COST MANAGEMENT

01) As per PM Study, Payback period do not consider the discount rates02)Opportunity cost is the cost of passing up the next best option.

So, the opportunity cost of choosing A (over project B, which is the next best option) = profit given up if Option B is chosen = profit of Option B = $ 300,000

03) Life cycle costs are not responsibility of a project as they include costs that are beyond scope of the project. However they include both direct and indirect costs, periodic or continuing costs of operation and maintenance. In project selection criteria, even if a project has lower NPV we can go for it if it has lower Life cycle costs

04) Parametric modeling is good if it is scalable, parameters are quantifiable, historical information is more accurate

05) When he is clearly saying to base on NPV, go with it even if PI or other criteria are more favorable to other project / even when NPV is same and other project is preferable.

06) Opportunity Cost is NEVER A PROJECT SELECTION CRITERIA07)Life cycle costing together with Value Engineering helps to reduce cost

and time, improve quality and performance and optimize decision-making.08)Many projects, especially larger ones may have multiple cost baselines to

measure different aspects of the cost performance09)Benefit Cost Ratio = Benefits (Or Payback Or Revenues) / Costs10)Benefits are not Profits, instead, they = Payback or Revenues11)Positive Schedule Variance means project is ahead of schedule; Negative

Cost Variance means the project is over-budget12) Budget updates are a special category of revised cost estimates - they are

changes to an approved cost baseline. These numbers are generally revised only in response to scope changes. If there is a change to the approved cost baseline, the project manager must issue a Budget Update

13)Physical Work Actually accomplished is also called EV14) CPI = EV/AC = BAC / EAC15) If a problem contains only SUNK and OPPORTUNITY COST informations, just

say you can’t select any project Both are irrelevant to decision making16) While Calculating Benefit Cost Ratio, if he gives Profit, Life Cycle Cost, Project

cost and Payback, apply the ratio of Payback / Project Cost Note that Life Cost and Profits are not at all concerned. The denominator shall be REVENUE = PAYBACK = BENEFITS

17) For Opportunity Cost Go with the full cost of the alternative not the difference. Remember in Economics, Opportunity Cost of Economics Book is Cinema Cost.

18) Actual cost of a previous small project is used for creating estimates for Analogous Modeling TRUE (small project term is also okay here!)

19)Analogous estimating is generally less costly than the other techniques, but it is also generally less accurate. Analogous Estimating is also called "Top-down" Estimating

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20) Resource Requirements is an output from Resource planning not INPUT Look at from this angle also.

21) Cost Estimating: Cost estimating involves developing an approximation (estimate) of the costs of the resources needed to complete project activities. In approximating cost, the estimator considers the causes of variation of the final estimate for purposes of better managing the project

22) Your project is plagued by frequent but minor changes to the project scope. In this case, you should Issue a Budget Update

23)

Total Cost Management Questions = 63

QUALITY MANAGEMENT

01) You have been assigned the task of trying to determine the potential cause for the variations as to why the Circuits are not accurate YOU WILL USE CONTROL CHARTS not Ishikawa Dig / Pareto / Inspection VERSUS… Cause and Effect Diagrams, also called Ishikawa diagrams or fishbone diagrams illustrate how various factors might be linked to potential problems or effects (This is for PROBABLE CAUSES OF PROBLEMS)

02) Modern Quality Management complements Project Management.... This requires a combination of conformance to requirements (the project must produce what it said it would produce) and fitness for use (the product or service produced must satisfy real needs)

03) PMI believes that providing more functionality (gold plating) is not a good practice - even if it satisfies the customer Still it is a quality failure if you give more than what you are supposed to give

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04) Cost of quality refers to the total cost of all efforts to achieve product/service quality, and includes all work to ensure conformance to requirements. There are three types of costs that are incurred: prevention costs, appraisal costs and failure costs.

05) For the Design of Experiments Dollars, Pounds, KGs are Measures but not VARIABLES; Weight is a Variable that can be used.

06) The project management team must have a working knowledge of statistical quality control, especially sampling and probability, to help it evaluate quality control outputs.

07) You are the project manager for an automobile company. Because of change in Government regulations, the emission norms for automobile vehicles have been made stricter. As a project manager, you are concerned that your project will not satisfy the required quality standards. This could be done through Quality Assurance

Question: Which of the following statements about Quality Control is not accurate? 31. Prevention refers to keeping errors out of the process, whereas

inspection refers to keeping errors out of hand of the customer.2. Attribute sampling determines whether the result confirms or not, and

variables sampling determines the degree of conformity.3. Special Causes are normal process variations, but random causes

refer to unusual events.4. Tolerance determines if the result falls within acceptable range, but

control limits are used to determine if the process is in control.

08) Product Analysis involves developing a better understanding of the product of the project. It includes techniques like product breakdown analysis systems engineering, value engineering, value analysis, function analysis and quality function deployment. Quality function Deployment is a tool used to Develop Better Understanding of the product of the project

09) Just in time Manufacturing is a process that continuously stresses waste reduction by optimizing the processes and procedures necessary to maintain a manufacturing operation. Part of this process is JIT purchasing or inventory where the materials needed appear just in time for use, thus eliminating costs associated with material handling, storage, paperwork, and even inspection. Please note that JIT stresses on having long term relationships with suppliers, so that the company can depend on the suppliers to provide materials Just In Time. It will also REDUCE THE INVENTORY TO ZERO

10) The different factors in the triple constraint may have different priorities depending on the project There is nothing like one is most important than other Factors are Chpt-5.6.7.8 & Customer Satisfaction (Scope, Schedule, Cost and Quality)

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11) Information will be gathered for optimistic (low), pessimistic (high) and most likely scenarios if triangular distributions are used; or on mean and standard deviation for the normal and log normal distributions (pmstudy notes: How much a set of data is different from the curve it should make when plotted on a graph. Or, the square root of the average of the squares of deviations about the mean of a set of data. Standard deviation is a statistical measure of spread or variability. A sample Normal Distribution that shows standard deviation (sigma) as distance of the measurement from the mean value.

12) A quality audit is a structured review of other quality management activities. The objective of a quality audit is to identify lessons learned that can improve performance of this project or of other projects within the performing organization.

13) The cost of quality includes quality planning, quality planning, quality assurance and rework. Because of the costs associated with quality, it is not necessary that the cost of the project will decrease because of better quality. However, better quality provides

Improved Cost Effectiveness Better Customer Satisfaction Increase in Productivity

14) 3-Sigma can go upto 99.7%, 2-Signma upto 95%, 1-Sigma upto 68%, - See below graph

        15) Quality Improvement includes taking action to increase the effectiveness

and efficiency of the project to provide added benefits to the project stakeholders. In most cases, implementing quality improvements will require preparation of change requests or taking corrective action, and will be handled according to procedures for integrated change control.

16) Gold plating is a concern not a happy thing!

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17)

This has been attempted wrong! Economic Security is a Social Need18) Process adjustments involve immediate corrective or preventive action as

a result of quality control measurements. In some cases, the process adjustment may need to be handled according to procedures for integrated change control.

19) Quality Audits: A quality audit is a structured review of other quality management activities. The objective of a quality audit is to identify lessons learned that could improve performance of this project or of other projects within the performing organization.

