PMI-SP Questions and Answers
What is the most commonly used relationship in a PDM (Precedence Diagramming Method) network?
C. As Soon As Possible.
The four types of dependency (or link) used in a PDM network are:
Finish-to-Start (FS), Start-to-Start (SS), Finish-to-finish (FF), and Start-to-Finish (SF).
SF is rarely used, FS is the most common dependency. Dummies are used in ADM networks, ASAP is a type of constraint.
Reference: PMBOK® Guide page 156 Sect. 188.8.131.52
Which calculation is correct for the To-Complete Performance Index (TCPI) based on the Estimate At Completion (EAC)?
A. AC + (BAC – EV)
B. (BAC - EV)/(BAC - AC)
D. (BAC - EV)/(EAC - AC)
TCPI is the projection of the future cost performance that must be achieved on the remaining work to achieve a management goal such as the original
Budget At Completion (BAC) or a calculated Estimate At Completion (EAC). All of these formula use standard Earned Value Management acronyms:
Option ‘a’ calculates EAC based on future work being performed at budgeted rates
Option ‘b’ calculates TCPI based on BAC (the question asked for EAC)
Option ‘c’ calculates EAC based on future work being performed at the same CPI as the completed work.
Reference: PMBOK® Guide p221 Sect 184.108.40.206
Is a negative schedule variance (SV) an indicator that the project will not finish as scheduled?
A. Yes, a negative SV indicates that the actual progress of the project master schedule is behind the planned progress.
B. No, a negative SV indicates that planned work was not planned appropriately.
C. No, a negative SV only indicates that all of the planned work has not been accomplished; other information is needed to assess the forecast project
D. Yes, a negative SV only get worse over time.
Schedule variance measures the amount of work accomplished compared to amount of work planned to have been accomplished in the period. This does
not translate directly into a delay because you do not know if the work not done affects the Critical Path.
Reference: Practice Standard for Earned Value Management 2nd Ed. 220.127.116.11
You are managing a project to develop a new training course. Which of the following statements is true regarding the tools and techniques used in
A. The precedence diagramming method (PDM) uses nodes to represent the activities and arrows to connect the nodes and show dependencies.
B. Leads and lags allow for the delaying and acceleration of successor activities respectively.
C. The precedence diagramming method (PDM) is used for dependency determination.
D. The two type of dependency determination are mandatory dependencies (hard logic) and discretionary dependencies (soft logic).
This is a sneaky question - most of the answers look correct at first glance:
B is incorrect - Leads accelerate, lags delay (the key word is 'respectively')
C is incorrect (or not the best answer) because the description is less complete than A and it is the 'arrows' or links that create the dependencies.
D is incorrect - there are four types of dependency "External" and “Internal” dependencies were missed from the answer.
The precedence diagramming method (PDM) uses nodes (boxes or rectangles) to represent the activities and arrows (links) to connect the nodes
and show dependencies. The type of dependency can be mandatory or discretionary, and either internal or external, the link type can be FS, SS, FF or SF.
Reference: PMBOK® Guide p156-158 Sect 6.3.2
Your qualitative risk assessment matrix uses the following values on each axis: 0.1, 0.3, 0.5, 0.7, 0.9.
This is a linear scale, what descriptions are most likely to be assigned to these values?
A. Very Low, low, moderate, high and very high.
B Avoid, transfer, mitigate, neutral and accept.
C. Very high, high, moderate, low and very low.
D. Accept, neutral, mitigate, transfer and avoid.
Decisions to accept, transfer avoid, etc are based on a combination of probability and impact, they are not the sale descriptors, eg, a 'high + very high
risk may need to be removed from the project = 'avoid'. The scale is ascending, this usually translates to 0.1 = Very Low through to 0.9 = Very High.
Reference: PMBOK® Guide page 331 Sect. 18.104.22.168.
Assuming a 'Modified Beta' distribution, calculate the expected value given the following three point estimate:
optimistic = 8, most likely = 14, pessimistic = 16?
The 'Modified Beta' distribution was the basis of PERT calculations.
The Expected value, E = (O + 4M + P)/6 = (8 + (4 x 14) + 16) / 6 = 13.33.
The standard deviation = P - O/6 = 1.333
Reference: PMBOK® Guide page 170 Sect. 22.214.171.124.
Typical causes of unfavourable cost variances include all but the following except:
A. Poor Planning.
B. Under staffing because of labour shortage.
D. Scope Creep.
This is a practical question based on the 'Control Costs' process, it is also a negative question - you are looking for the one wrong answer. Cost variances
are the difference between the planned cost and the actual cost. Poor planning includes poor cost estimating and is likely to lead to reported cost
variances (usually negative). Extra work caused by scope creep or re-work is also going to increase costs. Under staffing will definitely cause a negative
time variance (the work will take longer to do) but may not cause an increase in costs provided the work is still accomplished efficiently and the overall
project is not delayed.
Reference: PMBOK® Guide page 217 – 219 Sect 126.96.36.199.
Your steering committee chair has asked you for a report that highlights the start and finish of each of key project deliverables.
What is the best report format to use?
A. A summary bar chart.
B. The schedule network diagram.
C. A Gantt Chart.
D. A Milestone Chart.
Milestones highlight the start and finish of key deliverables - the information requested. A summary bar chart may also achieve this but shows additional
information not requested, particularly the duration of each activity. A 'Gantt Chart' is another name for a 'Bar Chart'.
Reference: PMBOK® Guide page 182 - 183 Sect. 188.8.131.52.
When distributing information to the project stakeholders, the project manager is responsible for making the information clear and complete so
the recipient can easily understand it. This competency is best described as a part of the project manager's _____________ skills.
The overarching skill is communication. Whilst under some circumstances the information may be documented in a report for the purpose of influencing a stakeholder, information can be communicated in many different forms and may be routine rather than designed to influence the person; but in every circumstance the transfer of information is a communication.
Reference: PMBOK® Guide page 293 Sect. 10.1.2.3.
Which of the following is true concerning the work breakdown structure (WBS)?
