The criteria for project success include attaining objectives relating to cost, schedule and revenue

Chapter 04 Defining the Project Answer Key Multiple Choice Questions 1. The method used to collect information to use through all phases of the project life cycle is called A. Responsibility matrix B. Organization breakdown structure C. Work breakdown structure D. Priority matrix E. Work package Answer C The method suggested is a selective outline of the project called the work breakdown structure. 2. Jose is looking at a document that outlines the specific tasks and subtasks required to complete the writing of a technical support manual. The method that was probably used to develop the document is most likely A. Responsibility matrix B. Organization breakdown structure C. Work breakdown structure D. Priority matrix E. Work package Answer C The method suggested is a selective outline of the project called the work breakdown structure. The early stages of developing the outline serve to ensure that all tasks are identified and that participants of the project have an understanding of what is to be done. 3. The first step in creating the necessary information to manage a project is to A. Establish project priorities B. Define the project scope C. Verify the budget available D. Assign team members to work on the project E. Determine the required completion date Answer B Defining the project scope sets the stage for developing a project plan. Project scope is a definition of the end result or mission of your project—a product or service for your client/customer. 4. Linda has just been assigned a project to develop a new advertising campaign for an established product. Her first step should be to A. Establish project priorities B. Define the project scope C. Verify the budget available D. Assign team members to work on the project E. Determine the required completion date Answer B Defining the project scope sets the stage for developing a project plan. Project scope is a definition of the end result or mission of your project—a product or service for your client/customer. 5. Research shows the most frequently mentioned barrier to project success is A. Not enough budget resources B. Poor performance by team members C. Weak project leadership D. Poorly defined scope or mission E. Political in-fighting Answer D Research clearly shows that a poorly defined scope or mission is the most frequently mentioned barrier to project success. 6. An expected output over the life of a project would be classified as A. A deliverable B. A product C. An end object D. An objective

E. A target Answer A Major deliverables—the expected outputs over the life of the project. 7. The first step of project scope definition is to A. Analyze the strategic plan B. Analyze the current budget plan C. Meet with team members D. Select team members E. Define the overall objective to meet the customer's needs Answer E The first step of project scope definition is to define the overall objective to meet your customer's need(s). 8. In reviewing the project plan, Susan sees that the first prototype is due by October 12. This would be best classified as a A. Project target B. Limit item C. Milestone D. Project objective E. Critical goal Answer C A milestone is a significant event in a project that occurs at a point in time. The milestone schedule shows only major segments of work; it represents first, rough-cut estimates of time, cost, and resources for the project. 9. The ability of 911 emergency systems to identify the caller's phone number and location are considered to be a A. Technical requirement B. Milestone C. Project limit D. Project exclusion E. Project deliverable Answer A More frequently than not, a product or service will have technical requirements to ensure proper performance. 10. Which of the following is not one of the items that would appear on a project scope checklist? A. Deliverables B. Technical requirements C. Objectives D. Work breakdown structure E. Reviews with customer Answer D 11. "To construct a high-quality, custom home within five months at costs not to exceed $150,000" is best classified as A. A deliverable B. A milestone C. An objective D. A limit E. An exclusion Answer C The first step of project scope definition is to define the overall objective to meet your customer's need(s). For example, as a result of extensive market research a computer software company decides to develop a program that automatically translates verbal sentences in English to Russian. The project should be completed within three years at a cost not to exceed $1.5 million. 12. The second step in the defining of a project would be to A. Analyze the strategic plan B. Analyze the current budget plan C. Establish project priorities D. Select team members E. Define the major objectives to meet the customer's needs

Answer C Quality and the ultimate success of a project are traditionally defined as meeting and/or exceeding the expectations of the customer and/or upper management in terms of cost (budget), time (schedule), and performance (scope) of the project (see Figure 4.1). 13. Which of the following is not one of the basic classifications of project priorities? A. Profit B. Cost C. Time D. Performance E. All of these are basic classifications Answer A One of the primary jobs of a project manager is to manage the trade-offs among time, cost, and performance. To do so, project managers must define and understand the nature of the priorities of the project. 14. If a project criterion indicates that the project must meet a specific date, that criterion is classified as A. Constrained B. Enhanced C. Accepted D. Limited E. Fixed Answer A The original parameter is fixed. The project must meet the completion date, specifications and scope of the project, or budget. 15. Scott has just been given a project that has a specific target date. After discussion with top management he finds that while the date is important the cost is more important and a slip in delivery would be acceptable if required to meet the cost targets. The target date is best classified as A. Constrain B. Enhance C. Accept D. Limit E. Optional Answer C For which criterion is it tolerable not to meet the original parameters? When trade-offs have to be made, is it permissible for the schedule to slip, to reduce the scope and performance of the project, or to go over budget? 16. The tool used to assist in making project trade-offs between schedule, budget, and performance objectives is called a A. Responsibility matrix B. Work breakdown structure C. Project priority matrix D. Work package E. Criterion matrix Answer C One technique found in practice that is useful for this purpose is completing a priority matrix for the project to identify which criterion is constrained, which should be enhanced, and which can be accepted. 17. The lowest element in the hierarchical breakdown of the WBS is A. A deliverable B. A work package C. A cost account D. A lowest sub deliverable E. An object Answer B 18. The highest element in the hierarchical breakdown of the WBS is A. A work package B. Sub deliverables C. A cost account D. Major deliverables

