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PMP TRAINING
PROJECT MANAGEMENT
PROFESSIONAL

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Certification Process
Premier Body- Project Management Institute, Philadelphia (PA)

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PMI Certification Materials


To Assist PMI Candidates For Completing The PMI Certification
Exam Administered By The Project Management Institute
Content Is From A Guide To The Project Management Body Of
Knowledge (PMBOK)
Www.Pmi.Org

Discussion Topics
What Is Project Management
Why Projects Fail
Components Of PMO
Project Constraints
Organizational Structure
Project Life Cycle
PROJECT MANAGEMENT PROCESS Groups
Project Management Knowledge Areas And Processes

What is a Project?
Project Temporary Endeavor Undertaken To Create A Unique
Product Or Service
Has A Definite Beginning And End And Interrelated Activities
Programs Adopt New Set Of Objectives And Continue To Work;
Projects Cease When Declared Objectives Have Been Attained

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Project Characteristics
Projects Are
Elaborated

Unique

Characteristics

Are

Progressively

o Progressively: Proceeding In Steps


o Elaborated: Worked With Care And Detail
Scope Of Project Should Remain Constant
Characteristics Are Progressively Elaborated

Even

As

Project vs. Product


Project Management Requires Active Management Of Project
Processes
o Series Of Actions That Achieve A Result
o Project Management Processes
o Describing And Organizing The Work
Product-oriented Processes
o Specifying And Creating The Product

What is Project Management?


Project Management: The Application Of Knowledge, Skills, Tools
And Techniques To Project Activities In Order To Meet Or Exceed
Stakeholder Needs And Expectations From A Defined Project
Balancing The Following:
o Scope, Time, Cost, And Quality
o Stakeholders Expectations
o Requirements (Needs)
(Expectations)

Vs.

Unidentified

Requirements

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Project Manager
The Accountable man for achieving the Project Objectives
Areas of Expertise
Knowledge of Project Management
Perform to achieve the objectives of the Project

Appropriate behavior and attitude while performing

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Project Manager Skills


General Business Management (Consistently Producing
Results Expected By Stakeholders)
Leading (Establishing
Motivating)

Direction,

Aligning

Resources,

Communicating (Clear, Unambiguous, And Complete)


Negotiating
Agreement

(Conferring

With

Others

To

Reach

An

Problem Solving (Definition And Decision Making)


o Distinguish Causes And Symptoms
o Identify Viable Solutions
Influencing Organization (Understanding Power And Politics)

What are Programs and Portfolios?


Programs Are Groups Of Projects Managed In A Coordinated Way
To Obtain Benefits Not Available From Managing The Projects
Individually
Most Programs Have Elements Of Ongoing Operations
o Series Of Repetitive Or Cyclical Undertakings
Projects Are
Manageability

Often

Divided

Into

Subprojects

For

More

o Often Contracted Out To External Organizations

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Project Management Phases


Project Phases Are Marked By The Completion Of A Deliverable
o Tangible, Verifiable Work Product
o Review Of Deliverables And Approval/Denial Are Phase
Exits, Stage Gates, Or Kill Points
Phases Are Collected Into The Project Life Cycle
o Set Of Defined Work Procedures To Establish Management
Control

Project Life cycle


Project Lifecycle-Two Types
o Plan Driven :These are predictive life cycles, example
construction of Dam
o Change Driven: Incremental, Iterative, Adaptive, example
:Development of a Website
Project Phases Can Overlap Fast Tracking
Common Characteristics Of Project Life Cycles:
o Stakeholder Influence Is High At The Beginning And
Progressively Lowers As Project Continues
o Cost And Staffing Levels Are Low At Start And Move Higher
Towards The End
o Probability Of Successfully Completing Project Is Low At
Beginning, Higher Towards The End As Project Continues

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Stakeholders
Stakeholders: Individuals And Organizations Who Are Actively
Involved In The Project
o Often Have Conflicting Expectations And Objectives
o In General, Differences Should Be Resolved In Favor Of The
Customer Individual(s) Or Organization(s) That Will Use
The Outcome Of The Project
o Stakeholder Management Is A Proactive Task
Project Managers Must Determine All Stakeholders
And Incorporate Their Needs Into The Project

Who Are Stakeholders


Stakeholders Are:
o Project Managers
o Customers
o Performing Organizations, Owners
o Sponsor
o Team
o Internal/External

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Who Are Stakeholders


End User
Society, Citizens
Others: Owner, Funders, Supplier, Contractor

Types of Organizations
Organization Structure Pros And Cons
o Projectized
o Efficient Organization No Home
o Loyalty Lack Of Professionalism
o Effective Communication Duplication Of Functions,
Less Efficient Resource Usage

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Types of Organizations
Matrix
o Visible Objectives Not Cost Effective
o PM Control More Than 1 Boss
o More Support More Complex To Control
o Utilize Scarce Resources Tough Resource Allocation
o Information Distribution Competition Of Priorities
o Home Based Potential For Conflict

Organizational Cultures
Organizational Cultures And Styles:
o Entrepreneurial Firms More Likely To Adopt Highly
Participative Project Manager Accept Higher Risk/Reward
o Hierarchical Firms Less Likely To Adopt Participative Project
Manager Take Fewer Risks
Organizational Structures
Organizational Structures
o Functional (Classical) Marked By Identifiable Superiors.
Staff Grouped By Specialty. Perceived Scope of Project
Limited by Function (Engineering, HR). Typically Have Parttime Project Manager
o Projectized Organization Blend Functional And Projectized
Characteristics. Mix Cross-department Personnel With Fulltime Project Manger

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Enterprise Environmental Processes


Socioeconomic Influences
o Standards Document Approved That Provides Common,
Repeated Use, Rules And Guidelines
o Compliance Is Not Mandatory
o Regulations Document That Identifies Products, Services
Or Characteristics
o Compliance Is Mandatory
o Standards Often Become De Facto Regulations
o Internationalization
o Cultural Influences
Functional Organizations
Functional Organization
o Specialists More Emphasis On Functions
o 1 Supervisor No Career Path In PM

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Project Management Process Groups

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Process Groups:
o Initiating Processes: Recognizing A Project Or Phase
Should Begin
o Planning Processes: Devising And Maintaining A Workable
Plan
o Executing Processes: Coordinating Resources To Execute
The Plan
o Controlling Processes: Ensuring Project Objectives Are
Met; Monitoring, Correcting And Measuring Progress
o Closing Processes: Formalized Acceptance

Project Management Process Groups


Initiating Process Group
Defines a new project or a phase
Planning Process Group
Plan course of action
Focus on scope, schedule, budget, quality, Communication
and vendors
Executing Process Group
Put the plan to action
Monitoring & Controlling Process Group
Review, Regulate and ensure adherence to plan and
validate the
plan is good.
Control Changes if and -when required
Closing Process Group
Formal closure of Project or a Phase

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Process Groups vs. PDCA

Process Initiation Process Groups

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The initial scope description and the resources that the


organization is willing to invest are further refined during initiation
process
Project manager is selected.
Initial assumptions and constraints will be documented.
Although the project management team may create the Project
Charter. approval and
Funding is handled external to the project boundaries.
As part of the Initiating Process Group. many large or complex
projects may be divided into Phases
It is imperative to review the entry criteria for each phase in such a
case
Go no go decision may be taken at this juncture
It is important to involve all the stakeholders to ensure shared
responsibility and ownership
Key Outputs :
Project Charter
Stakeholder Register

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Project Management Process Groups Planning


Planning Processes
Plan
Develops the Project Management Plan
Identify, define and refine the project scope, cost, schedule etc.
Perform the ongoing iterative planning to progressively detail the
project management plan (Rolling wave Planning)
Stakeholder participation
24 PM Processes

Project Management Process Groups


Executing Processes
Put the project management plan into action
Does following in accordance with the project management plan
Coordinate people & resources
Perform the activities
Consume the vast majority of the project budget and effort
8 PM Processes

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Rolling Wave Planning


Process Groups Are Linked By The Results Each Produces
Process Groups Are Overlapping Activities With Various Levels Of
Intensity
Process Group Interactions Cross Phases Rolling Wave
Planning
o Provides Details Of Work To Complete Current Phase And
Provide Preliminary Description Of Work For Subsequent
Phases
Individual Processes Have Inputs, Tools And Techniques, And
Outputs (Deliverables)

Initiation of Project-Broader Terms


Initiating And Planning Processes
Committing The Organization To Begin
o Initiation, High-level Planning, Charter
Amount Of Planning Proportional To The Scope Of The Project
Core Planning
o Scope Planning Written Statement
o Scope Definition Subdividing Major Deliverables Into
More Manageable Units
o Activity Definition Determine Specific Tasks Needed To
Produce Project Deliverables
o Activity Sequencing Plotting Dependencies

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Enterprise Environmental Factors


They are Baggage that comes with the project
It is outside the control of the Project Team
Organizational culture, structure, and governance;
Geographic distribution of facilities and resources;
Government or industry standards (e.g., regulatory agency
regulations, codes of conduct, product standards, quality
standards, and workmanship standards)

Infrastructure (e.g., existing facilities and capital equipment);

Existing human resources (e.g., skills, disciplines, and knowledge,


such as design, development, legal, contracting, and purchasing);

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Enterprise Environmental Factors


Personnel administration (e.g., staffing and retention guidelines,
employee performance reviews and training records, reward and
overtime policy, and time tracking);
Company work authorization systems;
Marketplace conditions;
Stakeholder risk tolerances;
Political climate;
Organizations established communications channels;
Commercial databases (e.g., standardized cost estimating data,
industry risk study information, and risk databases)
PMIS include automated tools like scheduling software,
configuration management system, shared workspaces or files
storage, work authorization software, time tracking software,
procurement management software and repositories of historic
data

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ORGANISATIONAL PROCESS ASSETS


Existing Processes, Policies and Procedures in the company
Proven Best Practices
QA, CI, Procurement, Change Control, Safety etc.
Corporate Knowledgebase
Historical Information Including

Activities

Lessons Learned
WBS
Benchmarks
Reports
Risks and Risk Response Plans

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Work Performance Data and Work Performance


Reports
PMBOK uses thee different terms to identify the stages through which
the data moves
Work Performance Data are the initial measurements and
details about activities gathered during Project (Executing)
During controlling the work performance data is analyzed to
make sure they conform to the Project Management Plan
and to assess what they mean for the project as a whole.
The result is known as Work Performance Information
Work Performance information can be organized into work
performance reports which are distributed to various
stakeholders
These reports are the outputs of Monitor And Control
Process Work
Activity Took 12 Days to Complete-Work Performance Data
Was Planned to complete in 10 Days, compare this to
Project Management Plan-Work Performance Information
Performance Information can be organized into Work
Performance Reports to be sent across to the stakeholders

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Questions and Answers


1. A Project is:
a) A set of sequential activities performed in a process or
system
b) A revenue generating activity that needs to be accomplished
while achieving customer satisfaction
c) An ongoing endeavor undertaken to meet customer or
market requirements
d) A temporary endeavor undertaken to create a unique
product, service, or result
2. Effective project management team must have expertise in all the
following areas excepta) Interpersonal skills
b) Application areas knowledge
c) General management knowledge
d) Political philosophy
3. A program is characterize as a:
a) Grouping of related tasks lasting one year or less
b) Grouping of related projects
c) Projects with a cost over Rupees 1 million
d) Sequence of steps constituting a

4. All the following are true about project phases and project life
cycle, EXCEPT:
a) Each phase normally includes a set of defined deliverables
b) The project life cycle serves to define the beginning and the
end of a project
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c) The project life cycle generally define what technical work to


do in each phase
d) Project cost and staffing levels are generally symmetrical
throughout the project life cycle
5. All are true about sub projects EXCEPT:
a) Contracted to an external enterprise
b) Not having definite start and finish dates
c) Assigned to another functional unit
d) Having distinct project life cycle
6. Project deliverables are:
a) Project phases of project life cycle
b) Measurable, verifiable work product, results, or service that
must be produced to complete a process, phase, or project.
c) Detailed description of project product
d) Work elements defined in work breakdown dictionary

7. Project based organizations are those whose operations generally


of all the Following EXCEPT.
a. Generating revenue by performing projects for others
b. Organizations that have adopted 'management by projects'
c. Having management systems in place to facilitate project
management in on- going operations
d. Having management systems in place to facilitate processbased operations

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8. Organizational cultures:
a. Are generally similar and indescribable
b. Are generally unique and indescribable
c. Have no impact on a clearly defined project
d. Often have a direct influence on the project
9. In a typical matrix organization, functional managers are
responsible for all the following EXCEPT.
a. General administrative philosophy
b. Assignment of personnel
c. Development standards
d. Monitoring performance

10.
The project manager has the highest level of independence
and authority in a _______ organization.
a. Strong matrix
b. Weak matrix c. Projectized d. Functional

11.
be:

Difference between or among project stakeholders should


a. Encouraged
b. Ignored
c. Generally resolved in favor to the customer
d. Generally resolved in favor of the schedule

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12. The project manager has the lowest level of independence and
authority in a _______
13.

The project manager's leadership involves:


a. Disciplinary, autocratic, and participative management
b. Projectized, matrix, and functional organization
c. Staff planning, team training, and performance monitoring
d. Developing a vision and strategy, and motivating people to
achieve that vision and strategy

14. How is a project expediter different from the project coordinator-?


a) The project expediter cannot make decisions
b) The project expediter can make more decisions
c) The project expediter reports to a higher-level manager
d) The project expediter has some authority
15. in a projectized organization the project team:
a) Reports to many bosses
b) Has no loyalty to the project
c) Reports to the functional manager
d) Will not always have a "home"
16. All of the following are characteristics of a project EXCEPT:
a) Temporary
b) Definite beginning and end
c) Interrelated activities
d) Repeats itself every month

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17. Who has the MOST power in a projectized organization?


a. The project manager
b. The functional manager
c. The team
d. They all share power
18. A project team member is talking to another team member and
complaining that so many people are asking him to do things. If he
works in a functional organization, who has the power to give
direction to the team member?
a. The project manager
b. The functional manager
c. The team
d. Tight matrix
19. The relationship between project management life cycle phases is
best described by the following:
a. They are unrelated, incompatible concepts
b. They are the same concept described by different terms to
satisfy application area extensions
c. Phases cross process groups such that closing one process
group provides an input to initiating the next
d. Process group interactions cross phases such that dosing
one phase provides an input to initiating the next
20.

Plan-do-check-act cycle was defined by:


a. PMBOK guide - 3rd edition
b. Shewhart
c. Deming
d. American society for Quality

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21.
A controlling process for a project's schedule typically will
focus on activities:
a. Starting earlier than scheduled
b. That vary from plan, whether late or early
c. That are only on the critical path
d. That are different to carry out

22.
The VP of marketing approaches you and requests that you
change the visitor logon screen on the company's website to
include a user name with at-least six characters. This is
considered:
a) Project initiation
b) Ongoing operations
c) A project
d) Project execution

23.
You are the project manager for a large construction project
to construct Olympic village to house sport men arriving 18 months
from the project start date. Youve been given a budget of Rs. 12
cores to complete this project. Resources are easily attained.
Which of the triple constraints is the primary constraint for this
project?
a. Time, because the date cannot be moved.
b. Money, because the budget is set at Rs. 12 crores
c. Resources, because they're not fixed
d. Quality, because the buildings have to be functional and safe

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24.
If in the above project, the resources are not readily available
as your company has engaged them in some other project
currently Mr X is an expert civil engineer whom you desire to have
in your project in order to expedite the project work without
compromising quality. Which of the following skills you use to get
Mr. assigned to your project?
a. Negotiation and influencing skills
b. Communication and organizational skills
c. Communication skills
d. Problem-solving skills

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Project Integration Management

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Inputs, Tools and Techniques, Outputs (ITTOs)


Inputs: What do I need before I can ?...
Tools And Techniques: The Tools and Methods that can be used
Output: What will I have when I am done with ?
OR
What am I trying to achieving when I am doing?

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Project Integration Management


Project Integration Management has Six Processes
1. Develop Project Charter ( Initiation PG)
2. Develop Project Management Plan (Planning PG)
3. Direct and Manage the Project (Execution PG)
4. Monitor and Control the Project Work (M&C PG)
5. Perform Integrated Change Control (M&C PG)
6. Close Project Phase (Closing PG)

Lets See the First PROCESS Develop Project


Charter

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Inputs Project Charter-First Process


Project Statement of Work
o The project statement of work (SOW) is a narrative description
of products, services, or results to be delivered by a project
Business Case
o The business case or similar document describes the
necessary information from a business standpoint to
determine whether or not the project is worth the required
investment
Agreements
o Agreements are used to define initial intentions for a project.
Agreements may take the form of contracts, memorandums
of understanding (MOUs), service level agreements (SLA),
letter of agreements, letters of intent, verbal agreements,
email, or other written agreements. Typically, a contract is
used when a project is being performed for an external
customer.
Enterprise Environmental Factors
o Governmental standards, industry standards, Organizational
culture and structure, Marketplace conditions
Organizational Process Assets
o Organizational standard processes, policies, and process
definitions, Templates (e.g., project charter template),,
Historical information and lessons learned knowledge base
. ETC

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Tools & Techniques- Project Charter


Expert Judgmental
o Expertise is provided by any group or individual with
specialized knowledge or training and is available from
many sources, including Consultants, Subject matter
experts, Professional and technical associations,
Industry groups, Project management office
Facilitation Techniques
o Brainstorming, conflict resolution, problem solving, and
meeting management are examples of key techniques
used by facilitators to help teams and individuals
accomplish project activities

Output Develop Project Charter

The Output of the first process Develop Project


Charter is Project Charter

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Lets See the SECOND PROCESS Develop


Project Management Plan

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Inputs Develop Project Management PlanSecond Process


Project Charter
The project charter is the document issued by the project initiator
or sponsor that formally authorizes the existence of a project and
provides the project manager with the authority to apply
organizational resources to project activities. It documents the
business needs, assumptions, constraints, the understanding of
the customers needs and high-level requirements, and the new
product, service, or result that it is intended to satisfy, such as:
Project purpose or justification, Measurable project objectives and
related success criteria, High-level requirements, Assumptions and
constraints, High-level risks, Summary budget, Stakeholder list,
Assigned project manager authority level, Name and authority of
the sponsor
Enterprise Environmental Factors
Outputs from Other Processes
Outputs from many of the other processes are integrated to create
the project management plan
Organizational Process Assets
Governmental standards, industry standards, Organizational
culture and structure, Marketplace conditions

Tools & Techniques- Project Charter


Expert Judgmental
Facilitation Techniques

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Output Develop Project Management Plan


The Output of the Second process Develop Project Management
Plan is Project Management Plan
The project management plan is the document that describes how
the project will be executed, monitored, and controlled. It
integrates and consolidates all of the subsidiary plans and
baselines from the planning processes.

