Information Technology Project Management 8th Edition By Kathy – Test Bank

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INSTANT DOWNLOAD COMPLETE TEST BANK WITH ANSWERS

 

Information Technology Project Management 8th Edition By Kathy – Test Bank

 

Sample  Questions

 

True / False

 

1. Decisions and actions taken in one knowledge area at a certain time rarely affect other knowledge areas.

a. True
b. False

 

ANSWER:   False
RATIONALE:   Feedback: Project management is an integrative endeavor; decisions and actions taken in one knowledge area at a certain time usually affect other knowledge areas.
POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.80
LEARNING OBJECTIVES:   INFO.SCHW.14.15 – LO: 3-1
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Project Management Process Groups
KEYWORDS:   Bloom’s: Knowledge

 

2. Initiating processes take place during each phase of a project.

a. True
b. False

 

ANSWER:   True
RATIONALE:   Feedback: Initiating processes include defining and authorizing a project or project phase. Initiating processes take place during each phase of a project.
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p. 81
LEARNING OBJECTIVES:   INFO.SCHW.14.15 – LO: 3-1
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Project Management Process Groups
KEYWORDS:   Bloom’s: Knowledge

 

3. Initiating processes are not required to end a project.

a. True
b. False

 

ANSWER:   False
RATIONALE:   Feedback: Initiating processes are also required to end a project. Someone must initiate activities to ensure that the project team completes all the work, documents lessons learned, assigns project resources, and that the customer accepts the work.
POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.81
LEARNING OBJECTIVES:   INFO.SCHW.14.15 – LO: 3-1
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Project Management Process Groups
KEYWORDS:   Bloom’s: Knowledge

 

4. The level of activity and length of each process group varies for every project.

a. True
b. False

 

ANSWER:   True
RATIONALE:   Feedback: The level of activity and length of each process group varies for every project. Normally, executing tasks requires the most resources and time, followed by planning tasks.
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.82
LEARNING OBJECTIVES:   INFO.SCHW.14.15 – LO: 3-1
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Project Management Process Groups
KEYWORDS:   Bloom’s: Knowledge

 

5. Initiating and closing tasks are usually the longest and require the most amount of resources and time.

a. True
b. False

 

ANSWER:   False
RATIONALE:   Feedback: Initiating and closing tasks are usually the shortest (at the beginning and end of a project or phase, respectively), and they require the least resources and time.
POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.82
LEARNING OBJECTIVES:   INFO.SCHW.14.15 – LO: 3-1
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Project Management Process Groups
KEYWORDS:   Bloom’s: Knowledge

 

6. The executing process group generally requires the most resources.

a. True
b. False

 

ANSWER:   True
RATIONALE:   Feedback: The executing process group takes the actions necessary to complete the work described in the planning activities. It should overlap the other process groups, and generally requires the most resources.
POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.84
LEARNING OBJECTIVES:   INFO.SCHW.14.15 – LO: 3-1
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Project Management Process Groups
KEYWORDS:   Bloom’s: Knowledge

 

7. Monitoring and controlling processes overlap all of the other project management process groups.

a. True
b. False

 

ANSWER:   True
RATIONALE:   Feedback: Monitoring and controlling processes overlap all of the other project management process groups because changes can occur at any time.
POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.84
LEARNING OBJECTIVES:   INFO.SCHW.14.15 – LO: 3-1
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Project Management Process Groups
KEYWORDS:   Bloom’s: Knowledge

 

8. Key outcomes of the executing process group are formal acceptance of the work and creation of closing documents.

a. True
b. False

 

ANSWER:   False
RATIONALE:   Feedback: Key outcomes of the closing process group are formal acceptance of the work and creation of closing documents, such as a final project report and lessons-learned report.
POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p. 84
LEARNING OBJECTIVES:   INFO.SCHW.14.15 – LO: 3-1
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Project Management Process Groups
KEYWORDS:   Bloom’s: Knowledge

 

9. Many project management activities occur as part of the planning process group.

a. True
b. False

 

ANSWER:   True
RATIONALE:   Feedback: Because each project is unique, project teams are always trying to do something that has not been done before.  To succeed at unique and new activities, projects teams must do a fair amount of planning.
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p. 85
LEARNING OBJECTIVES:   INFO.SCHW.14.20 – LO: 3-2
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Mapping the Process Groups to the Knowledge Areas
KEYWORDS:   Bloom’s: Knowledge

 

10. Agile methods comprise of 45 subprocesses which are organized into eight process groups.

a. True
b. False

 

ANSWER:   False
RATIONALE:   Feedback: All agile methods include an iterative workflow and incremental delivery of software in short iterations.
POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p. 87
LEARNING OBJECTIVES:   INFO.SCHW.14.16 – LO: 3-3
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Developing An IT Project Management Methodology
KEYWORDS:   Bloom’s: Knowledge

 

11. The Rational Unified Process (RUP) framework is incompatible with the PMBOK process.

a. True
b. False

 

ANSWER:   False
RATIONALE:   Feedback: According to RUP expert Bill Cottrell, “RUP embodies industry-standard management and technical methods and techniques to provide a software engineering process particularly suited to creating and maintaining component-based software system solutions.” Cottrell explained that you can tailor RUP to include the PMBOK process groups because several customers asked for that capability.
POINTS:   1
DIFFICULTY:   Difficulty: Challenging
REFERENCES:   p.88
LEARNING OBJECTIVES:   INFO.SCHW.14.16 – LO: 3-3
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Developing An It Project Management Methodology
KEYWORDS:   Bloom’s: Knowledge

 

12. The DMAIC (Define, Measure, Analyze, Improve, and Control) methodology of the Six Sigma projects, is used to improve an existing business process.

a. True
b. False

 

ANSWER:   True
RATIONALE:   Feedback: Two main methodologies are used on Six Sigma projects: DMAIC (Define, Measure, Analyze, Improve, and Control) is used to improve an existing business process, and DMADV (Define, Measure, Analyze, Design, and Verify) is used to create new product or process designs to achieve predictable, defect-free performance.
POINTS:   1
DIFFICULTY:   Difficulty: Challenging
REFERENCES:   p.88
LEARNING OBJECTIVES:   INFO.SCHW.14.16 – LO: 3-3
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Developing An IT Project Management Methodology
KEYWORDS:   Bloom’s: Knowledge

 

13. An organization’s project management plan expresses the vision, mission, goals, objectives, and strategies of the organization.

a. True
b. False

 

ANSWER:   False
RATIONALE:   Feedback: The organization’s strategic plan expresses the vision, mission, goals, objectives, and strategies of the organization.
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.89
LEARNING OBJECTIVES:   INFO.SCHW.14.17 – LO: 3-4
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Case Study 1: JWD Consulting’s Project Management Intranet Site Project (Predictive Approach)
KEYWORDS:   Bloom’s: Knowledge

 

14. Identifying the project sponsor is a pre-initiation task.

a. True
b. False

 

ANSWER:   True
RATIONALE:   Feedback: It is a good practice to lay the groundwork for a project before it officially starts. Senior managers often perform several tasks, sometimes called pre-initiation tasks. These include identifying the project sponsor and selecting the project manager.
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.90
LEARNING OBJECTIVES:   INFO.SCHW.14.17 – LO: 3-4
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Case Study 1: JWD Consulting’s Project Management Intranet Site Project (Predictive Approach)
KEYWORDS:   Bloom’s: Knowledge

 

15. The output of the stakeholder management strategy results is a project charter.

a. True
b. False

 

ANSWER:   False
RATIONALE:   Feedback: The output of the stakeholder management strategy results is a stakeholder register.
POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.94
LEARNING OBJECTIVES:   INFO.SCHW.14.17 – LO: 3-4
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Case Study 1: JWD Consulting’s Project Management Intranet Site Project (Predictive Approach)
KEYWORDS:   Bloom’s: Knowledge

 

16. The kick-off meeting is always held before the business case and project charter are completed.

a. True
b. False

 

ANSWER:   False
RATIONALE:   Feedback: A kick-off meeting is a meeting held at the beginning of a project so that stakeholders can meet each other, review the goals of the project, and discuss future plans. The kick-off meeting is often held after the business case and project charter are completed, but it could be held sooner, as needed.
POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.97
LEARNING OBJECTIVES:   INFO.SCHW.14.17 – LO: 3-4
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Case Study 1: JWD Consulting’s Project Management Intranet Site Project (Predictive Approach)
KEYWORDS:   Bloom’s: Knowledge

 

17. Details of kick-off meetings and the stakeholder details are usually recorded in a Word document.

a. True
b. False

 

ANSWER:   True
RATIONALE:   Feedback: Kick-off meetings and stakeholder registers are normally recorded in the form of Word documents.
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.97
LEARNING OBJECTIVES:   INFO.SCHW.14.17 – LO: 3-4
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Case study 1: JWD Consultaing’s Project Management Intranet Site Project (Predictive Approach)
KEYWORDS:   Bloom’s: Knowledge

 

18. A milestone list is an output associated with the Project Scope Management knowledge area.

a. True
b. False

 

ANSWER:   False
RATIONALE:   Feedback: A milestone list is an output associated with the Project Time Management knowledge area.
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.98
LEARNING OBJECTIVES:   INFO.SCHW.14.17 – LO: 3-4
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Case Study 1: JWD Consulting’s Project Management Intranet Site Project (Predictive Approach)
KEYWORDS:   Bloom’s: Knowledge

 

19. The WBS provides a basis for creating the project schedule and performing earned value management for measuring and forecasting project performance.

a. True
b. False

 

ANSWER:   True
RATIONALE:   Feedback: The WBS is a very important tool in project management because it provides the basis for deciding how to do the work. The WBS also provides a basis for creating the project schedule and performing earned value management for measuring and forecasting project performance.
POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.104
LEARNING OBJECTIVES:   INFO.SCHW.14.17 – LO: 3-4
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Case Study 1: JWD Consulting’s Project Management Intranet Site Project (Predictive Approach)
KEYWORDS:   Bloom’s: Knowledge

 

20. Project initiation involves taking the actions necessary to ensure that activities in the project plan are completed.

a. True
b. False

 

ANSWER:   False
RATIONALE:   Feedback: Executing the project involves taking the actions necessary to ensure that activities in the project plan are completed. It also includes work required to introduce any new hardware, software, and procedures into normal operations.
POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.107
LEARNING OBJECTIVES:   INFO.SCHW.14.17 – LO: 3-4
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Case Study 1: JWD Consulting’s Project Management Intranet Site Project (Predictive Approach)
KEYWORDS:   Bloom’s: Comprehension

 

21. The burndown chart is a Scrum created artifact that provides a list of features prioritized by business value.

a. True
b. False

 

ANSWER:   False
RATIONALE:   Feedback: A burndown chart shows the cumulative work remaining in a sprint on a day by- day basis.
POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.119
LEARNING OBJECTIVES:   INFO.SCHW.14.18 – LO: 3-5
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Case Study 2: JWD Consulting’s Project Management Intranet Site Project (Agile Approach)
KEYWORDS:   Bloom’s: Knowledge

 

22. A sprint review is a meeting in which the team demonstrates to the product owner what it has completed during the sprint.

a. True
b. False

 

ANSWER:   True
RATIONALE:   Feedback: A sprint review is a meeting in which the team demonstrates to the product owner what it has completed during the sprint.
POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.119
LEARNING OBJECTIVES:   INFO.SCHW.14.18 – LO: 3-5
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Case Study 2: JWD Consulting’s Project Management Intranet Site Project (Agile Approach)
KEYWORDS:   Bloom’s: Knowledge

 

23. The pre-initiation phase of a project using the Scrum method does not involve project charters, stakeholder management strategy, and kick-off meetings.

a. True
b. False

 

ANSWER:   False
RATIONALE:   Feedback: A project charter, stakeholder register, stakeholder management strategy, and kick-off meeting would be created as part of initiation in a project using the Scrum method.
POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.121
LEARNING OBJECTIVES:   INFO.SCHW.14.18 – LO: 3-5
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Case Study 2: JWD Consulting’s Project Management Intranet Site Project (Agile Approach)
KEYWORDS:   Bloom’s: Knowledge

 

24. In the Scrum method, team members work as a self-directed group coached by the ScrumMaster.

a. True
b. False

 

ANSWER:   True
RATIONALE:   Feedback: Because Scrum implies that team members work as a self-directed group, coached by the ScrumMaster, a team contract should not be necessary.
POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.122
LEARNING OBJECTIVES:   INFO.SCHW.14.18 – LO: 3-5
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Case Study 2: JWD Consulting’s Project Management Intranet Site Project (Agile Approach)
KEYWORDS:   Bloom’s: Knowledge