E. The project Answer E 19. All of the following are true about work packages except A. Consume resources B. Assigned to only one manager C. Have medium to long duration D. Definitive starts and stops dates E. All of these are true Answer C Work packages are short duration tasks that have a definite start and stop point, consume resources, and represent cost. Each work package is a control point. A work package manager is responsible for seeing that the package is completed on time, within budget, and according to technical specifications. 20. All of the following are usually included in a work package except A. What will be done? B. The time needed to complete the work. C. A single person who is responsible for its completion. D. All the costs for the work package. E. All of these are included in a work package. Answer E Work packages are short duration tasks that have a definite start and stop point, consume resources, and represent cost. Each work package is a control point. A work package manager is responsible for seeing that the package is completed on time, within budget, and according to technical specifications. 21. The integration of project work packages within the organization's management structure is known as A. Responsibility matrix B. Organization breakdown structure C. Work breakdown structure D. Priority matrix E. Process breakdown structure Answer B In practice, the outcome of this process is the organization breakdown structure (OBS). The OBS depicts how the firm has organized to discharge work responsibility. 22. The final step in the creation of a Work Breakdown Structure is to A. Code the WBS for tracking B. Assign the cost account to a manager C. Assign the work package to a manager D. Develop the responsibility matrix E. All of these are included in the final step Answer A The codes are used to define levels and elements in the WBS, organization elements, work packages, and budget and cost information. 23. The intersection of the WBS and the OBS is called the A. Responsibility matrix B. Priority matrix C. Work package D. Cost account E. Project overlap Answer D The "cost account" is the focal point because all budgets, work assignments, time, cost, and technical performance come together at this point. 24. Creating an extranet website or an internal software database system would be most closely associated with the A. Responsibility matrix B. Organization breakdown structure

C. Work breakdown structure D. Priority matrix E. Process breakdown structure Answer C The classic WBS is when the project is broken down to the lowest manageable deliverable and subsequent work packages. 25. If a project is small or of narrow scope and does not require an elaborate system, which of the following is a good choice? A. Responsibility matrix B. Organization breakdown structure C. Work breakdown structure D. Priority matrix E. Process breakdown structure Answer A The RM (sometimes called a linear responsibility chart) summarizes the tasks to be accomplished and who is responsible for what on a project. 26. The project scope statement indicates that the client is responsible for training the people who will be using the equipment and that the project team will train the client's trainers. This is an example of: A. Project objectives B. Deliverables C. Limits and exclusions D. Technical requirements E. Milestones Answer C The limits of scope should be defined. Failure to do so can lead to false expectations and to expending resources and time on the wrong problem. 27. The tendency for the project deliverables to expand over time—usually by changing requirements, specifications, and priorities—is called: A. Scope erosion B. Scope creep C. Project bloat D. Scope enhancement E. Project add-ons Answer B The tendency for the project scope to expand over time—usually by changing requirements, specifications, and priorities. Scope creep can be reduced by carefully writing your scope statement. 28. Which of the following is a good example of a Process Breakdown Structure? A. New car prototype B. New software program C. New computer hardware D. New sports stadium E. New project management book See Figure 4.4 on Page 112. Answer B 29. Which of the follow is least likely to be included in a Work Package? A. Materials B. Labor C. Overhead D. Duration E. Responsibilities Answer C Work packages are short duration tasks that have a definite start and stop point, consume resources, and represent cost. 30. The Snapshot from Practice dealing with Big Bertha II illustrated how important a project's project. A. Objective

is to the successful completion of a

B. Deliverables C. Technical requirements D. Milestones E. Limits and exclusions Answer C Fill in the Blank Questions 31. A selective outline of the project that ensures the identification of all tasks and an understanding of what is to be done is called a _____ work breakdown structure Once the scope and deliverables have been identified, the work of the project can be successively subdivided into smaller and smaller work elements. The outcome of this hierarchical process is called the work breakdown structure (WBS). 32. The first step in planning any project is to _____ . define the project scope Defining the project scope sets the stage for developing a project plan. Project scope is a definition of the end result or mission of your project—a product or service for your client/customer. 33. The primary purpose of the first step of defining a project is to identify the _____ for the end user and to focus project plans. objective The first step of project scope definition is to define the overall objective to meet your customer's need(s). 34. Significant events in a project that occur at a specific point in time, are natural control points, and are easily recognized by project participants are known as _____ . Milestones A milestone is a significant event in a project that occurs at a point in time. The milestone schedule shows only major segments of work; it represents first, rough-cut estimates of time, cost, and resources for the project. 35. The need for a computer to function in countries having different electrical systems is an example of a _____ technical requirement More frequently than not, a product or service will have technical requirements to ensure proper performance. For example, a technical requirement for a personal computer might be the ability to accept 120-volt alternating current or 240-volt direct current without any adapters or user switches. 36. The agreement that training will be the responsibility of the customer is an example of a project _____. limit and exclusion The limits of scope should be defined. Failure to do so can lead to false expectations and to expending resources and time on the wrong problem. 37. A project parameter such as completion date or cost is _____ if it is fixed and must be met. constrained The original parameter is fixed. The project must meet the completion date, specifications and scope of the project, or budget. 38. Taking advantage of opportunities to reduce costs or accelerate the schedule are examples of project criteria being classified as _____. enhance In the case of time and cost, this usually means taking advantage of opportunities to either reduce costs or shorten the schedule. Conversely, with regard to performance, enhancing means adding value to the project. 39. In making project trade-offs, a criteria that is allowed to not meet the original target is classified as _____. accept Questions to ask in regards to accept. For which criterion is it tolerable not to meet the original parameters? When trade-offs have to be made, is it permissible for the schedule to slip, to reduce the scope and performance of the project, or to go over budget? 40. Developing a _____ provides a forum for clearly establishing priorities with customers and top management so as to create shared expectations and avoid misunderstandings. priority matrix