20) An operation definition describes, in very specific terms, what something is and how it is measured by the quality control process. For example, it is not just enough to say that meeting the planned schedule dates is a measure of management quality; the project management team must also indicate whether every activity must start on time or only finish on time; whether individual activities will be measure or only certain deliverables, and if so which ones. Operational Definitions are also called metrics in some application areas

21) Flowcharting can be used as a tool for all three processes viz. Quality Planning, Quality Assurance and Quality Control

22) Description of how a project management team should implement the overall intentions and direction of an organization with regards to quality (as expressed by top management) is available in: Quality Management Plan Quality Policy is "the overall intentions and direction of an organization with regard to quality, as formally expressed by top management"

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23) Cost of quality refers to the total cost of all efforts to achieve product/service quality, and includes all work to ensure conformance to requirements, as well as all work resulting from nonconformance to requirements. There are three types of costs that are incurred: prevention costs, appraisal costs, and failure costs.

Total Number of Questions in Quality Management = 48

SCOPE MANAGEMENET

1. Project charter includes or references the business need and product description - Project Charter provides authority to the project manager - Project charter formally authorizes a project. The project charter should be issued by a manager external to the project, and at a level appropriate to the needs of the project

2. Work Component descriptions are often collected in the WBS Dictionary. A WBS Dictionary will typically include work package descriptions, as well as other planning information such as schedule dates, cost budgets, and staff assignments

3. Product Analysis involves developing a better understanding of the product of the project. It includes techniques such as product breakdown analysis systems engineering, value engineering, value analysis, function analysis and quality function deployment.

4. Management by Objectives is a systems approach for aligning project goals with organizational goals, project goals with the goals of other subunits of the organization, and project goals with individual goals

5. As a project manager, you must formalize acceptance of the project scope and keep the project focused on the business need that it was undertaken to address. This should be done After each phase of the project

6. Once the project is completed, maintenance of the product Will not be part of the project life cycle

7. WBS enables Shared Ownership8. If it is in the scope, it is not gold plating9. Benefit measurement methods include comparative approaches, scoring

models, benefit contribution or economic models10. A scope change control is any modification to the agreed upon project

scope as defined by the approved WBS. Scope changes often require changes to the cost, time, quality or other project objectives. Project scope changes are fed back through the planning process, technical and planning documents are updated as needed, and stakeholders are notified as appropriate

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11.pmstudy notes: As the project becomes more complicated, there are several parameters in the project which can impact the scope - so the uncertainty of the scope increases

12. Inspection(which is a Tool for Scope Verification) includes activities such as measuring, examining and testing undertaken to determine whether results confirm to requirements. Inspections are variously called reviews, product reviews, audits and walk-throughs

13.A value adding change (e.g. an environmental remediation project is able to reduce the costs by taking advantage of technology that was not available when the scope was originally defined).

14. If the project is terminated early, the scope verification process should establish and document the level and extent of completion.

15. For a project to be successful, what is the primary requirement? Customer Satisfaction

16. If there is a major change to the project, the Project Manager should try to influence the change to minimize the impact the project. Usually the project manager is advised to do the following: 1. Evaluate the impact of the change within the team 2. Let the customer(or person requesting the change) know about the

impacts of the change 3. If changes is required, then open a change control and get it approved

- definitely inform the management and the change control board about the impact of the changes

4. If changes are approved by the change control board, then make the appropriate changes in the project plan

17.Product documentation refers to the documents produced to describe the projects products - it includes plans, drawings and specifications.

18.A Change request could be because of an error or omission in defining the scope of the project (e.g. using a BOM instead of a WBS)

19.Decision Models include generalized techniques (Decision Trees, Forced Choice, and others) as well as specialized ones (Analytic Hierarchy process, Logical Framework Analysis and others).

20.Economic Models are part of Benefit Measurement methods

Question: All the following are examples of Constrained Optimization except: 1

1. Economic Models2. Multi Objective Programming3. Decision Trees4. Logical Framework Analysis

21.Benefit/cost Analysis involves estimating tangible and intangible costs (outlays) and benefits (returns) of various project and product alternatives, and then using financial measures such as return on investment or payback period to assess relative desirability of the identified alternatives.

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22.A WBS is a deliverable-oriented grouping of project components that organizes and defines the total scope of the project; work not in the WBS is outside the scope of the project. As with the scope statement, the WBS is often used to confirm a common understanding of the project scope

23. The items at the lowest level of the WBS may be referred to as work packages, especially in organizations that follow Earned Value Management practices. These work packages may in turn be decomposed in a subproject work break-down structure. Generally this type of approach is used when the project manager is assigning a scope of work to another organization, and this other organization must plan and manage the scope of work at a more detailed level than the project manager in the main project.

24) Project charter should include, either directly or by reference to other document:

Business Need that the project was undertaken to address. The product description

25) Question: A well-constructed Scope Statement can provide all the following benefits EXCEPT: 41. Provide a documented basis for making future project decisions2. Develop common understanding of project scope among stakeholders3. Provide knowledge of project justification, deliverables and objectives4. Provide a basis for time and cost estimates

26) You are the project manager for an initiative aimed at releasing a new product in the market. But because of Government Regulation, you will have to make some changes to the project scope. Any modifications to the contents of the scope statement should be done through Scope Statement updates

27) Your project is very critical for the company and must be completed within 6 months. The project charter has been signed, but Scope Statement is not yet prepared. Management asks you to go ahead with the project without the scope statement being approved. What should you do? (SELECT BEST ANSWER) Meet the Management and mention the problems you will face without a Scope Statement

28) Please note that it is Very Important to ensure that Customer does formal Scope Verification after each project phase or major project deliverable. Otherwise, there is a very good possibility that the project will not meet the customer requirements.

29) A project charter is a document that formally authorizes a project.30) Change requests: Changes may require expanding the scope or may

allow shrinking it. Most changes are the result of:...

An error or omission in defining the scope of the product (e.g., failure to include a required feature in the design of a telecommunications system).

31) Question: In your project, you use configuration management to record and report the change and its implementation status. In this context, you are using change control as a technique for: 2

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1. Performance Measurement2. Overall change control3. Change Control System4. Scope Definition

TOTAL NUMBER OF SCOPE QUESTIONS = 71

HUMAN RESOUCE MANAGEMENT

01) The five interpersonal influences are:

Legitimate Power: The ability to gain support because project personnel perceive the project manager as being officially empowered to issue orders.