 

25. The two main items for monitoring and controlling in the Scrum framework are the daily
Scrum and the sprint retrospectives.

a. True
b. False

 

ANSWER:   True
RATIONALE:   Feedback: The two main items for monitoring and controlling in the Scrum framework are the daily Scrum and the sprint review.
POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.124
LEARNING OBJECTIVES:   INFO.SCHW.14.18 – LO: 3-5
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Case Study 2: JWD Consulting’s Project Management Intranet Site Project (Agile Approach)
KEYWORDS:   Bloom’s: Knowledge

 

Multiple Choice

 

26. _____ processes include defining and authorizing a project or project phase.

a. Initiating b. Planning
c. Executing d. Monitoring and controlling

 

ANSWER:   a
RATIONALE:   Feedback: Initiating processes include defining and authorizing a project or project phase. Initiating processes take place during each phase of a project.
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.81
LEARNING OBJECTIVES:   INFO.SCHW.14.15 – LO: 3-1
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Project Management Process Groups
KEYWORDS:   Bloom’s: Knowledge

 

27. _____ processes include devising and maintaining a workable scheme to ensure that the project addresses the organization’s needs.

a. Initiating b. Planning
c. Executing d. Monitoring and controlling

 

ANSWER:   b
RATIONALE:   Feedback: Planning processes include devising and maintaining a workable scheme to ensure that the project addresses the organization’s needs. Projects include several plans, such as the scope management plan, schedule management plan, cost management plan, and procurement management plan.
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.81
LEARNING OBJECTIVES:   INFO.SCHW.14.15 – LO: 3-1
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Project Management Process Groups
KEYWORDS:   Bloom’s: Knowledge

 

28. Examples of _____ processes include acquiring and developing the project team, performing quality assurance, distributing information, managing stakeholder expectations, and conducting procurements.

a. monitoring and controlling b. executing
c. planning d. initiating

 

ANSWER:   b
RATIONALE:   Feedback: Executing processes include coordinating people and other resources to carry out the various plans and create the products, services, or results of the project or phase. Examples of executing processes include acquiring and developing the project team, performing quality assurance, distributing information, managing stakeholder expectations, and conducting procurements.
POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.81
LEARNING OBJECTIVES:   INFO.SCHW.14.15 – LO: 3-1
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Project Management Process Groups
KEYWORDS:   Bloom’s: Knowledge

 

29. A common _____ process is reporting performance, where project stakeholders can identify any necessary changes that may be required to keep the project on track.

a. executing b. closing
c. monitoring and controlling d. planning

 

ANSWER:   c
RATIONALE:   Feedback: Monitoring and controlling processes include regularly measuring and monitoring progress to ensure that the project team meets the project objectives. A common monitoring and controlling process is reporting performance, where project stakeholders can identify any necessary changes that may be required to keep the project on track.
POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.81
LEARNING OBJECTIVES:   INFO.SCHW.14.15 – LO: 3-1
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Project Management Process Groups
KEYWORDS:   Bloom’s: Knowledge

 

30. Administrative activities, such as archiving project files, closing out contracts, documenting lessons learned, and receiving formal acceptance of the delivered work as part of the phase or project, are often involved in _____ processes.

a. monitoring and controlling b. executing
c. initiating d. closing

 

ANSWER:   d
RATIONALE:   Feedback: Closing processes include formalizing acceptance of the project or project phase and ending it efficiently. Administrative activities such as archiving project files, closing out contracts, documenting lessons learned, and receiving formal acceptance of the delivered work as part of the phase or project are often involved in this process group.
POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.81
LEARNING OBJECTIVES:   INFO.SCHW.14.15 – LO: 3-1
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Project Management Process Groups
KEYWORDS:   Bloom’s: Knowledge

 

31. During _____ processes for a new project, the organization recognizes that a new project exists, and completes a project charter as part of this recognition.

a. initiating b. planning
c. opening d. controlling

 

ANSWER:   a
RATIONALE:   Feedback: While initiating processes for a new project, the organization recognizes that a new project exists, and completes a project charter as part of this recognition.
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   P.83
LEARNING OBJECTIVES:   INFO.SCHW.14.15 – LO: 3-1
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Project Management Process Groups
KEYWORDS:   Bloom’s: Knowledge

 

32. The project integration management knowledge area maps to the _____ process group through the activities of developing project charters.

a. initiating b. planning
c. executing d. monitoring and controlling

 

ANSWER:   a
RATIONALE:   Feedback: The project integration management knowledge area maps to the initiating process group through the activities of developing project charters.
POINTS:   1
DIFFICULTY:   Difficulty: Challenging
REFERENCES:   p.85
LEARNING OBJECTIVES:   INFO.SCHW.14.20 – LO: 3-2
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Mapping The Process Groups To The Knowledge Areas
KEYWORDS:   Bloom’s: Knowledge

 

33. The project scope management knowledge area maps to the _____ process group through the activities of scope validation and scope control.

a. initiating b. planning
c. executing d. monitoring and controlling

 

ANSWER:   d
RATIONALE:   Feedback: The project scope management knowledge area maps to the monitoring and controlling process group through the activities of scope validation and scope control.
POINTS:   1
DIFFICULTY:   Difficulty: Challenging
REFERENCES:   p.85
LEARNING OBJECTIVES:   INFO.SCHW.14.20 – LO: 3-2
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Mapping The Process Groups To The Knowledge Areas
KEYWORDS:   Bloom’s: Knowledge

 

34. The project time management knowledge area maps to the _____ process group through the activity of schedule control.

a. initiating b. planning
c. executing d. monitoring and controlling

 

ANSWER:   d
RATIONALE:   Feedback: The project time management knowledge area maps to the monitoring and controlling process group through the activity of schedule control.
POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.85
LEARNING OBJECTIVES:   INFO.SCHW.14.20 – LO: 3-2
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Mapping The Process Groups To The Knowledge Areas
KEYWORDS:   Bloom’s: Knowledge

 

35. Developing a _____ is a planning process that occurs in the Project Integration Management knowledge area.

a. schedule management plan b. project management plan
c. WBS d. quality management

 

ANSWER:   b
RATIONALE:   Feedback: Developing a project management plan is a planning process falling under the Project Integration Management knowledge area.
POINTS:   1
DIFFICULTY:   Difficulty: Challenging
REFERENCES:   p.85
LEARNING OBJECTIVES:   INFO.SCHW. 14.20 – LO: 3-2
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Mapping The Process Groups To The Knowledge Areas
KEYWORDS:   Bloom’s: Knowledge

 

36. _____ is a planning process that is within the Project Scope Management knowledge area.

a. Schedule development b. Developing a project management plan
c. Creation of a WBS d. Quality planning

 

ANSWER:   c
RATIONALE:   Feedback: Creation of a WBS is a planning process falling under the Project Scope Management knowledge area.
POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.85
LEARNING OBJECTIVES:   INFO.SCHW.14.20 – LO: 3-2
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Mapping The Process Groups To The Knowledge Areas
KEYWORDS:   Bloom’s: Knowledge

 

37. The project cost management knowledge area maps to the _____ process group through the activities of estimating costs and budget determination.

a. initiating b. planning
c. executing d. monitoring and controlling

 

ANSWER:   b
RATIONALE:   Feedback: The project cost management knowledge area maps to the planning process group through the activities of estimating costs and budget determination.
POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.86
LEARNING OBJECTIVES:   INFO.SCHW.14.20 – LO: 3-2
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Mapping The Process Groups To The Knowledge Areas
KEYWORDS:   Bloom’s: Knowledge

 

38. The project stakeholder management knowledge area maps to the ______ process group by identifying stakeholders.

a. initiating b. planning
c. executing d. monitoring and controlling

 

ANSWER:   a
RATIONALE:   Feedback: The project stakeholder management knowledge area maps to the initiating process group by identifying stakeholders.
POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.86
LEARNING OBJECTIVES:   INFO.SCHW.14.20 – LO: 3-2
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Mapping The Process Groups To The Knowledge Areas
KEYWORDS:   Bloom’s: Knowledge

 

39. _____ is an iterative software development process that focuses on team productivity and delivers software best practices to all team members.

a. Agile Unified Process b. Dynamic Systems Development Method
c. Rational Unified Process d. Six Sigma

 

ANSWER:   c
POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.88
LEARNING OBJECTIVES:   INFO.SCHW.14.16 – LO: 3-3
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Developing An IT Project Management Methodology
KEYWORDS:   Bloom’s: Knowledge

 

40. Which of the following is a pre-initiation task?

a. Drawing up a work breakdown structure b. Developing a business case for a project
c. Drafting the project charter d. Identifying stakeholders

 

ANSWER:   b
RATIONALE:   Feedback: It is good practice to lay the groundwork for a project before it officially starts. Senior managers often perform several tasks, sometimes called pre-initiation tasks which include the development of a business case for a project.
POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p. 90
LEARNING OBJECTIVES:   INFO.SCHW.14.17 – LO: 3-4
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Case Study 1: JWD Consulting’s Project Management Intranet Site Project (Predictive Approach)
KEYWORDS:   Bloom’s: Knowledge

 

41. One of the main outputs of the initiation process is _____.

a. creating the work breakdown structure b. selecting the project manager
c. developing the project charter d. identifying the project sponsor

 

ANSWER:   c
RATIONALE:   Feedback: The main outputs of the initiation process are a project charter and a stakeholder register.
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p. 93
LEARNING OBJECTIVES:   INFO.SCHW.14.17 – LO: 3-4
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Case Study 1: JWD Consulting’s Project Management Intranet Site Project (Predictive Approach)
KEYWORDS:   Bloom’s: Knowledge

 

42. The main purpose of project plans is to

a. schedule management plans b. define project scope
c. estimate activity resources d. guide project execution

 

ANSWER:   d
RATIONALE:   Feedback: Developing a project management plan is a planning process falling under the Project Integration Management knowledge area.
POINTS:   1
DIFFICULTY:   Difficulty: Challenging
REFERENCES:   p.98
LEARNING OBJECTIVES:   INFO.SCHW.14.17 – LO: 3-4
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Predictive Study 1: JWD Consulting’s Project Management Intranet Site Project (Predictive Approach)
KEYWORDS:   Bloom’s: Knowledge

 

43. The project management plan is the output of the planning process of project _____.

a. integration management b. quality management
c. scope management d. procurement management

 

ANSWER:   a
RATIONALE:   Feedback: The project management plan,which is part of the planning process, is the output of project integration management.
POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p. 98
LEARNING OBJECTIVES:   INFO.SCHW.14.17 – LO: 3-4
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Case Study 1: JWD Consulting’s Project Management Intranet Site Project (Predictive Approach)
KEYWORDS:   Bloom’s: Knowledge

 

44. The most difficult and unappreciated process in project management is often

a. initiating b. planning
c. executing d. monitoring and controlling

 

ANSWER:   b
RATIONALE:   Feedback: Because planning is not always used to facilitate action, many people view it negatively. However, the main purpose of planning is to guide project execution. As such, plans must be realistic and useful, so a fair amount of time and effort must go into the process.
POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p. 98
LEARNING OBJECTIVES:   INFO.SCHW.14.17 – LO: 3-4
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Case Study 1: JWD Consulting’s Project Management Intranet Site Project (Predictive Approach)
KEYWORDS:   Bloom’s: Knowledge

 

45. Which of the following is a planning process associated with project scope management?

a. Collecting requirements b. Performing qualitative risk analysis
c. Planning schedule management d. Estimating costs

 

ANSWER:   a
RATIONALE:   Feedback: Process improvement plans are an output of project quality management.
POINTS:   1
DIFFICULTY:   Difficulty: Challenging
REFERENCES:   p.99
LEARNING OBJECTIVES:   INFO.SCHW.14.17 – LO: 3-4
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Case Study 1: JWD Consulting’s Project Management Intranet Site Project (Predictive Approach)
KEYWORDS:   Bloom’s: Knowledge

 

46. The _____ provides a basis for creating the project schedule and performing earned value management for measuring and forecasting project performance.

a. scope statement b. cost management plan
c. work breakdown structure d. project charter

 

ANSWER:   c
RATIONALE:   Feedback: The WBS is a very important tool in project management because it provides the basis for deciding how to do the work. The WBS also provides a basis for creating the project schedule and performing earned value management for measuring and forecasting project performance.
POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.104
LEARNING OBJECTIVES:   INFO.SCHW.14.17 – LO: 3-4
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Case Study 1: JWD Consulting’s Project Management Intranet Site Project (Predictive Approach)
KEYWORDS:   Bloom’s: Knowledge