One technique found in practice that is useful for this purpose is completing a priority matrix for the project to identify which criterion is constrained, which should be enhanced, and which can be accepted. 41. The result of subdividing the work of a project into smaller and smaller work elements is called _____. work breakdown structure Once the scope and deliverables have been identified, the work of the project can be successively subdivided into smaller and smaller work elements. The outcome of this hierarchical process is called the work breakdown structure (WBS). 42. The most detailed element in the hierarchical breakdown of the project work to be accomplished is known as the _____. work package The lowest level of the WBS is called a work package. Work packages are short duration tasks that have a definite start and stop point, consume resources, and represent cost. 43. A(n) _____ is a grouping of work packages for monitoring progress and responsibility. cost account 44. Practice suggests that a work package should not exceed _____ workdays or one reporting period. ten Practice suggests a work package should not exceed 10 workdays or one reporting period. If a work package has a duration exceeding 10 days, check or monitoring points should be established within the duration, say, every three to five days, so progress and problems can be identified before too much time has passed. 45. The process of assigning specific work packages to a particular group or person within the organization is called_____ . organization breakdown structure The WBS is used to link the organizational units responsible for performing the work. In practice, the outcome of this process is the organization breakdown structure (OBS). 46. The final step in the defining of a project is focused on assigning _____ to each of the work packages. codes Gaining the maximum usefulness of a breakdown structure depends on a coding system. The codes are used to define levels and elements in the WBS, organization elements, work packages, and budget and cost information. 47. In a work breakdown structure the _____ is the focal point because all budgets, work assignments, time, cost, and technical performance come together at that point. cost account The "cost account" is the focal point because all budgets, work assignments time, cost, and technical performance come together at this point. 48. Once the _____ has been established, it is the basis for making trade-off decisions later in the project. Priority Matrix If midway through the project, a trade-off must be made between cost and expediting, which criterion has priority? One technique found in practice that is useful for this purpose is completing a priority matrix for the project to identify which criterion is constrained, which should be enhanced, and which can be accepted. 49. In a _____ the project is organized around phases or groups of activities rather than the more conventional deliverables. work breakdown structure Once the scope and deliverables have been identified, the work of the project can be successively subdivided into smaller and smaller work elements. The outcome of this hierarchical process is called the work breakdown structure (WBS). 50. The _____ summarizes, in graphic format, the tasks to be accomplished and who is responsible for what on a given project. responsibility matrix The RM (sometimes called a linear responsibility chart) summarizes the tasks to be accomplished and who is responsible for what on a project. 51. The Work Breakdown Structure is an outline of the project with different levels of _____ detail The WBS is an outline of the project with different levels of detail.

52. The purposes of the _____ are to provide a framework to summarize organization unit work performance, identify organization units responsible for work packages, and tie the organizational unit to cost control accounts. OBS (Organization Breakdown Structure) The purposes of the OBS are to provide a framework to summarize organization unit work performance, identify organization units responsible for work packages, and tie the organizational unit to cost control accounts. 53. The most commonly used method for coding the WBS is _____ numeric indention The most commonly used scheme in practice is numeric indention.

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54. The gradual expansion of project requirements during the execution of project is known as _____ scope creep Scope describes what you expect to deliver to your customer when the project is complete. Your project scope should define the results to be achieved in specific, tangible, and measurable terms. True / False Questions 55. The development of a work breakdown structure with appropriate dates and budget is usually accomplished in a single iteration. FALSE The WBS is an outline of the project with different levels of detail. 56. Studies suggest that there is a strong correlation between project success and clear project scope definition. TRUE Research clearly shows that a poorly defined scope or mission is the most frequently mentioned barrier to project success. 57. Project scope describes what you expect to deliver to your customers when the project is complete. TRUE Project scope is a definition of the end result or mission of your project—a product or service for your client/customer. 58. One of the items included on a project scope checklist is the reviews with the customer. TRUE 59. Quality and the ultimate success of a project are traditionally defined as meeting or exceeding the expectations of the customer or management. TRUE Quality and the ultimate success of a project are traditionally defined as meeting and/or exceeding the expectations of the customer and/or upper management in terms of cost (budget), time (schedule), and performance (scope) of the project (see Figure 4.1). 60. The criteria for project success include attaining objectives relating to cost, schedule, and revenue. FALSE Quality and the ultimate success of a project are traditionally defined as meeting and/or exceeding the expectations of the customer and/or upper management in terms of cost (budget), time (schedule), and performance (scope) of the project (see Figure 4.1). 61. Statements of project scope are sometimes referred to as Statements of Work or Project Charters. TRUE Many companies engaged in contracted work refer to scope statements as statements of work (SOW). Other organizations use the term project charter. However, the term project charter has emerged to have a special meaning in the world of project management. A project charter refers to a document that authorizes the project manager to initiate and lead the project. 62. If a project criterion should be optimized if at all possible, it is classified as being constrained. FALSE The original parameter is fixed. The project must meet the completion date, specifications and scope of the project, or budget. 63. Basically, the WBS is an outline of the project with different levels of detail. TRUE The WBS is an outline of the project with different levels of detail. 64. In general, work packages should not exceed 10 work days.