Lets See the Third PROCESS Direct and


MANAGE PROJECT WORK

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Inputs Direct and Manage Project Work-Third Process


Project Management Plan
The project management plan is the document that describes how
the project will be executed, monitored, and controlled. It
integrates and consolidates all of the subsidiary plans and
baselines from the planning processes.
Approved Change Requests
Approved change requests are an output of the Perform Integrated
Change Control process, and include those requests reviewed and
approved for implementation by the change control board (CCB).
The approved change request may be a corrective action, a
preventative action, or a defect repair
Enterprise Environmental Factors
Governmental standards, industry standards, Organizational
culture and structure, Marketplace conditions
Organizational Process Assets
Organizational standard processes, policies, and process
definitions, Templates (e.g., project charter template), Historical
information and lessons learned knowledge base . ETC

Tools & Techniques- D&M Project Work


Expert Judgment
PMIS
Meetings

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Output Direct and Manage Project Work


Deliverables
A deliverable is any unique and verifiable product, result or
capability to perform a service that is required to be produced to
complete a process, phase, or project
Work Performance Data
Work performance data are the raw observations and
measurements identified during activities being performed to carry
out the project work

Output Direct and Manage Project Work


Change Requests
A change request is a formal proposal to modify any document,
deliverable, or baseline. An approved change request will replace
the associated document, deliverable, or baseline and may result
in an update to other parts of the project management plan. It will
contain things like corrective action, preventive action, Defect
Repair etc.
Project Management Plan Updates
Elements of the project management plan that may be updated
include Scope, Cost, and Time Management Plans etc.
Project Document Updates:
Updates to Project Logs, Risk Register, Stakeholder Register etc.

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Lets See the Fourth PROCESS Monitor &


Control PROJECT WORK

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Inputs Monitor and Control Project Work-Fourth


Process
Project Management Plan
Schedule Forecasts
Schedule forecasts are estimates or predictions of conditions and
events in the projects future based on information and knowledge
available at the time of the forecast. The information is based on
the projects past performance and expected future performance
Cost Forecasts
Validated Changes
The cost forecasts are derived from progress against the cost
baseline and computed estimates to complete (ETC). Approved
changes that result from the Perform Integrated Change Control
process require validation to ensure that the change was
appropriately implemented
EEF
Organizational Process Assets

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Tools & Techniques- Monitor and Control


Project Work
Expert Judgment
Analytical Techniques
Analytical techniques are applied in project management to
forecast potential outcomes based on possible variations of project
or environmental variables and their relationships with other
variables. Examples of analytical techniques used in projects are:
Regression analysis,
Grouping methods,
Causal analysis, RCA...ETC
PMIS
Meetings

Output Monitor and Control Project Work


Change Requests
As a result of comparing planned results to actual results, change
requests may be issued to expand, adjust, or reduce project
scope, product scope, or quality requirements and schedule or
cost baselines.
Work Performance Reports
Work performance reports are the physical or electronic
representation of work performance information compiled in
project documents, intended to generate decisions, actions, or
awareness.
Project Management Plan Updates
Project Document Updates

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Lets See the Fifth PROCESS Perform


Integrated Change Control

Inputs Perform Integrated Change Control Fifth


Process
Project Management Plan
Work Performance Reports
Change Requests
EEF
Organizational Process Assets

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Tools & Techniques- Perform Integrated Change


Control
Expert Judgment
Meetings
Change Control Tools

Output Perform Integrated Change Control


Approved Change Requests
Approved change requests are an output of the Perform Integrated
Change Control process, and include those requests reviewed and
approved for implementation by the change control board (CCB).
The approved change request may be a corrective action, a
preventative action, or a defect repair
Change Log
A Change log is used to document changes that occur during a
project. These changes and their impact to the project in terms of
time, cost, and risk, are communicated to the appropriate
stakeholders
Project Management Plan Updates
Elements of the project management plan and all the subsidiary
plans are updated
Project Document Updates

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Lets See the Sixth PROCESS Close Project or


Phase

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Inputs Close Project or Phase Sixth Process


Project Management Plan
Accepted Deliverable
Organizational Process Assets

Tools & Techniques- Close Project or Phase


Expert Judgment
Analytical Techniques
Analytical techniques are applied in project management to
forecast potential outcomes based on possible variations of project
or environmental variables and their relationships with other
variables. Examples of analytical techniques used in projects are:
Regression analysis,
Grouping methods,
Causal Analysis, RCA.ETC

Output Close Project or Phase


Final Product or Service
This output refers to the transition of the final product, service, or
result that the project was authorized to produce (or in the case of
phase closure, the intermediate product, service, or result of that
phase).
Organizational Process Updates
All the Organizational documents are updated including the
lessons learnt
Meetings

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Analytical Techniques
Analytical techniques are applied in project management to
forecast potential outcomes based on possible variations of project
or environmental variables and their relationships with other
variables.
Examples of analytical
techniques used in projects are:
Regression analysis,
Grouping methods,
Causal analysis,
Root cause analysis,
Forecasting methods (e.g., time series, scenario building,
simulation, etc.),
Failure mode and effect analysis (FMEA),

Fault tree analysis (FTA),

Reserve analysis,
Trend analysis,
Earned value management, and
Variance analysis.

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Change Request
Corrective actionAn intentional activity that realigns the
performance of the project work with the project management
plan;
Preventive actionAn intentional activity that ensures the future
performance of the project work is aligned with the project
management plan;

Defect repairan intentional activity to modify a nonconforming


product or product component.

Meetings
Information exchange
Brainstorming, option evaluation, or design
Decision making.

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Project Management Plan vs. Project Documents

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Questions and Answers Time


1. Inputs included in Integrating Change Control are of the following
EXCEPT:
a. Work performance information
b. Deliverables
c. Project management information system
d. Project management plan
2. The Project management plan is used toa. Define how the project is executed, monitored and
controlled, and closed
b. Provide a variable measurement progress
c. Develop corrective actions
d. Improve project manager's general management skills
3. The project performance measurement baselinea. Is used for management control
b. Changes frequently
c. Documents relevant standards
d. Generally can be changed by the project team

4. Which process is included in Project Integration Management


a. Develop project charter
b. Scope definition
c. Scope verification
d. Procurement plan

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5. The project management plan should include all the following


EXCEPT:
a. Risk register
b. Milestone list
c. Cost baseline
d. Organizational process assets
6. Effective project integration usually requires an emphasis on:
a. A personal careers of the team members
b. Timely updates to the project plan
c. Effective communications at key interface points
d. Internal control
7. The need for ____ is one of the major driving forces for
communication in a project
a. Optimization
b. Integrity
c. Integration
d. Differentiation
8. Senior management's role on project is BEST described as:
a) Helping to plan tasks
b) Helping to prevent unnecessary changes to project objectives
c) Identifying unnecessary project constraints
d) Helping to put the project plan together

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9. All of the following are part of a effective integrated change control


system EXCEPT:
a. Control procedures
b. Standards for reports
c. Meetings
d. Lessons learned
10.

A work authorization system can be used to:


a. Control who does each task
b. Control what is done, at the right time and in proper
sequence
c. Control when each task is done
d. Control who does each task and when it is done

11.

Approved corrective action is an input to:


a. Scope change
b. Project plan execution
c. Integrated change control
d. Project plan development

12.
All technical work is completed on the project. Which of the
following remains to be done?
a. Scope verification
b. Risk response plan
c. Staffing management plan
d. Lessons learned

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13.
You established a change control board that is responsible
for approving, differing, or rejecting proposed changes to your
avionics project. When you set up a board, you established
specific procedures to govern its operation. The procedures
require all approved changes to be reflected in the:
a. Performance measurement baseline
b. Change management plan
c. Quality assurance plan
d. Project management plan

14.
Progressive elaboration is a characteristic of projects that
integrate the concepts of temporary and unique. In project plan
development progressive elaboration also is important in terms of :
a. Assumptions
b. Constraints
c. Project management information system
d. Organization process assets.

15.
Which of the following BEST describes a project
management plan?
a. A printout from project management software
b. A Gantt chart
c. Cost baseline, quality baseline, resource calendar, and
milestone list
d. Expert judgment

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Project Scope Management

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Project Scope Management


Project Scope Management Knowledge Area Has Six Process
1. Plan Scope Management (Planning PG)
2. Collect Requirements (Planning PG)
3. Define Scope (Planning PG)
4. Create WBS (Planning PG)
5. Validate Scope ( Monitoring and Cont. PG)
6. Control Scope ( Monitoring and Cont. PG)

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Lets See the First PROCESS Plan Scope


Management

Inputs Plan Scope Management Seventh


Process
Project Management Plan
Project Charter
EEF
Organizational Process Assets

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Tools & Techniques- Scope Management Plan


Expert Judgment
Expert judgment refers to input received from knowledgeable and
experienced parties. Expertise may be provided by any group or
person with specialized education, knowledge, skill, experience, or
training in developing scope management plans.
Meetings
Project teams may attend project meetings to develop the scope
management plan. Attendees at these meetings may include the
project manager, the project sponsor, selected project team
members, selected stakeholders, anyone with responsibility for
any of the scope management processes, and others as needed

Output Scope Management Plan


Scope Management Plan
The scope management plan is a component of the project or
program management plan that describes how the scope will be
defined, developed, monitored, controlled, and verified
Requirements Management Plan
The requirements management plan is a component of the project
management plan that describes how requirements will be
analyzed, documented, and managed. How the requirements
activities will be planned, tracked, prioritized and reported

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Lets See the Eighth PROCESS COLLECT


Requirements

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Inputs Collect Requirements Eighth Process


Project Management Plan
Project Charter
EEF
Organizational Process Assets

Tools & Techniques- Collect Requirements


Interviews
An interview is a formal or informal approach to elicit information from
stakeholders by talking to them directly. It is typically performed by
asking prepared and spontaneous questions and recording the
responses
Focus groups
Focus groups bring together prequalified stakeholders and subject
matter experts to learn about their expectations and attitudes about a
proposed product, service, or result. A trained moderator guides the
group through an interactive discussion, designed to be more
conversational than a one-on-one interview.
Facilitated Workshops
Facilitated workshops are focused sessions that bring key stakeholders
together to define product requirements. Workshops are considered a
primary technique for quickly defining cross-functional requirements and
reconciling stakeholder differences. Example QFD

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Tools & Techniques- Collect Requirements


Group Creativity TechniquesGroup activities can be organized to identify project and product
requirements, below are some of them
Brainstorming. A technique used to generate and collect multiple ideas
related to project and product requirements. Although brainstorming by
itself does not include voting or prioritization, it is often used with other
group creativity techniques that do.

Nominal group technique. A technique that enhances


brainstorming with a voting process used to rank the most useful
ideas for further brainstorming or for prioritization.

Idea/mind mapping. A technique in which ideas created through


individual brainstorming sessions are consolidated into a single
map to reflect commonality and differences in understanding, and
generate new ideas.
Affinity diagram. A technique that allows large numbers of ideas to
be classified into groups for review and analysis.
Multicriteria decision analysis. A technique that utilizes a decision
matrix to provide a systematic analytical approach for establishing
criteria, such as risk levels, uncertainty, and valuation, to evaluate
and rank many ideas.

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Tools & Techniques- Collect Requirements


Group Decision-Making Techniques
A group decision-making technique is an assessment process having
multiple alternatives with an expected outcome in the form of future
actions, below is some of them
Unanimity. A decision that is reached whereby everyone agrees on a
single course of action. One way to reach unanimity is the Delphi
technique, in which a selected group of experts answers questionnaires
and provides feedback regarding the responses from each round of
requirements gathering. The responses are only available to the
facilitator to maintain anonymity.
Majority. A decision that is reached with support obtained from
more than 50 % of the members of the group. Having a group size
with an uneven number of participants can ensure that a decision
will be reached, rather than resulting in a tie.

Plurality. A decision that is reached whereby the largest block in a


group decides, even if a majority is not achieved. This method is
generally used when the number of options nominated is more
than two.

Dictatorship. In this method, one individual makes the decision for


the group.

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Tools & Techniques- Collect Requirements


Questionnaires And Surveys
Questionnaires and surveys are written sets of questions designed to
quickly accumulate information from a large number of respondents.
Used for Geographically dispersed audience with a quick TAT
Observations
This technique provides a direct way of viewing individuals in their
environment and how they perform their jobs or tasks and carry out
processes. It is particularly helpful for detailed processes when the
people that use the product have difficulty or are reluctant to articulate
their requirements
Prototypes
Prototyping is a method of obtaining early feedback on requirements by
providing a working model of the expected product before actually
building it
Benchmarking
Comparing actual or planned practices, such as processes and
operations, to those of comparable organizations to identify best
practices

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Output Collect Requirements


Requirements Documentation
Requirements documentation describes how individual requirements
meet the business need for the project They Include
Business Requirements
Stakeholder Requirements
Solution Requirements
Project Requirements
Dependencies And Constraints
Requirements Traceability Matrix
The requirements traceability matrix is a grid that links product
requirements from their origin to the deliverables that satisfy them.
Tracing requirements helps us in identifying
Business Needs
Project Objectives
Project Scope/Deliverables
Product Design
Product Development

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Requirement Traceability Matrix

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Lets See the Ninth PROCESS DEFINE


SCOPE

Inputs Define ScopeNinth Process


Scope Management Plan
Project Charter
Requirements Documentation
The requirements traceability matrix is a grid that links product
requirements from their origin to the deliverables that satisfy them
Organizational Process Assets

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Tools & Techniques- Define Scope


Expert Judgment
Product Analysis
For projects that have a product as a deliverable, as opposed to a
service or result, product analysis can be an effective tool. Product
analysis includes techniques such as product breakdown, systems
analysis, requirements analysis, systems engineering, value
engineering, and value analysis
Alternatives Generation
Alternatives generation is a technique used to develop as many
potential options as possible in order to identify different
approaches to execute and perform the work of the project, this
includes Brainstorming, Lateral Thinking .etc.
Facilitated Workshops
The participation of key players with a variety of expectations
and/or fields of expertise in these intensive working sessions helps
to reach a cross-functional and common understanding of the
project objectives and its limits

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Output Define Scope


Project Scope Statement
The project scope statement is the description of the project
scope, major deliverables, assumptions, and constraints. It also
includes
Product Scope Description
Acceptance Criteria
Deliverable
Project Exclusions
Constraints
Assumptions
Project Documents Updates
Project documents that may be updated include:
Stakeholder register,
Requirements documentation,
Requirements traceability matrix.

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Lets See the Tenth PROCESS Create WBS

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Inputs Create WBSTenth Process


Scope Management Plan
The scope management plan specifies how to create the WBS from the
detailed project scope statement and how the WBS will be maintained
and approved.
Project Scope Statement
The project scope statement describes the work that will be performed
and the work that is excluded. It also lists and describes the specific
internal or external restrictions or limitations that may affect the
execution of the project.
Requirements Documentation
Detailed requirements documentation is essential for understanding
what needs to be produced as the result of the project and what needs
to be done to deliver the project and its final products.
EEF
Organizational Process Assets

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Tools & Techniques- Create WBS


Decomposition
Decomposition is a technique used for dividing and subdividing the
project scope and project deliverables into smaller, more
manageable parts. The work package is the work defined at the
lowest level of the WBS for which cost and duration can be
estimated and managed.
Expert Judgment
Expert judgment and expertise is applied to technical details of the
projects scope and used to reconcile differences in opinion on
how to best break down the overall scope of the project

Output Create WBS


Scope Baseline
The scope baseline is the approved version of a scope
statement, work breakdown structure (WBS), and its associated
WBS dictionary, that can be changed only through formal
change control rocedures and is used as a basis for
comparison. WBS dictionary includes
Code of account identifier
Description of work,
Assumptions and constraints
Responsible organization,
Schedule milestones
Resources required
Cost estimates,
Quality requirements

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Acceptance criteria
Technical references,
Agreement information
Project Document Updates

Lets See the Eleventh PROCESS Validate


Scope

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Inputs Validate ScopeEleventh Process


Project Management Plan
Requirements Documentation
Requirements Traceability Matrix
Verified Deliverables
Work Performance Data

Tools & Techniques- Validate Scope


Inspection
Inspection includes activities such as measuring, examining, and
validating to determine whether work and deliverables meet
requirements and product acceptance criteria. Inspections are
sometimes called reviews, product reviews, audits, and
walkthroughs
Group Decision Making Techniques

Output Validate Scope


Accepted Deliverables
Change Requests
Work Performance Information
Project Document Updates

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Lets See the Twelfth PROCESS Control


Scope

Inputs Control Scope


Project Management Plan
Requirements Documentation
Requirements Traceability Matrix
Work Performance Data
OPA

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Tools & Techniques- Control Scope


Variance Analysis
Variance analysis is a technique for determining the cause and
degree of difference between the baseline and actual
performance. Project performance measurements are used to
assess the magnitude of variation from the original scope baseline

Output Control Scope


Change Requests
Work Performance Information
Project Document Updates
Scope Baseline Updates
Other Baseline Updates.
OPA Updates

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Decomposition
Decomposition s a technique used for dividing and subdividing the
project scope and project deliverables into smaller, more manageable
parts. The work package is the work defined at the lowest level of the
WBS for which cost and duration can be estimated and managed.
Identifying and analyzing the deliverables and related work;
Structuring and organizing the WBS;
Decomposing the upper WBS levels into lower-level detailed
components;
Developing and assigning identification codes to the WBS
components; and
Verifying that the degree of decomposition of the
deliverables is appropriate.

Project Scope Management


Project Scope Management
o Processes Required To Ensure That The Project Includes
All, And Only, Work Required
o Defining What Is/Is Not Included In The Project
o Project Scope Work That Must Be Done Measured
Against Project Plan
o Product Scope Features And Functions Included In The
Product Or Service Measured Against Requirements

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1. Identify which is not true about Decomposition?