 

47. _____ are an output of the executing process of project integration management.

a. Deliverables b. Issue logs
c. Resource calendars d. Enterprise environmental factor updates

 

ANSWER:   a
RATIONALE:   Feedback: Deliverables are an output of the executing process of project integration management.
POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.108
LEARNING OBJECTIVES:   INFO.SCHW.14.17 – LO: 3-4
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Case Study 1: JWD Consulting’s Project Management Intranet Site Project (Predictive Approach)
KEYWORDS:   Bloom’s: Knowledge

 

48. Enterprise environmental factors are an output of the executing process of _____.

a. project integration management b. project quality management
c. project human resource management d. project procurement management

 

ANSWER:   c
RATIONALE:   Feedback: Enterprise environmental factors are an output of the executing process of project human resource management.
POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.108
LEARNING OBJECTIVES:   INFO.SCHW.14.17 – LO: 3-4
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Case Study 1: JWD Consulting’s Project Management Intranet Site Project (Predictive Approach)
KEYWORDS:   Bloom’s: Knowledge

 

49. _____ includes measuring progress toward project objectives and taking corrective action to match progress with the plan.

a. Planning b. Montioring and controlling
c. Executing d. Initiating

 

ANSWER:   b
RATIONALE:   Feedback: Monitoring and controlling is done throughout the life of a project and involves 9 of the 10 project management areas.
POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.108
LEARNING OBJECTIVES:   INFO.SCHW.14.17 – LO: 3-4
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Case Study 1: JWD Consulting’s Project Management Intranet Site Project (Predictive Approach)
KEYWORDS:   Bloom’s: Knowledge

 

50. The _____ process involves gaining stakeholder and customer acceptance of the final products and services and bringing the project, or project phase, to an orderly end.

a. executing b. closing
c. planning d. monitoring

 

ANSWER:   b
RATIONALE:   Feedback: The closing process involves gaining stakeholder and customer acceptance of the final products and services and then bringing the project or project phase to an orderly end. It includes verifying that all of the deliverables are complete, and it often includes a final project report and presentation.
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.114
LEARNING OBJECTIVES:   INFO.SCHW.14.17 – LO: 3-4
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Case Study 1: JWD Consulting’s Project Management Intranet Site Project (Predictive Approach)
KEYWORDS:   Bloom’s: Knowledge

 

51. Organizational process assets update is the output of the closing process of _____.

a. project integration management b. project quality management
c. project procurement management d. project time management

 

ANSWER:   a
RATIONALE:   Feedback: The closing process involves gaining stakeholder and customer acceptance of the final products and services and then bringing the project or project phase to an orderly end. It includes verifying that all of the deliverables are complete, and it often includes a final project report and presentation.
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.114-115
LEARNING OBJECTIVES:   INFO.SCHW.14.17 – LO: 3-4
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Case Study 1: JWD Consulting’s Project Management Intranet Site Project (Predictive Approach)
KEYWORDS:   Bloom’s: Knowledge

 

52. Which of the following is true about the agile method?

a. It is often used when a project team can express the scope early in the product life cycle.
b. It is used when a project team wants to provide a potentially shippable product earlier rather than later.
c. It uses several iterations or deliveries of software instead of waiting until the end of the project to provide a product.
d. It is used when project teams want to use the predicative approach to a project.

 

ANSWER:   c
RATIONALE:   Feedback: An agile approach is often used for projects in which the business team cannot clearly express the scope early in the product life cycle, but the team does want to provide a potentially shippable product earlier rather than later. An agile project team typically uses several iterations or deliveries of software instead of waiting until the end of the project to provide one product.
POINTS:   1
DIFFICULTY:   Difficulty: Challenging
REFERENCES:   p.118
LEARNING OBJECTIVES:   INFO.SCHW.14.18 – LO: 3-5
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Case Study 2: JWD Consulting’s Project Management Intranet Site Project (Agile Approach)
KEYWORDS:   Bloom’s: Comprehension

 

53. Which of the following project parameters would be compatible with the use of the agile approach?

a. Projects with inexperienced and dispersed teams
b. Projects that have a fairly rigid completion date
c. Projects with clear-up front requirements
d. Projects that have more flexible scheduling

 

ANSWER:   d
RATIONALE:   Feedback: Projects with heavy constraints, inexperienced and dispersed teams, large risks, generally clear up-front requirements, and a fairly rigid completion date are best done using a predictive approach. In contrast, projects with less rigid constraints, experienced and preferably co-located teams, smaller risks, unclear requirements, and more flexible scheduling would be more compatible with an agile approach.
POINTS:   1
DIFFICULTY:   Difficulty: Challenging
REFERENCES:   p.118
LEARNING OBJECTIVES:   INFO.SCHW.14.18 – LO: 3-5
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Case Study 2: JWD Consulting’s Project Management Intranet Site Project (Agile Approach)
KEYWORDS:   Bloom’s: Comprehension

 

54. Which of the following activities is a part of the planning process of the Scrum?

a. Determining how many sprints will compose each release
b. Demonstrating the product during a sprint review meeting
c. Completing tasks each day during sprints
d. Creating sprint backlog

 

ANSWER:   d
RATIONALE:   Feedback: Creating product backlogs, sprint backlogs and release backlogs are all part of the planning process of the scrum.
POINTS:   1
DIFFICULTY:   Difficulty: Challenging
REFERENCES:   p.121
LEARNING OBJECTIVES:   INFO.SCHW.14.18 – LO: 3-5
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Case Study 2: JWD Consulting’s Project Management Intranet Site Project (Agile Approach)
KEYWORDS:   Bloom’s: Comprehension

 

55. The improvement of the product and process in the Scrum method is discussed at the _____.

a. sprint reflection meeting b. sprint review meeting
c. kick-off meeting d. daily Scrum meeting

 

ANSWER:   a
RATIONALE:   Feedback: The improvement of the product and process in the Scrum method is discussed at the sprint reflection meeting.
POINTS:   1
DIFFICULTY:   Difficulty: Challenging
REFERENCES:   p.121
LEARNING OBJECTIVES:   INFO.SCHW.14.18 – LO: 3-5
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Case Study 2: JWD Consulting’s Project Management Intranet Site Project (Agile Approach)
KEYWORDS:   Bloom’s: Comprehension

 

56. A _____ is usually not necessary to the Scrum method.

a. team contract b. velocity estimate
c. Gantt chart d. product backlog

 

ANSWER:   a
RATIONALE:   Feedback: Because Scrum implies that team members work as a self-directed group, coached by the ScrumMaster, a team contract should not be necessary.
POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.122
LEARNING OBJECTIVES:   INFO.SCHW.14.18 – LO: 3-5
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Case Study 2: JWD Consulting’s Project Management Intranet Site Project (Agile Approach)
KEYWORDS:   Bloom’s: Comprehension

 

57. A _____ is an important Scrum artifact used to graphically display progress on each sprint during the monitoring and controlling process.

a. WBS b. sprint backlog
c. burndown chart d. product backlog

 

ANSWER:   c
RATIONALE:   Feedback: A burndown chart is an important artifact used to graphically display progress on each sprint.
POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.125
LEARNING OBJECTIVES:   INFO.SCHW.14.18 – LO: 3-5
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Case Study 2: JWD Consulting’s Project Management Intranet Site Project (Agile Approach)
KEYWORDS:   Bloom’s: Knowledge

 

Completion

 

58. A(n)_____ is a series of actions directed toward a particular result.

ANSWER:   process
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.81
LEARNING OBJECTIVES:   INFO.SCHW.14.15 – LO: 3-1
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Project Management Process Groups
KEYWORDS:   Bloom’s: Knowledge

 

59. _____ progress from initiation activities to planning activities, executing activities, monitoring and controlling activities, and closing activities.

ANSWER:   Project management process groups
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.81
LEARNING OBJECTIVES:   INFO.SCHW.14.15 – LO: 3-1
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Project Management Process Groups
KEYWORDS:   Bloom’s: Knowledge

 

60. The ideal outcome of the _____ process group is to complete a project successfully by delivering the agreed-upon project scope within time, cost, and quality constraints.

ANSWER:   monitoring and controlling
POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.84
LEARNING OBJECTIVES:   INFO.SCHW.14.15 – LO: 3-1
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Project Management Process Groups
KEYWORDS:   Bloom’s: Comprehension

 

61. _____ the project includes work required to introduce any new hardware, software, and procedures into normal operations.

ANSWER:   Executing
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.84
LEARNING OBJECTIVES:   INFO.SCHW.14.17 – LO: 3-4
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Case Study 1: JWD Consulting’s Project Management Intranet Site Project (Predictive Approach)
KEYWORDS:   Bloom’s: Knowledge

 

62. A(n) _____ describes how things should be done.

ANSWER:   methodology
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p. 86
LEARNING OBJECTIVES:   INFO.SCHW.14.16 – LO: 3-3
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Developing An IT Project Management Methodology
KEYWORDS:   Bloom’s: Knowledge

 

63. _____ is a project management methodology that defines 45 separate subprocesses and organizes these into eight process groups.

ANSWER:   PRojects IN Controlled Environments
PRINCE2
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p. 87
LEARNING OBJECTIVES:   INFO.SCHW.14.16 – LO: 3-3
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Developing An IT Project Management Methodology
KEYWORDS:   Bloom’s: Knowledge

 

64. _____ are people involved in or affected by project activities and include the project sponsor, project team, support staff, customers, users, suppliers, and even opponents to the project.

ANSWER:   Stakeholders
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.94
LEARNING OBJECTIVES:   INFO.SCHW.14.17 – LO: 3-4
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Case Study 1: JWD Consulting’s Project Management Intranet Site Project (Predictive Approach)
KEYWORDS:   Bloom’s: Knowledge

 

65. A(n) _____ is a document that includes stakeholders’ roles, names, organizations, and contact information.

ANSWER:   stakeholder register
POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.94
LEARNING OBJECTIVES:   INFO.SCHW.14.17 – LO: 3-4
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Case Study 1: JWD Consulting’s Project Management Intranet Site Project (Predictive Approach)
KEYWORDS:   Bloom’s: Knowledge

 

66. A(n) _____ is a meeting held at the beginning of a project so that stakeholders can meet each other, review the goals of the project, and discuss future plans.

ANSWER:   kick-off meeting
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.97
LEARNING OBJECTIVES:   INFO.SCHW.14.17 – LO: 3-4
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Case Study 1: JWD Consulting’s Project Management Intranet Site Project (Predictive Approach)
KEYWORDS:   Bloom’s: Knowledge

 

67. A risk register is the output of _____.

ANSWER:   risk identification planning
POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.102
LEARNING OBJECTIVES:   INFO.SCHW.14.17 – LO: 3-4
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Case Study 1: JWD Consulting’s Project Management Intranet Site Project (Predictive Approach)
KEYWORDS:   Bloom’s: Knowledge

 

68. The _____ is a very important tool in project management because it provides the basis for deciding how to do the work.

ANSWER:   WBS
work breakdown structure
work breakdown structure (WBS)
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.104
LEARNING OBJECTIVES:   INFO.SCHW.14.17 – LO: 3-4
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Case Study 1: JWD Consulting’s Project Management Intranet Site Project (Predictive Approach)
KEYWORDS:   Bloom’s: Knowledge

 

69. _________ issues often occur during project execution, especially conflicts.

ANSWER:   Human resource
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.110
LEARNING OBJECTIVES:   INFO.SCHW.14.17 – LO: 3-4
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Case Study 1: JWD Consulting’s Project Management Intranet Site Project (Predictive Approach)
KEYWORDS:   Bloom’s: Knowledge

 

70. A(n) _____ is the person responsible for the business value of the project and for deciding what work to do and in what order when using a Scrum method.

ANSWER:   product owner
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.118
LEARNING OBJECTIVES:   INFO.SCHW.14.18 – LO: 3-5
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Case Study 2: JWD Consulting’s Project Management Intranet Site Project (Agile Approach)
KEYWORDS:   Bloom’s: Knowledge

 

71. A(n) _____ is a set period of time, normally two to four weeks, during which specific work must be completed and made ready for review when using Scrum methods.