TRUE Practice suggests a work package should not exceed 10 workdays or one reporting period. If a work package has a duration exceeding 10 days, check or monitoring points should be established within the duration, say, every three to five days, so progress and problems can be identified before too much time has passed. 65. In a Work Breakdown Structure for a software development project, the typical structure follows the major phases of software development. TRUE 66. Integrating a project's work packages within the organization's management structure is known as work breakdown structure. FALSE Work packages are short duration tasks that have a definite start and stop point, consume resources, and represent cost. 67. Scope definitions are usually brief with only one or two pages being typical for small projects. TRUE Scope definition should be as brief as possible but complete; one or two pages are typical for small projects. 68. A work breakdown structure is frequently used on projects such as software development where the project is focused on activities rather than deliverables. TRUE The WBS should conform to how you are going to schedule work. For example, if assignments are made in terms of days, then tasks should be limited as best as possible to one day or more to complete. Conversely, if hours are the smallest unit for scheduling, then work can be broken down to one-hour increments; final activities should have clearly defined start/end events. Avoid open-ended tasks like "research" or "market analysis." 69. Responsibility matrices are used primarily with small and medium sized projects and have limited use in large projects. FALSE One tool that is widely used by project managers and task force leaders of small projects is the responsibility matrix (RM). The RM (sometimes called a linear responsibility chart) summarizes the tasks to be accomplished and who is responsible for what on a project. 70. In a work breakdown structure deliverables are ignored and replaced with activities or tasks that have been grouped in phases. FALSE Once the scope and deliverables have been identified, the work of the project can be successively subdivided into smaller and smaller work elements. The outcome of this hierarchical process is called the work breakdown structure (WBS). 71. The intersection of the WBS and the OBS represents a control point, called a cost account. TRUE The intersection of the WBS and OBS represents the set of work packages necessary to complete the sub deliverable located immediately above and the organizational unit on the left responsible for accomplishing the packages at the intersection. 72. The most commonly used scheme for coding the work breakdown structure is to use a department project number assigned by the accounting department. FALSE The most commonly used scheme in practice is numeric indention. 73. For large companies, the organization breakdown structure is used rather than the work breakdown structure. FALSE The OBS defines the organization sub deliverables in a hierarchical pattern in successively smaller and smaller units. Frequently, the traditional organization structure can be used. Even if the project is completely performed by a team, it is necessary to break down the team structure for assigning responsibility for budgets, time, and technical performance. 74. The hierarchical work breakdown structure can be used to represent the need for information at various levels of management. TRUE The WBS is a map of the project. Use of WBS helps to assure project managers that all products and work elements are identified, to integrate the project with the current organization, and to establish a basis for control. 75. The intersection of work packages and the organization unit creates a project control point called a cost account.

TRUE The intersection of the WBS and OBS represents the set of work packages necessary to complete the subdeliverable located immediately above and the organizational unit on the left responsible for accomplishing the packages at the intersection. 76. Reviews with customers only refers to projects with external customers who are paying for the project. FALSE Completion of the scope checklist ends with a review with your customer—internal or external. The main concern here is the understanding and agreement of expectations. 77. A typical responsibility matrix will include not only those responsible for a specific task but also those who supply support and assistance. TRUE

Chapter 05 Estimating Project Times and Costs Answer Key Multiple Choice Questions 1. The process of forecasting or approximating the time and cost of completing project deliverables is called A. Budgeting B. Predicting C. Estimating D. Planning E. Guesstimating Answer C Estimating is the process of forecasting or approximating the time and cost of completing project deliverables. 2. In practice, estimating processes are frequently classified as A. Top down/bottom up B. Rough/polished C. Precise/order of magnitude D. Draft/final E. Both A and B are correct Answer A Estimating processes are frequently classified as top-down and bottom-up. Top-down estimates are usually done by senior management. 3. A typical statement in actual practice is that estimates should have a probability of being met of the time. A. 100% B. 98% C. 95% D. 90% E. 80% Answer C But past experience estimates must almost always be refined by other considerations to reach the 95 percent probability level. 4. A good starting point for developing time and cost estimates is A. Past experience B. Work packages C. Task analysis D. Time and motion studies E. Work breakdown structure Answer A Past experience is a good starting point for developing time and cost estimates. 5. Which of the following is not one of the factors that need to be considered to improve quality of estimates for project times and costs? A. Planning horizon B. People