Reward Power: The ability to gain support because project personnel perceive the project manager as capable of directly or indirectly dispensing valued organizational rewards (i.e. salary, promotion, bonus, future work assignments

Penalty Power: The ability to gain support because the project personnel perceive the project manager as capable of directly or indirectly dispensing penalties that they wish to avoid. Penalty power usually derives from the same source as reward power, with one being a necessary condition for the other

Expert Power:The ability to gain support because personnel perceive the project manager as possessing special knowledge or expertise. (that functional personnel perceive as consider as important)

Referent power:The ability to gain support because project personnel feel personally attracted to the project manager or project

Referent power can be because of referring to someone higher up in the organization hierarchy

Expert power is based on knowledge and expertise of the project manager, not on his position in the organization AND hence max the Project Management position might derive Legitimate, Penalty, Reward Powers

02) Reward and Recognition system They promote or reinforce desired behavior; Reward and recognition systems must consider cultural differences; To be effective, they should make the link between project performance and reward clear, explicit and achievable; Projects must often have their own reward and recognition systems since the systems of the performing organizations may not be appropriate

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04) As a project nears completion, you notice that the functional managers are more interested in trying to find a new position, rather than concentrating on their project work. Their motivation is SAFETY

05) Douglas McGregor advocated that most workers can be categorized according to two theories:

Theory X: This assumes that the workers are inherently lazy and require supervision

Theory Y: The average worker finds that physical and mental effort on the job satisfying, and likes his work.

06) Expertise of the project manager is the most important factor in getting support from the project personnel; least important factor is ability to penalize

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07)

08) As a project manager, you advocate active participation of your team members - this is because you believe in Theory Y (McGregor Model) [Not Referent power]

09) All the following roles can exist in a Roles and Responsibility Matrix PARIS – Participant, Accountable, Review Required, Input Required, Sign Off Required

10) An Organizational breakdown structure(OBS) is a specific type of organization chart that shows which organizational units are responsible for which work packages.

11) You have been given a high priority task that needs to be completed within a short time frame. Since you know what has to be done, you instruct you assign tasks to the different team members and tell them when and how the tasks should e done. The management style that you are following is Directing

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12)

13) Direct and indirect costs for training are generally paid by the performing orga

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14)

15) You are the blue eyed boy of your Vice Chairman, who appreciates the way in which you handle projects. This helps you in managing interpersonal relationships with your team-members because you have the following power LEGITIMATE

16)

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17) You are the project manager for a complicated construction project which involves building highways in the whole state of North Carolina. You have several groups working with you in the project. To plan resources for this project, you should use Responsibility Assignment Matrix

18) The most preferred Conflict Resolution Techniques by project managers(in descending order of importance) are as follows:

1. Confrontation 2. Compromise 3. Smoothing 4. Forcing 5. Withdrawal

19) As a project manager, you are involved in launching a new software product across several markets around the world and interacting with different units in your company. This requires a thorough knowledge of Organizational Interfaces

20) Question: Organizational Planning involves identifying, documenting, and assigning project roles, responsibilities and reporting relationships. Roles, responsibilities and reporting relationships may be assigned to individuals or groups. All the following can assist in determining the impacts related to Organizational Planning EXCEPT:

1. Formal and Informal reporting relationships among different organizational units.

2. Kinds of competencies required for different individuals and groups3. Literature about how organizations can and should be structured4. Meetings held to assess project status and/or progress

Justification: Option 1 refers to Project Interfaces (Organizational interfaces) - this is an

input to Organizational Planning Option 2 refers to Staffing requirements - this is an input to Organizational

Planning Option 3 refers to Organizational Theory - this is a Tool and Technique for

Organizational Planning Option 4 refers to Performance Reviews - this is a tool for Performance

Reporting; and does not help in Organizational Planning

TOTAL NUMBER OF HRM QUESTIONS = 47

COMMUNICATIONS MANAGEMENT

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1.

2. To get summary information about the project, you should use Progress Reporting - Progress Reporting - describing what the project team has accomplished - for example, percent complete to schedule, or what is completed versus what is in process - Progress Reporting are summary reports about % complete and provide a quick overview of the project

3. Project Reports: Formal project reports on project status and/or issues4. Win-Win Situation of Conflict Resolution is by COLLABORATING

5.6. If too much dis-order at meeting prepare agenda You can’t influence

all communication channels as there would be n(n-1)/2 channels.

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7. The sender is responsible for making the information clear, unambiguous, and complete, so that the receiver can receive it correctly, and for confirming that it is properly understood. The receiver is responsible for making sure that the information is received in its entirety and understood correctly.

8. Question: All the following are inputs for Information Distribution EXCEPT 4

Work Results

Communication Management Plan

Project Plan

Performance Measurement Documentation

9.

10. Non-verbal communication is more than 50% of the total communication and is extremely important to look out for while negotiations are being conducted.

11.Common formats for Performance Reports include bar charts (also called Gantt Charts), S-curves, histograms and tables

12. Communication Skills is the most important trait in a project manager Look for this when you are interviewing for this position

13.Project closure - Confirmation that the project has met all customer requirements for the product of the project (the customer has formally accepted the project results and deliverables and the requirements of the

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delivering organization)

Please note that although Administrative Closure is the process in which you formalize acceptance of the product of the project, the specific output from the process is "Project Closure"

14.Contract Closeout is similar to administrative closure in that it involves both product verification (Was all work completed correctly and satisfactorily?) and administrative closeout (updating of records to reflect final results and archiving of such information for future use).

15.Number of Communication Channels increases exponentially when number of people increase

16.Communications management plan is a document that provides: A collection and filing structure that details what methods will be used

to gather and store various types of information. Procedures should also cover collecting and disseminating updates and corrections to previously distributed material

A Distribution structure that details to whom information will flow, and what methods will be used to distribute various types of information.

A description of the information to be distributed, including format, content, level of detail, and conventions/definitions to be used

Production schedules showing wven each type of communication will be produced.

Methods of accessing information between scheduled communications.

A method for updating and refining the communications management plan as the project progresses and develops.

17. After one week, there will be 9 people in your team (this includes 8 team members and you, the project manager). So, the number of communication channels = 9 * (9 - 1) / 2 = 9*8/2 = 36

18. Email and notes are examples are which type of communication Written Informal

19. A conflict resolution technique that results in a win-lose situation i.e. one party wins at the expense of another is FORCING

20.Question: Communication planning involves determining the information and communications needs of the stakeholders: who needs what information, when they will need it, and how it will be given. For this, you will need all the following inputs EXCEPT: 41. Sum of information requirements of the project stakeholders2. Factors that will limit the project management team`s options3. Methods used to transfer information back and forth among project

stakeholders4. Methods for distributing information between stakeholders

Justification: Option 4 refers to Information Distribution Methods which is a tool and technique for Information Distribution.

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All the remaining options are inputs to Communication Planning: Option 1 refers to Communication Requirements Option 2 refers to Communications Technology Option 3 refers to Constraints

21. Administrative closure consists of documenting project results to formalize acceptance of the product of the project by the sponsor, or customer.

22.Change Requests: Analysis of project performance often generates a request for a change to some aspect of the project. These change requests are often handled as described in various change control processes (e.g. scope change management, schedule control etc.)

TOTAL NUMBER OF QUESTIONS IN COMMUNICATIONS MANAGEMENT = 47

PROFESSIONAL RESPONSIBILITY

1. If standard deviation is slightly more than 0.002 then do not accept or reject it but Document the lower quality level, ask the contractor for explanation and try to find a solution - Any decrease in quality level should be documented and discussed with the contractor. If there is a small decrease from the required quality, rejecting the product outright(Choice 3) is extremely harsh. Similarly, allowing for lower quality (Choice 1 and Choice 4) is not advisable.

