Include
o When and how human resources will be bought onto and taken off of the project
team
o Resource Histograms
o Particular attention should be paid to how project team members will be released
when they ate no longer needed on the project
Reduce cost by reducing or eliminating the tendency to make work to
fill the time between this assignment and the next
Improve morale by reducing or eliminating the uncertainty about the
future employment opportunities
Supporting details (Organizational Planning output)
o Organizational Impact
o Job descriptions Position descriptions
o Training Needs
Characteristics of potential available staff members
o Previous Experience
o Personal Interests
o Personal Characteristics
o Availability
o Competencies & Proficiency
Individual development (managerial & Technical) is the foundation necessary to develop
the team
Team development often complicated when team members are accountable to both a
functional manager and the project manager. Effective management of this dual reporting
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relationships is often a critical success factor for the project, and is generally the
responsibility of the Project Manager
Team Development occurs through out the project
War room Where the team congregates and posts schedules, updates etc.,
Direct & indirect costs for training are generally paid by the performing organization
Communications planning is done as part of the earliest project phases. However, the
results of this process should be reviewed regularly throughout the project and revised as
needed to ensure continued applicability
Communication Technology influencing factors
o The immediacy of the need for information
o The availability of technology
o Expected staff assignments
o The length of the project
Responsibilities of Sender
o Making the information clear, unambiguous, and complete, so that the receiver
can receive it correctly
o Conforming that it is properly understood
Responsibilities of Receiver
o Making sure that information is received in its entirety and understood correctly
Project Records
o Correspondence
o Memos
o Documents describing the project etc.,
Project Reports Formal project reports on the project status and/or issues
Performance Reporting How resources are being used to achieve project objectives.
Generally provide information on Scope, Schedule, Cost, and Quality. (Also Risk and
Procurement). Reports can be prepared comprehensively or on an exception basis
EV Analysis Integrates Scope, Cost (or Resources) and Schedule.
Common formats of performance reports
o Bar Charts (also called Gantt Chart)
o S-Curve Display cumulative EV Analysis data
o Histograms
o Tables
Administrative Closure functions
o Collecting Project records
o Ensure they reflect final specifications
o Analyzing project success
o Effectiveness
o Lessons Learned
o Arching the information for future use
o Perform at the end of every phase and at the end
o Update the skills in the staff pool database
Project Closure (Administrative Closure output)
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o Customer formally accepted the project results, and deliverables


o Requirements of the performing organization (Staff evaluations, Budget Reports,
Lessons learned)
Risk Management Plan includes the following
o Methodology
o Roles and Responsibilities
o Budgeting
o Timing
o Scoring Interpretation
o Thresholds
o Reporting Formats Describes the content and format of the risk response plan.
o Tracking Document all facets of risk activities will be recorded for the benefit of
the current project, future needs, and lessons learned. Documents if and how risk
processes will be audited
Risk Categories
o Technical, Quality or Performance
o Project Management Risks
o Organizational Risk
o External Risks
Information gathering techniques
o Brainstorming
o Delphi technique
o Interviewing
o SWOT Analysis
Diagramming Techniques
o Cause-and-effect
o Flow charts
o Influence Diagram
Simulation
o Cost risk Analysis Use WBS
o Schedule risk Analysis Use PDM
Contested Changes Changes that can not be agreed upon in a Contract
Needs Analysis Feasibility Study
Most organizations have documented policies and procedures specially defining who can
sign such agreements on behalf of the organization, typically called a delegation of
procurement authority

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