C. Padding estimates D. Profit E. Project structure Answer D 6. Ed is looking over the actual results of projects and comparing them to what was estimated. He notices that projects that took six months or longer to complete were noticeably more off the estimates. Which of the following factors is he recognizing? A. Padding estimates B. Planning horizon C. Project structure D. People E. Organization culture Answer B The quality of the estimate depends on the planning horizon; estimates of current events are close to 100 percent accurate but are reduced for more distant events. The accuracy of time and cost estimates should improve as you move from the conceptual phase to the point where individual work packages are defined. 7. Janet is forecasting how much money her department needs to support a new project. She estimates that two people and $25,000 in expenses will cover her needs. Because management typically insists on reducing forecasts by 20 percent, she increases her estimates to allow for that reduction. Which of the following factors is illustrated in this situation? A. Padding estimates B. Planning horizon C. Project structure D. People E. Organization culture Answer A In work situations where you are asked for time and cost estimates, most of us are inclined to add a little padding to increase the probability and reduce the risk of being late. If everyone at all levels of the project adds a little padding to reduce risk, the project duration and cost are seriously overstated. 8. Which of the following is a good condition for top-down estimating? A. Cost and time important B. Fixed price contract C. Customer wants details D. Internal, small project E. All of these are good conditions for top-down estimating See table 5-1 on Page 132. Answer D 9. Which of the following is a good condition for bottom-up estimating? A. Strategic decision making B. Internal, small project C. Fixed price contract D. High uncertainty E. Both C and D are good conditions for bottom-up estimating See table 5-1 on Page 132. Answer C 10. Top-down estimates are most likely to occur during the phase. A. Concept B. Planning C. Execution D. Delivery E. All of these are equally likely Answer A Top-down estimates are only a rough cut and typically occur in the "conceptual" stage of the project. 11. _______ estimates are most likely to use low cost, efficient methods. A. Apportion B. Ratio

C. Top-down D. Bottom-up E. All of these are equally likely Answer D The bottom-up approach also provides the customer with an opportunity to compare the low- cost, efficient method approach with any imposed restrictions. 12. Which of the following methods is not considered a top-down approach to estimating project time and cost? A. Ratio B. Template C. Apportion D. Function point E. Learning curve Answer B Template Methods are used in bottom-down approach to estimating. 13. Jose is forecasting project time and cost for constructing a new building by multiplying the total square footage by a given dollar amount. Which of the following methods is he using? A. Ratio B. Template C. Apportion D. Function point E. Learning curve Answer A Top-down methods (sometimes called parametric) usually use ratios, or surrogates, to estimate project times or costs. Top-down approaches are often used in the concept or "need" phase of a project to get an initial duration and cost estimate for the project. 14. Sean is forecasting the time and cost of developing a customized software program by looking at the number of inputs, outputs, inquires, files, and interfaces. Which of the following methods is he using? A. Ratio B. Template C. Apportion D. Function point E. Learning curve Answer D In the software industry, software development projects are frequently estimated using weighted macro variables called "function points" or major parameters such as number of inputs, number of outputs, number of inquiries, number of data files, and number of interfaces. 15. Laura is forecasting the time and cost of developing an intranet for a new customer. Her department has completed six such intranets for customers during the last two years. Although the proposed system is about the same size as the others she estimates that it will take about 10 percent less time and money. Which of the following methods is she using? A. Ratio B. Template C. Apportion D. Function point E. Learning curve Answer E A phenomenon of tasks that are labor intensive. In these circumstances the pattern of improvement phenomenon can be used to predict the reduction in time to perform the task. From empirical evidence across all industries, the pattern of this improvement has been quantified in the learning curve (also known as improvement curve, experience curve, and industrial progress curve). 16. Learning curves are more likely to apply in situations where most of the costs are A. Materials B. Labor C. Overhead D. Evenly spread over materials, labor, and overhead E. All of these are equally likely situations for learning curves

Answer B A phenomenon of tasks that are labor intensive. In these circumstances the pattern of improvement phenomenon can be used to predict the reduction in time to perform the task. From empirical evidence across all industries, the pattern of this improvement has been quantified in the learning curve (also known as improvement curve, experience curve, and industrial progress curve). 17. Which of the following is not one of the bottom-up approaches to estimating project time and cost? A. Parametric procedures applied to specific tasks B. Estimates for the WBS work packages C. Learning curve D. Template method E. All of these are bottom-up approaches Answer C Learning curve is part of top-down approach to estimating. 18. The approach that begins with a top-down estimate for the project and then refines estimates as the project is implemented is known as method. A. Function point B. Template C. Learning curve D. Phase estimating E. Apportion Answer D This approach begins with a top-down estimate for the project and then refines estimates for phases of the project as it is implemented. 19. Which of the following would be the best method for projects where the final product is not known and the uncertainty is very large? A. Function point B. Template C. Learning curve D. Phase estimating E. Apportion Answer D Phase estimating is used when an unusual amount of uncertainty surrounds a project and it is impractical to estimate times and costs for the entire project. 20. The accuracy of top-down estimates will typically be in the range of A. Minus 50% to plus 50% B. Minus 0% to plus 75% C. Minus 20% to plus 60% D. Minus 35% to plus 35% E. Minus 10% to plus 30% See Table 5.4 on page 141. Answer C 21. The accuracy of bottom-up estimates will typically be in the range of A. Minus 50% to plus 50% B. Minus 0% to plus 75% C. Minus 20% to plus 60% D. Minus 35% to plus 35% E. Minus 10% to plus 30% See Table 5.4 on page 141. Answer E 22. The cost to prepare bottom-up estimates will typically run how much more than the costs to prepare the top-down estimates? A. About the same B. About twice as much C. About three times as much D. About four times as much E. About five times as much See Table 5.4 on page 141.