A. It is used to create a WBS
B. It divides major deliverables into smaller components
C. It is used for identifying and analysing the deliverables and
related work
D. It is one of the tools and techniques of Define Scope process

2. You are the project manager for your organization. You need to
ensure the customer formally accepts the deliverables of each
project phase. This process is known as __________________?
A. Earned Value Management
B. Scope Verification
C. Quality Control
D. Quality Assurance

3. Your customer signed-off on the requirements definition document


and scope statement of your video game project last month. Today
she requested a project scope change. She would like to make it
an interactive game that can be played on a television and on a
computer. This represents a scope change that, at a minimum
A. Modifies the project's agreed-upon scope as defined by the
WBS
B. Results in a change to all project baseline
C. Requires adjustments to cost, time, quality, and other
objectives
D. Results in a lesson learned

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4. You have been informed by your senior manager that your project
will not continue any further and needs to be closed in the next 15
days. You should?
A. Remove non-critical tasks to reduce decrease costs
B. Stop work and release all resources
C. Validate the completed scope and start project closure
activities
D. Decrease team-size to bare minimum and improve the
operating margin
5. During a project team meeting, a team member suggests an
enhancement to the scope that is beyond the scope of the project
charter. The project manager points out that the team needs to
concentrate on completing all the work and only the work
required. This is an example of
A. Change management process
B. Scope management
C. Bad project management
D. Scope decomposition
6. You just completed the project status report and find that project
is not doing well. You along with your senior team members
analyzed the situation and found one of the causes of these is
too many changes. Which of the following should be first in your
action plan to address the problem and to regain control over
project?
A. Immediately put a change control system in place
B. Review the project scope with your key stakeholders and rebaseline the scope if needed
C. Plan for some overtime work
D. Plan for proper closure

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7. You are executing a project for an insurance company where the


requirements are not very clear. You decide to use the iterative
method of development. The first deliverable is ready and you
have scheduled a client review of the deliverable. Which of the
following activities are you involved in?
A. Quality control
B. Scope change control
C. Scope verification
D. Scope definition
8. You are the project manager for a technical project. The projects
product is the complete installation of Windows Vista on 2000
workstations. You have, in your project cost and time estimates,
told the customer that the estimates provided will be accurate if
the workstations meet the hardware requirements of the new
operating system. This is an example of which of the following?
A. Risk
B. Assumption
C. Constraint
D. Order of magnitude

9. You are the project manager for the STG Project. This project
must be completed within ten months. This is an example of
which of the following?
A. Schedule
B. Assumption
C. Constraint
D. Planning process

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10. You are the project manager for an auto manufacturer. Your
project concerns the development of lighter, stronger material for
racing cars. As the project moves towards completion, different
material composition is considered for the deliverable. This is an
example of which of the following?
A. Program management
B. Alternative identification
C. Quality assurance
D. Regulatory guidelines

11.
Which of the following statement is not true about Collect
Requirements process
A. Collect requirement is the process of defining stakeholders
needs to meet the project objectives
B. One of the important inputs of Collect Requirements process
is WBS
C. Requirement Traceability Matrix helps to track the project
requirements
D. Many organizations categorize requirements into project
requirements and product requirements

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Project Time Management

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Project Time Management


Project Time Management has Seven Processes
1. Plan Schedule Management ( Planning PG)
2. Define Activities ( Planning PG)
3. Sequence Activities ( Planning PG)
4. Estimate Activity Resources ( Planning PG)
5. Estimate Activity Durations ( Planning PG)
6. Develop Schedule ( Planning PG)
7. Control Schedule (Monitoring And Control)

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Lets See the First PROCESS Plan Schedule


Management
-Thirteenth Overall

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Inputs Schedule ManagementThirteenth


Process
Project Management Plan
The project management plan contains information used to
develop the schedule management plan which includes Scope
Baseline and Information like cost, risks etc.
Project Charter
The project charter defines the summary milestone schedule and
project approval requirements that will influence the management
of the project schedule.
Enterprise Environmental Factors
OPA

Tools & Techniques- Schedule Management


Plan
Expert Judgment
The project management plan contains information used to
develop the schedule management plan which includes Scope
Baseline and Information like cost, risks etc.
Analytical Techniques
The Plan Schedule Management process may involve choosing
strategic options to estimate and schedule the project such as:
scheduling methodology, scheduling tools and techniques,
estimating approaches, formats, and project management
software.
Meetings
Project teams may hold planning meetings to develop the
schedule key stakeholders like the project sponsor, selected
project team members, selected stakeholders.

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Output Plan Schedule Management


Output of this Process is Schedule Management Plan
A Schedule Management Plan Includes
Project schedule model development
Level of accuracy
Units of measure
Organizational procedures links
Control thresholds

Lets See the Second PROCESS Define


Activities

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Inputs Define ActivitiesFourteenth Process


Schedule Management Plan
A key input from the schedule management plan is the prescribed
level of detail necessary to manage the work.
Scope Baseline
The project WBS, deliverables, constraints, and assumptions
documented in the scope baseline are considered explicitly while
defining activities.
Enterprise Environmental Factors
OPA

Tools & Techniques- Define Activities


Decomposition
Decomposition is a technique used for dividing and subdividing the
project scope and project deliverables into smaller, more
manageable parts
Rolling wave Planning
Rolling wave planning is an iterative planning technique in which
the work to be accomplished in the near term is planned in detail,
while the work in the future is planned at a higher level. It is a form
of progressive elaboration
Expert Judgment
Project team members or other experts, who are experienced and
skilled in developing detailed project scope statements, the WBS,
and project schedules, can provide expertise in defining activities

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Output Define Activities


Activity List
The activity list is a comprehensive list that includes all schedule
activities required on the project. The activity list also includes the
activity identifier and a scope of work description for each activity
Activity Attributes
Activity attributes extend the description of the activity by
identifying the multiple components associated with each activity
Milestone List
A milestone is a significant point or event in a project

Lets See The Third PROCESS Sequence


Activities-Overall fifteenth Process

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Inputs Sequence ActivitiesFifteenth Process


Schedule Management Plan
The schedule management plan identifies the scheduling method
and tool to be used for the project, which will guide how the
activities may be sequenced.
Activity List
The activity list contains all schedule activities required on the
project, which are to be sequenced
Activity Attributes
Activity attributes may describe a necessary sequence of events or
defined predecessor or successor relationships.
Milestone List
The milestone list may have scheduled dates for specific
milestones, which may influence the way activities are sequenced
EEF
OPA

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Tools & Techniques- Sequence Activities


Precedence Diagramming Method (PDM)
Details on Next Slide
Dependency Determination
Dependencies may be characterized by the following attributes:
mandatory or discretionary, internal or external
Mandatory dependencies - Example: On a construction project,
where it is impossible to erect the superstructure until after the
foundation has been built. This is also called hard logic
Discretionary dependencies We have liberty to use the
methodology we want to execute and schedule the work. This is
also called soft logic
External dependencies These dependencies are usually outside
the project teams control. For example, the testing activity in a
software project may be dependent on the delivery of hardware
from an external source
Internal Dependencies: Internal dependencies involve a
precedence relationship between project activities and are
generally inside the project teams control. For example, if the
team cannot test a machine until they assemble it, this is an
internal mandatory dependency Leads and Lags

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Precedence Diagramming Method


The precedence diagramming method (PDM) is a technique used for
constructing a schedule model in which activities are represented by
nodes and are graphically linked by one or more logical relationships to
show the sequence in which the activities are to be performed PDM
includes four types of dependencies or logical relationships Finish-tostart (FS). A logical relationship in which a successor activity cannot
start until a predecessor activity has finished. Example: The awards
ceremony (successor) cannot start until the race (predecessor) has
finished.
Finish-to-finish (FF). A logical relationship in which a successor activity
cannot finish until a predecessor activity has finished. Example: Writing
a document (predecessor) is required to finish before editing the
document (successor) can finish.
Start-to-start (SS). A logical relationship in which a successor
activity cannot start until a predecessor activity has started.
Example: Level concrete (successor) cannot begin until pour
foundation (predecessor) begins.
Start-to-finish (SF). A logical relationship in which a successor
activity cannot finish until a predecessor activity has started.
Example: The first security guard shift (successor) cannot finish
until the second security guard shift (predecessor) starts.

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Output Sequence Activities


Project Schedule Network Diagram
Project Document Updates

A project schedule network diagram is a graphical representation of the


logical relationships, also referred to as dependencies, among the
project schedule activities Project documents that may be updated
include, : Activity lists, Activity attributes, Milestone list, Risk
register

Lets See the Fourth PROCESS Estimate


Activities Resources

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Inputs Estimate Activities Resources


Sixteenth Process
Schedule Management Plan The schedule management plan
identifies the level of accuracy and the units of measure for the
resources to be estimated.
Activity List The activity list identifies the activities which will need
resources
The activity attributes provide the primary data input for use in estimating
those resources required for each activity in the activity list
Resource Calendar A resource calendar is a calendar that identifies
the working days and shifts on which each specific resource is
available
Activity Cost Estimates
EEF
OPA

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Tools & Techniques- Estimate Activities


Resources
Alternatives Analysis many schedule activities have alternative
methods of accomplishment. They include using various levels of
resource capability or skills, different size or type of machines,
different tools (hand versus automated), and make rent-or-buy
decisions regarding the resource

Published Estimate Data Several organizations routinely publish


updated production rates and unit costs of resources for an extensive
array of labor trades, material, and equipment for different countries
and geographical locations within countries.

Tools & Techniques- Estimate Activities


Resources
Bottom up Estimating
Bottom-up estimating is a method of estimating project duration or cost by
aggregating the estimates of the lower-level components of the WBS.
Project Management Software
Project management software, such as a scheduling software tool, has the
capability to help plan, organize, and manage resource pools and develop
resource estimates.

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Output Estimate Activities Resources


Activity Resource Requirements
Resource Breakdown Structure
Project Document Updates
Activity resource requirements identify the types and quantities of
resources required for each activity in a work package. These
requirements then can be aggregated to determine the estimated
resources for each work package and each work period. The resource
breakdown structure is a hierarchical representation of resources by
category and type. Examples of resource categories include labor,
material, equipment, and supplies.
Project documents that may be updated include,
Activity list,
Activity attributes,
Resource calendars.

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Lets See the Fifth PROCESS Estimate


Activities Duration

Inputs Estimate Activity Durations


Seventeenth Process
Schedule Management Plan
Activity List
Activity Attributes
Activity Resource Requirements
Resource Calendar

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Inputs Estimate Activity Durations


Seventeenth Process
Project Scope Statement
Risk Register
RBS
EEF
OPA

Tools & Techniques- Estimate Activity


Durations
Expert Judgment
Analogous Estimating
Analogous estimating is a technique for estimating the duration or
cost of an activity or a project using historical data from a similar
activity or project
Parametric Estimating
Parametric estimating is an estimating technique in which an
algorithm is used to calculate cost or duration based on historical
data and project parameters
Three Point Estimating
o The accuracy of single-point activity cost estimates may be
improved by considering estimation uncertainty and risk and
using three estimates to define an approximate range for an
activitys cost:
o Most likely (cM)
o Optimistic (cO)

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o Pessimistic (cP)
o Triangular Distribution. tE = (tO + tM + tP) / 3 And Beta
Distribution (from the traditional PERT technique). tE = (tO +
4tM + tP) / 6
Group Discussion Making Technique
Reserve Analysis

Output Estimate Activity Durations


Activity Duration Estimates
o Activity duration estimates are quantitative assessments of the
likely number of time periods that are required to complete an
activity. Activity duration estimates may include some indication
of the range of possible results.
o For example: 2 weeks 2 days, which indicates that the
activity will take at least eight days and not more than twelve
(assuming a five-day workweek); and
o 15 % probability of exceeding three weeks, which indicates a
high probability85 %that the activity will take three weeks
or less.
Project Document Updates
o Project documents that may be updated include,:
o Activity attributes;
o Assumptions made in developing the activity duration estimate,
such as skill levels and availability, as well as a basis of
estimates for durations

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Lets See the Sixth PROCESS Develop


Schedule

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Inputs Develop ScheduleEighteenth Process


The Scheduling Methods and plan
Schedule Management Plan- List of all the activities
Activity List- Details of nature of work.
Activity Attributes- The availability of the resources
Resource Calendar Project Network Diagram
Resource Requirements
Activity Duration Estimates
Project Scope Statement
Risk Register
Project Staff Assignments RBS
EEF
OPA

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Tools & Techniques- Develop Schedule


Schedule Network Analysis-In Detain on Next Slides
Critical Path Method-In Detail on next slides
Critical Chain Method-In detail on next Slides
Resource optimization Techniques-In detail on next slides
Modeling Techniques- In Detail on next Slides
Leads And Lags- In detail on next slides
Schedule Compression-In detail on next slides
Scheduling Tool

Tools & Techniques- Develop Schedule


Schedule Network Analysis- Schedule network analysis is a
technique that generates the project schedule model. It employs
various analytical techniques, such as critical path method, critical
chain method, what-if analysis, and resource optimization techniques
to calculate the early and late start and finish dates for the
uncompleted portions of project activities.

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Tools & Techniques- Develop Schedule


Critical Path Method The critical path method, which is a method used to estimate the
minimum project duration and determine the amount of scheduling
flexibility on the logical network paths within the schedule mode. A
CPM critical path is normally characterized by zero total float on the
critical path, Any activity on the critical path is called a critical path
activity

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Tools & Techniques- Develop Schedule


Critical Chain Method The critical chain method (CCM) is a schedule method that allows
the project team to place buffers on any project schedule path to
account for limited resources and project uncertainties. The critical
chain method adds duration buffers that are non-work schedule
activities to manage uncertainty

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Tools & Techniques- Develop Schedule


Resource Optimization Techniques Resource leveling a technique in which start and finish dates are
adjusted based on resource constraints with the goal of balancing
demand for resources with the available supply. Resource leveling
can be used when shared or critically required resources are only
available at certain times, or in limited quantities, or over-allocated,
such as when a resource has been assigned to two or more activities
during the same time period
Resource smoothing a technique that adjusts the activities of a
schedule model such that the requirements for resources on the
project do not exceed certain predefined resource limits. In resource
smoothing, as opposed to resource leveling, the projects critical path
is not changed and the completion date may not be delayed

Tools & Techniques- Develop Schedule


Modeling Techniques What if Analysis What-if scenario analysis is the process of
evaluating scenarios in order to predict their effect, positively or
negatively, on project objectives? This is an analysis of the question,
What if the situation represented by scenario Happens?
Simulation involves calculating multiple project durations with
different sets of activity assumptions, usually using probability
distributions constructed from the three-point estimates to account
for uncertainty. The most common simulation technique is Monte
Carlo analysis in which a distribution of possible activity durations is
defined for each activity and used to calculate a distribution of
possible outcomes for the total project.

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Tools & Techniques- Develop Schedule


Schedule Compression Techniques Crashing A technique used to shorten the schedule duration for the
least incremental cost by adding resources. Examples of crashing
include approving overtime, bringing in additional resources, or
paying to expedite delivery to activities on the critical path
Fast-tracking a schedule compression technique in which activities or
phases normally done in sequence are performed in parallel for at
least a portion of their duration. An example is constructing the
foundation for a building before completing all of the architectural
drawings

Output Develop Schedule


Schedule Baseline
Project Schedule
Schedule Data
Project Calendar
Project Management Plan Updates
Project Documents Updates
Project Document Updates

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Lets See the Seventh PROCESS Control


Schedule

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Inputs Control ScheduleNineteenth Process


Project Management Plan
Project Schedule
Work Performance Data
Project Calendar
OPA

Tools & Techniques- Control Schedule


Performance Reviews
Trend Analysis- Examines project performance over time to
determine whether performance is improving or deteriorating
Earned Value Management-Schedule performance measurements
such as schedule variance (SV) and schedule performance index
(SPI), are used to assess the magnitude of variation to the original
schedule baseline
Project Management Software-Project management software for
scheduling provides the ability to track planned dates versus actual
dates, to report variances to and progress made against the
schedule baseline, and to forecast the effects of changes to the
project schedule model.

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Tools & Techniques- Control Schedule


Resource optimization Techniques- Resource Leveling and
Resource Smoothing
Modeling Techniques-What -if Scenario, Simulation (Monte Carlo
Analysis)
Leads And Lags-Leads And Lags Analysis
Schedule Compression-Crashing And Fast Tracking
Scheduling Tool-Automated scheduling tools contain the schedule
model and expedite the scheduling process by generating start and
finish dates based on the inputs of activities, network diagrams,
resources and activity durations using schedule network analysis

Output Control Schedule


Work Performance Information-The calculated SV and SPI time
performance indicators for WBS components, in particular the work
packages and control accounts, are documented and communicated
to stakeholders.
Schedule Forecasts Change Requests-Schedule variance analysis, along with review of
progress reports, results of performance measures, and
modifications to the project scope or project schedule may result in
change requests to the schedule baseline
Project Management Plan Updates
Project Documents Updates
OPA Updates

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Project Time Management


Project Time Management
Processes Required To Ensure Timely Completion Of The Project
No Consensus Concerning Differences Between Activities And
Tasks
Activities Seen As Composed Of Tasks Most Common Usage
Other Disciplines Have Tasks Composed Of Activities

Project Time Management


Activity Sequencing Inputs:
o Activity List
Product Description Product Characteristics Often Affect Activity
Sequencing
Mandatory Sequencing Physical Limitations, Hard Logic,
Prototypes Needed; Inherent In Nature Of Work Being Done
Discretionary Dependencies Defined By Project Management
Team; Best Practices Or Unusual Aspects Of Project Soft
Logic, Preferred Logic, Preferential Logic
External Dependencies Relationship between Project Activities
and Non-project Activities (Company Policies, Procurement, Etc.)
o Constraints
o Assumptions

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Project Time Management


Network Diagrams
o Shows How The Project Tasks Will Flow From Beginning To End
o Proves How Long The Project Will Take To Complete
o Takes Project Tasks From Low Levels Of WBS And Placing Them
Into Their Order Of Completion (Beginning To End)

Project Time Management


Activity Sequencing Tools & Techniques (Continued)
Arrow Diagramming Method (ADM) Uses Arrows To Represent
Activities And Connecting At Nodes To Illustrate Dependencies
o Also Called Activity On Arrow (AOA)
o Only Uses Finish To Start Dependencies
o PERT And CPM Only Can Be Drawn Using AOA

Project Time Management


Activity Sequencing Tools & Techniques (Continued)
Conditional Diagramming Methods
o GERT (Graphical Evaluation And Review Technique)
o System Dynamic Models
o Allow For Non-sequential Activities (Loops) Or Conditional
Branches Not Provided By PDM Or ADM Methods

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Project Time Management


Activity Sequencing Tools & Techniques (Continued)
Network Templates Standardized Networks Can Be Used.
Composed Of Subnets, Or Fragnets
o Subnets Are Several Nearly Identical Portions Of A Network
(Floors On A Building, Clinical Trials, Program Modules)
o Useful For Several Identical Processes (Clinical Trials,
Programming Modules).

Project Time Management


Activity Sequencing Outputs:
Project Network Diagram Schematic Display of Project Activities
and Relationships (Dependencies). Should Be Accompanied By A
Summary Narrative That Describes The Diagram Approach
Activity List Updates

Project Time Management


Schedule Development Inputs (Continued):
Constraints
o Imposed Dates May Be Required
o Key Events Or Milestones Are Initially Requested And Become
Expected During Project
Assumptions
Lead And Lag Time Dependencies May Specify Time In Order To
Satisfy Relationship (Example 2 Weeks To Receive Order)

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Project Time Management


Schedule Development Tools & Techniques
Monte Carlo Analysis
o Uses A Computer With PERT Values And Network Diagram
o Tells
o Probability Of Completing A Project On Any Specific Day
o Probability Of Completing A Project For Any Specific Amount Of
Cost
o Probability Of Any Task Actually Being On The Critical Path
o Overall Project Risk
o Suggests That Monte Carlo Simulation Will Create A Project
Duration That Is Closer To Reality Than CPM Or PERT
o

Project Time Management


Schedule Development Tools & Techniques (Continued)
Duration Compression Look To Shorten Project Schedule
Without Affecting Scope
Crashing Cost And Schedule Trade-offs To Determine Greatest
Amount Of Compression For Least Incremental Cost Often Results
In Higher Costs
Fast Tracking Performing Activities In Parallel That Normally
Would Be Sequenced Often Results In Re-work And Usually
Increases Risk
Simulation

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Project Time Management


Schedule Development Tools & Techniques (Continued)
Resource Leveling Heuristics Leveling Resources That Apply To
Critical Path Activities A.K.A. Resource Constrained Scheduling
When Limitation On Quantity Of Available Resources; Sometimes
Called Resource Based Method Often Increases Project
Duration
Project Management Software

Project Teams Role in Schedule Development


Project Mangers Role
o Provide The Team With The Necessary Information To Properly
Estimate The Task
o Complete A Sanity Check Of The Estimate
o Formulate A Reserve
Project Team Should Be Involved; Determine Task Estimates
o Historical Records
o Guesses
o Actual Costs
o Benchmarks
o CPM And PERT

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Project Time Management


Schedule Control Tools & Techniques
Schedule Change Control System Defines Procedures For
Schedule Changes, Paperwork, Approval, Tracking Systems
Performance Measurement Assess Magnitude Of Variations To
Baseline; Determine If Corrective Action Is Needed
o Additional Planning
o Project Management Software

Project Time Management


Key Knowledge Points Not In PMBOK
o Need To Know Manual Calculations Of Network Diagrams
o Created After Project Charter And WBS (Task Estimates And
Dependencies Are Determined)
Mandatory Dependencies (Hard Logic) Inherent In Nature Of
Work
Discretionary Dependencies (Soft Logic) Based On Experience,
Desire Or Results
External Dependencies Based On Needs And Desires Of
Organizations Outside The Project

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Network Diagrams-Quick look


Methods To Draw Network Diagrams
o Activity On Node (AON) Or Precedence Diagramming Method
(PDM)
o Boxes Represent Tasks
o Arrows Show Task Dependencies
o 4 Types Of Task Relationships
o Finish To Start (Task Must Finish Before Next Can Start)
o Finish To Finish (Task Must Finish Before Next Can Finish)
o Start To Start (Task Must Start Before Next Can Start)
o Start To Finish (Task Must Start Before The Next Can Finish)
o No Dummy Tasks Used

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Critical Path Method- Problems

Find the Critical Path, Float on Activity B?