2. Requirements for PMP Code of Professional Conduct

a) Satisfying scope and obj of professional servicesb) refrain from offering or accepting inappropriate gifts or other forms

of personal compensation Unless in conformity with the laws or customs of the country where project management services are offered.

c) Maintaining confidentiality of sensitive informationd) Reporting Violations to PMP code of professional conducte) bribe should not be paid because it is unethical by PMI standards

3. A project manager has the Responsibility to refrain from offering or accepting inappropriate payments, gifts, or other forms of compensation for personal gain, unless in conformity with applicable laws or customs of the country where the project management services are being provided (Going to Asian Country to study business proposition of a contractor qualifies for this).

4. You recently took over the responsibilities of Project Manager from another person. While reviewing the costs for the project, you realize there is a $ 100,000 payment, which should not have taken place. Your project CPI is 1.2. In this case Inform your manager BUT DO NOT DENY THE PAYMNET

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5. Your project is close to completion, when you are informed by the customer that they would like to see an additional feature in the project. You realize that the feature was discussed with the project sponsor in an earlier meeting, and he categorically mentioned that he did not want this feature. What is the BEST course of action Deny the customer request, and ask him to open a change request

6. For Professional Responsibility questions, please note that the Project Manager should always try to solve the problem

7. You have scheduled a contractor conference after 2 days with potential contractors to discuss procurement. Today, you were informed by Management that there is a very high probability for the project to be cancelled. You should CANCEL THE MEETING AS There is no point in having the meeting and wasting time if there is a high probability for the project to be cancelled.

8. You are managing a project in a foreign country, where you realize that to get things done in your project, you may have to pay some tips to the government officials. You should: refuse to pay as the same is unethical and it is bribery

9. Certified PMP Duties are:1. Ensure that there is no conflict of interest that can compromise the

legitimate interests of a client or customer2. Disseminate PMP Code of Professional Conduct to other PMI

certificants.3. Cooperate with PMI concerning ethics violation and the collection of

related information4. As a PMP Certified project manager, you are responsible to comply with

all organizational rules and policies

Ensure that the technical specifications are appropriately defined IS NOT THE DUTY OF him as he is not technical expert

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As a PMP Certified project manager, you are responsible for all the following EXCEPT: 31. Confidentiality of sensitive information which you have access to2. Managing conflict of interest situations in your project3. Integrity of your team-members4. Refraining from offering and accepting inappropriate payments, gifts

and other forms of communication

10.Knowledge gained in one company is not proprietary information and can be used in subsequent jobs. Choice 1, Choice 3 and Choice 4 are inappropriate because you may have to work in projects for the competitor which will adversely impact products of the first company you worked for. This is acceptable so as long as you do not unethically use any contacts or proprietary information from the first company.

11. When you join a new company, you realize that all the project managers in the new company have the responsibility of managing individual product releases of a software product and the co-ordination of these releases over time. Since you are a Certified PMP, you realize that the situation is program because it involves several projects being done simultaneously, and elements of ongoing operations

12. You have been informed by the project sponsor that there has been a revaluation of projects within your company and your project will not be getting any additional funding. In this case, you should Means it is not going to continue and hence you need to PERFORM ADMIN CLOSURE

13. You are the project manager for a construction company which wants to build a water treatment plant close to a residential locality. Although the project owner and sponsor have got the legal approval for constructing the water treatment plant, some of the owners of residential properties have approached you with concerns regarding the potential impact to the environment - in this case, you must Try to find appropriate resolution of issues between the different stakeholder

14. A project manager disclosed some crucial information to a prospective seller. Which code of professional conduct did he violate preventing conflict of interest

15. You are aware that an employee in your project may potentially get a promotion - however, there is a possibility that he may get transferred after his promotion, thus impacting your project. In this situation, you should After the employee gets the promotion and is told of the transfer, you ask him to prepare a transition plan you are not sure whether the resource will get a promotion or get transferred. So, after the promotion/transfer are confirmed, you should ask him to do a proper transition

16.You are in the vendor management department of your company which sources computer hardware from companies. You recently

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visited a marketing conference for a leading computer hardware provider, where you were offered a gift-voucher for $ 200 for attending the conference. You should Return the gift because it could be construed as personal gain (I think coz. It is in conference and within USA)

17. There have been too many disagreements within two team-members in your project regarding the design of a particular product. You would like to incorporate the best features of the two designs - and want to create an environment that avoids conflicts and emphasis similarities. The conflict-handling mode you would like to emphasize is smoothing

18.One of your team-members provided you with a critical report 10 minutes before a bidders conference. You notice some serious errors in the report. The best thing for you to do is to Cancel the Meeting and reschedule to a later date

19.A project Managers responsibility is that upon a reasonable and clear factual basis to report possible violations of the PMP Code of Professional Conduct by individuals in the field of project management.

20. You are doing some work under contract, when the buyer requests you to add some additional requirements which were not defined in the original contract. Since satisfying the buyer is of paramount interest, you go ahead and incorporate the requirements as part of the project. You are violating which Code of Professional Conduct Responsibility to maintain and satisfy the scope and objective

21. You are managing a project in a foreign country, where you realize that you will have to pay a fee to some government agencies to get your work done. You should PAY FEE – No problem as it is not same as Bribe

22. If a risk emerges that was not anticipated in the risk response plan, or its impact on objectives is greater than expected, the planned response may not be adequate. It may be necessary to perform additional risk response planning to control the risk.

23.Question: As a PMP Certified project manager, you are responsible to comply with all organizational rules and policies. In this context, you have the responsibility to all of the following except 4 as he need not inform PMI but to client, parties etc.1. Provide accurate and truthful representations concerning all

information directly or indirectly related to all aspects of the PMI Certification Program

2. Report possible violations of the PMP Code of Professional Conduct by individuals in the field of project management.

3. Cooperate with PMI concerning ethics violations and the collection of related information

4. Disclose to PMI about significant circumstances that could be construed as a conflict of interest or an appearance of impropriety

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24.One of your team-member was late to a critical bidder conference, which caused a lot of confusion You should talk with the team member to understand why he was late and how to prevent similar situations in the future

25. EVM might be used not only to control cost and time but also to coordinate changes across the entire project.

26. In project management, the Constructive Roles are: Information Seeker, Information Giver, Consensus Taker Recognition Seeker is not!

27. In Information Seeker, Gate Keeper, Initiator and Withdrawer, WITHDRAWER is the DESTRUCTIVE ROLE

28. In your organization, you are the project manager of the engineering department. But if questions related to manufacturing arise, they are passed up to the engineering department head, who consults with the head of the manufacturing department. Once the manufacturing head gets the answers, he passes it the engineering department head, who in turn passes answer back down to you. The organization structure you are working on is functional

29. Withdrawal, Forcing, Compromising Mostly used in Project Management

30. Compromising is LOSE-LOSE, Confrontation, I think is Win-Win, Forcing is Win-Loose (Other two I think)

31. Quality Audits, Reward and Recognition Systems and Information Retrieval Systems are tools for Executing

32.Lessons Learned is an output of all the processes mentioned above Except Contract closeout (It is output of ICC, Schedule Control, Administrative Control)

33. Defining Requirements gives Customer Satisfaction

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34.