Answer C 23. Typical kinds of costs found in a project include A. Direct costs B. Project overhead costs C. General and administrative costs D. Only A and B are included E. A, B, and C are all included See list on Page 142. Answer E 24. Project costs are typically viewed from all of the following except: A. Scheduled B. Sunk C. Actual D. Committed E. All of these are correct See Figure 5.6 on Page 143. Answer B 25. Which of the following would be considered a direct project cost? A. Labor B. Materials C. Equipment D. Both A and B are direct costs E. A, B, and C are all considered direct costs Answer E Direct project overhead costs can be tied to project deliverables or work packages. Examples include the salary of the project manager and temporary rental space for the project team. 26. Which of the following is not one of the recommended guidelines for developing useful work package estimates? A. Estimates should be made by those responsible for the work B. Use several people to estimate the same work C. Estimates should be based on normal conditions D. Estimates should include a normal level of contingency E. Estimates should be independent of other projects See list on pages 144-145. Answer D 27. Companies like Boeing, Kodak, and IBM are using which of the following for improving the estimating process? A. Adjusting estimates based on individual forecasting abilities B. Benchmarking using the experience of other companies C. Using time and motion studies D. Creating historical databases of previous projects E. All of these are correct Answer D Some organizations have large estimating departments of professional estimators—e.g., Boeing, Kodak, IBM—that have developed large time and cost databases. 28. Reasons why estimating time and cost are important include all of the following except: A. To schedule work B. To determine how long the project should take and cost C. To develop cash flow needs D. To determine how well the project is progressing E. All of the above are valid reasons See Exhibit 5.1 on Page 127. Answer E 29. In a learning curve, the improvement ratio is applied to which of the following items? A. Direct materials B. Direct labor C. Overhead

D. Both A and B are correct E. A, B, and C are all correct Answer B These costs are clearly chargeable to a specific work package. Direct costs can be influenced by the project manager, project team, and individuals implementing the work package. These costs represent real cash outflows and must be paid as the project progresses; therefore, direct costs are usually separated from overhead costs. Lower-level project rollups frequently include only direct costs. 30. The bottom-up approach for estimating times and costs that uses costs from past projects that were similar to the current project is known as: A. Detailed WBS work package estimates B. Template method C. Function point method D. Time-phased cost estimates E. Phase estimating Answer B If the project is similar to past projects, the costs from past projects can be used as a starting point for the new project. Differences in the new project can be noted and past times and costs adjusted to reflect these differences. 31. Which of the follow top-down methods is used when projects closely follow past projects in features and costs and result in costs being assigned by percentages to major segments of the project? A. Apportion B. Function point C. Phase estimating D. Learning curve E. Consensus Answer A Apportionment is used when projects closely follow past projects in features and costs. Given good historical data, estimates can be made quickly with little effort and reasonable accuracy. This method is very common in projects that are relatively standard but have some small variation or customization. 32. Resource shortages, in the form of people, equipment, or materials, is a good example of A. Hidden interaction costs B. Things going wrong on a project C. Normal conditions not applying D. Changes in project scope E. None of these are correct Answer C Estimates are supposed to be based on normal conditions. While this is a good starting point, it rarely holds true in real life. This is especially true when it comes to the availability of resources. Resource shortages, whether in the form of people, equipment, or materials, can extend original estimates. 33. People working on prototype development needing time to interact with the design engineers after the design is completed is an example of: A. Hidden interaction costs B. Things going wrong on a project C. Normal conditions not applying D. Changes in project scope E. None of these are correct Answer A Interaction costs are hidden in estimates. According to the guidelines, each task estimate is supposed to be done independently. However, tasks are rarely completed in a vacuum. Work on one task is dependent upon prior tasks, and the hand-offs between tasks require time and attention. For example, people working on prototype development need to interact with design engineers after the design is completed, whether to simply ask clarifying questions or to make adjustments in the original design. 34. A manager getting further into a project and obtaining a better understanding of what needs to be done to accomplish a project is an example of: A. Hidden interaction costs

B. Things going wrong on a project C. Normal conditions not applying D. Changes in project scope E. None of these are correct Answer D As one gets further and further into the project, a manager obtains a better understanding of what needs to be done to accomplish the project. This may lead to major changes in project plans and costs. Likewise, if the project is a commercial project, changes often have to be made midstream to respond to new demands by the customer and/or competition. 35. Design flaws being revealed after the fact, extreme weather conditions, and accidents occurring are examples of: A. Hidden interaction costs B. Things going wrong on a project C. Normal conditions not applying D. Changes in project scope E. None of these are correct Answer B Design flaws are revealed after the fact, extreme weather conditions occur, accidents happen, and so forth. Although you shouldn't plan for these risks to happen when estimating a particular task, the likelihood and impact of such events need to be considered. Fill in the Blank Questions 36. Estimates that are typically based on estimates of elements found in the work breakdown structure are called _____ estimates. bottom-up The bottom-up approach at the work package level can serve as a check on cost elements in the WBS by rolling up the work packages and associated cost accounts to major deliverables. 37. Estimates that are usually derived from analogy or mathematical relationships are called _______ estimates. top-down Top-down estimates are usually done by senior management. Management will often derive estimates from analogy, group consensus, or mathematical relationships. 38. The estimating factor known as _____ considers the decreasing accuracy of estimates as one forecasts activities that are further into the future. planning horizon The quality of the estimate depends on the planning horizon; estimates of current events are close to 100 percent accurate but are reduced for more distant events. The accuracy of time and cost estimates should improve as you move from the conceptual phase to the point where individual work packages are defined. 39. The _____ factor in estimating project times and costs can introduce errors due to staff turnover, the skills of the participants, and whether the team members have worked with each other on previous projects. people The people factor can also introduce errors in estimating times and cost. For example, accuracy of estimates depends on the skills of the people making the estimates. A close match of people skills to the task will influence productivity and learning time. 40. The tendency to over-estimate project time and cost in order to improve the likelihood of meeting the estimates is known as the ___ factor. padding estimates In work situations where you are asked for time and cost estimates, most of us are inclined to add a little padding to increase the probability and reduce the risk of being late. If everyone at all levels of the project adds a little padding to reduce risk, the project duration and cost are seriously overstated. 41. The prevailing belief in some firms that detailed estimating takes too much time and is not worth the effort or that it is impossible to predict the future is an example of the _____ factor. organization culture Organizations vary in the importance they attach to estimates. The prevailing belief in some organizations is that detailed estimating takes too much time and is not worth the effort or that it's impossible to predict the future. Other organizations subscribe to the belief that accurate estimates are the bedrock of effective project management. Organization culture shapes every dimension of project management; estimating is not immune to this influence.