ANSWER:   sprint
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.118
LEARNING OBJECTIVES:   INFO.SCHW.14.18 – LO: 3-5
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Case Study 2: JWD Consulting’s Project Management Intranet Site Project (Agile Approach)
KEYWORDS:   Bloom’s: Knowledge

 

72. A(n) _____ is the person who ensures that the team is productive, facilitates the daily Scrum, enables close cooperation across all roles and functions, and removes barriers that prevent the team from being effective.

ANSWER:   ScrumMaster
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.118
LEARNING OBJECTIVES:   INFO.SCHW.14.18 – LO: 3-5
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Case Study 2: JWD Consulting’s Project Management Intranet Site Project (Agile Approach)
KEYWORDS:   Bloom’s: Knowledge

 

73. A(n) _____ is a cross-functional team of five to nine people who organize themselves and the work to produce the desired results for each sprint.

ANSWER:   Scrum team
development team
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.118
LEARNING OBJECTIVES:   INFO.SCHW.14.18 – LO: 3-5
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Case Study 2: JWD Consulting’s Project Management Intranet Site Project (Agile Approach)
KEYWORDS:   Bloom’s: Knowledge

 

74. In Scrum, a(n) _____ is a useful object created by people.

ANSWER:   artifact
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.119
LEARNING OBJECTIVES:   INFO.SCHW.14.18 – LO: 3-5
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Case Study 2: JWD Consulting’s Project Management Intranet Site Project (Agile Approach)
KEYWORDS:   Bloom’s: Knowledge

 

75. A(n) _____ is a Scrum artifact and consists of the highest-priority items from the product backlog to be completed in a sprint.

ANSWER:   sprint backlog
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.119
LEARNING OBJECTIVES:   INFO.SCHW.14.18 – LO: 3-5
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Case Study 2: JWD Consulting’s Project Management Intranet Site Project (Agile Approach)
KEYWORDS:   Bloom’s: Knowledge

 

76. _____ are short descriptions written by customers of what they need a Scrum system to do for them.

ANSWER:   User stories
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.123
LEARNING OBJECTIVES:   INFO.SCHW.14.18 – LO: 3-5
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Case Study 2: JWD Consulting’s Project Management Intranet Site Project (Agile Approach)
KEYWORDS:   Bloom’s: Knowledge

 

77. The most time and money should be spent on

ANSWER:   executing

execution

project execution

POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.124
LEARNING OBJECTIVES:   INFO.SCHW.14.18 – LO: 3-5
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Case Study 2: JWD Consulting’s Project Management Intranet Site Project (Agile Approach)
KEYWORDS:   Bloom’s: Knowledge

 

78. If done well, the _________ can produce several releases of useful software.

ANSWER:   agile approach

agile method

POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.126
LEARNING OBJECTIVES:   INFO.SCHW.14.18 – LO: 3-5
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Case Study 2: JWD Consulting’s Project Management Intranet Site Project (Agile Approach)
KEYWORDS:   Bloom’s: Knowledge

 

Essay

 

79. List and describe the five process management groups.

ANSWER:   Initiating processes include defining and authorizing a project or project phase. Initiating processes take place during each phase of a project. Therefore, you cannot equate process groups with project phases. Recall that there can be different project phases, but all projects will include all five process groups. For example, project managers and teams should reexamine the business need for the project during every phase of the project life cycle to determine if the project is worth continuing. Initiating processes are also required to end a project. Someone must initiate activities to ensure that the project team completes all the work, documents lessons learned, assigns project resources, and that the customer accepts the work.

Planning processes include devising and maintaining a workable scheme to ensure that the project addresses the organization’s needs. There are several plans for projects, such as the scope management plan, schedule management plan, cost management plan, procurement management plan, and so on, defining each knowledge area as it relates to the project at that point in time. For example, a project team must develop a plan to define the work that needs to be done for the project, to schedule activities related to that work, to estimate costs for performing the work, to decide what resources to procure to accomplish the work, and so on. To account for changing conditions on the project and in the organization, project teams often revise plans during each phase of the project life cycle.

Executing processes include coordinating people and other resources to carry out the various plans and produce the products, services, or results of the project or phase. Examples of executing processes include acquiring and developing the project team, performing quality assurance, distributing information, managing stakeholder expectations, and conducting procurements.

Monitoring and controlling processes include regularly measuring and monitoring progress to ensure that the project team meets the project objectives. The project manager and staff monitor and measure progress against the plans and take corrective action when necessary. A common monitoring and controlling process is reporting performance, where project stakeholders can identify any necessary changes that may be required to keep the project on track.

Closing processes include formalizing acceptance of the project or project phase and ending it efficiently. Administrative activities are often involved in this process group, such as archiving project files, closing out contracts, documenting lessons learned, and receiving formal acceptance of the delivered work as part of the phase or project.

POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.81
LEARNING OBJECTIVES:   INFO.SCHW.14.15 – LO: 3-1
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Project Management Process Groups
KEYWORDS:   Bloom’s: Knowledge

 

80. What is a methodology and what are some methodologies other than the PMBOK Guide do organizations use as a basis for project management methodology?

ANSWER:   A methodology describes how things should be done, and different organizations often have different ways of doing things.

In addition to using the PMBOK® Guide as a basis for project management methodology, many organizations use others, such as the following:

• PRojects IN Controlled Environments (PRINCE2): Originally developed for information technology projects, PRINCE2 was released in 1996 as a generic project management methodology by the U.K. Office of Government Commerce (OCG). It is the de facto standard in the United Kingdom and is used in over 50 countries. PRINCE2 defines 45 separate subprocesses and organizes these into eight process groups as follows:
1. Starting up a project
2. Planning
3. Initiating a project
4. Directing a project
5. Controlling a stage
6. Managing product delivery
7. Managing stage boundaries
8. Closing a project

• Agile methodologies: Agile software development is a form of adaptive software development. All agile methodologies include an iterative workflow and incremental delivery of software in short iterations. Several popular agile methodologies include extreme programming, scrum, feature driven development, lean software development, Agile Unified Process (AUP), Crystal, and Dynamic Systems Development Method (DSDM).

• Rational Unified Process (RUP) framework: RUP is an iterative software development process that focuses on team productivity and delivers software best practices to all team members. According to RUP expert Bill Cottrell, “RUP embodies industry-standard management and technical methods and techniques to provide a software engineering process particularly suited to creating and maintaining component-based software system solutions.” Cottrell explains that you can tailor RUP to include the PMBOK process groups, since several customers asked for that capability. There are several other project management methodologies specifically for software development projects such as Joint Application Development (JAD) and Rapid Application Development (RAD).

• Six Sigma methodologies: Many organizations have projects underway that use Six Sigma methodologies. The work of many project quality experts contributed to the development of today’s Six Sigma principles. Two main methodologies are used on Six Sigma projects: DMAIC (Define, Measure, Analyze, Improve, and Control) is used to improve an existing business process, and DMADV (Define, Measure, Analyze, Design, and Verify) is used to create new product or process designs to achieve predictable, defect-free performance.

POINTS:   1
DIFFICULTY:   Difficulty: Challenging
REFERENCES:   p. 86-87-88
LEARNING OBJECTIVES:   INFO.SCHW.14.16 – LO: 3-3
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Developing An IT Project Management Methodology
KEYWORDS:   Bloom’s: Knowledge

 

81. Describe the process of initiating a project and the issues involved.

ANSWER:   In project management, initiating includes recognizing and starting a new project. An organization should put considerable thought into project selection to ensure that it initiates the right kinds of projects for the right reasons. It is better to have a moderate or even small amount of success on an important project than huge success on one that is unimportant. The selection of projects for initiation, therefore, is crucial, as is the selection of project managers. Ideally, the project manager would be involved in initiating a project, but often the project manager is selected after many initiation decisions have already been made. Organizations must also understand and plan for the ongoing support that is often required after implementing a new system or other product or service resulting from a project.

It is important to remember that strategic planning should serve as the foundation for deciding which projects to pursue. The organization’s strategic plan expresses the vision, mission, goals, objectives, and strategies of the organization. It also provides the basis for information technology project planning. Information technology is usually a support function in an organization, so it is critical that the people initiating information technology projects understand how those projects relate to current and future needs of the organization. Information systems must support the firm’s business goals, such as providing consulting services more effectively and efficiently.

An organization may initiate information technology projects for several reasons, but the most important reason is to support business objectives. Providing a good return on investment at a reasonable level of risk is also important, especially in tough economic times.

POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.89-90
LEARNING OBJECTIVES:   INFO.SCHW.14.17 – LO: 3-4
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Case Study 1: JWD Consulting’s Project Management Intranet Site Project (Predictive Approach)
KEYWORDS:   Bloom’s: Comprehension

 

82. What is a work breakdown structure?

ANSWER:   The WBS is a very important tool in project management because it provides the basis for deciding how to do the work. The WBS also provides a basis for creating the project schedule and performing earned value management for measuring and forecasting project performance.
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p. 104
LEARNING OBJECTIVES:   INFO.SCHW.14.17 – LO: 3-4
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Case Study 1: JWD Consulting’s Project Management Intranet Site Project (Predictive Approach)
KEYWORDS:   Bloom’s: Knowledge

 

83. In the Scrum method, what role is played by the ScrumMaster?

ANSWER:   The ScrumMaster facilitates four ceremonies or meetings when using Scrum methods:

• Sprint planning session: A meeting with the team to select a set of work from the product backlog to deliver during a sprint. This meeting takes about four hours to a full day.

• Daily Scrum: A short meeting for the development team to share progress and challenges and plan work for the day. Ideally the team members are in the same place, the meeting usually lasts no more than 15 minutes, and it is held at the same time and place each day. If that is not possible, teams can use videoconferencing to have short virtual meetings. The ScrumMaster asks what work has been done since yesterday, what work is planned for today, and what impediments or stumbling blocks might hamper the team’s efforts. The ScrumMaster documents these stumbling blocks and works with key stakeholders to resolve them after the daily Scrum. Many teams use the term issues for items that do not have to be solved in the next 24 hours and blockers for items that need to be addressed immediately. This allows a ScrumMaster to maintain focus on highest-priority items (blockers) first and then manage the resolution of other issues over the next day or so.

• Sprint reviews: A meeting in which the team demonstrates to the product owner what it has completed during the sprint.

• Sprint retrospectives: A meeting in which the team looks for ways to improve the product and the process based on a review of the actual performance of the development team.

POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p. 119
LEARNING OBJECTIVES:   INFO.SCHW.14.18 – LO: 3-5
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Case Study 2: JWD Consulting’s Project Management Intranet Site Project (Agile Approach)
KEYWORDS:   Bloom’s: Knowledge

 

True / False

 

1. Overrun is the additional percentage amount by which estimates exceed actual costs.

a. True
b. False

 

ANSWER:   False
RATIONALE:   Feedback: Overrun is the additional percentage or dollar amount by which actual costs exceed estimates.
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.264
LEARNING OBJECTIVES:   INFO.SCHW.14.48 – LO: 7-1
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   The Importance of Project Cost Management
KEYWORDS:   Bloom’s: Knowledge

 

2. The primary output of the planning cost management process is a change request.

a. True
b. False

 

ANSWER:   False
RATIONALE:   Feedback: The main output of the planning cost management process process is a cost management plan. Planning cost management involves determining the policies, procedures, and documentation that will be used for planning, executing, and controlling project cost.
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.266
LEARNING OBJECTIVES:   INFO.SCHW.14.48 – LO: 7-1
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   The Importance of Project Cost Management
KEYWORDS:   Bloom’s: Knowledge

 

3. IT project managers must be able to present and discuss project information both in financial and technical terms.

a. True
b. False

 

ANSWER:   True
RATIONALE:   Feedback: Most members of a company’s executive board have a better understanding of financial terms than IT terms, and are more interested in finance. Therefore, IT project managers need to be able to present and discuss project information both in financial terms and technical terms.
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.266
LEARNING OBJECTIVES:   INFO.SCHW.14.49 – LO: 7-2
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Basic Principles of Cost Management
KEYWORDS:   Bloom’s: Knowledge

 

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

a. True
b. False

 

ANSWER:   True
RATIONALE:   Feedback: Cash flow analysis is a method of determining the estimated annual costs and benefits for a project and the resulting annual cash flow. Project managers must conduct cash flow analysis to determine net present value.
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.269
LEARNING OBJECTIVES:   INFO.SCHW.14.49 – LO: 7-2
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   The Importance of Project Cost Management
KEYWORDS:   Bloom’s: Knowledge

 

5. Intangible costs can be easily measured in monetary terms.

a. True
b. False

 