35. You are in the build phase of your project, when you realize that because of a design error, the product will not meet the performance parameters specified by the customer. In this context, what should you do first Discuss with your team to try to find out alternatives means to solve the issue

TOTAL NUMBER OF QUESTIONS IN PROF RES IS 47

TIME MANAGEMENT1. Graphical Evaluation and Review techniques are similar to PERT but have

the distinct advantages of allowing for looping, branching, and multiple project end results.

2. In a Normal Distribution, the PERT duration (also called mean) = (Pessimistic + 4* (Most Likely) + Optimistic)/6= (10 + 4 * 13 + 16)/6= 13

1 Standard Deviation (sigma) = (Pessimistic - Optimistic) / 6= (16 - 10) / 6

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= 1

So, if the the comany has a quality requirement of 6 sigma, Mean - 6 Sigma = 13 - 6 * 1 = 7Mean + 6 Sigma = 13 + 6 * 1 = 19

So, the task can be completed within 7 days to 19 days.3. Resource leveling often results in a project duration longer than the

preliminary schedule.... Resource reallocation from non critical to critical activities is a common way to bring the schedule back, or as close as possible to the to its originally intended duration

4. For what activities to be crashed look at per extra month how much it costs, and then go for lower per month cost activities for crashing

5. Simulation involves calculating multiple project durations with different sets of activity assumptions. The most common technique is called Monte Carlo Analysis, in which a distribution of probable results is defined for each activity and is used to calculate a distribution of probable results for the whole project

6. Attributes of the activities - including responsibility (i.e. who will perform the work), geographic area or building (where the work has to be performed) and activity type (i.e, summary or detailed) - are very important for further selection and sorting of the planned activities in a convenient way for the users. WBS classification is also an important attribute that allows useful activity ordering and sorting.

7. Milestone charts (see Figure 6-7) are similar to bar charts, but only identify the scheduled start or completion of major deliverables and key external interfaces.

8. Any of the dependencies may require specification of a lead or lag to accurately define the relationship. An example of a lag: there might be a desire to schedule a two-week delay (lag) between ordering a piece of equipment and using it

9. A project may have negative project float. To deal with such conditions, if the project has to be completed on time, the project manager will have to either fast-track or Crash the project schedule Project Float = CPM Duration – Desired Duration of Completion

10. If there is delay in project schedule – then try to crash / fast track do not ask the resources to work extra hours or overtime

11. If more critical paths risk of the project increases12.Schedule Development Inputs Project Network Diagrams, Activity

duration estimates, Calendars, Leads and Lags13.As with the WBS, the activity list must include descriptions of each activity

to ensure that the project team members will understand how the work is to be done.

14.The different classes of estimates are (DCA-FO) 35-25-15 (10 range), 10-5 (5 Range)

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Definitive: + 5% Capital Cost: + 10-15% Appropriation: + 15 - 25% Feasibility: + 25 - 35% Order of Magnitude > + 35%

15.The objective of duration compression includes all the following except:3 Duration Compression includes fast-tracking but not simulation1. Shorten the project schedule without impacting scope2. Do compression of tasks for the least incremental cost3. Do simulation to calculate distribution of probable reasons for the

whole project4. Do activities in parallel which would normally be done sequentially

16.Milestone Events, as such will have ZERO duration these are better choice to give presentations to management

17.As different techniques like crashing, fast tracking, resource reallocation etc. are being considered for Resource Leveling, there is a real potential for the costs to increase but it increases project duration, Utilization of weekends, extended hours or multiple shifts, Productivity increases by using different technologies and/or methodologies

18.The length of the different paths are:

Start -> 1 -> 2 -> End : 10 Start -> 3 -> 5 -> End : 11 Start -> 4 -> 5 -> End : 12

Since the longest path is Start -> 4 -> 5 -> End, this is the critical path. Length of the critical path is 12.

Slack = Late Finish - Early StartLate Finish of Task 3     = Length of Critical Path - (5->End + 3->5)    = 12 - (4 + 5)    = 3

Early Start of Task 3 = Start->2 = 2

So, Slack in Task 3     = Late Finish - Early Start      = 3 - 2 = 1

19.ADM uses only finish to start dependencies and may require the use of dummy activities to define all logical relationships correctly Note that CPM, PERT and ADM uses Dummy activities

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20.Path Method (CPM) calculates a single, deterministic early and late start and finish date for each activity based on specified, sequential network logic and a single duration estimate

21.As a project manager of a construction company, you always prefer to do concrete curing during the weekend holiday, because no work can be done on the building for 2 days while the concrete curing is being done. This helps you decrease the: Elapsed Time

22.Float is the amount of time an activity can be delayed without delaying the project finish date. It can also be called as Slack, Total Float, and Path Float. Free Float is the amount of time an activity can be delayed without delaying the early start of an immediately following activity

23.The second advantage of PERT is that one can determine the probability of meeting specific deadlines by development of alternative plans. If the decision maker is statistically sophisticated, he can examine the standard deviation and the probability of accomplished data.

So, standard deviation gives an idea of the probability of whether a task will happen. Standard Deviation is a measure for the probability of getting a result - hence it is a good indication for the risk of completing the task in time

24.Note that the 1,2,3,6 Sigma Values are 68%, 95%, 99.7%, and 99.9%

25.Question: All the following statements about float are correct except: 31. Float refers to amount of time an activity can be delayed from its early

start without delaying the project finish date.2. Float changes as the project progresses and as changes are made to

the project plan3. Float is the amount of time an activity can be delayed without delaying

early start of any immediately following activity.

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4. Float can also be referred to as Slack, Total Float or Path Float.

Justification: Free Float is the amount of time an activity can be delayed without delaying the early start of an immediately following activity. (This is different from the float)

26.The project Network Diagram is an input to what process Sch Dev27. If shipment gets delayed in 2 weeks Review the performance reports

to determine which planned dates have not been met, and the impact on critical path

28.The moment slack is being asked, check if it is on CRITICAL PATH29. If management wants to complete the project in 20 weeks, then project

float will be : 20 - 23 = -3 weeks. The project float compares the critical path with an externally imposed date and may be negative. (you may be forced to fast-track or perform crashing to ensure that the project is completed within the dates required by management). But, there will be no change to the critical path

30.Schedule Development means determining the start and finish dates for project activities. If the start and finish dates are not realistic, then the project is unlikely to be finished as scheduled

In your project, you realize the importance of determining the start and finish dates for project activities. If the project start or end dates are not realistic, then the project may not be completed on time. This is done as part of: 3

1. Activity Sequencing2. Activity Duration Estimating3. Schedule Development4. Activity Definition

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31.