A. The PMI WBS and PRINCE2 product breakdown structure (PBS) are effectively the same thing.
B. The WBS is the same as the organisational breakdown structure (OBS).
C. The WBS is a hierarchical decomposition of the total scope of work to be carried out by the project team.
D. The WBS is the bill of materials (BoM) needed to accomplish the work of the project.
The difference between the PBS and the WBS is the PBS is focused on the products to be delivered; the WBS is focused on all of the work needed to
achieve the project’s objectives including all of the ancillary works (not just the ‘product’). Non-product elements in the WBS include project
management work, safety and hygiene work, etc. The OBS is the document that defines the lines of management responsibility within the project. The point where the OBS and WBS intersect is known as a ‘control account’ and defines the manager responsible for a section of the project work.
The BoM only describes the materials used in the work, not the other elements of the project (eg, labour). The WBS defines all of the work and
consequently all of the costs.
Reference: PMBOK® Guide p126 Sect: 5.4
You are managing a critically important project that is experiencing a high level of change. On-time delivery is vital! Which of the following best
describes the changes you will incorporate into the schedule for the team?
A. The likely changes you expect to occur based on your experience.
B. The seller receives a fixed fee calculated as a percentage of the initial estimated project cost.
C. All authorised changes that affect the budget.
D. Only approved change requests.
Only approved changes should be incorporated into the schedule. Approved scope changes cause the baseline to change but other approved
changes may also affect the schedule. Unauthorised changes should not be worked on and therefore should not be in the execution schedule. It is
important to assess the impact of proposed changes but this is done 'offline' to see 'what-if' the change proceeds and determine the best options to
recommend to the Change Control Board. Urgent changes may need an interim approval to allow critical work to proceed ahead of the final approval
of the change request.
Reference: PMBOK® Guide page 186 - 187 Sect 6.7.
You are compiling a monthly summary for your PMO reports.
There are 4 projects reporting the following data:
Project A has an EV of $500 and an AC of $505;
Project B has a CPI of 1.08,
Project C has an EV of $455 and an AC of $450;
Project D has a CPI of 0.98.
Which project is the most cost efficient?
A. Project A.
B. Project B.
C. Project C.
D. Project D.
EV = Earned Value, AC = Actual Cost, CPI = Cost Performance Index. CPI is calculated by EV/AC (earned value divided by actual cost). A CPI of less
than one means the project is over spending, a CPI greater than 1 is good news, the project is costing less than planned (ie, is cost efficient), the
higher the value the better the performance. Project C has a CPI = $455/$50 - 1.01, Project B has a CPI of 1.08, the CPI on project B of 1.08 is
better than Project C at 1.01; the other two are losing money.
Reference: PMBOK® Guide page 217 - 218 Sect 184.108.40.206.
Analogous estimating when applied to a duration is:
A. Based on expert judgement and is consequently more accurate than standard critical path estimating.
B. Used when there is a limited amount of detailed information available.
C. A calculation based on a three point estimate using a modified BETA distribution.
D. The same as ‘bottom up’ estimating.
Analogous estimating uses the duration from a similar completed activity or project as the basis for the current estimate. This is a ‘top down’ estimating
technique used when there is little detailed information available.The critical path method is a precise set of calculations applied to the
schedule (including the estimated durations). It is not an estimating process. The PERT technique uses three point estimates and a modified BETA
distribution to assess the probability of completing the project in a given time frame.
Reference: PMBOK® Guide p149 Sect: 220.127.116.11
Who is responsible for identifying risks in a project?
A. The Project Manager.
B. Any project personnel including stakeholders.
C. The Project Planner.
d. The main stakeholders including the sponsor.
Anyone working on or associates with a project can help identify the risks in a project (and should be encouraged to help). The project manager or risk
manager manages the risk management processes with input from the sponsor and other key stakeholders
Reference: PMBOK® Guide page 321 Sect. 11.2.
You are managing a project that is running late. You propose corrective actions that will affect the schedule baseline. This proposal is called a:
A. Change request.
B. Corrective action.
C. Schedule baseline update.
D. Preventative action.
The schedule variance analysis that has identified the project is running late may result in change requests to the schedule baseline. However, the
proposed change must be approved before the baseline can be altered. Corrective and preventative actions may, or may not need to be submitted
as a change request depending on the nature of the action. However, the question clearly indicates the proposal will affect the baseline and therefore
approval of a formal change request is required before the actions can be implemented.
Reference: PMBOK® Guide page 191 Sect 18.104.22.168.
The level of information on your project has improved significantly since the original estimates were completed, and a part of the planning process
you have been asked to review the cost estimate and produce the definitive estimate for the project baseline. What would be a reasonable
range for you to achieve?
A. -0% to +0%.
B. -5% to +5%.
C. -5% to + 15%.
D. -15% to +25%.
The PMBOK® Guide considers a range of -5% to +10% to be realistically achievable as a definitive estimate. The other values are not in the
PMBOK. It is impossible to be precisely accurate when predicting the future (+/- 0%) and in most circumstances attempting to achieve an
accuracy of +/- 5% is unrealistic (the exception being processes primarily involving mechanical production).
Reference: PMBOK® Guide page 201 Sect 7.2.
The primary difference between an Arrow Diagramming Method (ADM) network and a Precedence Diagramming Method (PDM) network is:
A. PDM is more accurate then ADM.
B. PDM networks use the CPM (critical path method), ADM networks do not.
C. PDM networks are developed from the WBS, ADM networks are not.
D. The way the network is drawn.
The only significant difference between an ADM network and a PDM network is the way they are drawn. PDM networks have the 'activity on the
node' (usually a rectangular box), connected by arrows (called Links). ADM networks represent the activity by an arrow (activity on the Arrow) and the
arrows join at the nodes. Both ADM and PDM networks use the CPM methodology, and may be based on a WBS (or may not depending on how
the information was developed). There is no difference in the accuracy of the calculations.
Reference: PMBOK® Guide page 177 Sect 6.6.
You are working on a major project and after the first couple of months you realise it takes an extra two weeks to get approvals on any purchase
order over $10,000. What should you do?
A. Ignore the situation; you are not responsible for the approval of purchase orders.
B. Record the information in your project records.
C. Adjust your purchasing practices to keep all purchases under $10,000.
D. Document the information in your Lessons Learned.
The purchase order process obviously merits a review (but this is not an option), you may also need to adjust the timing of your ordering processes
to take account of the longer approval periods (again this is not an option). Ignoring the issue or 'fiddling' the procurement processes to avoid the
scrutiny are both unethical; the review and approval system is part of the organisations governance processes. The best option from a
documentation perspective is to record your findings in the projects 'Lessons Learned' - this is an integral part of the project records and will
make the information available for consideration and possible action.