ANSWER:   False
RATIONALE:   Feedback: Intangible costs or benefits are difficult to measure in monetary terms. Conversely, tangible costs or benefits can easily be measured in dollars.
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.269
LEARNING OBJECTIVES:   INFO.SCHW.14.49 – LO: 7-2
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
TOPICS:   Basic Principles of Cost Management
KEYWORDS:   Bloom’s: Knowledge

 

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

a. True
b. False

 

ANSWER:   False
RATIONALE:   Feedback: Sunk cost is money that has been spent in the past. When deciding what projects to invest in or continue, one should not include sunk costs.
POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.270
LEARNING OBJECTIVES:   INFO.SCHW.14.49 – LO: 7-2
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
TOPICS:   Basic Principles of Cost Management
KEYWORDS:   Bloom’s: Comprehension

 

7. It is important for project managers to focus on indirect costs because they can be easily controlled.

a. True
b. False

 

ANSWER:   False
RATIONALE:   Feedback: Direct costs can be directly related to creating the products and services of the project. Project managers should focus on direct costs because they can be controlled.
POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.269-270
LEARNING OBJECTIVES:   INFO.SCHW.14.49 – LO: 7-2
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
TOPICS:   Basic Principles of Cost Management
KEYWORDS:   Bloom’s: Comprehension

 

8. If an important supplier goes out of business, management reserves can be set aside to cover the resulting costs.

a. True
b. False

 

ANSWER:   True
RATIONALE:   Feedback: Management reserves allow for future situations that are unpredictable. For example, if a project manager gets sick for two weeks or an important supplier goes out of business, management reserves could be set aside to cover the resulting costs.
POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.270
LEARNING OBJECTIVES:   INFO.SCHW.14.49 – LO: 7-2
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
TOPICS:   Basic Principles of Cost Management
KEYWORDS:   Bloom’s: Comprehension

 

9. Contingency reserves are also known as unknown unknowns.

a. True
b. False

 

ANSWER:   False
RATIONALE:   Feedback: Contingency reserves allow for future situations that may be partially planned for. They are sometimes called known unknowns.
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.270
LEARNING OBJECTIVES:   INFO.SCHW.14.49 – LO: 7-2
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
TOPICS:   Basic Principles of Cost Management
KEYWORDS:   Bloom’s: Knowledge

 

10. A cost management plan can include organizational procedures links, control thresholds, and process descriptions.

a. True
b. False

 

ANSWER:   True
RATIONALE:   Feedback: In general, a cost management plan includes level of accuracy, organizational procedures links, process descriptions, control thresholds, and rules of performance measurement, among others.
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.271
LEARNING OBJECTIVES:   INFO.SCHW.14.50 – LO: 7-3
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Planning Cost Management
KEYWORDS:   Bloom’s: Knowledge

 

11. A budgetary estimate is the most accurate of the three types of estimates.

a. True
b. False

 

ANSWER:   False
RATIONALE:   Feedback: A definitive estimate provides an accurate estimate of project costs. It provides details for purchases and estimates actual costs.
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.272
LEARNING OBJECTIVES:   INFO.SCHW.14.51 – LO: 7-4
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Estimating Costs
KEYWORDS:   Bloom’s: Knowledge

 

12. Budgetary estimates are made even before a project is officially started.

a. True
b. False

 

ANSWER:   False
RATIONALE:   Feedback: Budgetary estimates are made one to two years prior to project completion.
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.272
LEARNING OBJECTIVES:   INFO.SCHW.14.51 – LO: 7-4
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Estimating Costs
KEYWORDS:   Bloom’s: Knowledge

 

13. Definitive estimates are made one year or less prior to project completion.

a. True
b. False

 

ANSWER:   True
RATIONALE:   Feedback: Definitive estimates are made one year or less prior to project completion. They provide an accurate estimate of project costs.
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.272
LEARNING OBJECTIVES:   INFO.SCHW.14.51 – LO: 7-4
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Estimating Costs
KEYWORDS:   Bloom’s: Knowledge

 

14. Estimates should become more accurate as time progresses.

a. True
b. False

 

ANSWER:   True
RATIONALE:   Feedback: Estimates are usually done at various stages of a project and should become more accurate as time progresses.
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.273
LEARNING OBJECTIVES:   INFO.SCHW.14.51 – LO: 7-4
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Estimating Costs
KEYWORDS:   Bloom’s: Knowledge

 

15. Supporting details for an estimate include the ground rules and assumptions used in creating the estimate.

a. True
b. False

 

ANSWER:   True
RATIONALE:   Feedback: In addition to creating cost estimates for the entire project and activity cost estimates, it is also important to provide supporting details for the estimates and updates to project documents. The supporting details include the ground rules and assumptions used in creating the estimate, a description of the project used as a basis for the estimate, and details on the cost estimation tools and techniques used to create the estimate.
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.273
LEARNING OBJECTIVES:   INFO.SCHW.14.51 – LO: 7-4
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Estimating Costs
KEYWORDS:   Bloom’s: Knowledge

 

16. Analogous estimates are called activity-based costing.

a. True
b. False

 

ANSWER:   False
RATIONALE:   Feedback: Analogous estimates are also called top-down estimates. Such estimates use the actual cost of a previous, similar project as the basis for estimating the cost of the current project.
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.273
LEARNING OBJECTIVES:   INFO.SCHW.14.51 – LO: 7-4
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Estimating Costs
KEYWORDS:   Bloom’s: Knowledge

 

17. Analogous estimates are the most accurate technique to estimate costs.

a. True
b. False

 

ANSWER:   False
RATIONALE:   Feedback: Analogous estimates requires a good deal of expert judgment and is generally less costly than other techniques. However, it is also less accurate.
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.273
LEARNING OBJECTIVES:   INFO.SCHW.14.51 – LO: 7-4
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Estimating Costs
KEYWORDS:   Bloom’s: Knowledge

 

18. In a bottom-up estimate, the size of the individual work items is one of the factors that drives the accuracy of the estimates.

a. True
b. False

 

ANSWER:   True
RATIONALE:   Feedback: The size of the individual work items and the experience of the estimators drive the accuracy of the estimates. Using smaller work items increases the accuracy of the cost estimate because the people assigned to do the work develop the cost estimate instead of someone unfamiliar with the work.
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.274
LEARNING OBJECTIVES:   INFO.SCHW.14.51 – LO: 7-4
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Estimating Costs
KEYWORDS:   Bloom’s: Knowledge

 

19. Parametric models are reliable when the models are flexible in terms of the project’s size.

a. True
b. False

 

ANSWER:   True
RATIONALE:   Feedback: Parametric models are most reliable when the historical information used to create the model is accurate, the parameters are readily quantifiable, and the model is flexible in terms of the project’s size.
POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.274
LEARNING OBJECTIVES:   INFO.SCHW.14.51 – LO: 7-4
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Estimating Costs
KEYWORDS:   Bloom’s: Comprehension

 

20. One of the reasons why project cost estimates are inaccurate is because human beings are biased toward underestimation.

a. True
b. False

 

ANSWER:   True
RATIONALE:   Feedback: One of the reasons why project cost estimates are very inaccurate is because human beings are biased toward underestimation. It is thus important for project managers and top management to review estimates and ask important questions to make sure the estimates are not biased.
POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.275
LEARNING OBJECTIVES:   INFO.SCHW.14.51 – LO: 7-4
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Estimating Costs
KEYWORDS:   Bloom’s: Comprehension

 

21. It is important for project managers to understand that every cost estimate is unique.

a. True
b. False

 

ANSWER:   True
RATIONALE:   Feedback: Every cost estimate is unique, just as every project is unique.
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.275
LEARNING OBJECTIVES:   INFO.SCHW.14.51 – LO: 7-4
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Estimating Costs
KEYWORDS:   Bloom’s: Knowledge

 

22. Determining the budget involves allocating the project cost estimate to individual work items over time.

a. True
b. False

 

ANSWER:   True
RATIONALE:   Feedback: Determining the budget involves allocating the project cost estimate to individual material resources or work items over time. These material resources or work items are based on the activities in the work breakdown structure for the project.
POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.281
LEARNING OBJECTIVES:   INFO.SCHW.14.52 – LO: 7-5
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Determining the Budget
KEYWORDS:   Bloom’s: Knowledge

 

23. The project management plan and project funding requirements are inputs of the process of controlling costs.

a. True
b. False

 

ANSWER:   True
RATIONALE:   Feedback: The project management plan, project funding requirements, work performance data, and organizational process assets are inputs for controlling costs.
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.282
LEARNING OBJECTIVES:   INFO.SCHW.14.53 – LO: 7-6
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Controlling Costs
KEYWORDS:   Bloom’s: Knowledge

 

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

a. True
b. False

 

ANSWER:   True
RATIONALE:   Feedback: The formulas for variances and indexes start with EV, the earned value. Variances are calculated by subtracting the actual cost or planned value from EV, and indexes are calculated by dividing EV by the actual cost or planned value.
POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.284
LEARNING OBJECTIVES:   INFO.SCHW.14.53 – LO: 7-6
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Controlling Costs
KEYWORDS:   Bloom’s: Comprehension

 

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

a. True
b. False

 

ANSWER:   False
RATIONALE:   Feedback: Cost variance (CV) is the earned value minus the actual cost. If cost variance is a negative number, it means that performing the work costs more than planned. If cost variance is a positive number, performing the work costs less than planned.
POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.284
LEARNING OBJECTIVES:   INFO.SCHW.14.53 – LO: 7-6
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Controlling Costs
KEYWORDS:   Bloom’s: Comprehension

 

26. A negative schedule variance means that it took lesser than planned to perform the work.

a. True
b. False

 

ANSWER:   False
RATIONALE:   Feedback: A negative schedule variance means that it took longer than planned to perform the work, and a positive schedule variance means that the work took less time than planned to perform.
POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.284
LEARNING OBJECTIVES:   INFO.SCHW.14.53 – LO: 7-6
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Controlling Costs
KEYWORDS:   Bloom’s: Comprehension

 

27. If the cost performance index (CPI) is less than 100 percent, the project is under budget.

a. True
b. False

 

ANSWER:   False
RATIONALE:   Feedback: If the CPI is less than one or less than 100 percent, the project is over budget. On the other hand, if the CPI is greater than one or more than 100 percent, the project is under budget.
POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.284
LEARNING OBJECTIVES:   INFO.SCHW.14.53 – LO: 7-6
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Controlling Costs
KEYWORDS:   Bloom’s: Comprehension

 

28. A schedule performance index of one means that the project is on schedule.

a. True
b. False

 

ANSWER:   True
RATIONALE:   Feedback: The schedule performance index (SPI) is the ratio of earned value to planned value; it can be used to estimate the projected time to complete the project. A schedule performance index of one means the project is on schedule.
POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.284
LEARNING OBJECTIVES:   INFO.SCHW.14.53 – LO: 7-6
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Controlling Costs
KEYWORDS:   Bloom’s: Comprehension

 

29. In an earned value chart, when the actual cost line is right on or above the earned value line, it indicates that costs are less than planned.

a. True
b. False

 

ANSWER:   False
RATIONALE:   Feedback: Viewing earned value information in chart form helps in visualizing how a project is performing. If the actual cost line is always on or above the earned value line, it indicates that costs are equal to or more than planned.
POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.286
LEARNING OBJECTIVES:   INFO.SCHW.14.53 – LO: 7-6
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Controlling Costs
KEYWORDS:   Bloom’s: Comprehension

 

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

a. True
b. False

 

ANSWER:   True
RATIONALE:   Feedback: Most organizations use software to assist in various activities related to project cost management. Spreadsheets are a common tool for cost estimating, cost budgeting, and cost control.
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.289
LEARNING OBJECTIVES:   INFO.SCHW.14.54 – LO: 7-7
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Using Project Management Software to assist In Project Cost Management
KEYWORDS:   Bloom’s: Knowledge

 

Multiple Choice

 

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

a. Project scope management b. Project quality management
c. Project time management d. Project cost management

 

ANSWER:   d
RATIONALE:   Feedback: Project cost management includes the processes required to ensure that a project team completes a project within an approved budget. Project managers must make sure their projects are well defined, have accurate time and cost estimates, and have a realistic budget that they were involved in approving.
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.266
LEARNING OBJECTIVES:   INFO.SCHW.14.48 – LO: 7-1
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
TOPICS:   The Importance of Project Cost Management
KEYWORDS:   Bloom’s: Knowledge

 

32. Which of the following involves developing an approximation of the costs of resources needed to complete a project?

a. Determining the budget b. Finalising the cost baseline
c. Controlling costs d. Estimating costs

 

ANSWER:   d
RATIONALE:   Feedback: Estimating costs involves developing an approximation or estimate of the costs of the resources needed to complete a project. The main outputs of the cost estimating process are activity cost estimates, basis of estimates, and project documents updates.
POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.266
LEARNING OBJECTIVES:   INFO.SCHW.14.48 – LO: 7-1
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   The Importance of Project Cost Management
KEYWORDS:   Bloom’s: Comprehension

 

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

a. Determining the budget b. Finalising policies for project costs
c. Controlling costs d. Estimating costs

 

ANSWER:   a
RATIONALE:   Feedback: Determining the budget involves allocating the overall cost estimate to individual work items to establish a baseline for measuring performance.
POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.266
LEARNING OBJECTIVES:   INFO.SCHW.14.48 – LO: 7-1
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   The Importance of Project Cost Management
KEYWORDS:   Bloom’s: Comprehension

 

34. One of the main outputs of the _____ process is a cost baseline.

a. cost controlling b. cost estimating
c. cost budgeting d. cost planning

 

ANSWER:   c
RATIONALE:   Feedback: Determining the budget involves allocating the overall cost estimate to individual work items to establish a baseline for measuring performance. The main outputs of the cost budgeting process are a cost baseline, project funding requirements, and project documents updates.
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.266
LEARNING OBJECTIVES:   INFO.SCHW.14.48 – LO: 7-1
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   The Importance of Project Cost Management
KEYWORDS:   Bloom’s: Knowledge

 

35. The process of controlling costs primarily involves:

a. determining the policies for project costs. b. managing changes to the project budget.
c. finalising the procedures for project costs. d. determining a basis for estimates.