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Critical Path Method

Find the Critical Path, Float on Activity5?

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Critical Path Method

Find the Critical Path, Float on Activity3?

Project Time Management


Methods To Draw Network Diagrams
Activity On Arrow (AOA Or Arrow Diagramming Method (ADM)
Continued:
PERT (Program Evaluation And Review Technique)
o 3 Time Estimates Per Activity: Optimistic (O), Most Likely (M),
Pessimistic (P)
o Emphasizes Meeting Schedule, Flexibility With Cost
o Can Have Dummy Tasks

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Project Time Management


Monte Carlo Simulation:
o Uses A Computer With PERT Values (P, M, O) And A Network
Diagram But Does Not Use The PERT Formula
o Indicates
o Probability Of Completing Project On A Specific Day
o Probability Of Completing Project For Any Specific Amount Of
Cost
o Probability Of Any Task Actually Being On Critical Path
o Overall Project Risk

Project Time Management


Estimating Techniques In General:
o Should Be Performed By Entire Project Team
o Project Manager Needs To Provide Information To Allow Team To
Create Estimates; Sanity Check; Formulate Reserve
o Estimates Are:
o Guesses, Historical Records, Actual Costs, Benchmarks, CPM,
PERT
o Critical Paths Determines The Earliest Completion Date And
Identifies Tasks That Need Monitoring
o Can Be Obtained By CPM, PERT And Monte Carlo Estimating
Techniques

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Project Time Management


Key Definitions:
Slack (Float): The Amount Of Time A Task Can Be Delayed Without
Delaying The Entire Project. Tasks On Critical Path Have No Slack.
o Slack Is Calculated By The Difference Between Early Start And
Late Start Of A Task
o Free Slack (Float): The Amount Of Time A Task Can Be Delayed
Without Delaying The Early Start Date Of Its Successor
o Total Slack (Float): The Amount Of Time A Task Can Be Delayed
Without Delaying The Project Completion Date
Lag: Inserted Waiting Time Between Tasks

Project Time Management


General Comments:
o To Shorten Project Schedule Examine The Critical Path
Crashing Add More Resources To The Critical Path Tasks
o Usually Results In Increased Cost
Fast Tracking Performing Tasks In Parallel
o Can Result In Re-work And Increased Risk
o Best To Select Method That Has Least Impact On The Project (Is
The Importance On Cost, Risk Or Schedule?)

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Project Time Management


General Comments:
o Bar (Gantt) Charts
o Weak Planning Tool, Effective Progress And Reporting Tool
o Does Not Show Interdependencies Of Tasks
o Does Not Help Organize The Project More Effectively
Network Diagrams (PERT, CPM, PDM)
o Shows Task Interdependencies
o Aids In Effectively Planning And Organizing Work
o Provides A Basis For Project Control
Milestone Charts
o Only Shows Major Events
o Good For Reporting To Management And Customer
Flow Charts
o Depicts Workflow And Not Commonly Used For Project
Management

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1. You have defined the activities and the next step is to sequence
them. Identify which is NOT a part of Sequence Activities process?
a) Identify total float available
b) Schedule the activities
c) Create the necessary Lag or Lead
d) Set the proper precedence

2. A project Manager has scheduled tasks in such a way that Coding


activity can start when Low Level Design is 20% remaining. This
means Project manager is creating a __________
a) Lead
b) Lag
c) Backward Pass
d) None of the above

3. Which of the following statements is not true about critical path:


a) Critical path changes during project execution
b) Multiple critical paths are not possible in any network diagram
c) All tasks on critical path will have zero slack
d) Critical path is the longest duration path in the network

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4. For your project you have committed that deliveries will be made by
Nov 30th. However, the Network department has just informed you
that computer procurement for your project has been delayed and
they do not have any stand-by computers as a back-up. However,
they want to know the maximum delay that is acceptable. You have
to recalculate your time lines and inform them, without having an
impact on the Finish date that you have committed to the Customer.
Which of the following would you use to respond to your network
team?
a) Backward Pass
b) Critical Path
c) Forward Pass
d) Slack

5. Where is a project manager most likely to experience a subnet?


a) WBS
b) Kill points
c) GERT charts
d) A network templates

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6. You are the project manager for the SAP-R3 implementation


Project. Should this project run over schedule, it will cost your
organization $15,000 per day in lost sales. With four months to
completion, you realize the project is running late. You decide, with
managements approval, to add more project team members to the
plan to complete the work on time. This is an example of which of the
following?
a) Crashing
b) Fast Tracking
c) Expert judgment
d) Cost benefit analysis

7. Which of the following statement is true about PDM (Precedence


Diagramming Method)?
a) PDM places activities on arrows
b) PDM is also known as AOA (Activities on Arrow)
c) PDM places activities on nodes
d) PDM supports only FS (Finish-to-Start) relationship

8. Which of the following is not an output of Define activities process?


a) Milestone list
b) Activity List
c) Activity attributes
d) Project network diagram

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9. Which type of sequencing relationship Precedence Diagramming


Method supports?
a) Finish-to-Start (FS)
b) Start-to-Start (SS)
c) Start-to-Finish (SF)
d) All of the above

10.
You are working on a drug discovery project. In the final stage,
the drug would need FDA approval before your start manufacturing
the drug to be consumed by human. Which type of dependency is
it?
a) Discretionary dependencies
b) Legal compliances
c) Mandatory dependencies
d) None of the above

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Project Cost Management

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Project Cost Management


Project Scope Management Knowledge Area Has Four Process
1.
2.
3.
4.

Plan Cost Management ( Planning PG)


Estimate Cost ( Planning PG)
Determine Budget ( Planning PG)
Control Cost ( Monitoring and Controlling PG )

Lets See the First PROCESS Plan Cost


Management

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Inputs Plan Cost Management Twentieth


Process
Project Management Plan The project management plan contains
information used to develop the cost management plan, which
contains
Scope Baseline
Schedule Baseline
Other Information
Project Charter The project charter provides the summary budget
from which the detailed project costs are developed

Inputs Plan Cost Management Twentieth


Process
Enterprise Environmental Factors- Market Place Conditions,
Currency Exchange Rates, Org Culture
Organizational Process Assets
Financial Control Procedures
Financial Data Bases
Historical Information

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Tools & Techniques- Plan Cost Management


Expert Judgment based upon expertise in an application area,
Knowledge Area, discipline, industry, etc.
Analytical Techniques Developing the cost management plan may
involve choosing strategic options to fund the project such as: selffunding, funding with equity, or funding with debt.
Meetings Project teams may hold planning meetings to develop the
cost management plan. Attendees at these meetings may include the
project manager, the project sponsor, selected project team
members, selected stakeholders, anyone with responsibility for
project costs, and others as needed

Output Plan Cost Management


The output of this Process is Cost Management Plan
The cost management plan is a component of the project
management plan and describes how the project costs will be
planned, structured, and controlled A cost Management Plan can
establish the following
Units of measure-Each unit used in measurements (such as staff
hours, staff days, weeks for time measures; or meters, liters, tons,
kilometers, or cubic yards for quantity measures
Level of precision-The degree to which activity cost estimates will be
rounded up e.g. US$100.49 to US$100
Level of accuracy-The acceptable range (e.g., 10%) used in
determining realistic activity cost estimates is specified, and may
include an amount for contingencies
Rules of performance measurement-Earned value management
(EVM) rules of performance measurement are set
Reporting formats- The formats and frequency of various reports are
defined

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Lets See the Second PROCESS Estimate


Cost

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Inputs Estimate CostsTwenty First Process


Cost Management Plan-The cost management plan is a component
of the project management plan and describes how the project costs
will be planned, structured, and controlled
Human Resource Management Plan-The human resource
management plan provides project staffing attributes, personnel
rates, and related rewards/recognition
Scope Baseline-It defines scope statement, WBS, WBS dictionary
Project Schedule-The type and quantity of resources and the amount
of time which those resources are applied to complete the work of
the project are major factors in determining the project cost

Inputs Estimate CostsTwenty First Process


Risk Register-The risk register should be reviewed to consider risk
response costs.
EEF- Market Conditions, Published Commercial Information
OPA-The organizational process assets that influence the Estimate
Costs process include
Cost estimating policies
Cost estimating templates,
Historical information
Lessons learned

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Tools & Techniques- Estimate Costs


Bottom-up estimating.-Estimating the from a smaller work package
and Rolling it up to the entire cost of the Project
Three-point estimating.
Reserve analysis Includes Contingency Reserves
Analogous estimating is a technique for estimating the duration or
cost of an activity or a project using historical data from a similar
activity or project
Expert judgment.
Analogous estimating. Parametric estimating is an estimating
technique in which an algorithm is used to calculate cost or duration
based on historical data and project parameters

Tools & Techniques- Estimate Costs


Parametric estimating.
The accuracy of single-Most likely (cM),Optimistic (cO),Pessimistic
(cP)
Triangular Distribution. tE = (tO + tM + tP) / 3 And Beta Distribution
(from the traditional PERT technique). tE = (tO + 4tM + tP) / 6
o Cost of quality
o Project management software.
o Vendor bid analysis.
o Group decision-making techniques

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Output- Estimate Costs


Activity cost estimates-Activity cost estimates are quantitative
assessments of the probable costs required to complete project
work. Cost estimates can be presented in summary form or in detail
Basis of estimates-How The Estimates Were Arrived To
Documentation of the basis of the estimate (i.e., how it was
developed), Documentation of all assumptions made,
Documentation of any known constraints, Indication of the range of
possible estimates (e.g., 10,000 (10%) to indicate that the item is
expected to cost between a range of values), Indication of the
confidence level of the final estimate
Project documents updates

Lets See the Third PROCESS Determine


Budget

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Inputs-Determine Budget - Overall Twenty


Second Process
Cost management plan Scope baseline- Project Scope Statement, WBS,WBS Dictionary
Activity cost estimates- Cost estimates for each activity within a work
package are aggregated to obtain a cost estimate for each work
package
Basis of estimates- Supporting detail for cost estimates contained in
the basis for estimates should specify any basic assumptions dealing
with the inclusion or exclusion of indirect or other costs in the project
budget
Project schedule- The project schedule includes planned start and
finish dates for the projects activities, milestones, work packages,
and control accounts

Inputs-Determine Budget - Overall Twenty


Second Process
Resource calendars- Resource calendars provide information on
which resources are assigned to the project and when they are
assigned
Risk register - The risk register should be reviewed to consider how
to aggregate the risk response costs
Agreements- Applicable agreement information and costs relating to
products, services, or results that have been or will be purchased are
included when determining the budget.
Organizational process assets- The organizational process assets
that influence the Determine Budget process include, but are not
limited to: Existing formal and informal cost budgeting-related
policies, procedures, and guidelines; Cost budgeting tools; and
Reporting methods.
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Tools & Techniques- Determine Budget


Cost aggregation- Cost estimates are aggregated by work packages
in accordance with the WBS. The work package cost estimates are
then aggregated for the higher component levels of the WBS (such
as control accounts) and ultimately for the entire project.
Reserve analysis- Budget reserve analysis can establish both the
contingency reserves and the management reserves for the project.
Management and contingency reserves
Expert judgment- Expert judgment, guided by experience in an
application area, Knowledge Area, discipline, industry, or similar
project, aids in determining the budget

Tools & Techniques- Determine Budget


Historical relationships- Any historical relationships that result in
parametric estimates or analogous estimates involve the use of
project characteristics (parameters) to develop mathematical models
to predict total project costs
Funding limit reconciliation- The expenditure of funds should be
reconciled with any funding limits on the commitment of funds for the
project. A variance between the funding limits and the planned
expenditures will sometimes necessitate the rescheduling of work to
level out the rate of expenditures

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Output Determine Budget


Cost baseline- The cost baseline is the approved version of the timephased project budget, excluding any management reserves, which
can only be changed through formal change control procedures and
is used as a basis for comparison to actual results
Project funding requirements- Total funding requirements and
periodic funding requirements (e.g., quarterly, annually) are derived
from the cost baseline. The cost baseline will include projected
expenditures plus anticipated liabilities.
Project documents updates- Project documents that may be updated
include, but are not limited to: Risk register, Activity cost
estimates, Project schedule

Lets See the Fourth PROCESS Control Cost

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Inputs Control CostsTwenty Third Process


Project management plan- The project management plan contains
the following information that is used to control cost like cost baseline
and cost management plan
Project funding requirements- The project funding requirements
include projected expenditures plus anticipated liabilities
Work performance data- Work performance data includes
information about project progress, such as which activities have
started, their progress, and which deliverables have finished
Organizational process assets- The organizational process assets
that can influence the Control Costs process include, Existing formal
and informal cost control-related policies, procedures, and guidelines
Cost control tools and Monitoring and reporting methods to be used.

Tools & Techniques- Control Costs


Earned value management-Discussed in detail in coming slides
Forecasting
To-complete performance index (TCPI)
Performance reviews
Project management software
Reserve analysis

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Output Control Costs


Work performance information
Cost forecasts
Change requests
Project management plan updates
Project documents updates
Organizational process assets updates

Project Budget Components

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Creating a Budget

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Cost Management Plan Can Establish The


Following
Units of measure. Each unit used in measurements (such as staff hours,
staff days, and weeks for time Measures; or meters, liters, tons, kilometers,
or cubic yards for quantity measures; or lump sum in Currency form) is
defined for each of the resources.
Level of precision. The degree to which activity cost estimates will be
rounded up or down (e.g., US$100.49 to US$1 00, or US$995.59 to
US$1,000), based on the scope of the activities and magnitude of the
project.
Level of accuracy. The acceptable range (e.g., 10%) used in
determining realistic activity cost estimates is specified, and may
include an amount for contingencies;

Earned Value Management


Earned Value Management Earned value management (EVM) is a
methodology that combines scope, schedule, and resource measurements
to assess project performance and progress planned value. Planned
value (PV) is the authorized budget assigned to scheduled work. It is the
authorized budget planned for the work to be accomplished for an activity
or work breakdown structure component, not including management
reserve. This budget is allocated by phase over the life of the project, but
at a given moment, planned value defines the physical work that should
have been accomplished. The total of the PV is sometimes referred to as
the performance measurement baseline (PMB). The total planned value for
the project is also known as budget at co
Earned Value Management
Earned value.
o Earned value (EV) is a measure of work performed expressed in
terms of the budget authorized for that work. It is the budget
associated with the authorized work that has been completed. The
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EV being measured needs to be related to the PMB, and the EV


measured cannot be greater than the authorized PV budget for a
component. The EV is often used to calculate the percent complete
of a project. Progress measurement criteria should be established for
each WBS component to measure work in progress. Project
managers monitor EV, both incrementally to determine current status
and cumulatively to determine the long-term performance trends
mention (BAC).

Actual cost.
Actual cost (AC) is the realized cost incurred for the work performed on an
activity during a specific time period. It is the total cost incurred in
accomplishing the work that the EV measured. The AC needs to
correspond in definition to what was budgeted in the PV and measured in
the EV (e.g., direct hours only, direct costs only, or all costs including
indirect costs). The AC will have no upper limit; whatever is spent to
achieve the EV will be measured
Variances from the approved baseline

Schedule variance
Schedule variance (SV) is a measure of schedule performance expressed
as the difference between the earned value and the planned value. It is the
amount by which the project is ahead or behind the planned delivery date,
at a given point in time. It is a measure of schedule performance on a
project. It is equal to the earned value (EV) minus the planned value (PV).
The EVM schedule variance is a useful metric in that it can indicate when a
project is falling behind or is ahead of its baseline schedule. The EVM
schedule variance will ultimately equal zero when the project is completed
because all of the planned values will have been earned. Schedule
variance is best used in conjunction with critical path methodology (CPM)
scheduling and risk management. Equation: SV = EV PV

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Cost variance.
Cost variance (CV) is the amount of budget deficit or surplus at a given
point in time, expressed as the difference between earned value and the
actual cost. It is a measure of cost performance on a project. It is equal to
the earned value (EV) minus the actual cost (AC). The cost variance at the
end of the project will be the difference between the budget at completion
(BAC) and the actual amount spent. The CV is particularly critical because
it indicates the relationship of physical performance to the costs spent.
Negative CV is often difficult for the project to recover. Equation: CV= EV
AC.