Reference: PMBOK® Guide page 192 Sect. 22.214.171.124.
You are not sure how long the commissioning will take on your project so you review several completed projects and decide to use the duration
required to complete a similar commissioning process on a completed project. What is this called?
A. Analogous Estimating.
B. Using Historical Records.
C. Expert Judgement.
Estimating the cost or duration of a project activity (or the whole, or part of a project) by reference to a similar completed project is known as
analogous estimating. To perform an analogous estimate, you need historical information and have to apply expert judgement (but neither of
these options is the best answer).
Reference: PMBOK® Guide page 169 Sect 126.96.36.199.
The Control Costs process includes all of the following except:
A. Informing appropriate stakeholders of all approved changes and associated costs.
B. Influencing factors that create changes in the authorised cost baseline.
C. Developing the cost performance baseline.
D. Acting to bring expected cost overruns within acceptable limits.
Developing the cost performance baseline is part of the Determine Budget process (see: 188.8.131.52). All of the other options are listed as inclusions in the
Control Costs process.
Reference: PMBOK® Guide 215 Sect 7.4
One of your team has been asked to gather information on the actual start and finish date of activities and the remaining duration of any activities
that are still in progress. This work is a part of the projects ________________________ process.
A. Performance review.
B. Performance measurement.
C. Earned Value assessment.
D. Critical path analysis.
The gathering of progress information is part of the performance review process. Once gathered, the specific data listed will be used to update the
schedule (but the schedule may be either a Critical Chain or Critical Path schedule). And the schedule information will be used to update the Earned
Value data (along with other information). Performance measurement is a specific Earned Value technique.
Reference: PMBOK® Guide page 188 - 189 Sect 184.108.40.206.
Based on the information below, what is the most likely cause of the cost variance in this Work Package?
PV Labour Hours = 1000
PV Labour cost = $100,000
EV Labour Hours = 1000
EV Labour cost = $100,000
AC Labour Hours = 1000
AC Labour cost = $125,000
B. Rate Variance.
C. Schedule Slippage.
D. Labour Shortage.
Based on this information, both rework and a labour shortage are likely to cause schedule slippage as well as cost variances and there is no schedule slippage (a negative SV). Therefore the most likely cause of the variance is an unexpected increase in the rate paid for the labour used.
Reference: Download Mosaic's White paper for the basic EV Formulae:
Reference: PMBOK® Guide page 218 - 219 Sect 220.127.116.11.
For some of the risks identified in the project risk register you decide to develop a response plan that will be implemented when certain predefined
conditions are observed. This approach is called a(n) _________________response strategy?
B. Work around.
A contingent response strategy can be used for both opportunities and threats that cannot be reasonably avoided or mitigated; it is a prepared plan
of action that will be implements as soon as a predefined set of circumstances are seen to exist. Typical examples include securing a
facility and evacuating staff in the event of a Hurricane (or Cyclone / Typhoon) warning of a certain level or implementing a PR plan to exploit
the publicity generated by a celebrity visiting your project. If you don't have a prepared plan, then you have to implement a 'workaround' as the risk event unfolds. Mitigation is an action taken to change the project so as to reduce the probability or impact of an identified threat.
Reference: PMBOK® Guide page 346 Sect. 18.104.22.168.
Which of the following deliverables identifies and describes the types and quantities of each resource required to complete all of the project work
A. Activity resource requirements.
B. Work breakdown structure (WBS) dictionary.
C. Activity attributes.
D. Resource breakdown structure.
The ‘activity resource requirements’ identifies the type and quantities of resources required for each activity. Some of the information may be
included in the WBS dictionary (as resources required) but usually at a more summary level. (Note: process outputs are internal project deliverables)
Reference: PMBOK® Guide page 165 Sect 22.214.171.124.
If not budgeted, what would the likely effect be on the cost variance and schedule variance of asking the team to work additional overtime?
A. There may be a negative impact to the cost variance; potentially a positive improvement to the schedule variance.
B. There will be no impact to the cost variance; potentially a positive improvement to the schedule variance.
C. There will be a negative impact to the cost variance; potentially no impact on the schedule variance.
D. There will be a negative impact to the cost variance; and a positive improvement to the schedule variance.
Working overtime is a form of 'crashing' the project schedule. If the overtime is paid, the cost paid for the time worked will increase due to the penalty rates paid for overtime (but if the overtime is unpaid the reverse applies). Working additional hours should improve the schedule variance but only if the workers can operate efficiently and do not become too tired.
Reference: PMBOK® Guide page 181 Sect 126.96.36.199.
You are the project manager of the AHQ project. This project is scheduled to last for six months and will require $345,000 to complete. If the project completes earlier than scheduled, your organization will receive a bonus of $5,000 per day of early completion. Management has asked you to develop an aggressive schedule to realize as much of the bonus as possible, but management does not want you to increase the costs of the project
beyond $1,000 per day of the bonus realization. Which of the following approaches will likely add costs to the project?
A. Adding leads to the project work
B. Fast tracking
D. Using the critical chain method
Crashing adds labor to the project. This approach adds costs to the project because you will have to pay for the added labor. Answer option B is incorrect. Fast tracking allows entire phases to overlap in the project. This approach adds risks to the project. Answer option D is incorrect. The critical chain method considers the availability of project resources. Answer option A is incorrect. Adding lead time to activities allows activities to overlap and does not add project costs
You work as a project manager for ABC Inc. You are currently overseeing a project on a high-rise building site. Your prime concern is to ensure that cranes are used effectively for moving materials. You also have to ensure that delivery trucks do not have to wait in a queue and that workers on the upper floors are able to get their deliveries on time. Which type of scheduling would be required in such a scenario?
A. Critical path scheduling
B. Time-oriented scheduling
C. Resource-oriented scheduling
D. Network scheduling
Resource-oriented scheduling focuses on using and scheduling particular resources in an effective manner. This type of scheduling should be used whenever there are limited resources available for a project and the struggle for these resources between the project activities is intense. As a result, delays are likely to arise in such cases, as actions must wait until general resources become available. Resource-oriented scheduling is also suitable in cases where unique resources are to be used, such as when there is only one excavator available in an excavation operation. Answer option B is incorrect. Time-oriented scheduling is a time-scheduling method that focuses on determining the finishing time of a project. It also specifies the crucial precedence relationships among the activities involved in the project. In time-oriented scheduling, the appropriate time is allocated for the whole project through the successive stages of the project life cycle. Answer option A is incorrect. Critical path scheduling is a technique that calculates the minimum completion time for a project along with the possible start and finish times for the project activities. Answer option D is incorrect. Network scheduling provides a basis for obtaining facts for decision making.