 

ANSWER:   b
RATIONALE:   Feedback: Controlling costs involves controlling changes to the project budget. The main outputs of the cost control process are work performance information, cost forecasts, change requests, project management plan updates, project documents updates, and organizational process assets updates.
POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.266
LEARNING OBJECTIVES:   INFO.SCHW.14.48 – LO: 7-1
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   The Importance of Project Cost Management
KEYWORDS:   Bloom’s: Comprehension

 

36. Work performance information and cost forecasts are main outputs of the _____ process.

a. cost budgeting b. cost estimating
c. cost control d. cost pricing

 

ANSWER:   c
RATIONALE:   Feedback: Controlling costs involves controlling changes to the project budget. The main outputs of the cost control process are work performance information, cost forecasts, change requests, project management plan updates, project documents updates, and organizational process assets updates.
POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.266
LEARNING OBJECTIVES:   INFO.SCHW.14.48 – LO: 7-1
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   The Importance of Project Cost Management
KEYWORDS:   Bloom’s: Comprehension

 

37. Profits may be defined as:

a. expenses plus net income. b. costs plus revenues.
c. revenues plus expenses. d. revenues minus expenditures.

 

ANSWER:   d
RATIONALE:   Feedback: Profits are revenues minus expenditures. To increase profits, a company can increase revenues, decrease expenses, or try to do both.
POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.267
LEARNING OBJECTIVES:   INFO.SCHW.14.49 – LO: 7-2
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
TOPICS:   Basic Principles of Cost Management
KEYWORDS:   Bloom’s: Comprehension

 

38. _____ helps develop an accurate projection of a project’s financial expenses and benefits.

a. Critical path analysis b. Fast tracking
c. Life cycle costing d. Crashing

 

ANSWER:   c
RATIONALE:   Feedback: Life cycle costing helps develop an accurate projection of a project’s financial costs and benefits. It allows one to see a big-picture view of the cost of a project throughout its life cycle.
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.267
LEARNING OBJECTIVES:   INFO.SCHW.14.49 – LO: 7-2
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Basic Principles of Cost Management
KEYWORDS:   Bloom’s: Knowledge

 

39. _____ is a method for determining the estimated annual costs and benefits for a project.

a. Critical path analysis b. Cash flow analysis
c. Present value analysis d. Requirements analysis

 

ANSWER:   b
RATIONALE:   Feedback: Cash flow analysis is a method for determining the estimated annual costs and benefits for a project and the resulting annual cash flow. Project managers must conduct cash flow analysis to determine net present value.
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.269
LEARNING OBJECTIVES:   INFO.SCHW.14.49 – LO: 7-2
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Basic Principles of Cost Management
KEYWORDS:   Bloom’s: Knowledge

 

40. Which of the following is true of tangible costs?

a. They cannot be calculated in monetary terms.
b. They can be easily measured.
c. They are difficult to quantify.
d. Their examples include goodwill and prestige.

 

ANSWER:   b
RATIONALE:   Feedback: Tangible and intangible costs and benefits are categories for determining how well an organization can define the estimated costs and benefits for a project. Tangible costs or benefits can easily be measured in dollars.
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.269
LEARNING OBJECTIVES:   INFO.SCHW.14.49 – LO: 7-2
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
TOPICS:   Basic Principles of Cost Management
KEYWORDS:   Bloom’s: Knowledge

 

41. _____ are those costs that are difficult to measure in monetary terms.

a. Intangible costs b. Direct costs
c. Tangible costs d. Fixed costs

 

ANSWER:   a
RATIONALE:   Feedback: Intangible costs or benefits are difficult to measure in monetary terms.
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.269
LEARNING OBJECTIVES:   INFO.SCHW.14.49 – LO: 7-2
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
TOPICS:   Basic Principles of Cost Management
KEYWORDS:   Bloom’s: Knowledge

 

42. Newtech Inc. hires John for the position of a software programmer to work on their new project. Salary paid to John by Newtech Inc. would be an example of _____ costs.

a. direct b. indirect
c. sunk d. intangible

 

ANSWER:   a
RATIONALE:   Feedback: Direct costs can be directly related to creating the products and services of a project. For instance, direct costs include the salaries of people working full time on a project.
POINTS:   1
DIFFICULTY:   Difficulty: Challenging
REFERENCES:   p.269
LEARNING OBJECTIVES:   INFO.SCHW.14.49 – LO: 7-2
NATIONAL STANDARDS:   United States – BUSPROG: Reflective Thinking
TOPICS:   Basic Principles of Cost Management
KEYWORDS:   Bloom’s: Application

 

43. Indirect costs are:

a. directly related to performing the project.
b. those that cannot be allocated to projects.
c. those that can be easily controlled by managers.
d. not directly related to the products or services of a project.

 

ANSWER:   d
RATIONALE:   Feedback: Indirect costs are not directly related to the products or services of the project, but are indirectly related to performing the project.
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.270
LEARNING OBJECTIVES:   INFO.SCHW.14.49 – LO: 7-2
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
TOPICS:   Basic Principles of Cost Management
KEYWORDS:   Bloom’s: Knowledge

 

44. Soles is a footwear company which has recently set up its store in Ambrosia. To manufacture its products, Soles incurs a range of different costs. Which of the following would be an example of an indirect cost?

a. Cost of machines to produce shoes
b. Salary paid to factory workers
c. Electricity used to run its factories
d. Cost of leather used to manufacture shoes

 

ANSWER:   c
RATIONALE:   Feedback: Indirect costs are not directly related to the products or services of the project, but are indirectly related to performing the project. For example, indirect costs would include the cost of electricity, paper towels, and other necessities in a large building that houses 1,000 employees who work on many projects.
POINTS:   1
DIFFICULTY:   Difficulty: Challenging
REFERENCES:   p.270
LEARNING OBJECTIVES:   INFO.SCHW.14.49 – LO: 7-2
NATIONAL STANDARDS:   United States – BUSPROG: Reflective Thinking
TOPICS:   Basic Principles of Cost Management
KEYWORDS:   Bloom’s: Application

 

45. Good Earth, a company manufacturing packaged food products, sets up its stores in Baltonia. However, a year later, the company closes the store down due to high operating costs. In such a scenario, the money spent in paying for the rent of the store in Baltonia would be an example of _____ costs.

a. recurring b. direct
c. sunk d. intangible

 

ANSWER:   c
RATIONALE:   Feedback: Sunk cost is money that has been spent in the past. When deciding what projects to invest in or continue, one should not include sunk costs.
POINTS:   1
DIFFICULTY:   Difficulty: Challenging
REFERENCES:   p.270
LEARNING OBJECTIVES:   INFO.SCHW.14.49 – LO: 7-2
NATIONAL STANDARDS:   United States – BUSPROG: Reflective Thinking
TOPICS:   Basic Principles of Cost Management
KEYWORDS:   Bloom’s: Application

 

46. Which of the following is true of contingency reserves?

a. They allow for future situations that can be partially planned for.
b. They are also known as unknown unknowns.
c. They are not included in a cost baseline.
d. They allow for dollar amounts to be used to cover existing, fixed costs.

 

ANSWER:   a
RATIONALE:   Feedback: Contingency reserves allow for future situations that may be partially planned for (sometimes called known unknowns) and are included in the project cost baseline.
POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.270
LEARNING OBJECTIVES:   INFO.SCHW.14.49 – LO: 7-2
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
TOPICS:   Basic Principles of Cost Management
KEYWORDS:   Bloom’s: Comprehension

 

47. Which of the following reserves allows for future situations that are unpredictable?

a. Contingency reserves b. Management reserves
c. Known unknowns d. Cost baseline reserves

 

ANSWER:   b
RATIONALE:   Feedback: Management reserves allow for future situations that are unpredictable. They are sometimes called unknown unknowns.
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.270
LEARNING OBJECTIVES:   INFO.SCHW.14.49 – LO: 7-2
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
TOPICS:   Basic Principles of Cost Management
KEYWORDS:   Bloom’s: Knowledge

 

48. The first step in project cost management is:

a. to allocate project cost estimates to individual material resources.
b. to plan how costs will be managed.
c. to control project costs and monitor cost performance.
d. to develop several estimates of costs for different types of resources.

 

ANSWER:   b
RATIONALE:   Feedback: The first step in project cost management is planning how the costs will be managed throughout the life of the project. The project manager and other stakeholders use expert judgment, analytical techniques, and meetings to produce the cost management plan.
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.270-271
LEARNING OBJECTIVES:   INFO.SCHW.14.50 – LO: 7-3
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
TOPICS:   Planning Cost Management
KEYWORDS:   Bloom’s: Knowledge

 

49. Which of the following is true of a rough order of magnitude estimate?

a. It is used to allocate money into an organization’s budget.
b. It provides an estimate of what a project will cost.
c. Its timeframe is always less than a year prior to project completion.
d. It is a type of estimate that is done in the final stages of a project.

 

ANSWER:   b
RATIONALE:   Feedback: A rough order of magnitude (ROM) estimate provides an estimate of what a project will cost. This type of estimate is done very early in a project or even before a project is officially started.
POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.272
LEARNING OBJECTIVES:   INFO.SCHW.14.51 – LO: 7-4
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Estimating Costs
KEYWORDS:   Bloom’s: Comprehension

 

50. A rough order of magnitude estimate can be referred to as a _____ estimate.

a. definitive b. budgetary
c. final d. ballpark

 

ANSWER:   d
RATIONALE:   Feedback: A rough order of magnitude (ROM) estimate provides an estimate of what a project will cost. A ROM estimate can also be referred to as a ballpark estimate, a guesstimate, a swag, or a broad gauge.
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.272
LEARNING OBJECTIVES:   INFO.SCHW.14.51 – LO: 7-4
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Estimating Costs
KEYWORDS:   Bloom’s: Knowledge

 

51. A cost estimation tool which is used to allocate money into an organization’s budget is known as a _____ estimate.

a. budgetary b. definitive
c. rough order of magnitude d. ballpark

 

ANSWER:   a
RATIONALE:   Feedback: A budgetary estimate is used to allocate money into an organization’s budget. Budgetary estimates are made one to two years prior to project completion.
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.272
LEARNING OBJECTIVES:   INFO.SCHW.14.51 – LO: 7-4
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Estimating Costs
KEYWORDS:   Bloom’s: Knowledge

 

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

a. budgetary b. definitive
c. rough order of magnitude d. final

 

ANSWER:   b
RATIONALE:   Feedback: A definitive estimate provides an accurate estimate of project costs. Definitive estimates are used for making many purchasing decisions for which accurate estimates are required and for estimating final project costs.
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.272
LEARNING OBJECTIVES:   INFO.SCHW.14.51 – LO: 7-4
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Estimating Costs
KEYWORDS:   Bloom’s: Knowledge

 

53. Which of the following types of estimate use the actual cost of a previous, similar project as the basis for estimating the cost of the current project?

a. Definitive estimates b. Parametric estimates
c. Bottom-up estimates d. Analogous estimates

 

ANSWER:   d
RATIONALE:   Feedback: Analogous estimates use the actual cost of a previous, similar project as the basis for estimating the cost of the current project. This technique requires a good deal of expert judgment and is generally less costly than other techniques, but it is also less accurate.
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.273
LEARNING OBJECTIVES:   INFO.SCHW.14.51 – LO: 7-4
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Estimating Costs
KEYWORDS:   Bloom’s: Knowledge

 

54. Analogous estimates are also known as _____ estimates.

a. bottom-up b. top-down
c. parametric d. budgetary

 

ANSWER:   b
RATIONALE:   Feedback: Analogous estimates use the actual cost of a previous, similar project as the basis for estimating the cost of the current project. They are also called top-down estimates.
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.273
LEARNING OBJECTIVES:   INFO.SCHW.14.51 – LO: 7-4
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Estimating Costs
KEYWORDS:   Bloom’s: Knowledge

 

55. Which of the following is true of analogous estimates?

a. Their main disadvantage is that they cost more than other techniques.
b. They are the only technique which do not require expert judgement.
c. They are most reliable when previous projects are similar in fact with current projects.
d. They use project characteristics in a mathematical model to estimate project costs.