Performance Index
Schedule performance index
The schedule performance index (SPI) is a measure of schedule efficiency
expressed as the ratio of earned value to planned value. It measures how
efficiently the project team is using its time. It is sometimes used in
conjunction with the cost performance index (CPI) to forecast the final
project completion estimates. An SPI value less than 1.0 indicates less
work was completed than was planned. An SPI greater than 1.0 indicates
that more work was completed than was planned. Since the SPI measures
all project work, the performance on the critical path also needs to be
analyzed to determine whether the project will finish ahead of or behind its
planned finish date. The SPI is equal to the ratio of the EV to the PV.
Equation: SPI = EV/PV
Cost performance index
The cost performance index (CPI) is a measure of the cost efficiency of
budgeted resources, expressed as a ratio of earned value to actual cost. It
is considered the most critical EVM metric and measures the cost
efficiency for the work completed. A CPI value of less than 1.0 indicates a
cost overrun for work completed. A CPI value greater than 1.0 indicates a
cost under run of performance to date. The CPI is equal to the ratio of the
EV to the AC. The indices are useful for determining project status and
providing a basis for estimating project cost and schedule outcome.
Equation: CPI = EV/AC

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Project Cost Management


Ensure That The Project Is Completed Within Budget
Concerned With Cost Of Resources Needed To Complete Activities;
Consider Effect Of Project Decisions On Cost Of Using Product
Life-cycle Costing
Most Prospective Financial Impact Of Using The Product Is Outside
The Project Scope
Consider Information Needs Of Stakeholders, Controllable And
Uncontrollable Costs (Budget Separately For Reward And
Recognition Systems)

Resource Planning
Resource Planning:
Work Breakdown Structure
Network Diagram
Schedule
Risks
Historical Information
Scope Statement Justification & Objectives
Resource Pool Description What Resources Are Potentially
Available For Resource Planning
Organizational Policies Staffing, Procurement

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Estimation Methods
Cost Estimating Tools & Techniques
o Analogous Estimating Top Down; Using Actual Costs
From Previous Project As Basis For Estimate
Reliable When Previous Projects Are Similar And
Individuals Have Expertise Form Of Expert Judgment
o Parametric Modeling Uses Project Characteristics In
Mathematical Models To Predict Costs (E.G. Building Houses)
Reliable When Historical Information Is Accurate,
Parameters Are Quantifiable, And Model Is Scalable
2 Types: Regression Analysis, Learning Curve
o Bottom Up Estimating Rolling Up Individual Activities Into
Project Total Smaller Work Activities Have More Accuracy
o Computerized Tools Spreadsheets, Software
Cost Estimating Tools & Techniques
o Pros And Cons
o Analogous Estimating
o Quick - Less Accurate
o Tasks Dont Need To Be Identified Estimates Prepared
With Little Detail And Understanding Of Project
o Less Costly Requires Considerable Experience To Do
Well
o Gives PM Idea Of Management Expectations Infighting
At High Levels Of Organization
o Overall Project Costs Are Capped Difficult For Projects
With Uncertainty

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Project Cost Management


Cost Estimating Tools & Techniques
Pros And Cons
Bottom Up Estimating
More Accurate Takes Time And Expense
Gains Buy-in From The Team Tendency For Team To Pad
Estimates
Based On Detailed Analysis Of Project Requires That Project Be
Defined And Understood
Provides A Basis For Monitoring And Control Team Infighting
To Get Biggest Piece Of Pie

Project Cost Management


Cost Control
Concerned With Influencing Factors That Create Changes To The
Cost Baseline That Are Beneficial
Determining That The Cost Baseline Has Changed
Managing Actual Changes As They Occur
Monitor Cost Performance To Detect Variances
Preventing Incorrect, Unauthorized Changes Being Included In The
Cost Baseline
Informing Stakeholders Of Authorized Changes
Determine The Whys Of Positive And Negative Variances
Integrated Will All Other Control Processes (Scope, Change,
Schedule, Quality)
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Project Cost Management


Inputs To Cost Control
Cost Baseline
Performance Reports Meet, Exceed Budget
50/50 Rule Task Is Considered 50% Complete When It Begins And
Gets Credit For Remainder 50% Only When Completed
20/80 Rule - Task Is Considered 20% Complete When It Begins And
Gets Credit For Remainder 80% Only When Completed
0/100 Rule Task Only Credited When Fully Completed

Change Requests
Cost Management Plan
Tools & Techniques Of Cost Control
Cost Change Control System Defines The Procedures By Which
The Cost Baseline May Be Changed
Performance Measurement Assess Magnitude Of Cost Variations
(Earned Value Analysis) And What Is Causing The Variance
Additional Planning Examine Alternatives
Computerized Tools Forecast Planned Costs, Track Actual Costs,
Forecast Effect Of Cost Changes

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Project Cost Management


Earned Value Analysis
Integrates Cost, Schedule And Scope
Better That Comparing Projected Vs. Actual Because Time And Cost
Are Analyzed Separately
Terms:
BCWS (PV) Budgeted Cost Of Work Scheduled (How Much Work
Should Be Done)
BCWP (EV) Budgeted Cost Of Work Performed A.K.A. Earned
Value (How Much Work Is Budgeted, How Much Did We Budget)
ACWP (AC) Actual Cost Of Work Performed (How Much Did The
Completed Work Cost)

Project Cost Management


Earned Value Analysis
Terms:
BAC Budget At Completion (How Much Did You Budget For The
Total Job)
EAC Estimate At Completion (What Do We Expect The Total
Project To Cost)
ETC Estimate To Completion (How Much More Do We Expect To
Spend To Finish The Job)
VAC Variance At Completion (How Much Over/Under Budget Do
We Expect To Be)

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Project Cost Management


Earned Value Analysis
Formulas
Variance (Plan Actual)
Cost Variance (CV): BCWP (EV) ACWP (AC); Negative Is Over
Budget
Schedule Variance (SV): BCWP(EV) BCWS (PV); Negative Is
Behind Schedule
Cost Performance Index (CPI):
I Am Only Getting X Out Of Every $

Project Cost Management


Earned Value Analysis
Formulas
Schedule Performance Index (SPI):
I Am Only Progressing X % Of The Planned Rate
Estimate At Completion (EAC):
As Of Now We Expect The Total Project To Cost X$
Estimate To Complete (Etc.): EAC AC; How Much Will It Cost
From Now To Completion
Variance At Completion: BAC EAC; When The Project Is Over
How Much More Or Less Did We Spend (Most Common Way Of
Calculating EVA
BCWP
BCWS BAC CPI
EV, PV
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Chapter 7 Project Cost Management


Earned Value Analysis
BCWP Comes First In Most Formulas
If It Is A Variance, BCWP Comes First
If It Is An Index, BCWP Is Divided By
If The Formula Relates To Cost, Use AWCP
If The Formula Related To Schedule, Use BWCP
Negative Is Bad; Positive Results Are Good
ETC Refers To This Point On; EAC Refers To When Job Is
Completed

Chapter 7 Project Cost Management


Accuracy Of Estimates
Order Of Magnitude Estimate: -25% - 75%; Usually Made During
Initiation Phase
Budget Estimate: -10% - 25%; Usually Made During The Planning
Phase
Definitive Estimate: -5% - 10%; Usually Made During The Planning
Phase

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Problems Cost Management


Exercise: Your project is running well. In the latest earned value
report, you see the CPI = 1.2, the SPI 0.8, i.e. PV = $600,000, and
the SV = -$120,000.
You cant find the CV in the report, so you calculate it based on the
information given. What is the CV?
CPI =1.2
SPI = 0.8
PV =$600000
SV =-$120000
Find CV
CV=EV-AC
We Know SV=EV-PV
-$120000=EV-$600000
EV=$600000-$120000
EV=$480000
CPI=EV/AC
1.2=$480000/AC
AC=$480000/1.2
AC=$400000 CV=EV-AC CV=$480000-$40000 CV=$80000

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Problems cost management


Problem: 1
PV = 100, EV = 105, BAC = 400, AC = 102, CV = 3, EAC = 390.
How much is the VAC?
Problem: 2
PV = 100, EV = 105, BAC = 400, AC = 102, CV = 3, ETC = 300. How
much is the EAC if the variances from the BAC are expected to
continue at the same rate?

Problems Cost Management


Problems
1. PV = 100, EV = 105, BAC = 400, AC = 102, CV = 3, ETC = 300,
EAC = 407.
1. How much is the Actual Cost?
A.) 100 B.) 102 C.) 7 D.) 2
2. Your project has an SPI of 1.1 and a CPI of 0.9. What does this
mean?
A.)We are over budget and ahead of schedule
B.)We are ahead of schedule but under budget
C.) We are over budget and behind schedule
D.) We are behind schedule and under budget

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Project Cost Management


Accounting Standards
Net Present Value: Total Benefits (Income Or Revenue) Less The
Costs. NPV Is The Sum Of Each Present Value Of Each
Income/Revenue Item
Internal Rate Of Return (IRR): Company May Select Project Based
On Highest IRR
Payback Period: Number Of Time Periods It Takes To Recover The
Investment In The Project Before Generating Revenues
Benefit Cost Ratio (BCR): Compares Costs To The Benefits Of
Different Projects
Greater Than 1 Means Benefits Are Greater Than Costs
Less Than 1 Means Costs Are Greater Than Benefits
Opportunity Cost: Opportunity Given Up By Selecting One Project
Over Another

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Project Cost Management


Accounting Standards
Sunk Costs: Expended Costs. Sunk Costs Should Not Be
Considered When Determining To Continue With A Troubled Project
Law Of Diminishing Returns: The More That Is Put In The Less Of
An Outcome Is Received
Working Capital: Current Assets Current Liabilities
Variable Cost: Costs That Change With The Amount Of Production
Or The Amount Of Work (Materials, Wages)
Fixed Cost: Non-recurring Costs That Do Not Change
Direct Cost: Directly Attributable To Project Work (Travel, Wages,
Materials)
Indirect Cost: Overhead Items Or Costs For The Benefit Of More
Than One Project (Taxes, Fringe Benefits)

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Project Cost Management


Accounting Standards
Depreciation: Assets Lose Value Over Time
Straight Line Depreciation: Same Amount Is Taken Each Year
Accelerated Depreciation: 2 Forms
Double Declining Balance: Double the depreciation rate
Sum Of The Years Digits (5 years, the Years' digits are: 5, 4, 3, 2,
and 1. Now, calculate the sum of the digits: 5+4+3+2+1=15
Life Cycle Costing: Includes Operations And Maintenance Phases
Value Analysis: Find A Less Costly Way To Do Same Work
Make Or Buy Decisions At Development (Planning) Phase, Not
Conceptual Phase

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Project Cost Management


Accounting Standards
Project Objectives Are Not Necessarily Needed To Fund Project
Project Definition Focus On End Product Initially; Costs And
Benefits Will Be Evaluated Later
o 25% Of Project Lifecycle Expended At End Of Planning
o No Guarantees; Only Most Likely Results
o Line Of Balance Charts Are Used For Manufacturing
Negative Float The Late Start Date Is Earlier Than The Early Start
Date
Value Engineering/Analysis Does Not Trade Performance For
Cost
Prospectus Profitability And Technical Feasibility Used To Solicit
Funding

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1. Your software project is based on a similar project that the


company has already completed a few years ago. Since you are
the project manager of this project, you are asked to estimate the
cost of delivering this project. The salaries and wages that are
paid now are about 4-5 times higher. Which method would you
use to estimate your costs:
a) Analogous Estimation
b) Parametric Estimation
c) Determine Resource Cost Rates
d) Expert Judgment
2. Good performance
a) Project Ahead of Schedule
b) Project Behind Schedule
c) Project cost higher than estimated

3. Calculate the Cost Variance, if the PV = 25000, EV = 8000, AC


=12000, SV = 15000
a) +3000
b) +13000
c) -4000
d) +4000

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4. You are developing software and you need to calculate the actual cost.
The management has asked you to differentiate between direct and indirect costs. In considering the following, which would you consider as indirect cost?
a) Salaries
b) The rent for the PCs being used to develop the application software
c) The salaries of the management
d) The software licenses that you purchase for the particular project

5. The project manager of a software maintenance project is asked to


report on the status of the project in terms of its cost and schedule. The
two factors that would help her would be
a) EAC and ETC
b) CV and SV
c) PV and NPV
d) CPI and SPI

6. As the project manager on a product development project, you are


estimating the cost of the project and are allocating funds to cover risks.
Which of the following reserve would you use when you are allocating a
reserve fund at a project level for some future situation that can be planned
for.?
a) Reserve Fund
b) Management Reserve
c) Contingency Reserve
d) Planned fund

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7. A project manager assigns a task that was scheduled for 2 weeks with 2
developers. After one week, his project progress shows that he needs 1
more resource because only 20% of the work is actually completed. What
is the SPI VALUE?
a) 0.4
b) 2
c) 1
d) 4

8. The project is currently experiencing a variance of about 50% and it is


expected that the variance will continue in future also, in a similar manner.
Which formula should be used to calculate the ETC?
a) ETC=(CV-AC)/CPI
b) ETC =CPI/SPI
c) ETC=BAC EV
d) ETC = (BAC-EV)/CPI

9. The value of BAC can be equated with


a) ETC
b) AC
c) summation of all PV
d) VAC

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10. For a project, the Earned Value Report shows the following values for
EV = 25 PV = 20 AC = 22 which of the following statements regarding the
state of the project is true?
a) The project is delayed but would be completed under budget
b) The project is delayed and would have a cost overrun
c) The project is early but has a cost overrun
d) The project is early and has no cost overrun

11. A project being executed within the company has CPI > 1 and SPI < 1.
The management asks the project manager to look into ways to bring the
project back on track. The option that is best suited in this situation would
be
a) Crashing
b) Fast Tracking
c) Scope Management
d) Cost Control

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Project Quality Management

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Project Quality Management


Project Quality Management Has Three Processes
1. Plan Quality Management (Planning PG)
2. Perform Quality Assurance (Executing PG)
3. Control Quality (Monitor And Control PG)

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Lets See the FIRST PROCESS PLAN


QUALITY Management

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Inputs Plan Quality Management


Project Management Plan The process of identifying quality
requirements and/or standards for the project and its deliverables
and documenting how the project will demonstrate compliance with
quality requirements
Stakeholder Register The stakeholder register aids in identifying
those stakeholders possessing a particular interest in, or having an
impact on, quality.
Requirements Documentation Requirements documentation
captures the requirements that the project shall meet pertaining to
stakeholder expectations.

Inputs Plan Quality Management


EEF
The enterprise environmental factors that influence the Plan Quality
Management process include, but are not limited to: Governmental
agency regulations;
Rules, standards, and guidelines specific to the application area;
Working or operating conditions of the project or its deliverables that
may affect project quality;
Cultural perceptions that may influence expectations about quality
OPA

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Tools & Techniques- Plan Quality Management


Cost Benefit Analysis-A cost-benefit analysis for each quality activity
compares the cost of the quality step to the expected benefit
Cost of Quality-Cause-and-effect diagrams,
Seven Basic Tools of Quality-Discussed in Coming Slides
Benchmarking-Benchmarking involves comparing actual or planned
project practices to those of comparable projects to identify best
practices, generate ideas for improvement, and provide a basis for
measuring performance.
DOE-Design of experiments (DOE) is a statistical method for
identifying which factors may influence specific variables of a product
or process under development or in production
Statistical Sampling-Statistical sampling involves choosing part of a
population of interest for inspection
Additional Quality Planning Tools
Meetings

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Cost of Quality

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Output Plan Quality Management


Quality Management Plan- The quality management plan is a
component of the project management plan that describes how the
organizations quality policies will be implemented
Process Improvement Plan-The process improvement plan details
the steps for analyzing project management including process
boundaries, process configuration etc.
Quality Metrics-A quality metric specifically describes a project or
product attribute and how the control quality process will measure it
Quality Checklists-A checklist is a structured tool, usually
component-specific, used to verify that a set of required steps has
been performed.roject Documents Updates

Lets See the Second PROCESS PERFORM


QUALITY ASSURANCE

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Inputs Perform Quality Assurance


Quality Management Plan
Process Improvement Plan
Quality Metrics
Quality Control Measurements-Quality control measurements are the
results of control quality activities. They are used to analyze and
evaluate the quality of the processes of the project against the
standards of the performing organization or the requirements
specified
Project Documents

Tools & Techniques- Perform Quality Assurance


Quality Management And Control Tools Affinity diagrams To Categorize the Requirements
Process decision program charts (PDPC) Decompose Goals Into
Steps
Interrelationship digraphs RCA
Tree diagrams Decision Analysis
Activity network diagrams Improve Time Management Process
Quality Audits
Process Analysis

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Output Perform Quality Assurance


Change Requests-Corrective, Preventive Actions and Defect Repairs
Project Management Plan Updates
Project Documents Updates
OPA Updates

Lets See the Third PROCESS QUALITY


Control

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Inputs Control Quality


Project Management Plan
Quality Metrics
Quality Checklists
Work Performance Data
Approved Change Requests
Deliverables
Project Documents
OPA

Tools & Techniques- Control Quality


Seven Basic Tools
Statistical Sampling
Inspection
Approved Change Requests

Output Control Quality


Quality Control Measurements
Validated Changes
Validated Deliverables
Work Performance Information
Change Requests
Project Management Plan Updates
Project Documents Updates
OPA updates
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Project Quality Management


Project Quality Management
Processes Required To Ensure That The Project Will Satisfy The
Needs For Which It Was Designed
Includes All Activities Of The Overall Management Function That
Determine The Quality Policy, Objectives, And Responsibilities.
These Are Implemented By Quality Planning, Quality Control, Quality
Assurance, And Quality Improvement.

Project Quality Management


3 Major Processes:
Quality Planning Identifying Quality Standards That Are Relevant
To The Project (Plan); Project Manager, Project Owner
Quality Assurance Evaluating Overall Project Performance To
Provide Confidence That Project Will Satisfy Relevant Quality
Standards (Implement Or Execution); Project Team
Quality Control Monitoring Specific Results To Comply With
Quality Standards And Eliminating Unsatisfactory Performance
Causes (Check Or Control); Project Manager, Project Team
Compatible With ISO 9000 And 10000 Series
Proprietary And Non-proprietary Approaches (Total Quality
Management
Must Address The Management Of The Project And The Product Of
The Project

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Project Quality Management


Quality The Totality of Characteristics of an Entity That Bear on Its
Ability to Satisfy Stated or Implied Needs
Critical Aspect Is to Turn Implied Needs into Stated Needs through
Project Scope Management
Do not Confuse with Grade Category or Rank Given to Entities
Having the Same Functional Use but Different Requirements for
Quality
Customer Satisfaction Conformance to Specifications (Must
Produce What Is Stated) And Fitness for Use (Must Satisfy Real
Needs)
Prevention Avoid Mistakes vs. Cost of Correction
Management Responsibility Requires Participation of Team;
Responsibility of Management to Provide Resources
Processes Within Phases Plan-do-check-act Cycle
Recognize That The Investment In Product Quality Improvements
May Be Borne By The Performing Organization Since The Project
May Not Last Long Enough To Reap Reward

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Project Quality Management


Quality Planning
o Identify Quality Standards Are Relevant And How To Satisfy
Inputs To Quality Planning
Quality Policy The Overall Intentions And Direction Of An
Organization With Regard To Quality As Expressed By Management
o Scope Statement
o Product Description
o Standards And Regulations
Other Process Outputs Processes From Other Knowledge Areas
(Procurement Planning)

Tools &Techniques for Quality Planning


Benefit/Cost Analysis Consider Trade-offs, Benefit Is Less
Rework; Cost Is Expense Of Project Management Activities
Benchmarking Comparing Actual Or Planned Practices To Those
Of Other Projects
Flowcharting
o Cause And Effect Diagramming (Ishikawa Or Fishbone Diagrams)
Illustrate How Causes Relate To Potential Problems Or Effects
o System Or Process Flowcharts Show How Various Elements Of
The System Interrelate
o Helps Anticipation Of What And Where Quality Problems May
Occur
Design Of Experiments Analytical Technique Which Defines
What Variables Have Most Influence Of The Overall Outcome
o Cost And Schedule Tradeoffs

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Outputs from Quality Planning


Quality Management Plan Describes How Team Will Implement
Its Quality Policy; Describes The Project Quality System
Organizational Structures, Responsibilities, Procedures, Processes
And Resources Needed To Implement Quality Management
Operational Definitions Defines How An Item Is Measured By
The Quality Control Process. Also Known As Metrics.
Checklists Structured Tool Used To Verify That A Set Of Required
Steps Has Been Performed
Inputs To Other Processes May Identify A Need For Further
Activity In Another Area
Quality Assurance
o All Planned And Systematic Activities Implemented Within The
Quality System To Provide Confidence That The Project Will
Satisfy Quality Standards