Which of the following components of the change control system includes the documentation, tracking systems, and defined approval levels necessary for authorizing and controlling changes?
A. Scope Verification
B. Configuration Management System
C. Project Management Information System
D. Integrated Change Control
The change management system comprises several components that guide the change request through the process. When a change request is made, it will affect the project scope. The Configuration Management System evaluates the change request, and documents the features and functions of the change on the project scope. What is Configuration Management System? Configuration Management System is a subsystem of the overall project management system. It is a collection of formal documented procedures used to identify and document the functional and physical characteristics of a product, result, service, or component of the project. It also controls any changes to such characteristics, and records and reports each change and its implementation status. It includes the documentation, tracking systems, and defined approval levels necessary for authorizing and controlling changes. Audits are performed as part of configuration management to determine if the requirements have been met. Answer option D is incorrect. Integrated Change Control, part of the change control system, does not document changes to the features and functions of the project scope. It evaluates the change's impact on eight knowledge areas: scope, time, cost, quality, human resources, communication, risk, and procurement. What is Perform Integrated Change Control? Perform Integrated Change Control is the process of reviewing all change requests, approving changes, and controlling changes to the deliverables and organizational process assets in a project. Perform Integrated Change Control has to do with influencing the things that cause change, determining that the change is required or has happened, and managing the change. Answer option A is incorrect. Verify scope is a process of formalizing acceptance of the completed project deliverables. It is an inspection- driven process the stakeholders will complete to inspect the project scope deliverables. It is typically performed at the end of the phase
You work as a project manager for BlueWell Inc. Your project requires the project team to paint 1,500 hotel rooms. Your project team reports that it will take them approximately 4 hours to paint each hotel room. You reason, then, that it will take 6,000 hours to paint all of the hotel rooms. What type of an estimate are you creating in this scenario?
A. Parametric estimate
B. Definitive estimate
C. Analogous estimate
D. Bottom-up estimate
This is an example of a parametric estimate. This estimate type uses a parameter, such as four hours of painting per hotel room, and multiplies this value across the total number of units, such as 1,500 rooms. A parametric estimate is an estimate that uses a parameter to predict the costs of the project, such as cost per network drop or cost per software license. Parametric estimating technique utilizes the statistical relationship that exists between a series of historical data and a particular delineated list of other variables. Answer option C is incorrect. An analogous estimate type uses a similar project's duration as a basis for the current project's estimate duration. Answer option B is incorrect. A definitive estimate type accounts for the duration or costs of each work package in the WBS. Answer option D is incorrect. A bottom-up estimate, also known as a definitive estimate, accounts for the duration or costs of each work package in the WBS.
Laura is the project manager for her organization and management has requested her to create a report on her project's performance. Laura needs to analyze her current project performance and then compare it against what, in order to create a performance report?
A. Cost variances and Cost Performance Index
B. Scope baseline
C. Performance measurement baseline
D. Schedule variances, planned value, and the Schedule Performance Index
The performance measurement baseline, which can be comprised of cost, scope, and schedule, is the foundation for creating a performance report. Answer option B is incorrect. The scope baseline will only reflect the performance of the scope, whereas performance reports typically need scope, time, and cost as its foundation. Answer option A is incorrect. Cost variances and the cost performance index are cost values that must be considered along with the scope performance and schedule performance. Answer option D is incorrect. Only reporting performance on the schedule is not enough for a performance report. Laura should also report on scope and cost at a minimum.
Gary is the project manager of the NHF project, which is a part of a program in his organization. According to the PMBOK, how will Gary provide feedback to programs and portfolios?
A. Status meetings
B. Push communications
C. Regular communications
D. Status reports and change requests
According to the PMBOK, the project manager provides the feedback to programs and portfolios by means of status reports and change requests that may impact other projects, programs, or portfolios. The needs of the projects, including the resource needs, are rolled up and communicated back to the portfolio level, which in turn sets the direction for organizational planning. What is a status report? A status report is a narrative description about a subject that is relevant to an organization. Typically, a user submits a status report that was created for him by a manager. He can also create and submit his own unrequested status report at any time. It is a collaborative feature specific to PW A. Status report in PWA is a convenient way to exchange textual information with the team members about the status of a project or items in addition to task progress, which a user updates on the Tasks page. What are change requests? Change requests are requests to expand or reduce the project scope, modify policies, processes, plans, or procedures, modify costs or budgets or revise schedules. These requests for a change can be direct or indirect, externally or internally initiated, and legally or contractually imposed or optional. A Project Manager needs to ensure that only formally documented requested changes are processed and only approved change requests are implemented. Answer option C is incorrect. While regular communication is needed, this is not the best answer for the question. Answer option A is incorrect. Status meetings are a part of project communications, but do not answer the question as completely as status reports and change requests. Answer option B is incorrect. Push communications is one type of communicating mode where the project manager pushes the information to recipients. This is not the best choice for the question because there are other modes communicating as well.
You are the project manager of a project that has a budget of $675,000 and you have completed 40 percent of the project work. Your project is supposed to be 60 percent complete but you are actually only 40 percent complete. Due to some errors, however, you have actually spent $335,000 of the budget. Management wants to know what the project's cost performance index (CPI) is. What value do you report?
Cost performance index (CPI) is used to calculate performance efficiencies. It is used in trend analysis to predict future performance. CPI is the ratio of earned value to actual cost. The CPI is calculated based on the following formula: CPI = Earned Value (EV) / Actual Cost (AC) If the CPI value is greater than 1, it indicates better than expected performance, whereas if the value is less than 1, it shows poor performance. The CPI value of 1 indicates that the project is right on target. In this instances it is $270,000 divided by $335,000 for a CPI of .81. Answer option B is incorrect. .67 is actually the schedule performance index. Answer option D is incorrect. -$65,000 is the cost variance for the project. Answer option A is incorrect. -$135,000 is the schedule variance of the project.
Fred is the project manager of the NHA project. This project has a BAC of $2,456,900 and is sixty percent complete. Fred has crashed the project, which has driven the project costs to date to $1,525,140, but his project is five percent more complete than what was planned.
What is the cost variance for this project that Fred needs to report to management?