 

ANSWER:   c
RATIONALE:   Feedback: Analogous estimates use the actual cost of a previous, similar project as the basis for estimating the cost of the current project. They are most reliable when the previous projects are similar in fact, not just in appearance.
POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.273
LEARNING OBJECTIVES:   INFO.SCHW.14.51 – LO: 7-4
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Estimating Costs
KEYWORDS:   Bloom’s: Comprehension

 

56. A cost estimation tool which involves estimating individual work items or activities and summing them to get a project total is known as a(n) _____ estimate.

a. budgetary b. parametric
c. bottom-up d. analogous

 

ANSWER:   c
RATIONALE:   Feedback: Bottom-up estimates involve estimating the costs of individual work items or activities and summing them to get a project total. This approach is sometimes referred to as activity-based costing.
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.274
LEARNING OBJECTIVES:   INFO.SCHW.14.51 – LO: 7-4
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Estimating Costs
KEYWORDS:   Bloom’s: Knowledge

 

57. Which of the following is true of bottom-up estimates?

a. They are based on the actual cost of a previous, similar project.
b. They are also known as parametric estimating.
c. They are most accurate when they involve large, extensive work items.
d. They are time-intensive and expensive to develop.

 

ANSWER:   d
RATIONALE:   Feedback: Bottom-up estimates involve estimating the costs of individual work items or activities and summing them to get a project total. The drawback with bottom-up estimates is that they are usually time-intensive and therefore expensive to develop.
POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.274
LEARNING OBJECTIVES:   INFO.SCHW.14.51 – LO: 7-4
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Estimating Costs
KEYWORDS:   Bloom’s: Comprehension

 

58. _____ uses project characteristics in a mathematical model to estimate project costs.

a. Rough order of magnitude estimating b. Parametric estimating
c. Bottom-up estimating d. Analogous estimating

 

ANSWER:   b
RATIONALE:   Feedback: Parametric estimating uses project characteristics (parameters) in a mathematical model to estimate project costs.
POINTS:   1
DIFFICULTY:   Difficulty: Knowledge
REFERENCES:   p.274
LEARNING OBJECTIVES:   INFO.SCHW.14.51 – LO: 7-4
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Estimating Costs
KEYWORDS:   Bloom’s: Knowledge

 

59. Which of the following is most likely to be a reason for inaccuracies in information technology cost estimates?

a. Estimates take a long time to be worked out.
b. People lack estimating experience.
c. Human beings are biased toward overestimation.
d. Only software development provides the scope for estimates to be accurate.

 

ANSWER:   b
RATIONALE:   Feedback: The people who develop software cost estimates often do not have much experience with cost estimation, especially for large projects. They also do not have enough accurate, reliable project data on which to base estimates.
POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.275
LEARNING OBJECTIVES:   INFO.SCHW.14.51 – LO: 7-4
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Estimating Costs
KEYWORDS:   Bloom’s: Comprehension

 

60. If the cost estimate for a project is a basis for contract awards and performance reporting, it should be a(n) _____ estimate and as accurate as possible.

a. budgetary b. definitive
c. rough order of magnitude d. analogous

 

ANSWER:   b
RATIONALE:   Feedback: If the cost estimate for a project is a basis for contract awards and performance reporting, it should be a definitive estimate and as accurate as possible.
POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.276
LEARNING OBJECTIVES:   INFO.SCHW.14.51 – LO: 7-4
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Estimating Costs
KEYWORDS:   Bloom’s: Comprehension

 

61. The main goal of the _____ process is to produce a cost baseline for measuring project performance and project funding requirements.

a. cost budgeting b. cost planning
c. cost controlling d. cost estimating

 

ANSWER:   a
RATIONALE:   Feedback: The main goal of the cost budgeting process is to produce a cost baseline for measuring project performance and to determine project funding requirements. Determining the budget involves allocating the project cost estimate to individual material resources or work items over time.
POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.281
LEARNING OBJECTIVES:   INFO.SCHW.14.52 – LO: 7-5
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
TOPICS:   Determining the Budget
KEYWORDS:   Bloom’s: Comprehension

 

62. Which of the following is an output of the process of controlling costs?

a. Cost forecasts b. Project funding requirements
c. Basis of estimates d. Scope baselines

 

ANSWER:   a
RATIONALE:   Feedback: Outputs of the process of controlling costs are work performance information, cost forecasts, change requests, project management plan updates, project documents updates, and organizational process asset updates.
POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.282
LEARNING OBJECTIVES:   INFO.SCHW.14.53 – LO: 7-6
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Controlling Costs
KEYWORDS:   Bloom’s: Comprehension

 

63. Which of the following is an input of the process of controlling costs?

a. Cost forecasts b. Work performance data
c. Change requests d. Scope baseline

 

ANSWER:   b
RATIONALE:   Feedback: The project management plan, project funding requirements, work performance data, and organizational process assets are inputs for controlling costs.
POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.282
LEARNING OBJECTIVES:   INFO.SCHW.14.53 – LO: 7-6
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Controlling Costs
KEYWORDS:   Bloom’s: Knowledge

 

64. The budget is one of the three values of earned value management and is also known as _____.

a. earned value b. actual cost
c. indirect cost d. planned value

 

ANSWER:   d
RATIONALE:   Feedback: The planned value (PV), also called the budget, is the portion of the approved total cost estimate planned to be spent on an activity during a given period.
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.283
LEARNING OBJECTIVES:   INFO.SCHW.14.53 – LO: 7-6
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Controlling Costs
KEYWORDS:   Bloom’s: Knowledge

 

65. Which of the following is true of earned value?

a. It is the actual cost plus the planned cost.
b. It is based solely on the total cost estimate to be spent on an activity.
c. It is an estimate of the value of the physical work actually completed.
d. It is also known as the planned value.

 

ANSWER:   c
RATIONALE:   Feedback: The earned value (EV) is an estimate of the value of the physical work actually completed. EV is based on the original planned costs for the project or activity and the rate at which the team is completing work on the project or activity to date.
POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.283
LEARNING OBJECTIVES:   INFO.SCHW.14.53 – LO: 7-6
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Controlling Costs
KEYWORDS:   Bloom’s: Comprehension

 

66. Variances are calculated by subtracting the actual cost from _____.

a. earned value b. schedule variance
c. planned value d. rate of performance

 

ANSWER:   a
RATIONALE:   Feedback: Variances are calculated by subtracting the actual cost or planned value from EV or earned value, and indexes are calculated by dividing EV by the actual cost or planned value.
POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.284
LEARNING OBJECTIVES:   INFO.SCHW.14.53 – LO: 7-6
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
TOPICS:   Controlling Costs
KEYWORDS:   Bloom’s: Comprehension

 

67. Cost variance is:

a. the planned value plus actual costs.
b. the earned value minus the actual cost.
c. the rate of performance minus earned value.
d. the planned value minus the rate of performance.

 

ANSWER:   b
RATIONALE:   Feedback: Cost variance (CV) is the earned value minus the actual cost. If cost variance is a negative number, it means that performing the work costs more than planned. If cost variance is a positive number, performing the work costs less than planned.
POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.284
LEARNING OBJECTIVES:   INFO.SCHW.14.53 – LO: 7-6
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
TOPICS:   Controlling Costs
KEYWORDS:   Bloom’s: Comprehension

 

68. Schedule variance is:

a. the earned value minus the planned value.
b. the earned value minus the actual cost.
c. the planned value plus the earned value.
d. the planned value plus the rate of performance.

 

ANSWER:   a
RATIONALE:   Feedback: Schedule variance (SV) is the earned value minus the planned value. A negative schedule variance means that it took longer than planned to perform the work, and a positive schedule variance means that the work took less time than planned to perform.
POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.284
LEARNING OBJECTIVES:   INFO.SCHW.14.53 – LO: 7-6
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
TOPICS:   Controlling Costs
KEYWORDS:   Bloom’s: Comprehension

 

69. The cost performance index (CPI):

a. indicates that a project is under budget if CPI is less than one.
b. can be used to estimate the projected cost of completing the project.
c. indicates that the planned and actual costs are equal if CPI is more than one.
d. is the ratio of earned value to planned value.

 

ANSWER:   b
RATIONALE:   Feedback: The cost performance index (CPI) is the ratio of earned value to actual cost; it can be used to estimate the projected cost of completing the project.
POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.284
LEARNING OBJECTIVES:   INFO.SCHW.14.53 – LO: 7-6
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Controlling Costs
KEYWORDS:   Bloom’s: Comprehension

 

70. Which of the following is true of the schedule performance index (SPI)?

a. It can be used to estimate the projected time to complete the project.
b. It means that a project is behind schedule if an SPI is greater than one.
c. It means that a project is ahead of schedule if SPI is lesser than one or hundred percent.
d. It is the ratio of planned value to actual costs.

 

ANSWER:   a
RATIONALE:   Feedback: The schedule performance index (SPI) is the ratio of earned value to planned value; it can be used to estimate the projected time to complete the project.
POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.284
LEARNING OBJECTIVES:   INFO.SCHW.14.53 – LO: 7-6
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Controlling Costs
KEYWORDS:   Bloom’s: Comprehension

 

Completion

 

71. The additional percentage or dollar amount by which actual costs exceed estimates is known as a(n) _____.

ANSWER:   overrun
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.264
LEARNING OBJECTIVES:   INFO.SCHW.14.48 – LO: 7-1
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
TOPICS:   The Importance of Project Cost Management
KEYWORDS:   Bloom’s: Knowledge

 

72. Accountants define _____ as a resource sacrificed or foregone to to achieve a specific objective.

ANSWER:   cost
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.265
LEARNING OBJECTIVES:   INFO.SCHW.14.48 – LO: 7-1
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
TOPICS:   The Importance of Project Cost Management
KEYWORDS:   Bloom’s: Knowledge

 

73. The main output of the planning cost management process is a(n) _____.

ANSWER:   cost management plan
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.266
LEARNING OBJECTIVES:   INFO.SCHW.14.48 – LO: 7-1
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   The Importance of Project Cost Management
KEYWORDS:   Bloom’s: Knowledge

 

74. The main outputs of the _____ process are activity cost estimates, basis of estimates, and project document updates.

ANSWER:   cost estimating
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.266
LEARNING OBJECTIVES:   INFO.SCHW.14.48 – LO: 7-1
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   The Importance of Project Cost Management
KEYWORDS:   Bloom’s: Knowledge

 

75. The main outputs of the _____ process are a cost performance baseline, project funding requirements, and project document updates.

ANSWER:   cost budgeting
POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.266
LEARNING OBJECTIVES:   INFO.SCHW.14.48 – LO: 7-1
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   The Importance of Project Cost Management
KEYWORDS:   Bloom’s: Knowledge

 

76. _____ are revenues minus expenditures.

ANSWER:   Profits
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.267
LEARNING OBJECTIVES:   INFO.SCHW.14.49 – LO: 7-2
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
TOPICS:   Basic Principles of Cost Management
KEYWORDS:   Bloom’s: Knowledge

 

77. _____ costing helps to see a big-picture view of the cost of a project throughout its life cycle.