32. Question: You are using an Arrow Diagramming method to construct a project network diagram - you use arrows to represent the activities and connect them at nodes to show their dependencies. You can use all the following as Inputs for this process EXCEPT: 4

1. List of All Activities that will be performed on the project2. Description of the product3. Mandatory and Discretionary Dependencies4. Schematic Display of project`s activities and logical relationships

33. Major difference between Decomposition in context of Activity Definition as compared to Decomposition in Scope Definition is that Final output of Decomposition in Activity Definition is described as activities and not deliverables

TOTAL NUMBER OF QUESTIONS IN TIME MANAGEMENT = 75

INTEGRATION MANAGEMENT

1. The project plan is a document or collection of documents that should be expected to change over time as more information becomes available about the project. The performance measurement baselines will usually

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change intermittently, and then generally only in response to an approved scope of work or deliverable change

2. Project Management Information system (PMIS): A PMIS consists of tools and techniques used to gather, integrate and disseminate the outputs of project management processes

3. Corrective Action is an output of Integrated Change Control and not a "Tool".

4. Which common tool is required for Project Plan Development, Project Plan Execution and Integrated Change Control PMIS

5. To integrate the various processes and measure the performance of the project throughout project lifecycle, a project manager should use EVM

6. Question: Which of the following is not an example of project integration management?1. Integrating the work of the project with the ongoing operations of the

performing organization.2. Making tradeoffs between competing objectives and alternatives to

meet or exceed stakeholder needs and expectations.3. Integrating product scope and project scope4. For change in scope of the project, figuring out what the impact will be

to the project from a cost and schedule perspective7. A lower position in a project organization can often be helpful in avoiding

and resolving conflict Note a reason of Conflict8. The project plan includes the Risk Management plan. Risk Management

plan includes defining key risks, including constraints and assumptions, and planned responses and contingencies

9. Integrated change control requires:...Ensuring that changes to the product scope are reflected in the definition of the project scope

10.Question: You are the Project Manager for an aircraft manufacturing company developing a new range of supersonic fighter planes. Since government funding is essential for your project, you hire a lobbying firm to get Government support for funding your project. This is an example of: 11. Integrated Change Control2. Risk Management3. Cost Management4. Project Planning Methodology

11. In many application areas, configuration management is a subset of the change control system and is used to ensure that the description of the projects product is correct and complete.

12.Question: Because of the change in scope of your project, you may have to do all the following except:1. Co-ordinate changes across knowledge areas2. Do Scope Planning3. Make changes to the project baselines4. Perform Configuration Management

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Justification: Scope Planning is the process of progressively elaborating and documenting the project work(project scope) that produces the product of the project.

13.Task Dependencies are not evident in a WBS. WBS does not specify the time frame in which different tasks should be accomplished.

14.Question: You are the Project Manager for a construction company responsible for developing an estate. During implementation time, you spend some time with your team overseeing the work being done by them. You will require all the following tools except 41. Product Skills and Knowledge2. Work Authorization system3. Organizational procedures4. Earned value Management

15. During Project Plan Execution, which area will the Project Manager spend least time on Documentation

16.Anytime there is a potential request for a change from a customer, 1. Understand what functionality was requested - Talk with team-

members to access the implication of the change 2. Open up a Change Control if there is a formal Change Control

Mechanism 3. Communicate the change to Management, and inform Customer about

the impact of the change (e.g. increase in sizing, schedule etc.) 4. If change is accepted, go ahead and implement the changes

If there is a confirmed change request, the first thing to do is to open up a change control

17.Lessons Learned: The causes of variances, the reasoning behind the corrective action chosen, and other types of lessons learned should be documented so that they become part of the historical database for both this project and other projects of the performing organization. The database is also the basis for knowledge management.

18. Integrated change control is concerned with a)influencing the factors that cause changes to ensure that changes are agreed upon b) determining that a change has occured, and c) managing the actual changes when and as they occur. The original defined project and the integrated performance baseline must be maintained by continuously managing changes to the baseline, either by rejecting new changes or by approving changes and incorporating them into a revised project baseline.

19. If you would like to find out who will be approving changes in your project, you can refer to the CCS

20. Integrated change control includes coordinating changes across knowledge areas. For example, a proposed schedule change will often affect cost, risk, quality and staffing.

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Reference: PMBOK 2000 Page 47

Please note that amongst the available alternatives, Procurement will not be impacted unless you have outsourced some work and that work will be impacted by your schedule change. All the remaining control processes (i.e. Cost, Scope and Staffing) are directly impacted by a proposed schedule change

TOTAL NUMBER OF QUESTIONS IN INTEGRATION = 47

PROJECT MANAGEMNET FRAMEWORK

1. Projects involve doing something that has not been done before and which is, therefore, unique. A product or service may be unique even if the category to which it belongs is large....

A project to bring a new drug to market may require thousands of doses of he drug to support clinical trials

2. Your IT company is responsible for making software virus programs. You are responsible for managing both the individual product releases and the co-ordination of multiple releases over time Program

3. Pfeffer defines power as "the potential ability to influence behavior, to change the course of events, to overcome resistance, and to get people to do things that they would not otherwise do."…The negative sense, of course derives from the fact that attempts to reconcile these interests result in power struggles and organizational games that can sometimes take on a thoroughly unproductive life of their own.

4. These phase-end reviews are after called phase exits, stage gates or kill points

5. Project Office: There is a range of uses for what constitutes a project office. A project office may operate on a continuum from providing support functions to project managers in the form of training, templates, etc. to actually being responsible for the results of the project

6. In a projectized organization, most of the resources are often collocated. Most of the organizations resources are involved in project work, and project managers have a great deal of independence and authority. Projectized organizations often have organizational units called departments, but these groups either report directly to the project manager or provide support services to the various projects. (Maximum Influence of PM is in Projectized organizations) (Least power in Functional ones)

7. People exhibit a greater resistance to change than other factors8. Weak Matrix Project Mgr is a coordinator and expeditor 9. Preparing a financial plan requires both Project Management and Industry

specific skills

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10.Project life cycles generally define what technical work should be done in each phase

11.Question: Which of the following statement(s) about project customer and project sponsor is (are) correct? 41. Along with the customer, the sponsor threshold for risks should be

taken into account2. Along with the customer, this sponsor may provide key events,

milestones, and deliverable due dates3. Along with the customer, the sponsor formally accepts the product of

the project.4. All of the above.

12.Politics is about getting collective action from a group of people who may have quite different interests. It is about being willing to use conflict and disorder creatively. The negative sense, of course, derives from the fact that attempts to reconcile these interests result in power struggles and organizational games that can sometimes take on a thoroughly unproductive life of their own.

13. In a matrix organization, Project Manager does not have authority about doing Personnel Performance Management; this task is done by the Functional Managers.

14.As a project Manager, Problem solving is high in your list of priorities. Which statement about Problem Solving is not accurate? 41. Problem solving involves a combination of problem definition and

decision-making2. Problems may be technical, managerial or interpersonal.3. Decision Making includes analyzing the problem to identify viable

solutions, and then making a choice from among them4. You should try to solve a problem as soon as it is identified

15.Solving Technical problems from functional managers is not influencing it is problem solving

16.The ability of the stakeholders to influence the final characteristics of the projects product is highest at the start and gets progressively lower as the project continues. A major contributor to this phenomenon is that the cost of changes and error correction generally increases as the project continues.

17.The five constraints in the Triple Constraint are: (Chp – 5,6,7,8 and Customer Satisfaction) Time Quality Cost Scope of Work Customer Satisfaction

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18.Core processes: Some planning processes have clear dependencies that require them to be performed in essentially the same order on most projects. For example, activities must be defined before they can be scheduled or costed.