The cost variance for the project is -$51,000. You can find the cost variance by using the formula earned value minus planned value. In this instance, it is: CV = EV - AC = (0.60* 2,456,900) - 1,525,140 = -51,000 Answer option C is incorrect. -$85,000 is the project's variance at completion. Answer option A is incorrect. $122,845 is the project's schedule variance. Answer option D is incorrect. There is a cost variance on this project of -$51,000.
Which of the following individuals performs various management roles within an administrative or functional area of the business, such as human resources, finance, accounting, or procurement?
B. Operations manager
C. Functional manager
D. Project manager
The role of a functional manager is to perform various management roles within an administrative or functional area of the business, such as human resources, finance, accounting, or procurement. He is assigned his own permanent staff to carry out the ongoing work. He should have a clear directive to manage all tasks within his functional area of responsibility. Answer option D is incorrect. A project manager is an expert in the field of project management. He is responsible for the entire project from inception to completion. The project manager leads the team and helps negotiate the multiple relationships within any project whether with clients, team members, firm principals or any variety of partners and functions as the hub of a project. Answer option A is incorrect. Seller is also known as a vendor, supplier or contractor. They are external company's elements that enter into a contractual agreement to provide components or services necessary for the project. Answer option B is incorrect. The role of operations manager is to perform various management roles in a core business area, such as research and development, design, manufacturing, provisioning, testing, or maintenance. The operations manager directly deals with constructing and maintaining the saleable products or services of the enterprise.
Beth is the project manager for her organization. Her current project has many deliverable that have been defined at a high level, but the details of the deliverable are still unknown. In her project, Beth is planning in detail only the activities that are most imminent in the project work. This approach to project management planning is known as what?
A. Imminent activity management
B. Rolling wave planning
C. Predecessor-only diagramming
Rolling wave planning is a technique to plan and do the most imminent project work before moving onto the details that are far off in the project schedule and project plan. Rolling wave planning is a technique for performing progressive elaboration planning where the work to be accomplished in the near future is planned in detail at a low level of the work breakdown structure. The work to be performed within another one or two reporting periods in the near future is planned in detail as work is being completed during the current period. Answer option D is incorrect. Decomposition is the process of breaking down work packages into the activity list. Answer options A and C are incorrect. These are not valid project management terms.
Marty is the project manager of the recently completed NHK Project. The project was deemed successful by the project customer and they have signed the formal acceptance documentation. Marty has written the final project report, released the project team, and completed the lessons learned documentation. What else should Marty do in the closure of the NHK Project?
A. Archive the project records.
B. Summarize the project risks costs.
C. Summarize the project variance.
D. Close the project office.
The last duty of a project manager is to archive the project records as part of the organizational process assets. Answer option B is incorrect. The cost summary is included in the final project report. Answer option C is incorrect. The project variance is included in the final project report as it shows cost performance. Answer option D is incorrect. A project office is an organization within the company that oversees and supports project. Marty would not close the project office.
Ben is the project manager for his organization. His project has 26 stakeholders this week and will have five additional stakeholders next week. How many more communication channels will Ben's project have next week?
Ben's project will have 140 more communication channels because of the five additional stakeholders. To solve the question, you will need to find the current stakeholder communication channels first, which is (26*25)/2= 325, and then find the difference of the number of channels for the five additional stakeholders. You can use the formula of N(N-1), where N is the number of stakeholders. In this example, the formula would read: Total number of communication channels that Ben will have next = ((31*30)/2)-((26*25)/2 =140 Answer option D is incorrect. Five is the number of additional stakeholders. Answer option B is incorrect. 10 is the number of communication channels among just five stakeholders. Answer option C is incorrect. 325 is the number of current communication channels.
You are the project manager for your organization. Management has asked you to document the holidays, weekends, and other corporate working hours, which will supersede the project timings for your schedule. Which calendar will communicate to the project stakeholders, when the project work will take place within the organization?
A. Project calendar
B. Resource calendar
C. Organizational calendar
D. Company calendar
The project calendar defines the working hours for the project, including any days that project work will not happen due to the organizational calendar. Answer option D is incorrect. The company calendar is not the correct choice for this question. Answer option C is incorrect. The organizational calendar is not the correct choice for this question. Answer option B is incorrect. The resource calendar defines whether resources the project needs will be available. The resources include people, facilities, equipment, and other things that project needs to be completed.
Gina is the project manager for her organization and she is working with her project team to define the project activities. In this project, the stakeholders are sensitive to the project completion date, so Gina is stressing to her project team members that while they need to
provide and account for all of the project activities, they should focus on one work package in the WBS at a time. In order to start the decomposition of the project work packages into activities, Gina will need all of the following except for which one?
A. Scope baseline
B. Organizational process assets
D. Enterprise environmental factors
According to the PMBOK, Gina will not need the WBS directly, but will rely on the scope baseline. A Work Breakdown Structure (WBS) in project management is a tool that defines a project and groups the project's discrete work elements in a way that helps organize and define the total work scope of the project. A WBS element may be a product, data, a service, or any combination. WBS also provides the necessary framework for detailed cost estimating and control along with providing guidance for schedule development and control. Answer option A is incorrect. The scope baseline is an input to define the project activities. Answer option D is incorrect. Enterprise environmental factors are an input to define the project activities. Answer option B is incorrect. Organizational process assets are an input to define the project activities.
You are the project manager of the GHE Project. You have identified the following risks with the characteristics as shown in the following figure: How much capital should the project set aside for the risk contingency reserve?
Contingency reserves are estimated costs to be used at the discretion of the project manager to deal with anticipated, but not certain, events. These events are "known unknowns" and are part of the project scope and cost baselines. The contingency reserve is calculated by multiplying the probability and the impact for the risk event value for each risk event. The sum of the risk events equals the contingency reserve for the project. Note that Risk D is a positive risk amount. Answer option C is incorrect. This value is the sum of the risk events if you did not include Risk D as a positive risk value. Answer option A is incorrect. This is a sum of the risk event. Answer option B is incorrect. This is a sum of the risk events without including Risk D as a positive risk event.
You are the project manager of the GHY Project. This project is scheduled to last for one year and has a BAC of $4,500,000. You are currently 45 percent complete with this project, though you are supposed to be at your second milestone which accounts for half of the project completion. There have been some errors in the project, which has caused you to spend $2,073,654. What is this project's schedule variance?