42. Using the _____ method of forecasting project time and costs is the preferred method for situations involving strategic decisionmaking, projects with a high degree of uncertainty, and projects with an unstable scope. top-down 43. Using the _____ method of forecasting project time and costs is the preferred method for situations where the cost and time estimates are important, in a fixed contract situation, and when the customer wants a lot of detail. bottom-up 44. The information necessary to conduct a bottom-up estimate of project time and costs starts with the _____ . work package If possible and practical, you want to push the estimating process down to the work package level for bottom-up estimates that establish low-cost, efficient methods. This process can take place after the project has been defined in detail. Good sense suggests project estimates should come from the people most knowledgeable about the estimate needed. 45. In the _____ method of top-down estimating, a quantitative relationship is established between the estimates and a project parameter. ratio Top-down methods (sometimes called parametric) usually use ratios, or surrogates, to estimate project times or costs. Top-down approaches are often used in the concept or "need" phase of a project to get an initial duration and cost estimate for the project. 46. Given that a project closely follows past projects in features and costs, the _____ method of assigns costs and times to particular phases that a project will go through. apportion This method is an extension to the ratio method. Apportionment is used when projects closely follow past projects in features and costs. Given good historical data, estimates can be made quickly with little effort and reasonable accuracy. This method is very common in projects that are relatively standard but have some small variation or customization. 47. The _____ method for estimating project time and cost uses weighted variables based on major parameters and is frequently used in the development of software. function point In the software industry, software development projects are frequently estimated using weighted macro variables called "function points" or major parameters such as number of inputs, number of outputs, number of inquiries, number of data files, and number of interfaces. 48. The _____ method of estimating project time and costs is useful for projects requiring the same task, group of tasks, or product repeated several times, especially if it is labor intensive. learning curve A phenomenon of tasks that are labor intensive. In these circumstances the pattern of improvement phenomenon can be used to predict the reduction in time to perform the task. From empirical evidence across all industries, the pattern of this improvement has been quantified in the learning curve (also known as improvement curve, experience curve, and industrial progress curve). 49. In the _____ method of estimating project time and costs past projects are used as a starting point with adjustments made based on differences in the new project. template If the project is similar to past projects, the costs from past projects can be used as a starting point for the new project. Differences in the new project can be noted and past times and costs adjusted to reflect these differences. 50. Probably the most reliable method for estimating time and cost is to use the _____ and to ask the people responsible for the work package to make the estimates. bottom-up If possible and practical, you want to push the estimating process down to the work package level for bottom-up estimates that establish low-cost, efficient methods. This process can take place after the project has been defined in detail. Good sense suggests project estimates should come from the people most knowledgeable about the estimate needed. 51. The _____ approach to estimating project time and cost begins with an overall estimate for the project and then refines estimates for various stages of the project as it is implemented. phase estimating

This approach begins with a top-down estimate for the project and then refines estimates for phases of the project as it is implemented. Some projects by their nature cannot be rigorously defined because of the uncertainty of design or the final product. Phase estimating is used when an unusual amount of uncertainty surrounds a project and it is impractical to estimate times and costs for the entire project. 52. The cost to prepare a top-down budget will typically run _____ percent of the total project cost. one-tenth to three tenths 53. The cost to prepare a bottom-up budget will typically run _____ percent of the total project cost. three tenths to one 54. Project costs such as labor and materials are typically classified as _____ costs. direct 55. The salary of the project manager and temporary rental space for the project team would be classified as _____ costs. direct overhead Direct overhead rates more closely pinpoint which resources of the organization are being used in the project. Direct project overhead costs can be tied to project deliverables or work packages. Examples include the salary of the project manager and temporary rental space for the project team. 56. Estimates should be made based on _____ conditions, efficient methods, and a normal level of resources. normal Estimates should be based on normal conditions, efficient methods, and a normal level of resources. 57. The _____ method is a top-down approach that uses the pooled experience of senior and/or middle managers to estimate the total project duration and cost. consensus The consensus simply uses the pooled experience of senior and/or middle managers to estimate the total project duration and cost. 58. Costs that are not directly related to a specific project, such as advertising, accounting, and senior management, are classified as ___________ General and administrative overhead costs These represent organization costs that are not directly linked to a specific project. These costs are carried for the duration of the project. True / False Questions 59. Project estimates should be broken down into as much detail than and with as much accuracy as possible. FALSE Detailed data gathering is not always possible or practical and other methods are used to develop project estimates. 60. Bottom-up-estimating is another name for overzealous top management estimates. FALSE Top-down estimates usually are derived from someone who uses experience and/or information to determine the project duration and total cost. These estimates are sometimes made by top managers who have very little knowledge of the processes used to complete the project. 61. The use of past experience is almost always used primarily in the initial phases of a project. TRUE Past experience is a good starting point for developing time and cost estimates. 62. Due to the averaging out of under-estimates and over-estimates, a long duration project is more likely to be on target than a short term, small project. FALSE The smaller the element of a work package, the more accurate the overall estimate is likely to be. 63. The project structure chosen to manage the project will have little impact on the actual project work to be accomplished. FALSE