Inputs to Quality Assurance


Quality Management Plan
Results Of Quality Control Measurements (Testing)
Operational Definitions
Tools & Techniques For Quality Assurance
Quality Planning Tools & Techniques
Quality Audits Structured Review Of Quality Management
Activities To Identify Lessons Learned
Outputs From Quality Assurance

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Quality Improvements Taking Action To Increase The


Effectiveness And Efficiency Of The Project To Provide Added
Benefits To The Stakeholders
Most Likely Will Involve Change Control
Quality Control Monitoring Specific Results to Determine If They
Comply With Quality Standards and Identifying Ways To Eliminate Causes
Of Unsatisfactory Results
Includes Project (Deliverables) And Management (Cost And
Schedule Performance) Results
Awareness Of Statistical Quality Control
Prevention (Keep Errors Out Of Process) And Inspection (Keep
Errors From Customers)
Attribute Sampling (Result Conforms) And Variable Sampling
Special Causes (Unusual Events) And Random Causes
Tolerances (Acceptable Range) And Control Limits (Result Falls
Within Range)

Inputs to Quality Control


Work Results Include Process And Product Results
o Quality Management Plan
o Operational Definitions
o Checklists
Tools & Techniques For Quality Control
Inspection Activities Such As Testing To Determine If Results
Comply With Requirements
Control Charts Plot Results Over Time

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Pareto Diagrams Frequency Of Occurrence That Identifies Type


Or Category Of Result (80/20 Rule) Guides Corrective Action
Statistical Sampling Select Population Of Interest For Inspection

Flowcharting
Trend Analysis Forecast Future Outcomes Based On Historical
Results
o Technical Performance (# Of Errors Identified; # Of Errors That
Remain)
o Cost And Schedule Performance (Activities Per Period With
Significant Variances)
Outputs From Quality Control
o Quality Improvement
o Acceptance Decisions (Accept/Reject)
Rework Action To Bring Defective Item Into Compliance
o Frequent Cause Of Project Overruns
o Completed Checklists
Process Adjustments Immediate Corrective/Preventive Actions
o Most Likely Involves Change Control

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Project Quality Management


Tips From The Review Guide
Philosophy: Definition Of Quality, Avoidance Of Gold Plating
Giving Customer Extras, Prevention Over Inspection
Conformance To Requirements, Specifications And Fitness Of
Use
Quality Management Processes Required To Ensure That The
Project Will Satisfy The Needs For Which It Was Undertaken
Continuous Improvement - Small Improvements To Reduce Costs
And Ensure Consistency
Marginal Analysis Optimal Quality Is Reached At The Point When
Revenue From Improvement Equals The Costs To Secure It
Just In Time - Decrease Amount Of Inventory/Decrease Investment

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Project Quality Management


Tips From The Review Guide
ISO 9000 Or 10000 Standards To Ensure That Corporations
Follow Their Own Quality Procedures
Total Quality Management Continuous Improvement In Business
Practices
Normal Distribution Most Common Probability Used To
Measure Variations
Standard Deviation (Sigma) Measure How Far Away From The
Mean (Dotted Vertical Line)
3 Or 6 Sigma Represents Level Of Quality
o +/- 1 Sigma Equal To 68.26%
o +/- 2 Sigma Equal To 95.46%
o +/- 3 Sigma Equal To 99.73%
o +/- 6 Sigma Equal To 99.99%

Project Quality Management


Tips From The Review Guide
Responsibility To Quality Entire Organization
Ultimate Employee
Overall Or Primary Project Manager
Design And Test Specifications Engineer
Prevention Over Inspection Quality Must Be Planned In Not
Inspected In

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Project Quality Management


Tips From The Review Guide
Cost Of Conformance Vs. Non-conformance
o Quality Training Vs. Rework
o Studies Vs. Scrap
o Surveys Vs. Inventory Costs And Warranty Costs
Quality Planning (Plan) Determine What Will Be Quality On
Project And How Quality Will Be Measured Done During Planning
Phases
o Identifying Which Standards Are Relevant To Project How To
Satisfy Them
o Benchmarking Look At Past Projects To Determine Ideas For
Improvement
o Cost Benefit Analysis
o Flowcharts (Fishbone)
o Design Of Experiments

Project Quality Management


Tips From The Review Guide
Quality Assurance (Implement) Determine If Your Measurement
Of Quality Is Appropriate Done During Execution Phases
Process Of Evaluating Overall Performance On A Regular Basis
Quality Audits Structured Review Of Quality Activities That
Identify Lessons Learned

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Project Quality Management


Tips From The Review Guide
Quality Control (Check) Perform The Measurement And
Compare To The Quality Plan Done During Control Phases
Process Of Monitoring Specific Project Results To Determine If They
Comply With Relevant Quality Standards And Identify Ways Of
Eliminating Unsatisfactory Performance
Performance Of The Measurement Or Process, Using Quality
Control Tools Checking Work

Project Quality Management


Tips From The Review Guide
Quality Control Tools
Pareto Diagrams 80/20 Rule The Chart Presents The
Information Being Examined In Its Order Of Priority And Helps Focus
Attention On The Most Critical Issues
Fishbone Diagram (Cause And Effect)
A Creative Way To Look At The Causes Or Potential Causes Of A
Problem
Helps Stimulate Thinking, Organizes Thoughts And Generates
Discussion
Can Be Used To Explore A Desired Future Outcome And The
Factors To Which It Relates

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Project Quality Management


Tips From The Review Guide
Quality Control Tools
Checklists List Of Items To Inspect
Control Charts Graphic Displays Of The Results Over Time
Used To Determine If A Process Is In Control
Upper And Lower Control Limits Two Dashed Lines Show The
Acceptable Range Of A Variation Range Determined By
Companys Quality Standard (Sigma)
Mean Line In The Middle Shows Middle Of The Range Of
Acceptable Results
Specification Limits 2 Solid Lines Outside The Upper And Lower
Control Limits Represent The Customer's
Expectations/Requirements Of Quality

Project Quality Management


Tips From The Review Guide
Quality Control Tools
Out Of Control Process Is Out Of Control When:
A Data Point Falls Outside Of The Upper Or Lower Control Limit
Non-random Data Points Are Within The Upper Control And Lower
Control Limits
Rule Of 7 Non-random Points Outside The Mean - Process Should
Be Investigated
Assignable Cause Data Point The Requires Investigation To
Determine The Cause Of The Variation

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Quality Tools Pmbok

Project Quality Management


PMI And Deming
Cost Of Conformance 85% Of Costs of Quality Are Responsibility
of Management
o Quality Training Rework
o Studies Scrap
o Surveys Inventory And Warranty Costs
Crosby Absolutes Of Quality
o Performance Standard Is Zero Defects; Measurement System Is
Cost Of Non-conformance
Continuous Improvement
o Japanese (Kaizen)

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Project Quality Management


Marginal Analysis Optimal Quality Is Reached When Incremental
Revenue From Improvement Equals Incremental Cost To Secure
Variable Characteristic To Be Measured
Attribute Measurement (Objective Or Subjective)
Increase Quality = Increased Productivity, Increased Cost
Effectiveness, Decreased Cost Risk

Project Quality Management


Review Guide Tips
Primary Responsibility For Quality Management Is The PM
Results Of Increase In Quality
Increased Productivity
Increased Cost Effectiveness
Decreased Cost Risk
Quality Attributes Can Be Subjective, Objective And Are Specific
Characteristics For Which A Project Is Designed And Tested
Quality Assurance Example Is Team Training
Cost Of Conformance = Team Training

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Project Quality Management


Review Guide Tips
Marginal Analysis: Optimal Quality Is Reached When Incremental
Revenue From Improvement Equals The Incremental Cost To
Secure
Standard Deviation: How Far Away From Mean
Variable: Characteristic You Want To Measure
Attribute: Measurement (Subjective Or Objective)
Ultimate Responsibility Employee
Overall Responsibility PM
Design/Test Specifications - Engineer

Project Quality Management


Review Guide Tips
o If Quality Sample Size Increases, The Quality Control Band
Decreases
o Product Cost Plus Operations And Maintenance Costs Increase
Perceived Value When Balanced
Cost Of Conformance = Training
Crosby Absolutes Of Quality Performance Of Standard Is Zero
Defects And The Measurement System Is The Cost Of Nonconformance
o Deming & Japanese Are Associated With Quality Improvement
Programs
Quality Control Performed By Operating Personnel

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Project Quality Management


Review Guide Tips
o Quality Objectives Are Approved In Conceptual Stage By Project
Owner
QA Auditing Function That Provides Feedback To Team And Client
About Quality Of Output Being Produced
o If Sample Size Is A Constant And Acceptance Numbers Increase,
The Producers Risk Decreases And Consumer Risk Increases
o 85% Of Costs Of Quality Are Direct Responsibility Of
Management

Putting It All Together

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Questions and Answers


1. Your customer has sent complain about the quality of your last
shipment as there was lot of defects. You need to find out the
reasons for the defects. You will use:
a) A Ishikawa Diagram
b) A run chart
c) A control chart
d) A flow chart
2. As a project manager you decided to reduce one test cycle.
During the acceptance testing the customer reported more
than the expected no. of defects. This forced you to send an
additional resource to customer location for stabilizing the
system. The cost associated with this additional effort is best
described as:
a) Lost value
b) Opportunity cost
c) Cost of non-conformance
d) Contingency
3. You have been plotting the response time for servicing each
customer at a bank teller on a run chart. You concluded that
during the period 1:00pm to 3:00pm your average response
time jumps 100% to 30 mins. You decide to add an additional
counter for this period. Your analysis was an example of:
a)

Cause and Effect

b)

Trend Analysis

c)

Quality Assurance

d)

Inspection

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4. As a project manager you analyzed that conducting an


additional round of testing will cost you US$15,000 worth of
resource time. You do not expect too many defects to be found
in this additional testing and the cost associated due to any
defects leaked would not be more than US$ 5000. You:
a)
Should not proceed as the Cost-benefit analysis
does not favor the additional round of testing
b)

Should conduct the tests as planned

c)
Are going against the tenants of Quality
Management
d)
Should continue testing as long as you find even a
single defect

5. Geeta from the Quality department has sent you a mail,


informing that she will be visiting you the following week to
review the implementation of the relevant CMMI process in
your project. Geeta is performing:
a) Quality Planning
b) Quality Assurance
c) Quality Control
d) Quality Benchmarking

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6. You are managing a very large project that is very critical to


your client. You have promised the client that the product will
not have more than 6 delivered defects. In a meeting with your
team you decide that you will be following the CMMI framework
and the project will be executed of Level 4. You also decide
that to control the defects you will be using control charts to
monitor the defect density of each module. You in the middle of
:
a) Plan Quality Process
b) Performing Quality Assurance
c) Performing Quality Control
d) Doing Quality Audit
7. All of the following is examples of proprietary Quality
Management Approaches except:
a) Six Sigma
b) Quality Audits
c) Failure Mode and Effect Analysis
d) Total Quality Management
8. Nicholas is the project manager of the Lidon Project. Sample
testing results indicates that product defect density is too high
in compare to the upper control limit set for the respective
matrix as part of project planning. The organization has asked
Nicholas to create a chart showing the distribution of defects
density against time. Which of the following is the most
appropriate tool for this activity
a) Pareto diagram
b) effect of different shifts on Productivity
c) defect log
d) Control chart

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Questions and Answers


1. You are managing a very large project that is very critical to your
client. You have promised the client that the product will not have
more than 6 delivered defects. In a meeting with your team you
decide that you will be following the CMMI framework and the project
will be executed of Level 4. You also decide that to control the
defects you will be using control charts to monitor the defect density
of each module. You in the middle of :
a) Plan Quality Process
b) Performing Quality Assurance
c) Performing Quality Control
d) Doing Quality Audit
2. All of the following is examples of proprietary Quality Management
Approaches except:
a) Six Sigma
b) Quality Audits
c) Failure Mode and Effect Analysis
d) Total Quality Management
3. Nicholas is the project manager of the Lidon Project. Sample testing
results indicates that product defect density is too high in compare to
the upper control limit set for the respective matrix as part of project
planning. The organization has asked Nicholas to create a chart
showing the distribution of defects density against time. Which of the
following is the most appropriate tool for this activity
a) Pareto diagram
b) effect of different shifts on Productivity
c) defect log
d) Control chart

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Questions and Answers


1. All of the following are true about Pareto chart except:
a) Its a type of Histogram
b) It helps find causes that are causing majority of the defects
c) Is based on the 80/20 rule
d) Is based on statistical sampling
2. All of the following is true about Quality Metrics
a) Is an output of Quality Planning process
b) Is an input to Quality Assurance process
c) Is an input to Quality Control process
d) Is an input to Quality Planning process
3. The First Company is developing a software product in the
healthcare realm. As part of their stringent quality control policy, the
quality manager utilizing the data from related industries and
checking if the current project is performing acceptably. Which of the
following tool best suitable for this?
a) Design of experiments
b) Flowcharting
c) Benchmarking
d) Control Chart

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4. Two variables are plotted on a graph and a relationship is derived,


this is an example of
a) Pareto diagram
b) Scatter Diagram
c) Control Chart
d) Flow Chart

Questions and Answers


All of the following are true about Pareto chart except:
Its a type of Histogram
It helps find causes that are causing majority of the defects
Is based on the 80/20 rule
Is based on statistical sampling
All of the following is true about Quality Metrics
Is an output of Quality Planning process
Is an input to Quality Assurance process
Is an input to Quality Control process
Is an input to Quality Planning process
The First Company is developing a software product in the healthcare
realm. As part of their stringent quality control policy, the quality manager
utilizing the data from related industries and checking if the current project
is performing acceptably. Which of the following tool best suitable for this?
Design of experiments
Flowcharting
Benchmarking
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Control Chart
Two variables are plotted on a graph and a relationship is derived,
this is an example of
Pareto diagram
Scatter Diagram
Control Chart
Flow Chart

Questions and Answers


1. A quality analyst is asked to measure the various parameters such
as number of defects, the amount of work performed in a day, the
defects per 1000 hours of work etc. The identified parameters, their
definition and how they will be measured is example of:
a) Productivity
b) Defect Density
c) Quality Metrics
d) MTBF
2. With respect to Quality and Grade, which of the following is not true:
a) Low quality is always a problem
b) Low grade may not be a problem
c) A product can be low grade but high quality A high quality
product cannot be low grade

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Plan Human Resource Management

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Lets See the FIRST PROCESS PLAN HUMAN


RESOURCE Management

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Inputs Plan Human Resources Management


Project Management Plan-The project management plan is used to
develop the human resource management plan which includes
The project life cycle and the processes that will be applied to each
phase
How work will be executed to accomplish the project objectives,
A change management plan that documents how changes will be
monitored and controlled, A configuration management plan that
documents how configuration management will be performed,
How integrity of the project baselines will be maintained,
Needs and methods of communication among stakeholders.
Activity Resource Requirements

EEF
Organizational culture and structure,
Existing human resources,
Geographical dispersion of team members,
Personnel administration policies,
Marketplace conditions
OPA

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Tools & Techniques- Plan Human Resource


Management
Org Charts and Position Descriptions-Various formats exist to
document team member roles and responsibilities. Most of the
formats fall into one of three types hierarchical, matrix, and textoriented

Networking-Networking is the formal and informal interaction with


others in an organization, industry, or professional environment
Organizational Theory-Organizational theory provides information
regarding the way in which people, teams, and organizational units
behave
Expert Judgment
Meetings

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Output Plan Human Resource Management


The Output of this process is Human Resource Management
Plan
Roles and responsibilities
Project organization charts
Staffing management plan

Lets See the SECOND PROCESS ACQUIRE


PROJECT TEAM

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Inputs Acquire Project Team


Human Resource Management Plan-The human resource
management plan provides guidance on how project human
resources should be identified, staffed, managed, and eventually
released
EEF-The enterprise environmental factors that influence the Acquire
Project Team process include,
Existing information on human resources including availability,
competency levels, prior experience, interest in working on the
project and their cost rate;
Personnel administration policies such as those that affect
outsourcing;
Organizational structure as described in Section 2.3.1;
Colocation or multiple locations.
OPA-Organizational standard policies, processes, and procedures

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Tools & Techniques- Acquire Project Team


Pre-Assignment-When project team members are selected in
advance, they are considered pre-assigned
Negotiation-Staff assignments are negotiated on many projects they
include
Functional managers
Other project management teams
External organizations, vendors, supplier, contractors, etc.
Acquisition-When the performing organization is unable to provide
the staff needed to complete a project, the required services may be
acquired from outside sources.
Virtual Teams-The use of virtual teams creates new possibilities
when acquiring project team members located across geographies
Multi-Criteria Decisions-Selection criteria are often used as a part of
acquiring the project team including
Availability, Cost, Experience, Ability, Knowledge, Skills, Attitude,
International factors

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Output Acquire Project Team


Project Staff Assignments-The project is staffed when appropriate
people have been assigned to the team
Resource Calendars-Resource calendars document the time
periods that each project team member is available to work on the
project
Project Management Plans-Resource calendars document the time
periods that each project team member is available to work on the
project

Lets See the Third PROCESS DEVELOP


PROJECT TEAM

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Inputs Develop Project Teams


Human Resource Management Plan
Project Staff Assignments-The project is staffed when appropriate
people have been assigned to the team
Resource Calendars-Resource calendars document the time periods
that each project team member is available to work on the project

Tools & Techniques- Develop Project Teams


Interpersonal Skills-Interpersonal skills, sometimes known as soft
skills, are behavioral competencies that include proficiencies such
as communication skills, emotional intelligence, conflict resolution,
negotiation, influence, team building, and group facilitation
Training-Training includes all activities designed to enhance the
competencies of the project team members
Team Building Activities Discussed in Next Slide
Ground Rules-Ground rules establish clear expectations regarding
acceptable behavior by project team members. Early commitment to
clear guidelines decreases misunderstandings and increases
productivity
Colocation Recognition And Rewards
Personnel Assessments Tools
Forming: This phase is where the team meets and learns about the
project and their formal roles and responsibilities. Team members
tend to be independent and not as open in this phase.
Storming. During this phase, the team begins to address the project
work, technical decisions, and the project management approach. If
team members are not collaborative and open to differing ideas and
perspectives, the environment can become counterproductive.

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Norming. In the norming phase, team members begin to work


together and adjust their work habits and behaviors to support the
team. The team learns to trust each other.
Performing. Teams that reach the performing stage function as a
well-organized unit. They are interdependent and work through
issues smoothly and effectively.
Adjourning. In the adjourning phase, the team completes the work
and moves on from the project. This typically occurs when staff is
released from the project as deliverables are completed or as part of
carrying out the Close Project or Phase process

Output Develop Project Teams


Team Performance Assessments-The project management team
makes formal or informal assessments of the project teams
effectiveness
EEF Updates

Lets See the Fourth PROCESS Manage


PROJECT TEAM

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Inputs Manage Project Teams


Human resource management plan Project staff assignments-The project is staffed when appropriate
people have been assigned to the team
Team performance assessments-How the team is performing on the
project.
Issue log-Issues arise in the course of managing the project team.
An issue log can be used to document and monitor who is
responsible for resolving specific issues by a target date.
Work performance reports-Work performance reports provide
documentation about the current project status compared to project
forecasts
Organizational process assets

Tools & Techniques- Manage Project Teams


Observation and conversation-Observation and conversation are
used to stay in touch with the work and attitudes of project team
members
Project performance appraisals-Clarification of roles and
responsibilities, constructive feedback to the team members
Conflict management-Conflict is inevitable in a project environment.
Sources of conflict include scarce resources, scheduling priorities,
and personal work styles
Withdraw/Avoid
Smooth/Accommodate
Compromise/Reconcile
Force/Direct

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Collaborate/Problem Solve
Interpersonal skills-Project managers use a combination of technical,
personal, and conceptual skills to analyze situations and interact
appropriately with team members
Leadership.
Influencing.
Effective decision making.