B. 13 percent
The schedule variance can be found by subtracting the planned value form the earned value. In this instance, it is $2,025,000 minus $2,250,000. SV = 2,025,000 - 2,250,000 = - 225,000 Schedule variance (SV) is a measure of schedule performance on a project. The variance notifies that the schedule is ahead or behind what was planned for this period in time. The schedule variance is calculated based on the following formula: SV = Earned Value (EV) - Planned Value (PV) If the resulting schedule is negative, it indicates that the project is behind schedule. A value greater than 0 shows that the project is ahead of the planned schedule. A value of 0 indicates that the project is right on target. Answer option A is incorrect. This is the cost variance for the project. Answer option B is incorrect. 13 percent is not a valid answer. Answer option D is incorrect. This is not a valid variance for this question; variances are typically negative numbers.
You have been hired as a project manager for Tech Perfect Inc. You are studying the documentation of planning of a project. The documentation states that there are twenty-five stakeholders with the project. What will be the number of communication channels for the project?
According to the question, the project has twenty-five stakeholders. Communication channels are paths of communication with stakeholders in a project. The number of communication channels shows the complexity of a project's communication and can be derived through the formula shown below: Total Number of Communication Channels = n (n-1)/2 where, n is the number of stakeholders. Hence, a project having five stakeholders will have ten communication channels. Putting the value of the number of stake holder in the formula will provide the number of communication channels: Number of communication channel = (n (n-1)) / 2 = (25 (25-1)) / 2 = (25 x 24) / 2 = 600 / 2 = 300 Who are project stakeholders? Project stakeholders are those entities within or without an organization, which: Sponsor a project or, Have an interest or a gain upon a successful completion of a project. Examples of project stakeholders include the customer, the user group, the project manager, the development team, the testers, etc. Stakeholders are anyone who has an interest in the project. Project stakeholders are individuals and organizations that are actively involved in the project, or whose interests may be affected as a result of project execution or project completion. They may also exert influence over the project's objectives and outcomes. The project management team must identify the stakeholders, determine their requirements and expectations, and, to the extent possible, manage their influence in relation to the requirements to ensure a successful project.
Andy works as the project manager for Bluewell Inc. He is developing the schedule for the project. There are eight tools and techniques that a project manager can use to develop the project schedule. Which of the following is a tool and technique for the Schedule Development process?
A. Schedule compression
B. Reserve Analysis
C. Variance analysis
D. Expert Judgment
Schedule compression is a tool used as part of the Schedule Development process. The tools and techniques for schedule development are as follows: Schedule network analysis Critical path method Critical chain method Resource leveling What-if scenario analysis Applying leads and lags Schedule compression Scheduling tool Answer options D, B, and C are incorrect. These are not tools and techniques for schedule development.
Your project team is executing the project plan and things are going well. Your team has reached its first milestone and is now in the second phase of the project. The project stakeholders have requested that you find a method to reduce the duration of the project. They will reward you and your project team with a 25 percent bonus of the project costs if you can finish the project thirty days earlier than what was already planned. The stakeholders, however, will not approve any additional labor costs as part of the agreement. Which approach could you use to shorten the duration of the project?
A. Perform resource leveling for the project.
B. Crash the project schedule.
C. Fast track the project.
D. Remove things from the project scope.
Fast tracking is a technique for compressing project schedule. In fast tracking, phases are overlapped that would normally be done in sequence. It is shortening the project schedule without reducing the project scope. It does not add any additional labor but it can introduce project risks. Answer option D is incorrect. Removing things from the project scope can reduce the project duration, but it will not satisfy the requirements the stakeholders have identified. Answer option A is incorrect. Resource leveling can actually increase the project duration. Answer option B is incorrect. Crashing can reduce the project duration but it increases the labor expense, something the stakeholders won't approve.
Amy is working on a project which is forty percent complete though it was scheduled to be fifty percent complete as of today. Management has asked Amy to report on the schedule variance for her project. If Amy's project has a BAC of $750,000 and she has spent $485,000 to date, what is the schedule variance value?
The schedule variance is found by subtracting the planned value from the earned value. The earned value is the percentage of the project completeness multiplied by the BAC. Planned value is the percetage of where the project should be at this time multiplied by the BAC. Schedule variance (SV) is a measure of schedule performance on a project. The variance notifies that the schedule is ahead or behind what was planned for this period in time. The schedule variance is calculated based on the following formula: SV = Earned Value (EV) - Planned Value (PV) If the resulting schedule is negative, it indicates that the project is behind schedule. A value greater than 0 shows that the project is ahead of the planned schedule. A value of 0 indicates that the project is right on target. In this example, EV = 40% of BAC = 300,000, and PV = 50% of BAC = 375,000 SV = 300,000 - 375,000 = -75,000 Answer options C, B, and D are incorrect. These are not the correct values for the schedule variance.
You are the project manager of the JKM Project for your organization. Your project is supposed to be 60 percent complete but you are only 45 percent complete. The project has an assigned budget of $765,000 but you have already spent $365,000 to reach this point in the project due to some errors and rework. Management is pressing you on when you'll complete the project and how much the project will likely cost based on the current
performance. You need to tell management what the project's current cost performance index (CPI) is. What value should you report to management based on your project's performance?
Management wants to know the cost performance index (CPI). You can find the CPI by first finding the earned value (EV) and then dividing it by the actual costs (AC) spent to date on the project. You find EV by multiplying percent complete by the project's budget; in this instance that's $344,250. The actual costs are reported as $365,000. The formula for the CPI on this project is $344,250 / $365,000 for a value of .94. What is CPI? Cost performance index (CPI) is used to calculate performance efficiencies. It is used in trend analysis to predict future performance. CPI is the ratio of earned value to actual cost. The CPI is calculated based on the following formula: CPI = Earned Value (EV) / Actual Cost (AC) If the CPI value is greater than 1, it indicates better than expected performance, whereas if the value is less than 1, it shows poor performance. The CPI value of 1 indicates that the project is right on target. What is BCWP (or EV)? Budgeted cost of work performed (BCWP) or Earned Value (EV) is the value of completed work. It is the budgeted amount for the work actually completed on the schedule activity during a given time period. Answer options C, A, and D are incorrect. These do not reflect an accurate value for the project's cost performance index. The project is performing moderately well on cost as the closer the CPI is to 1 the better the project's performance.