Which project structure is chosen to manage the project will influence time and cost estimates. 64. As long as everyone in a project adds just a little padding to reduce risk, the project duration and costs are probably overstated by a small amount. FALSE This phenomenon causes some managers or owners to call for a 10-15 percent cut in time and/or cost for the project. Of course the next time the game is played, the person estimating cost and/or time will pad the estimate to 20 percent or more. 65. Organization culture can significantly influence project time and cost estimates. TRUE Organization culture can significantly influence project estimates. 66. If a project is internal to the company and relatively small, the bottom-up approach to estimating time and costs for the project is the best choice. FALSE 67. If time and costs are important to a project the top-down approach to estimating time and costs for the project is the best choice. FALSE The bottom-up approach at the work package level can serve as a check on cost elements in the WBS by rolling up the work packages and associated cost accounts to major deliverables. Similarly, resource requirements can be checked. Later, the time, resource, and cost estimates from the work packages can be consolidated into time-phased networks, resource schedules, and budgets that are used for control. 68. The ideal approach to estimating project time and costs is to use both the top-down and the bottom-up approach. TRUE The ideal approach is for the project manager to allow enough time for both the top-down and bottom-up estimates to be worked out so a complete plan based on reliable estimates can be offered to the customer. In this way false expectations are minimized for all stakeholders and negotiation is reduced. 69. At the strategic level top-down estimating methods are used to evaluate a project proposal. TRUE 70. Top-down estimates usually are derived from someone who uses experience and/or information to determine the project duration and total cost. TRUE Top-down estimates usually are derived from someone who uses experience and/or information to determine the project duration and total cost. 71. Estimating the total cost of a house by multiplying the total square feet by a cost per square foot is an example of the apportion method of estimating costs. FALSE Apportionment is used when projects closely follow past projects in features and costs. Given good historical data, estimates can be made quickly with little effort and reasonable accuracy. This method is very common in projects that are relatively standard but have some small variation or customization. 72. Estimating the total cost of a project by multiplying each major function by a complexity factor is an example of the apportion method of estimating costs. FALSE Apportionment is used when projects closely follow past projects in features and costs. Given good historical data, estimates can be made quickly with little effort and reasonable accuracy. This method is very common in projects that are relatively standard but have some small variation or customization. 73. Phase estimating is used when a project cannot be rigorously defined because of the uncertainty of design or the final product. TRUE Phase estimating is used when an unusual amount of uncertainty surrounds a project and it is impractical to estimate times and costs for the entire project.

74. Phase estimating uses both the bottom-up and top-down methods for estimating project time and costs. TRUE This approach begins with a top-down estimate for the project and then refines estimates for phases of the project as it is implemented. 75. Using a WBS permits the use of different levels of detail for different levels of management. TRUE Getting the level of detail in the WBS to match management needs for effective implementation is crucial, but the delicate balance is difficult to find. The level of detail in the WBS varies with the complexity of the project; the need for control; the project size, cost, duration; and other factors. 76. The Consensus method of estimating costs is a bottom-up technique. FALSE These first top-down estimates are only a rough cut and typically occur in the "conceptual" stage of the project. 77. The salary of the project manager and her administrative assistant is classified as direct labor costs. FALSE Direct project overhead costs can be tied to project deliverables or work packages. Examples include the salary of the project manager and temporary rental space for the project team. 78. General and Administrative costs are usually allocated as a percent of the total of a direct cost such as labor, materials, or equipment. TRUE G&A costs are usually allocated as a percent of total direct cost, or a percent of the total of a specific direct cost such as labor, materials, or equipment. 79. The apportion method is a top-down approach that uses the pooled experience of senior and/or middle managers to estimate the total project duration and cost. FALSE Apportionment is used when projects closely follow past projects in features and costs. Given good historical data, estimates can be made quickly with little effort and reasonable accuracy. This method is very common in projects that are relatively standard but have some small variation or customization. 80. The function point method of time and cost estimating is best applied to projects that have large, complex physical deliverables, such as a bridge or building. FALSE In the software industry, software development projects are frequently estimated using weighted macro variables called "function points" or major parameters such as number of inputs, number of outputs, number of inquiries, number of data files, and number of interfaces.

What method will allow for detailed cost account reporting on a project team's efforts?

Which of the following items has to do with the overall goal of meeting your customer's needs?

Which of the following is the highest element in the hierarchical breakdown of the work breakdown structure?

When three forms of the Matrix project management structure are considered all share the same advantages and disadvantages and at an equal level?