19.You are one of ten full-time project managers in your organization. You all share two administrative persons. There are generally 30 - 40 projects per year that involve about 30% of the organization employees - however, these employees do not report to you. Your organization can best be classified as: 2

1. Projectized2. Balanced3. Strong Matrix4. Weak Matrix

20.A program is a group of projects managed in a coordinated way to obtain benefits not available from managing them individually. Many programs also include elements of ongoing operations NASA Launching of Satellites

21.Kotter(4) distinguishes between leading and managing while emphasizing the need for both: one without the other is likely to produce poor results. He says that managing is primarily concerned with "consistently producing key results expected by stakeholders" --- Managing is primarily concerned with "consistently producing key results expected by stakeholders," while leading involves:

Establishing Direction... Aligning People... Motivating and Inspiring...

22.Subprojects within projects may have distinct project life cycles. For example, an architectural firm hired to design a new office building is first involved in the owners definition phase when supporting the construction effort. The Architects design project, however, will have its own series of phases from conceptual development through definition and implementation and closure

23.Question: You are a project manager in an Information Technology(software) company, but you recently got an offer as a project manager in a construction company with 25% salary hike. You have excellent technical knowledge in software field, but do not have much exposure to the Construction Industry. In this context, 31. You should attend training classes related to construction industry to

get more technical expertise in the field2. You should not take up the assignment because you will lose out on

the experience and skills gained in Information Technology field

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3. You should take up the assignment because similar project management skills will be required in the Construction company, as was required in the software company

4. You should try to get more information about project management in the Construction Industry and then make an informed decision about whether to take up the new opportunity

Justification: Project Management skills span across industries and the knowledge gained in one industry can be used in other industries.A project manager need not be technically qualified in the industry to succeed.

24.When properly defined, the scope of the project - the work to be done - should remain constant even as the product characteristics are progressively elaborated

25.Major categories of socio-economical influences are: Standards and Regulations Internationalization Cultural Influences Socio-Economic Environmental Sustainability

26. In balanced org, Project Mgr reports to Functional Manager!27.Problem solving involves combination of problem definition and decision-

making... Problems may be technical (differences of opinion about the best way to design a product), managerial (a functional group is not performing according to plan), or interpersonal (personality or style clashes)

28.The authority of a project manager is greatly dependent on Organizational Structure

29.A tangible verifiable work product to ensure proper definition of product of the project is also called DELIVERABLE

30.Project Portfolio Management refers to the selection and support of projects or program investments. These investments in projects and programs are guided by the organization’s strategic plan and available resources.

31.Agreements may be negotiated directly or with assistance; mediation and arbitration are two types of assisted negotiation

32.Factors like Probability of successfully completing the project, Cost of changes, Cost of error correction etc. are highest AT THE END

33.A project manager is responsible for managing project costs and human resources. Factors like Cost and Staffing level for a project Are low at the start, higher toward the end, and decrease rapidly as project draws to a conclusion

34.Please note that the final core process in Planning Phase is Project Plan Development

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TOTAL NUMBER OF QUESTIONS IN FRAMEWORK = 54

PROJECT PROCUREMENT MANAGEMENT

1. In a Lump-sum contract, the profit is: 41. Determined by the buyer during contract sign-off2. Determined by the seller during contract sign-off3. Provided by the buyer to the seller at end of project if defined

performance criteria are met4. Not known at time of the contract sign-off

2. Procurement planning is the process of identifying which project needs can be best met by procuring products or services outside the project organization.

3. Administrative Closure is performed after contract closeout4. Output from the Contract Closeout process Contract File5. If it is a non-core item, it may make sense to consider outsourcing as an

option - it may be cheaper than making the item inhouse. Note that you may lean for making it if item under consideration is a capital item which can be used for other projects in the same organization (so, ongoing need of the item)

6. The objective of contract negotiation is to build a lasting relationship. Maximizing monetary return in itself should not be a main consideration because quality, responsibilities and authority, applicable terms and law, technical and business management approaches should also be considered.

7. Correspondence: Contract Terms and conditions often require written documentation of certain aspects of the buyer/seller communications, such as warnings of unsatisfactory performance and contract changes or clarifications.

8. Early termiation of a contract is a special case of Contract Closeout9. Which is the best thing to do during the Solicitation process?

1. Determine whether a product should be outsourced or manufactured in-house

2. Ensure that prospective sellers clearly understand the technical and contract requirements

3. Clarify on the structure and requirements of the contract, before sign-off

4. Prepare an independent estimate to check the proposed price of the different sellers

10.The only situation where a contract may be nullified is because it violates the law of the country.

11.A procurement audit is a structured review of the procurement process from procurement planning through contract administration.

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12.Evaluation Criteria are an input to Source Selection, not contract administration

13. Incentives are provided in contracts to ensure that the goals of both the buyer and seller are the same

14. Independent Estimates (which is a Tool/Technique for Source Selection): For many procurement items, the procuring organization may prepare its own independent estimates as a check on proposed pricing.

Option 1 is Make or Buy Analysis - done during Procurement Planning Option 2 is Bidder Conference - done during Solicitation Option 3 is Advertising - done during Solicitation 15.Cancellation of the contract has to be done by both the seller and buyer

(i.e. it cannot be done unilaterally by the buyer)16. Fixed Price contract should not be entered into if scope is not well-defined

GO FOR “Cost Plus Fixed Fee” This is best from minimizing buyers’ risk if the scope is not well defined

17.The statement of work (SOW) describes the procurement item in sufficient detail to allow prospective sellers to determine if they are capable of providing the item.

18. Your company has defined some Criteria to be used throughout the organization to rate or score proposals. From your project perspective, these will be Evaluation Criteria

19. Standard Form is not an output of procurement planning ; Input for Souce Selection is PROPOSAL

20.Procurement management plan should describe how the remaining procurement processes (from solicitation planning through contract closeout) will be managed. For example, What types of contracts will be used? If independent estimates will be needed as evaluation criteria, who will

prepare them and when? .... how will multiple providers be managed?

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21.

22.

23. Make-or-buy analysis: This is a general management technique and a part of the initial scope definition process that can be used to determine whether a particular product can be produced cost effectively by the performing organization. Analysis should include both indirect as well as direct costs.

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24.Statement(s) of Work: The statement of work (SOW) describes the procurement item in sufficient detail to allow prospective sellers to determine if they are capable of providing the item. "Sufficient detail" may vary, based on the nature of the item, the needs of the buyer, or the expected contract form.

25.Procurement audits: A procurement audit is a structured review of the procurement process from procurement planning through contract administration. The objective of a procurement audit is to identify successes and failures that warrant transfer to other procurement items on this project or to other projects within the performing organization.

26.Early Termination of a contract is a special case of contract closeout27.The product description is generally broader than a statement of work. A

product description describes the ultimate end product of the project; a statement of work describes the portion of that product to be provided by a seller to the project. However, if the performing organization chooses to procure the entire product, then the distinction between the two terms disappears.

28.The statement of work(SOW) describes the procurement item in sufficient detail to allow prospective sellers to determine if they are capable of providing the item. "Sufficient detail" may vary, based on the nature of the item, the needs of the buyer, or the expected contract form.