You are the project manager of the NHQ project. This project deals with a new technology that your company has never used before. You have petitioned the management to hire a consultant to help you and the project team to create the WBS, the activity list, and complete the duration estimates. The management is concerned about the costs of the consultant, but agrees to your request because of the nature of this new work. The consultant can best be described as what type of resource for this project?
A. Direct expense
B. External requirement
C. Temporary resource
D. Expert judgment
The consultant is an example of expert judgment, as he is helping you and the project team to create the project elements. Expert judgment is a technique based on a set of criteria that has been acquired in a specific knowledge area or product area. It is obtained when the project manager or project team requires specialized knowledge that they do not possess. Expert judgment involves people most familiar with the work of creating estimates. Preferably, the project team member who will be doing the task should complete the estimates. Expert judgment is applied when performing administrative closure activities, and experts should ensure the project or phase closure is performed to the appropriate standards. Answer option A is incorrect. The consultant may be considered a direct expense because the fees can only be assigned to your project work, but this is not the best choice for the question. Answer option B is incorrect. An external requirement is not a valid choice for this question. Answer option C is incorrect. A temporary resource is not a valid project management term.
You are the project manager for your organization. You need the oak cabinets for your project delivered by December 1 in order to install the floors around the oak cabinets by December 15. Your company's procurement office generally takes 45 days to complete procurement orders. Based on this information, how should you schedule the lead time for the cabinet delivery?
A. Cabinet procurement December 1, plus 45 days lead time
B. Cabinet procurement November 15
C. Cabinet procurement December 1, minus 45 days lead time
D. Cabinet procurement December 15 minus 45 days lead time
The cabinet procurement and delivery must be completed by December 1. By scheduling the activity to finish on December 1 with minus 45 days lead time for procurement, the cabinets will arrive by the needed date. Answer option A is incorrect. Lead time is always negative time, lag time is positive time. This choice would cause the cabinets to not arrive until 45 days after December 1. Answer option D is incorrect. This choice would cause the cabinets to arrive on December 15 when the floors are to be installed. Answer option B is incorrect. This choice is not the best answer because it does not necessarily account for holidays, weekends, or other factors in the project calendar. By scheduling the cabinet for December 1 and working backwards through lead time, the project's PMIS will account for these breaks in the project work.
Mary is the project manager for her company. She's working with the project team to compress the project schedule as the project must be completed by December 30. For some of the project activities, she and the project team have agreed to crash the project work. What must be true of these project activities for crashing to be acceptable?
A. The activities must be of fixed duration.
B. The activities must be effort-drive.
C. The activities must not be susceptible to the Law of Diminishing Returns.
D. The activities must be risk-free.
Crashing is the addition of project resources to complete effort-driven activities in faster time. By adding more labor the activity can be completed faster. Crashing is a schedule compression technique to obtain the greatest amount of compression for the least incremental cost. Crashing works for activities where additional resources will shorten the duration. Approving overtime, bringing in additional resources, paying to expedite delivery to activities on the critical path are examples of crashing. Answer option A is incorrect. An activity of fixed duration, such as printing 100,000 brochures in a printing press, won't be completed faster by adding more effort. Answer option D is incorrect. Activities need not be risk-free to use project crashing. Answer option C is incorrect. All effort-driven activities are susceptible to the Law of Diminishing Returns. By adding more labor the value of the yield of the work decreases because of the cost of the labor added to the project work.
You are the project manager for your organization. You are meeting with your customers to discuss the project performance. In this meeting, you will have eight project customers, the project sponsor, and ten members of your project team. What type of communication method are you using in this instance?
A. Interactive communication
B. Active communication
C. Pull technique
D. Push technique
Any meetings, phone calls with multiple participants, or conferences are examples of the interactive communications. Answer option B is incorrect. Active communication is not a PMBOK term for project management. Answer option D is incorrect. A push technique describes a distribution from the project manager out to the message recipients, such as email. Answer option C is incorrect. A pull technique describes a distribution method where the recipients of the message pull the message from a source, such as a Web server.
Nancy is the project manager of the JJJ Project. This project has recently been approved by the project customer as complete so Nancy must now finalize the administrative closure. Nancy needs to create the final project report to report the successes and failures in the project. Who should Nancy deliver this final project report to if she is participating in a projectized structure?
A. Functional Management
B. Project sponsor
C. Whomever the communications management plan directs her to
D. Project customer
The communications management plan will define who will receive what information. Answer option B is incorrect. The project sponsor may be a recipient but the project communications management plan is the best selection. Answer option A is incorrect. Functional management is not the best choice in a projectized structure. Answer option D is incorrect. The project customer may receive a copy of the report, but the project communications management plan should direct the communications.
Gary is the project manager for his organization. At each weekly status meeting with his project team, Gary collects information on the work that has been completed and reviews the work that is remaining in the project. Alice, one of Gary's project team members, consistently reports that she's late on her project work. After the meeting, Gary and Alice discuss why the work is late as it is causing other delays in the project. What is the review of the late work commonly called?
A. Variance analysis
C. Quality control
Variance analysis is the study to determine why a variance in the project exists. Alice's late work may be for a number of reasons so Gary needs to determine why in order to address the problem. Variance analysis is a process that examines the dissimilarities between the planned and the actual budget or schedule in order to discover unacceptable risks to the budget, schedule, quality, or scope of the project. It is a method for resolving the total variance in the set of scope, schedule, and cost variables into particular component variances that are associated with defined factors affecting the cost, scope and schedule variables. Answer option D is incorrect. Discipline is not the best answer as Gary, at this point, is simply reviewing the situation to determine why the variance exists. Answer option C is incorrect. Quality control is the inspection of the work results to prove the existence of quality and to prevent mistakes from reaching the customer. Answer option B is incorrect. This may be a type of leadership, but it is not the best answer for the question.
You are the project manager for your organization. You and the project team are developing the project schedule for your current project. In addition to the enterprise environment factors and the organizational process assets, you will need seven other inputs to this process. Which one of the following is NOT an input to the Develop Schedule process?
A. Resource calendars
B. Schedule data
C. Activity list
D. Project scope statement
Schedule data is an output of the Develop Schedule process. The nine inputs to the Develop Schedule process are: activity list, activity attributes, project schedule network diagrams, activity resource requirements, resource calendars, activity duration estimates, project scope statement, enterprise environmental factors, and organizational process assets. Answer options C, A, and D are incorrect. These are the inputs to the Develop Schedule process.