Output Manage Project Teams


Change requests-Staffing changes, whether by choice or by
uncontrollable events, can affect the rest of the project management
plan
Project management plan updates-Staffing changes, whether by
choice or by uncontrollable events, can affect the rest of the project
management plan
Project documents updates-Project documents that may indirectly be
updated include:
Issue log,
Roles description,
Project staff assignments
Enterprise environmental factors updates
Organizational process assets updates

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Human Resource Management


Project Human Resource Management
o Processes Required To Make The Most Efficient Use Of
People
o 3 Major Processes:
Organizational Planning
Staff Acquisitions
Team Development
o Keep In Mind Of Transient Nature Of Projects
o Apply Techniques That Apply To Current Project Needs
o Ensure HR Compliance With Project Management Activities

Human Resource Management


Project Human Resource Management
o Manager = Good Relationship With Team
o Project Organization
Conflict Between PM And Functional Managers
Dual Allegiance Of Team Members
Complex Prioritization Of Resources
Loss Of Developed Procedures On Project Dissolution
o Compromise = Both Sides Will Lose
o Delegation
Defer The Decision
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Interpreted As Passive
Emphasize Task Vs. Personnel
Can Be Frequently Used

Human Resource Management


Project Human Resource Management
o If There Is A Team Of Experts, PM Decisions Will Promote High
Satisfaction
o Functional/Project Managers Likely To Exercise:
o Power
o Authority
o Influence
o Traditional Organization Forms Have No Single Point Of Contact
For Client/Sponsor

Human Resource Management


Organizational Planning
o Identifying, Documenting And Assigning Project Roles,
Responsibilities, And Reporting Relationships
o Individual And Group Assignments
o Internal And External Employees
o Linked With Communication Planning

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Human Resource Management


Inputs To Organizational Planning
o Project Interfaces
Organizational Interfaces Formal And Informal
Reporting Relationships Among Organizational Units
Technical Interfaces - Formal And Informal Reporting
Relationships Among Technical Disciplines
Engineers, Manufacturers, Electrical, Etc.
Interpersonal Interfaces Formal And Informal
Reporting Relationships Among Individuals
o Staffing Requirements Define Skill Sets From
Individual/Group In Particular Time Frames

Human Resource Management


Inputs To Organizational Planning
o Constraints Factors That Limit Project Teams Options
Organizational Structure (Strong Vs. Weak Matrix)
Collective Bargaining Agreements Contractual
Arrangements
Preferences Of Project Management Team
Expected Staff Assignments

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Human Resource Management


Tools & Techniques For Organizational Planning
o Templates Reuse A Similar Projects Role And
Responsibility Definitions
o Human Resource Practices Corporate Policies, Guidelines,
And Practices
o Organizational Theory How Organizations Are Structured
o Stakeholder Analysis Needs Of Stakeholders Are Ensured

Human Resource Management


Outputs From Organizational Planning
o Role And Responsibility Assignments Can Vary Over
Time, Closely Linked To Scope Definition. Utilizes A
Responsibility Assignment Matrix (RAM) To Define
Responsibility For Each Item In The Work Breakdown
Structure/Task List
o Staffing Management Plan When And How Personnel Are
Included And Removed From The Project Team
o Resource Leveling, Reduce Transition Periods,
Eliminate Dead Time Between Assignments,
Sensitivity To Morale
o Organizational Chart Display Reporting Relationships
o Supporting Detail
o Organizational Impact
o Job Descriptions
o Training Needs

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Human Resource Management


Staff Acquisition
o Ensure Resources Are Available For Project Work
Inputs To Staff Acquisition
o Staffing Management Plan
o Staffing Pool Description
o Previous Experience
o Personal Interests
o Personal Characteristics
o Availability
o Recruitment Practices

Human Resource Management


Tools & Techniques For Staff Acquisition
o Negotiations With Functional Managers And Other Teams
o Staff Utilization And Corporate Politics
o Pre-assignment Result Of A Competitive Proposal, Or An
Internal Initiative
o Procurement Outside Services Are Needed (Lacking Internal
Skills Or Availability Can Not Be Met)
Outputs From Staff Acquisition
o Project Staff Assigned
o Project Team Directory Contact List

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Human Resource Management


Team Development Enhancing Stakeholders To Contribute Along
With Maintaining The Project Teams Functionality
o Personal Development Is The Foundation
o Team Members Often Balance Responsibilities To A Functional
Manager And Project Manager
o Critical To Success Of Project
Inputs To Team Development
o Project Staff
o Project Plan
o Staffing Management Plan
o Performance Reports
o External Feedback
o Periodic Measurements Of Performance

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Human Resource Management


Tools & Techniques For Team Development
o Team-building Activities
o General Management Skills
o Reward And Recognition Systems
Promote Desired Behavior
Must Be Achievable; Apply To The Project
Cultural Differences Recognition
o Co-location Place Members In Physical Location
o Training Enhance Skills, Knowledge, And Capabilities Of
Project Team
Must Be Factored In Cost Analysis Of Project

Human Resource Management


Outputs From Team Development
o Performance Improvements
Individual Skills
Team Behavior
Identify More Efficient Methods Of Work
o Input For Performance Appraisals

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Human Resource Management


Review Guide Tips
o Roles And Responsibilities
Project Manager Plan, Estimate And Schedule Of
Project
Team Help Prepare The WBS, Network Diagrams, And
Estimate Time For Tasks, Complete Tasks
Senior Management Approve Overall Project Plan,
Budget And Schedule And To Approve Any Changes
That Are Made To Those Figures
The Person Experiencing The Problem Must Try To
Solve It Themselves As Long As Means Are In Their
Control
o Powers:
Formal (Legitimate)
Reward
Penalty (Coercive)
Expert (Earned)
Referent Authority Of A Higher Position

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Human Resource Management


Review Guide Tips
o Best Are Expert And Reward; Penalty Is The Worst
Formal, Reward And Penalty Derived From Pms Position
Within The Company
o Conflict
Inevitable Consequence Of Organizational Interactions
Can Be Beneficial
Resolved By Identifying The Causes And Problem
Solving By People That Are Involved & Their Immediate
Manager
Nature Of Project
Limited Power Of The Project Manager
Necessity For Obtaining Resources From Functional
Managers

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Human Resource Management


Review Guide Tips
o Avoid Conflict
Informing The Team
Clearly Assigning Tasks Without Ambiguity
Challenging And Interesting Work Assignments
o Conflict Sources (In Order Of Frequency)
Schedules
Project Priorities
Resources
Technical Opinions
Administrative Procedures
Cost
Personality

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Human Resource Management


Review Guide Tips
o Motivational Theories
Maslows Hierarchy Of Needs People Work To Get A
Chance To Contribute And Use Their Skills
o Self-actualization
McGregors Theory Of X And Y
o X People Need To Be Watched Every Minute
o Y People Willing To Work Without Supervision
Herzbergs Theory Poor Hygiene Factors Destroy Motivation
But Improving Them Will Not Improve Motivation
o Motivating Agents
o Responsibility
o Self-actualization
o Professional Growth
o Recognition

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Human Resource Management


Review Guide Tips
o Responsibility Charts
o Matrix Cross References Team Members With Tasks
(Does Not Show Time When Job Is Done)
o Histogram Months Vs. Number Of Resources
o Gantt Chart Shows When Staff Allocated To Tasks
Leadership Skills
o Directive
o Facilitating
o Coaching
o Supportive
Team Building Skills

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Human Resource Management


Review Guide Tips
o Projectized Organization
o Conflict Between PM And Functional Managers
o Dual Allegiance Of Team Members
o Complex Prioritization Of Resources
o Loss Of Developed Procedures On Project Dissolution
o Compromise Both Sides Will Lose
o Delegation
o Defer The Decision
o Interpreted As Passive
o Emphasize Task Vs. Personnel
o Can Be Frequently Utilized

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Questions and Answers


1. As a project manager, you are preparing the Human Resource plan.
You are considering all the factors that need to be a part of the plan. Which
of these would not form a part of this plan?
A. Project Roles
B. Project Responsibilities
C. Management Reserve
D. Responsibilities

2. You are a project manager who is managing a project that has been
formed for developing the software application requested by an important
client of the organization. Currently, you are preparing the project
management plan and start assigning roles and responsibilities to
resources. What would be the type of chart you would use for this?
A. Hierarchical Chart
B. Gantt Chart
C. Run Chart
D. Roles and Responsibilities Chart

3. One example of a Roles and Responsibilities chart is the RACI Chart.


Which of the following is not depicted by the RACI CHART?
A. Inform
B. Risk
C. Accountable
D. Consult

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4. As a project manager you are developing an Human Resource plan for


a fixed price project. The company does not have the practice of defining
the release criteria and they generally hold on to all resources till the end
of the project. Hence, you try to explain the benefits of having well-defined
release criteria. Which of the following would not be the benefit of a
release management plan?
A. May improve moral of the individuals
B. Other projects can plan based on the release dates identified
C. External customers are happy since they see smaller number of
people working on their project
D. Costs are optimized due to appropriate release of resources.

5. You are attending a seminar of project managers and during the lunch
break; you talk to the other participants, who are also project managers
from other organizations. During such conversation, you get a lot of ideas
about how others plan and execute ideas. What is the type of interaction
would this be an example of?
A. Hierarchical
B. Peer to Peer
C. Networking
D. Organizational Theory

6. You are a project manager in an organization that has a weak matrix


organization. Who is the person with authority in the project?
A. Project Sponsor
B. Customer
C. Project Manager
D. Functional Manager

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7. As a project manager of a project that has been chartered to develop a


product to automate the production process of a toy manufacturing
company. The manager is currently developing the Human Resource plan.
Which of the following would be an objective of HR Management?
A. Reduce costs to ensure that the project is profitable
B. To plan and acquire the best possible team for the project
C. To outsource the project to an external organization
D. To prove to the management that you can meet the expectations
with the existing resources.

8. You, as a project manager of a development project are developing the


HR Plan. To develop the plan you need various inputs and one of them is
the Project Management Plan. Which of the following aspects of the
Project Management plan will impact the Resource Management Plan?
A. Risk Management Plan
B. Earned Value Management
C. Project Charter
D. Organizational HR Processes and Guidelines

9. Which of the following is not a factor that will influence the selection of a
resource into a project team?
A. Budget allocated and the cost of the resource
B. The project is delayed and would have a cost overrun
C. The Time Management System in use within the organization t
D. Availability and skills of the resource being considered

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Questions and Answers


1. Which of the following is a good practice in terms of rewards and
recognition?
a. Working overtime hours on the project after slacking
through the day
b. Rewarding a specific individual when there are many who
contributed to the success of the project.
c. Rewarding the group that produced the successful
product
d. Rewarding is Win-lose behavior

2. Which of the following conflict resolution methods provides for a win-win


situation?
a. Problem Solving
b. Withdrawal
c. Compromising
d. Smoothing
3. Which of the following is not an output?
a. Issue Log
b. Recommended Corrective Actions
c. Organizational Process Assets
d. Project Management Plan

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Project Communication Management

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Lets See the First PROCESS Plan


Communication Management

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Inputs Plan Communication Management


Project management plan -The project management plan provides
information on how the project will be executed, monitored,
controlled, and closed.
Stakeholder register -The stakeholder register provides the
information needed to plan the communication with project
stakeholders.
Enterprise environmental factors -The Plan Communications
Management process is tightly linked with enterprise environmental
factors, since the structure of an organization will have a major effect
on the projects communication requirements.
Organizational process assets-Lessons learned and historical
information are of particular importance because they can provide
insights on both the decisions taken regarding communications
issues

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Tools & Techniques- Plan Communication


Management
Communication requirements analysis -The analysis of the
communication requirements determines the information needs of
the project stakeholders. Calculation of number communication
channels
The total number of potential communication channels is n(n 1)/2,
where n represents the number of stakeholders . For example, a
project with 10 stakeholders has 10(10 1)/2 = 45 potential
communication channels
Communication technology-The methods used to transfer
information among project stakeholders
Impacting Factors which include Urgency of the need for information,
Availability of technology, Ease of Use, Project environment,
Sensitivity and confidentiality of the information
Communication models -The communication models used to
facilitate communications and the exchange of information may vary
from project to project and also within different stages of the same
project.
Sequence of steps in basic communication model
Encode.
Transmit Message.
Decode
Acknowledge.
Feedback/Response

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Communication methods -Communication methods that are used to share


information among project stakeholders.
Interactive communication. Ex meetings, phone calls, instant
messaging, video conferencing, etc.
Push communication- Examples letters, memos, reports, emails,
faxes, voice mails, blogs, press releases, etc.
Pull communication-Used for very large volumes of information, or
for very large audiences, and requires the recipients to access the
communication content at their own discretion Example intranet
sites, e-learning, lessons learned databases, knowledge repositories,
etc.

Output Plan Communication Management


Communications management plan-The communications
management plan is a component of the project management plan
that describes how project communications will be planned,
structured, monitored, and controlled.
Project documents updates-All the related documents are updated

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Lets See the Second Process Manage


Communication

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Inputs Manage Communications


Communications management plan-The communications
management plan describes how project communications will be
planned, structured, monitored, and controlled
Work performance reports Progress Reports
Enterprise environmental factors
Organizational process assets

Tools & Techniques- Manage Communications


Communication technology Which technology to use
Communication models What model of communication use
Communication methods Analyze which method would be
beneficial for communication
Information management systems
Performance reporting

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Output Manage Communications


Project communications
Project management plan updates
Project documents updates
Organizational process assets updates

Lets See the Third PROCESS Control


Communication

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Inputs Control Communications


Project management plan
Project communications
Issue log
Work performance data
Organizational process assets

Tools & Techniques- Control Communications


Information management systems
Expert judgment
Meetings

Output Control Communications


Work performance information
Change requests.
Project management plan updates
Project documents updates
Organizational process assets updates

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Project Communications Management


Project Communications Management
o Processes To Ensure Timely And Proper Generation,
Collection, Dissemination And Disposition Of Project
Information
o General Communications Management
Communications Planning Determining Informational
Needs, Who Needs What And When; 90% Of Pms Time
Is Spent Communicating
Information Distribution Making Information Available
Performance Reporting Collecting And Disseminating
Project Information
Administrative Closure Formalize Project/Phase
Completion

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Project Communications Management


Communications Planning
o Determining Information Requirements Of Stakeholders
o Tightly Linked With Organizational Planning
Inputs To Communications Planning
o Communication Requirements Sum Of The Information
Requirements Of The Stakeholders
Define Type And Format Of Information With Analysis Of
Value Of Information
Project Organization And Stakeholder Responsibility
Relationships
Disciplines, Departments And Specialties Involved In
Project
Logistics Of Number Of Individuals At Location
External Communication Needs (Media)

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Project Communications Management


Communication Technology Used To Transfer Information
o Immediacy Of Need For Information
o Availability Of Technology
o Expected Project Staffing Compatible With Personnel
Experience
o Length Of Project Will Technology Change During Duration?
Constraints Factors That Limit Project Teams Options
Assumptions

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Project Communications Management


Tools & Techniques For Communication Planning
o Stakeholder Analysis Informational Needs Should Be Analyzed
To Develop Methodology Suited For The Project; Eliminate
Unnecessary Information Or Technologies
Outputs From Communications Planning
o Communication Management Plan
o Collection And Filing Structure To Detail The Gathering And
Storage Of Information; Updating And Dissemination
o Distribution Structure Who Gets Info In Certain Format;
Compatible With Project Organization Chart
o Description Of Information Included Format, Level Of
Detail, Conventions
o Production Schedules Of Each Type Of Communication
o Methods For Accessing Information
o Method For Updating And Refining Communications Plan

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Project Communications Management


Information Distribution Making Information Available In A Timely
Manner By Implementing The Communications Plan; Responding To
Requests For Information
Inputs To Information Distribution
o Work Results
o Communication Management Plan
o Project Plan

Project Communications Management


Tools & Techniques For Information Distribution
o Communication Skills Used To Exchange Information.
Sender Is Responsible For Clarity; Receiver Is Responsible For
Receipt And Understanding
o Information Retrieval Systems Filing Systems, Software
o Information Distribution Systems Meetings,
Correspondence, Networked Databases, Video/Audio
Conferencing
Outputs From Information Distribution
o Project Records Maintained In An Organized Fashion

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Project Communications Management


Performance Reporting
o Collecting And Disseminating Performance Indicators To Provide
Stakeholders Information How Resources Are Achieving Project
Objectives
o Status Reporting
o Progress Reporting
o Forecasting
o Project Scope, Schedule, Cost And Quality, Risk And
Procurement
Inputs To Performance Reporting
o Project Plan
o Work Results Deliverables Completed, % Completed, Costs
Incurred
o Other Project Records

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Project Communications Management


Tools & Techniques For Performance Reporting
o Performance Reviews Meetings To Assess Status
o Variance Analysis Comparing Actual Results To Planned Or
Expected Results (Baseline); Cost And Schedule Most
Frequent
o Trend Analysis Examining Results Over Time To Determine
Performance
o Earned Value Analysis Integrates Scope, Cost And
Schedule Measures Calculate 3 Keys:
Budgeted Cost Of Work (BCWS) Portion Of Approved
Cost Estimate Planned To Be Spent On Activity
During A Given Period
Actual Cost Of Work Performed (ACWP) Total Of
Direct And Indirect Cost Incurred In Accomplishing Work
On Activity In A Given Period

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Project Communications Management


Earned Value (Budgeted Cost Of Work Performed BCWP)
Percentage Of Total Budget Equal To Percentage Of Work Actually
Completed
o Cost Variance (CV) = BCWP ACWP
o Schedule Variance (SV) = BCWP BCWS
o Cost Performance Index (CPI) = BCWP/ACWP
Information Distribution Tools & Techniques

Project Communications Management


Outputs From Performance Reporting
o Performance Reports Organize And Summarize Information
Gathered And Present Results
o Bar Charts, Gantt Charts, S-curves, Etc.
Change Requests Handled As Part Of Change Control
Administrative Closure
o Projects/Phases After Achieving Results Or Terminated Require
Closure
o Verifying And Documenting Project Results To Formalize
Acceptance
o Collection Of Project Records, Analysis Of Effectiveness, Reflect
Final Specifications And Archiving Of Material

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Project Communications Management