ANSWER:   Life cycle
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.267
LEARNING OBJECTIVES:   INFO.SCHW.14.49 – LO: 7-2
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Basic Principles of Cost Management
KEYWORDS:   Bloom’s: Knowledge

 

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

ANSWER:   Life cycle
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.267
LEARNING OBJECTIVES:   INFO.SCHW.14.49 – LO: 7-2
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Basic Principles of Cost Management
KEYWORDS:   Bloom’s: Knowledge

 

79. Project managers must conduct cash flow analysis to determine _____.

ANSWER:   net present value
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.269
LEARNING OBJECTIVES:   INFO.SCHW.14.49 – LO: 7-2
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Basic Principles of Cost Management
KEYWORDS:   Bloom’s: Knowledge

 

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

ANSWER:   learning curve
POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.270
LEARNING OBJECTIVES:   INFO.SCHW.14.49 – LO: 7-2
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Basic Principles of Cost Management
KEYWORDS:   Bloom’s: Comprehension

 

81. Project costs, like project schedules, grow out of the basic documents that initiate a project, like the _____.

ANSWER:   project charter
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.270
LEARNING OBJECTIVES:   INFO.SCHW.14.50 – LO: 7-3
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Planning Cost Management
KEYWORDS:   Bloom’s: Knowledge

 

82. A(n) _____ estimate is done very early in a project or even before a project is officially started.

ANSWER:   rough order of magnitude (ROM)
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.272
LEARNING OBJECTIVES:   INFO.SCHW.14.51 – LO: 7-4
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Estimating Costs
KEYWORDS:   Bloom’s: Knowledge

 

83. The timeframe for a(n) _____ estimate is often three or more years prior to project completion.

ANSWER:   rough order of magnitude (ROM)
POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.272
LEARNING OBJECTIVES:   INFO.SCHW.14.51 – LO: 7-4
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Estimating Costs
KEYWORDS:   Bloom’s: Comprehension

 

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

ANSWER:   cost estimates
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.274
LEARNING OBJECTIVES:   INFO.SCHW.14.51 – LO: 7-4
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Estimating Costs
KEYWORDS:   Bloom’s: Knowledge

 

85. ________ are a means of measuring software size based on what the software does for end users.

ANSWER:   Function points
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.277
LEARNING OBJECTIVES:   INFO.SCHW.14.51 – LO: 7-4
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Estimating Costs
KEYWORDS:   Bloom’s: Knowledge

 

86. Project cost estimates are allocated to work items which are based on the activities in the _____ for the project.

ANSWER:   work breakdown structure
POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.281
LEARNING OBJECTIVES:   INFO.SCHW.14.52 – LO: 7-5
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Determining the Budget
KEYWORDS:   Bloom’s: Comprehension

 

87. A(n) _____ is a time-phased budget that project managers use to measure and monitor cost performance.

ANSWER:   cost baseline
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.281
LEARNING OBJECTIVES:   INFO.SCHW.14.52 – LO: 7-5
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Determining the Budget
KEYWORDS:   Bloom’s: Knowledge

 

88. A cost management plan is a subsidiary of the _____ plan.

ANSWER:   project management
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.282
LEARNING OBJECTIVES:   INFO.SCHW.14.52 – LO: 7-5
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Determining the Budget
KEYWORDS:   Bloom’s: Knowledge

 

89. In addition to providing input for budgetary estimates, the process of _____ provides a cost baseline.

ANSWER:   cost budgeting
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.281
LEARNING OBJECTIVES:   INFO.SCHW.14.52 – LO: 7-5
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Determining the Budget
KEYWORDS:   Bloom’s: Knowledge

 

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

ANSWER:   Earned value management (EVM)
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.282
LEARNING OBJECTIVES:   INFO.SCHW.14.53 – LO: 7-6
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Controlling Costs
KEYWORDS:   Bloom’s: Knowledge

 

91. A(n)_____ is the original project plan plus approved changes.

ANSWER:   baseline
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.282
LEARNING OBJECTIVES:   INFO.SCHW.14.53 – LO: 7-6
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Controlling Costs
KEYWORDS:   Bloom’s: Knowledge

 

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

ANSWER:   rate of performance (RP)
POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.283
LEARNING OBJECTIVES:   INFO.SCHW.14.53 – LO: 7-6
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Controlling Costs
KEYWORDS:   Bloom’s: Comprehension

 

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

ANSWER:   planned value (PV)
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.283
LEARNING OBJECTIVES:   INFO.SCHW.14.53 – LO: 7-6
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Controlling Costs
KEYWORDS:   Bloom’s: Knowledge

 

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

ANSWER:   actual cost (AC)
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.283
LEARNING OBJECTIVES:   INFO.SCHW.14.53 – LO: 7-6
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
TOPICS:   Controlling Costs
KEYWORDS:   Bloom’s: Knowledge

 

95. The _____ is based on the original planned costs for the project or activity and the rate at which the team is completing work on the project or activity to date.

ANSWER:   earned value
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.283
LEARNING OBJECTIVES:   INFO.SCHW.14.53 – LO: 7-6
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Controlling Costs
KEYWORDS:   Bloom’s: Knowledge

 

96. The _____ index is the ratio of earned value to planned value.

ANSWER:   schedule performance
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.284
LEARNING OBJECTIVES:   INFO.SCHW.14.53 – LO: 7-6
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Controlling Costs
KEYWORDS:   Bloom’s: Knowledge

 

97. The cost performance index can be used to calculate the _____ which gives an approximate cost of completing a project based on performance to date.

ANSWER:   estimate at completion (EAC)
POINTS:   1
DIFFICULTY:   Difficulty: Easy
REFERENCES:   p.285
LEARNING OBJECTIVES:   INFO.SCHW.14.53 – LO: 7-6
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Controlling Costs
KEYWORDS:   Bloom’s: Knowledge

 

Essay

 

98. List and briefly describe the four project cost management processes.

ANSWER:   The four processes for project cost management are as follows:

(1) Planning cost management involves determining the policies, procedures, and documentation that will be used for planning, executing, and controlling project cost. The main output of this process is a cost management plan.

(2) Estimating costs involves developing an approximation or estimate of the costs of the resources needed to complete a project. The main outputs of the cost estimating process are activity cost estimates, basis of estimates, and project document updates.

(3) Determining the budget involves allocating the overall cost estimate to individual work items to establish a baseline for measuring performance. The main outputs of the cost budgeting process are a cost baseline, project funding requirements, and project document updates.

(4) Controlling costs involves controlling changes to the project budget. The main outputs of the cost control process are work performance information, cost forecasts, change requests, project management plan updates, project documents updates, and organizational process assets updates.

POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.266
LEARNING OBJECTIVES:   INFO.SCHW.14.48 – LO: 7-1
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   The Importance of Project Cost Management
KEYWORDS:   Bloom’s: Comprehension

 

99. What are tangible and intangible costs? Distinguish between direct and indirect costs and give examples of each.

ANSWER:   Tangible and intangible costs and benefits are categories for determining how well an
organization can define the estimated costs and benefits for a project. Tangible costs or benefits are those costs or benefits that an organization can easily measure in dollars.Conversely, intangible costs or benefits are costs or benefits that are difficult to measure in monetary terms. Intangible benefits for projects often include items like goodwill, prestige, and general statements of improved productivity that an organization cannot easily translate into dollar amounts. Because intangible costs and benefits are difficult to quantify, they are often harder to justify.

Direct costs are costs that can be directly related to producing the products and services of the project. One can attribute direct costs directly to a certain project. Project managers should focus on direct costs, since they can control them. For example, direct costs include the salaries of people working full time on the project and the cost of hardware and software purchased specifically for the project. Indirect costs are costs that are not directly related to the products or services of the project, but are indirectly related to performing the project. For example, the cost of electricity, paper towels, and so on in a large building housing a thousand employees who work on many projects would be indirect costs. Indirect costs are allocated to projects, and project managers have very little control over them.

POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.269-270
LEARNING OBJECTIVES:   INFO.SCHW.14.49 – LO: 7-2
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
TOPICS:   Basic Principles of Cost Management
KEYWORDS:   Bloom’s: Comprehension

 

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

ANSWER:   The three basic types of cost estimating are as follows:

(1) A rough order of magnitude (ROM) estimate provides an estimate of what a project will cost. This type of estimate is done very early in a project or even before a project is officially started. Project managers and top management use this estimate to help make project selection decisions. The timeframe for this type of estimate is often three or more years prior to project completion. A ROM estimate’s accuracy is typically –50 percent to +100 percent, which means that the project’s actual costs could be 50 percent below the ROM estimate or 100 percent above. For information technology project estimates, this accuracy range is often much wider. ROM estimates are also known as a ballpark estimate, a guesstimate, a swag, or a broad gauge.

(2) A budgetary estimate is used to allocate money into an organization’s budget. Many organizations develop budgets at least two years into the future. Budgetary estimates are made one to two years prior to project completion. The accuracy of budgetary estimates is typically –10 percent to +25 percent, meaning the actual costs could be 10 percent less or 25 percent more than the budgetary estimate.

(3) A definitive estimate provides an accurate estimate of project costs. Definitive estimates are used for making many purchasing decisions for which accurate estimates are required and for estimating final project costs. Definitive estimates are made one year or less prior to project completion. A definitive estimate should be the most accurate of the three types of estimates. The accuracy of this type of estimate is normally –5 percent to +10 percent, meaning the actual costs could be 5 percent less or 10 percent more than the definitive estimate.

POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.272
LEARNING OBJECTIVES:   INFO.SCHW.14.51 – LO: 7-4
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Estimating Costs
KEYWORDS:   Bloom’s: Comprehension

 

101. Describe three tools used in developing a good cost estimate.

ANSWER:   Several tools and techniques can be used to create a cost estimate. Three of such tools are as follows:

(1) Analogous estimates: They use the actual cost of a previous, similar project as the basis for estimating the cost of the current project. This technique requires a good deal of expert judgment and is generally less costly than other techniques, but it is also less accurate. Analogous estimates are most reliable when the previous projects are similar in fact, not just in appearance. In addition, the groups preparing cost estimates must have the needed expertise to determine whether certain parts of the project will be more or less expensive than analogous projects.

(2) Bottom-up estimates: They involve estimating the costs of individual work items or activities and summing them to get a project total. This approach is sometimes referred to as activity-based costing. The size of the individual work items and the experience of the estimators drive the accuracy of the estimates. Using smaller work items increases the accuracy of the cost estimate because the people assigned to do the work develop the cost estimate instead of someone unfamiliar with the work. The drawback with bottom-up estimates is that they are usually time-intensive and therefore expensive to develop.

(3) Parametric estimating: They use project characteristics (parameters) in a mathematical model to estimate project costs. Parametric models are most reliable when the historical information used to create the model is accurate, the parameters are readily quantifiable, and the model is flexible in terms of the project’s size.

POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.273-274
LEARNING OBJECTIVES:   INFO.SCHW.14.51 – LO: 7-4
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Estimating Costs
KEYWORDS:   Bloom’s: Comprehension

 

102. Earned value management involves calculating three values for each activity or summary
activity from a project’s WBS. Describe each of these three values with examples.

ANSWER:   (1) The planned value (PV), also called the budget, is that portion of the approved total cost estimate planned to be spent on an activity during a given period. Suppose a project included a summary activity of purchasing and installing a new Web server. Suppose further that, according to the plan, it would take one week and cost a total of $10,000 for the labor hours, hardware, and software involved. The planned value (PV) for that activity that week is, therefore, $10,000.

(2) The actual cost (AC) is the total direct and indirect costs incurred in accomplishing work on an activity during a given period. For example, assume that it actually took two weeks and cost $20,000 to purchase and install the new Web server. Assume that $15,000 of these actual costs were incurred during Week 1 and $5,000 was incurred during Week 2. These amounts are the actual cost (AC) for the activity each week.

(3) The earned value (EV) is an estimate of the value of the physical work actually completed. It is based on the original planned costs for the project or activity and the rate at which the team is completing work on the project or activity to date. The rate of performance (RP) is the ratio of actual work completed to the percentage of work planned to have been completed at any given time during the life of the project or activity. For example, suppose that the server installation was halfway completed by the end of week 1. The rate of performance would be 50 percent (50/100) because by the end of week 1, the planned schedule reflects that the task should be 100 percent complete and only 50 percent of that work has been completed.

POINTS:   1
DIFFICULTY:   Difficulty: Moderate
REFERENCES:   p.283
LEARNING OBJECTIVES:   INFO.SCHW.14.53 – LO: 7-6
NATIONAL STANDARDS:   United States – BUSPROG: Technology
TOPICS:   Controlling Costs
KEYWORDS:   Bloom’s: Comprehension

 

 

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