Tom works as the project manager for BlueWell Inc. He is working with his project to ensure timely and appropriate generation, retrieval, distribution, collection, storage, and ultimate disposition of project information. What is the process in which Tom is working?
A. Work performance measurement
B. Stakeholder expectation management
C. Project communication management
D. Stakeholder analysis
Tom is working with the project communication management process, as it is required to ensure the timely disposition of project information. Project Communications Management is one of the nine Knowledge Areas. It employs the processes required to ensure timely and appropriate generation, collection, distribution, storage, retrieval, and ultimate disposition of project information. The following processes are part of Project Communications Management: Identify Stakeholders Plan Communications Distribute information Manage Stakeholder Expectations Report Performance The Project Communications Management processes provide the critical links among people and information that are necessary for successful communications. These processes interact with each other and with the processes in the other Knowledge Areas as well. Answer option B is incorrect. Managing stakeholder expectation is the process of working and communicating with the stakeholders to meet their requirements. Answer option A is incorrect. Work performance measurement uses the information to create project activity metrics to evaluate actual progress compared to planned progress. Answer option D is incorrect. Stakeholder analysis is the process of gathering and analyzing quantitative and qualitative information to determine the interest of the stakeholders. You are the project manager for your organization. Management has asked you to document the holidays, weekends, and other corporate working hours, which will supersede the project timings for your schedule. Which calendar will communicate to the project stakeholders, when the project work will take place within the organization?
Diane is the project manager of the HGF Project. A risk that has been identified and analyzed in the project planning processes is now coming into fruition. What individual should respond to the risk with the preplanned risk response?
B. Project sponsor
C. Risk Owner
D. Subject matter expert
The risk owner is the individual on the project team that is closest to the risk event. The risk owner can be an individual or an organization responsible for implementing risk responses or contingency plan. The risk owner should be empowered with the ability to respond to the risk as it was planned. Answer option A is incorrect. Diane is the project manager and likely won't be the risk owner as well. Answer option B is incorrect. The project sponsor authorizes the project but does not participate in the execution of the project. Answer option D is incorrect. While a subject matter expert may be the risk owner on some occasions, he won't be the risk owner on every occasion.
A project with a total budget of $100,000 finished with a BAC value of $90,000. What term can best describe the difference of $10,000?
A. Cost Variance.
C. Management Reserve.
D. Contingency Reserve.
The difference between the Cost Baseline and total funding requirement for a project (the budget) is the Management Reserve. The BAC (Budget At Completion) represents the authorised cost baseline for the project; management reserves are held outside of this baseline to cove the costs of any unforeseen risk events (unknown-unknowns). Contingency reserves are included in the cost baseline (BAC) to cover the costs of identified risk events (known-unknowns) and form part of the project manager's responsibilities to manage. Project management control systems only deal with the cost aspects of a project, any profit included in the project sale price is additional to the project budget.
During which process are the specific activities that must be performed to produce the deliverables in the WBS identified and documented?
A. Decompose WBS.
B. Define Activities.
C. Develop Schedule.
D. Work package decomposition.
Activity definition is: The identification and documentation of the specific activities (tasks) that must be performed to produce the deliverables defined in the WBS. This process will generally expand the ‘work package’ from the WBS into the schedule activities. These activities then form the basis for duration estimating, scheduling, executing and monitoring and controlling the project work to meet the project objectives.
Reference: PMBOK® Guide 6th Edition 6.2
The document that describes how the project scope will be managed and how scope changes will be integrated into the project is the:
A. Project plan.
B. Change control plan.
C. Scope management plan.
D. Scope statement.
The scope management plan describes how the project’s scope will be defined and managed through to verification and hand over, including the way project’s objectives and deliverables will be achieved. The scope management plan is incorporated as part of the overall project management plan.
Reference: PMBOK® Guide 6th Edition 188.8.131.52
To find out the critical path duration in a simple network:
A. It is sufficient to perform the forward pass only.
B. It is necessary to check if the free float of each activity is equal to zero.
C. It is necessary to perform both forward pass and the backward pass.
D. It is necessary to know the contractual completion time fixed by the Client.
The forward pass calculates the earliest dates each activity an be performed and the earliest the project can be completed. This is all that is needed for the duration of the critical path to be determined. The back pass calculates how late activities can be finished without delaying the completion of the project or violating a constraint. Both the forward pass and the back pass are needed to calculate activity float.
You have just joined a new company and you are to replace a project manager who retired 3 months ago. The most recent project status report reveals that schedule performance index is 1.0 and the cost performance index is 1.1. The report also indicates that the customer is not happy with the performance of the project and is requesting urgent changes. What is the first thing you should do?
A. Discuss with the project team.
B. Discuss with the retired project manager.
C. Renegotiate the contract.
D. Meet with the customer
The information provided tells you the project is technically successful (on-time and on-budget) but is failing to meet the requirements of the customer. Resolving this problem will require negotiations with the customer either to reframe their expectations or to adjust the project so that it meets their requirements. However, meeting with the customer without being fully briefed FIRST is unprofessional - you will lack the knowledge needed to contribute to the discussion sensibly.
Any negotiation / discussion requires thorough preparation before opening the conversation. If you are not thoroughly prepared, you will have no idea if the customer is being reasonable or unreasonable in her requests and ‘perceived unhappiness’ and you will have no idea what can be considered to alleviate the unhappiness. The first step in your preparation for the meeting with the customer is to be fully briefed by the people available (ie, the team), you will then be in a position to know if seeking a meeting the the retired project manager is necessary (or feasible); then when fully prepared the final step is to open discussions with the customer with a view to achieving a win-win outcome.
You would like to add a row at the top of your project schedule that rolls up, or sums up, all the information below. What is the easiest way to do this?
A. Insert a Summary Task at the top of the schedule and indent all tasks below it.
B. Insert a task at the top of the schedule and establish the successors appropriately.
C. Insert a task at the top of the schedule and establish the predecessors appropriately.
D. Enable the Project Summary Task through Project tab and Project Information.
There are many different ways to incorporate a summary task in the project schedule. Come tools have an automated option to enable a 'Project Summary Task' through the Format tab, other require 'Hammocks' or WBS roll ups. Option A is the best answer because it is generally correct, Option D is only correct if the tool has this specific capability and is therefore not as good. Options B and C are incorrect - good practice dictates that schedules are linked at the detail level, not at the summary level.