TOTAL NUMBER OF QUESTIONS IN PROCURMEENT = 48

RISK MANAGEMENT

1. Decision Tree Analysis: A Decision Tree is a diagram that describes a decision under consideration and the implications of choosing one or another of the available alternatives. It incorporates probabilities of risks and the costs or rewards of each logical path of events and future decisions. Solving the decision tree indicates which decision yields the greatest expected value to the decision-maker when all the uncertain implications, costs, rewards and subsequent decisions are quantified.

2. Residual Risks are those that remain after avoidance, transfer, or mitigation responses have been taken. They also include minor risks that have been accepted and addressed, e.g. by adding contingency amount to the cost or time allowable.

3. Profit of Build : $ 5,000Profit of Buy : $ 3,500Opportunity cost of Build = Profit you give up if you do not buy = $ 3,500

4. As part of Risk Management process, you just created an overall risk ranking of the project, created list of prioritized risks, identified which risks need additional analysis and determined trends in risk analysis results. What should you be doing next? 21. Assessing the impact and likelihood of identified risks

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2. Analyzing numerically the probability of each risk and its impact on the project objectives

3. Determining actions to enhance opportunities and reduce threats to project objectives

4. Keeping track of identified risks and ensuring execution of risk plans

5. Reports commonly used to monitor and control risks include Issues Logs, Action-item Lists, Jeopardy Warnings and Escalation Notices.

6. Please note that Risk Probability and Impact, and Data Precision Ranking have already been done as part of Qualitative Analysis and Brainstorming has been done as part of Risk Identification.

Sensitivity Analysis is the only task in Quantitative Risk Management, that needs to be done after Qualitative Risk Analysis.

7. Triggers, sometimes called risk symptoms or warning signs are indications that a risk has occurred or is about to occur.

8. Results from an earned value analysis may indicate potential deviation of the project at completion from cost and schedule targets. When a project deviates significantly from the baseline, updated risk identification and analysis should be performed

9. Risk Mitigation may take the form of implementing a new course of action that will reduce the problem... It may require a prototype development to reduce the risk of scaling up a from a bench-scale model

In your project, you decide to create a prototype first to ensure that it is accepted by stakeholders before moving on to build your product. This is an example of 1

1. Risk Mitigation2. Risk Avoidance3. Simulation4. Project Assumptions Testing

10.10. Question: While doing risk response planning, you realize that there is a very critical risk which may have a high impact on the project completion. So, you create a fallback plan which could include any of the following conditions EXCEPT: 1

1. Subcontracting the project to an outside Vendor2. Developing Alternative Options3. Allocation of Contingency Reserves4. Changing project scope

11.The probability of the activity happening every year is 25%. So, the probability that the task will happen in the 3rd year is also 25%

12.Qualitative Risk Analysis requires accurate and unbiased data if it is to be helpful to project management. Data Precision Ranking is a technique to

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evaluate the degree to which the data about risks is useful for risk management.

13.Workarounds are unplanned responses to emerging risks that were previously unidentified or accepted. Workarounds must be properly documented and incorporated into the project plan and risk response plan.

14.Question: All the following statements relating to transferring of risk to a contractor are true EXCEPT: 2

1. Transferring risk requires payment of a risk premium 2. Fixed price contracts transfer risk to the seller if the design is

unstable3. Cost reimbursable contract leaves more of the risk with the

customer or sponsor4. Cost reimbursable contract helps reduce cost if there are mid-

project changes

15. Interviewing techniques are used to quantify the probability and consequences of risks on project objectives. A risk interview with the project stakeholders and subject-matter experts is the first step in quantifying risks.

16.Reducing scope, adding resources and using familiar approaches are all examples of Risk Avoidance

17.Risk Monitoring and Control is the process of keeping track of the identified risks, monitoring residual risks and identifying new risks, ensuring the execution of the risk plans, and evaluating their effectiveness in reducing risk.

18.Sensitivity Analysis helps to determine which risks have the most potential impact on the project. It examines the extent to which the uncertainty of each project element affects the objective being examined when all other uncertain elements are held at their baseline values.

19.Project risk reviews must be regularly scheduled. Project risk should be an agenda item at all team meetings. Risk ratings and prioritization may change during the life of the project. Any changes may require additional qualitative or quantitative analysis

20.Additional Risk Response Planning: If a risk emerges that was not anticipated in the risk response plan, or its impact on objectives is greater than expected, the planned response may not be adequate. It will be necessary to perform additional risk response planning to control the risks.

21.Question: In your new project, you objective is to develop a new pharmaceutical drug. After doing a financial analysis, your finance manager provided you with these statistics:

30% probability of success with benefits of $ 700,000 70% probability of failure with loss of $ 300,000

Based on this information, you 3

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1. Suggest that the project to proceed ahead2. Suggest that the project to be stopped3. Communicate to your senior management that you cannot make a

decision about whether to proceed with the project4. Start working on the project and ask your finance manager for

additional information.

22.Question: As a project manager, you put a lot of emphasis on Risk Management. You just completed Data Precision Ranking to evaluate the degree to which the data about risks is useful for risk management. What could be a next step? 4

1. Perform a structured review of project plans and assumptions, both at the total project and detailed scope levels

2. Develop checklists for identifying risks based on historical information and knowledge that has been accumulated from previous similar projects

3. Conduct planning meetings to develop the risk management plan4. Conduct interviews to quantify the probability and consequences of

risks on project activities

Justification: Data Precision Ranking is a tool and technique for Qualitative Risk Analysis.

Option 4 refers to "Interviewing" which is a tool and technique for Quantitative Risk Analysis. Quantitative Risk Analysis is conducted after Qualitatitive Risk Analysis

Option 1 refers to "Documentation Reviews" which is a tool and technique for Risk Identification. Risk Identification is conducted before Qualitatitive Risk Analysis

Option 2 refers to "Checklists" which is a tool and technique for Risk Identification. Risk Identification is conducted before Qualitatitive Risk Analysis

Option 3 refers to "Planning Meetings" which is a tool and technique for Risk Management Planning. Risk Management Planning is conducted before Qualitatitive Risk Analysis

23.The most usual risk acceptance response to to establish a contingency allowance or reserve, including amounts of time, money, or resources to account for known risks

24.Corrective action: Corrective action consists of performing the contingency plan or workaround

25.Risk Trigger is an output from Risk Identification and is not included in Risk Management Plan (Risk Management Plan is an output from Risk Management Planning which occurs before Risk Identification.

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26.S-curve: Graphic display of cumulative costs, labour hours, percentage of work, or other quanitities, plotted against time. The name derives from the S-like shape of the curve (flatter at the beginning and end, steeper in the middle) produced on a project that starts slowly, accelerates and then falls off. Also a term for the cumulative likelihood distribution that is a result of a simulation, a tool of quanitative risk analysis.

27.

28.The risk response plan (sometimes called the risk register) should be written to the level of detail at which actions will be taken.

TOTAL NUMBER OF QUESTIONS IN RISK MGT = 53

Framework 54Integration Mgt 47Scope Management 71Cost Management 63Time Management 75Quality Management 48HRM 47Communications Mgt 47Risk Mgt 53Procurement Mgt 48Professinal Resp 47

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600

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