Inputs To Administrative Closure
o Performance Measurement Documentation Includes Planning
Docs; All Information That Records And Analyzes Performance
o Documentation Of Product And Project
o Other Project Records
Tools & Techniques Of Administrative Closure
o Performance Reporting Tools & Techniques
Outputs From Administrative Closure
o Product Archives Complete Index Of All Records, Database
Updates
o Formal Acceptance Signoffs From Client Or Sponsor
o Lessons Learned

Project Communications Management


Tips From Review Guide
o Understand All Concepts And Major Points
o Memorize The Communications Model
o Understand The Inputs/Outputs Of Administrative Closure
o Understand How Administrative Closure Differs From Contract
Closeout
Contract Closeout Has Product Verification And
Administrative Closeout But The Contract Terms May
Have Special Provisions/Procedures For Closeout

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Project Communications Management


Communication Model
o Messages Are Encoded By Sender And Decoded By Receiver
Based On Receivers Education, Experience, Language And
Culture
o Sender Should Encode Message Carefully
Nonverbal
Para lingual (Pitch And Tone)
Active Listening Receiver Confirms They Are
Listening, Confirms Agreement And Ask For
Clarification
Effective Listening Watching Speaker, Think Before
Speaking, Ask Questions, Repeating And Providing
Feedback

Project Communications Management


Communication Methods
o Pick The Form Of Communication That Is Best For The
Situation
Formal Written Complex Problems, All Plans,
Communicating Over Long Distances
Formal Verbal Presentations, Speeches
Informal Written Memos, E-mail, Notes
Informal Verbal Meetings, Conversations

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Project Communications Management


Communication Blockers
o Noise, Distance, Improper En-coding, Bad Idea, Hostility,
Language, Culture
Performance Reporting
o Status Reports (Where Project Stands)
o Progress Reports (What Has Been Accomplished)
o Trend Report (Project Results Over Time)
o Forecasting Report (Projecting Future Status)
o Variance Report (Actual Results Vs. Planned)
o Earned Value
Communication Channels Communications Grow At A Linear
Rate
o N (N-1)/2 Where N = The Number Of People
o Example 4 People Equals 6 Communication Channels

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Project Communications Management


To Determine If Someone Understands Message Feedback Must Be
Obtained
Unanimous Agreement
o All Members Committed
o Decisions Reached Slowly
o Integrity Is Developed
o Future Decision Making Is Enhanced
Clearly Defined Group Goals
o Motivate Team Behavior
o Cause Tension Until Completed
o Encourage Member Identification
Complex Messages Need Oral, Written And Non Verbal Methods
There Are 5 Directions Of Communication
Faade When An Individual Processed Needed Information But
Withholds The Information

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Project Communications Management


Least Effective Form Of Communication For Complex Situations Is
Verbal And Formal
If There Are A Team Of Experts, PM Decisions Will Likely Promote
High Satisfaction
Functional/Project Managers Likely To Exercise
Power
Authority
Influence
Traditional Organization Forms Have No Single Point Of Contact For
Clients/Sponsors
To Determine If Someone Understands Message, Must Obtain
Feedback
Unanimous Agreement All Members Committed, Decisions
Reached Slowly, Integrity Is Developed, Future Decision Making Is
Enhanced
Clearly Defined Group Goals: Motivate Team Behavior, Cause
Tension Until Completed, Encourage Member Interaction
Complex Messages Need Oral, Written And Non Verbal Methods
Least Effective Form Of Communication For Complex Issues: Verbal
And Formal

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Questions and Answers


1. Of the following, which one is not an example of formal
communications?
a) Presentations to groups
b) Ad hoc conversations
c) Contractual agreements
d) Presentations to management
2. You are the project manager for the LKH Project. Management has
requested that you create a document detailing what information will be
expected from stakeholders and to whom that information will be
disseminated. Management is asking for which one of the following?
a) Roles and responsibilities matrix
b) Scope Management Plan
c) Communications Management Plan
d) Communications worksheet
3. Which one of the following will help you, the project manager, complete
the needed Communications Management Plan by identifying the
stakeholders and their communication needs?
a) Identification of all communication channels
b) Formal documentation of all communication channels
c) Stakeholder Register
d) Communication matrix

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Questions and Answers


1. You are the project manager for the KLN Project. You had 19
stakeholders on this project. You have added three team members to the
project. How many more communication channels do you have now than
before?
a) 171
b) 231
c) 60
d) 1
2. Which one of the following can use EVM in its preparation for
management?
a) Status reports
b) Trend reports
c) Performance reports
d) All of the above

3. Of the following, which term describes the pitch and tone of an


individuals voice?
a) Para lingual
b) Feedback
c) Effective listening
d) Active listening

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Questions and Answers


1. The three basic elements needed for communication in project
management are
a) Words, sentences, paragraphs
b) Proper grammar, spelling, ideas
c) Verbal, nonverbal, action
d) Sender, receiver, message

2. Which one of the following is the method of analyzing project


performance preferred in government projects?
a) Communications management
b) Management by walking around
c) EVM
d) Variance analysis

3. What percentage of a message is sent through nonverbal


communications, such as facial expressions, hand gestures, and body
language?
a) Greater than 50 percent
b) 30 to 40 percent
c) 20 to 30 percent
d) 10 to 20 percent

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Questions and Answers


1. When does lessons-learned identification take place within a project?
a) At the time of singing the contract.
b) When the requirements are signed off
c) On project completion
d) Through the course of the project
2. Often in project management you will have to negotiate. Negotiations
work best in which environment?
a) Caution and yielding
b) Sincerity, honesty, and extreme caution
c) Mutual respect and admiration
d) Mutual respect and cooperation

3. You are the project manager for the PMU Project. Your project has 13
members. You have been informed that next week your project will receive
the seven additional members you requested. How many channels of
communications will you have next week?
a) 1
b) 78
c) 190
d) 112

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Project Risk Management

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Plan risk management Plan Risk Management


has 6 processes
1. Plan Risk Management
2. Identify Risks
3. Perform Qualitative Risk Analysis
4. Perform Quantitative Risk Analysis
5. Plan Risk Response
6. Control Risks

Lets See the First Process Plan Risk


Management

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Inputs Plan Risk Management


Project management plan
Project charter- The project charter can provide various inputs such
as high-level risks, high-level project descriptions, and high-level
requirements.
Stakeholder register- The stakeholder register, which contains all
details related to the projects stakeholders, provides an overview of
their roles.
Enterprise environmental factors- The enterprise environmental
factors that can influence the Plan Risk Management process include
risk attitudes, thresholds, and tolerances that describe the degree of
risk that an organization will withstand.
Organizational process assets

Tools & Techniques- Develop Schedule


Analytical techniques - Analytical techniques are used to understand
and define the overall risk management context of the project
Expert judgment
Meetings

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Output Develop Schedule


Risk management
The risk management plan includes the following:
Methodology. Defines the approaches, tools, and data sources that
will be used to perform risk management on the project.
Roles and responsibilities. Defines the lead, support, and risk
management team members for each type of activity in the risk
management plan, and clarifies their responsibilities.
Budgeting. Estimates funds needed, based on assigned resources,
for inclusion in the cost baseline and establishes protocols for
application of contingency and management reserves.
Timing. Defines when and how often the risk management processes
will be performed throughout the project life cycle, establishes
protocols for application of schedule contingency reserves, and
establishes risk management activities for inclusion in the project
schedule.

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Lets See the Second Process Identify Risks

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Inputs Identify Risks


Risk management plan
Cost management plan- The cost management plan provides
processes and controls that can be used to help identify risks across
the project.
Schedule management plan- The schedule management plan
provides insight to project time/schedule objectives and expectations
which may be impacted by risks (known and unknown).
Quality management plan- The schedule management plan provides
insight to project time/schedule objectives and expectations which
may be impacted by risks (known and unknown).

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Inputs Identify Risks


Human resource management plan - The schedule management
plan provides insight to project time/schedule objectives and
expectations which may be impacted by risks (known and unknown).
Scope baseline- Project assumptions are found in the project scope
statement
Activity cost estimates
Activity duration estimates
Stakeholder register
Project documents
Procurement documents
Enterprise environmental factors

Tools & Techniques- Identify Risks


Documentation reviews - A structured review of the project
documentation may be performed, including plans, assumptions,
previous project files, agreements, and other information
Information gathering techniques Brainstorming, Delphi,
Interviewing etc.
Checklist analysis- Risk identification checklists are developed based
on historical information and knowledge that has been accumulated
from previous similar projects and from other sources of information

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Tools & Techniques- Identify Risks


Assumptions analysis - Every project and its plan is conceived and
developed based on a set of hypotheses, scenarios, or assumptions.
Assumptions analysis explores the validity of assumptions as they
apply to the project
Diagramming techniques
Cause and effect diagrams. These are also known as Ishikawa or
fishbone diagrams and are useful for identifying causes of risks
System or process flow charts. These show how various elements of
a system interrelate and the mechanism of causation.
Influence diagrams. These are graphical representations of situations
showing causal influences, time ordering of events, and other
relationships among variables and outcomes
SWOT analysis
Expert judgment

Output Identify Risks


Risk register- The primary output from Identify Risks is the initial
entry into the risk register
List of identified risks
List of potential responses

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Lets See the Third Process Perform


Qualitative Risk Analysis

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Inputs Perform Qualitative Risk Analysis


Risk management plan- The risk management plan provides
guidelines, methods, and tools to be used in qualitative risk analysis.
Scope baseline- Projects using state-of-the-art or first-of-its-kind
technology, and highly complex projects, tend to have more
uncertainty. This can be evaluated by examining the scope baseline
Risk register- The risk register contains the information that will be
used to assess and prioritize risks.
Enterprise environmental factors- Enterprise environmental factors
may provide insight and context to the risk assessment, such as:
Industry studies of similar projects by risk specialists,
Risk databases that may be available from industry or proprietary
sources.
Organizational process assets- The organizational process assets
that can influence the Perform Qualitative Risk Analysis process
include information on prior, similar completed projects.

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Tools & Techniques- Perform Qualitative Risk


Analysis
Risk probability and impact assessment- Risk probability assessment
investigates the likelihood that each specific risk will occur and the
impact of it.
Probability and impact matrix- Risks can be prioritized for further
quantitative analysis and planning risk responses based on their risk
rating
Risk data quality assessment- Risk data quality assessment is a
technique to evaluate the degree to which the data about risks is
useful for risk management
Risk categorization- Risks to the project can be categorized by
sources of risk (e.g., using the RBS), the area of the project affected
(e.g., using the WBS), or other useful categories (e.g., project phase)
to determine the areas of the project most exposed to the effects of
uncertainty
Risk urgency assessment- Risks requiring near-term responses may
be considered more urgent to address
Expert judgment

Output Perform Qualitative Risk Analysis


Project documents updates
Risk register updates.
Assumptions log updates

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Lets See the Fourth Process Perform


Quantitative Risk Analysis

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Inputs Perform Quantitative Risk Analysis


Risk management plan- The risk management plan provides
guidelines, methods, and tools to be used in quantitative risk
analysis.
Cost management plan- The risk management plan provides
guidelines, methods, and tools to be used in quantitative risk
analysis.
Schedule management plan- The schedule management plan
provides guidelines on establishing and managing risk reserves.
Risk register- The risk register is used as a reference point for
performing quantitative risk analysis
Enterprise environmental factors- Enterprise environmental factors
may provide insight and context to the risk analysis, such as:
Industry studies of similar projects by risk specialists,
Risk databases that may be available from industry or proprietary
sources.
Organizational process assets

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Tools & Techniques- Perform Quantitative Risk


Analysis
Data gathering and representation techniques- Gathering data from
various sources like interviewing etc. and representing them through
various techniques like Probability distributions.
Quantitative risk analysis and modeling techniques- Discussed in
next slide
Expert judgment

Tools & Techniques- Perform Quantitative Risk


Analysis
Quantitative risk analysis and modeling techniques
Sensitivity analysis.

Expected monetary value analysis.


Modeling and simulation
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Output Perform Quantitative Risk Analysis


Project management plan updates
Project documents updates

Lets See the Fifth Process Plan Risk


Response

Inputs Plan Risk Response


Risk management plan
Risk register

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Tools & Techniques- Plan Risk Response


Strategies for negative risks or threats Avoid
Transfer
Mitigate
Accept
Strategies for positive risks or opportunities
Enhance
Share
Accept
Contingent response strategies
Expert judgment

Output Plan Risk Response


Project management plan updates
Project document updates

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Lets See the Sixth Process Control Risks

Inputs- Control Risks


Project management plan
Risk register
Work performance data
Work performance reports

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Tools & Techniques- Control Risks


Risk reassessment- Control Risks often results in identification of
new risks, reassessment of current risks, and the closing of risks that
are outdated.
Risk audits- Risk audits examine and document the effectiveness of
risk responses in dealing with identified risks and their root causes,
as well as the effectiveness of the risk management process
Variance and trend analysis- Many control processes employ
variance analysis to compare the planned results to the actual results
Technical performance measurement- Technical performance
measurement compares technical accomplishments during project
execution to the schedule of technical achievement. Ex weight,
transaction times, number of delivered defects, storage capacity, etc.
Reserve analysis- Reserve analysis compares the amount of the
contingency reserves remaining to the amount of risk remaining at
any time in the project in order to determine if the remaining reserve
is adequate
Meetings

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Output Control Risk


Work performance information
Change requests
Project management plan updates
Project documents updates
Organizational process assets updates

Project Risk Management


Project Risk Management
Includes Identifying, Analyzing, And Responding To Risk Areas;
Maximizing Results Of Positive Events And Minimizing
Consequences Of Adverse Events
o Risk Identification Which Are Likely To Affect The Project
o Risk Quantification Evaluation Of Risk To Assess The
Range Of Possible Outcomes
o Sometimes Treated As Single Process; Risk
Analysis/Assessment
Risk Response Development Defining Enhancement Steps
For Opportunities And Response
o Sometimes Called Response Planning/Mitigation
Risk Response Control Responding To Changes In Risk Over
Course Of Project
o May Be Combined As Risk Management

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Project Risk Management


Risk Identification
o Determining Which Risks Are Likely To Affect The Project And
Documenting Them
o Performed On A Regular Basis; Address Internal And External
Risks
Internal Project Team Has Control/Influence Over
External Beyond Project Teams Control
o Identify Cause And Effect And Effects And Causes; What
Could Happen Vs. What Outcomes Should Be Avoided

Project Risk Management


Inputs To Risk Identification
o Product Description More Risk Associated With Unproven
Technologies (Innovation/Invention). Often Described In Terms
Of Cost And Schedule Impact
o Other Planning Reports
WBS (Any Non-traditional Approaches)
Cost/Duration Estimates Aggressive Schedules;
Limited Amount Of Information
Staffing Plan Hard To Replace/Source Skill Sets
Procurement Management Plan Market Conditions
o Historical Information Previous Projects
Project Files
Commercial Databases
Project Team Knowledge Member Experiences
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Project Risk Management


Tools & Techniques For Risk Identification
o Checklists Organized By Source Of Risk, Included Project
Context, Process Outputs, Product And Technology Issues,
Internal Sources
o Flowcharting Understand Cause And Effect Relationships
o Interviewing Conversations With Stakeholders

Project Risk Management


Outputs From Risk Identification
o Sources Of Risk Categories Of Possible Risk Events, Allinclusive
o Changes In Requirements
o Design Errors, Omissions, Misunderstanding
o Poorly Defined Roles And Responsibilities
o Insufficiently Skilled Staff
Include Estimate Of Probability, Range Of Possible
Outcomes, Expected Timing, Anticipated Frequency

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Project Risk Management


Potential Risk Events Discrete Occurrences That May Affect
Project
o Identified When Probability/Magnitude Of Loss Is High (E.G.
Turnover)
New Technologies Obsolete Need Of Product
Socio, Political And Economic Events
Include Estimate Of Probability, Range Of Possible
Outcomes, Expected Timing, Anticipated Frequency
Risk Symptoms Triggers That Are Indirect Manifestations Of
Actual Risk Events (E.G. Poor Morale)
Inputs To Other Processes Identify Need In Another Area;
Constraints And Assumptions

Project Risk Management


Risk Quantification
o Evaluation Of Possible Project Outcomes And Determining
Which Events Warrant Response
Opportunities And Threats Can Provide Unanticipated
Results (E.G. Schedule Delay Considers A New
Strategy)
Multiple Effects From A Single Event
Singular Stakeholder Opportunities May Force Suffering
In Other Areas
Reliance On Statistics And Forecasting (Mathematical
Errors)

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Project Risk Management


Inputs To Risk Quantification
o Stakeholder Risk Tolerance
More Capital To Expend; Perceptions Of Severity
Sources Of Risk
Potential Risk Events
Cost Estimates
Activity Duration Estimates

Project Risk Management


Tools & Techniques For Risk Quantification
o Expected Monetary Value Product Of 2 Numbers
Risk Event Probability Estimate That Event Will Occur
Risk Event Value Estimate Of Gain Or Loss
Statistical Sums Calculate Range Of Total Costs From Cost
Estimates For Individual Work Items
Simulation Representation or Model; Provide Statistical
Distribution of Calculated Results.
o Monte Carlo, Critical Path, Pert Techniques
Decision Trees Depicts Key Interactions Among Decisions And
Possible Outcomes
Expert Judgment

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Project Risk Management


Outputs From Risk Quantification
o Opportunities To Pursue; Threats To Respond
o Opportunities To Ignore; Threats To Accept
Risk Response Development
o Defining Enhancement Steps For Opportunities And
Responses To Threats
Avoidance Eliminating Threat By Eliminating The
Cause
Mitigation Reducing Expected Monetary Value Of
Event By Reducing The Probability Of Occurrence
Acceptance Accept The Consequences (Active Contingency Plan - Or Passive Response)

Project Risk Management


Inputs To Risk Response Development
o Opportunities To Pursue, Threats To Respond
o Opportunities To Ignore, Threats To Accept
Tools & Techniques For Risk Response Development
o Procurement Acquire Resources (Exchange 1 Risk For
Another)
o Contingency Planning Defining Action Steps Should A Risk
Event Occur
o Alternative Strategies Change Planned Approach
o Insurance

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Project Risk Management


Outputs From Risk Response Development
o Risk Management Plan Document Procedures To Manage
Risk Events. Addresses Risk Identification And Quantification
Processes, Personnel Responsible For Managing Areas Of
Risk, Maintenance Of Identification And Quantification
Process, Implementation Of Contingency Plans And Allocation
Of Reserve
o Inputs To Other Processes Alternative Strategies,
Contingency Plans, Anticipated Procurements
o Contingency Plans
o Reserves Provision in Project Plan to Mitigate Costs And
Schedule Risks. Used With A Modifier (Management,
Schedule, Budget) To Provide Further Detail When Type Of
Reserve Can Be Used
o Contractual Agreements Insurance, Services And Other
Functions To Avoid And Mitigate Threats.

Project Risk Management


Risk Response Control
o Involves Executing The Risk Management Plan In Order To
Respond To Risk Events During The Project
Control And Iteration Are Required; Not All Risks Can Be
Identified
Inputs To Risk Response Control
o Risk Management Plan
o Actual Risk Events Recognize Occurrence
o Additional Risk Identification Surfacing Of Potential Or
Actual Risk Sources

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Project Risk Management


Tools & Techniques For Risk Response Control
o Workarounds Unplanned Responses To Negative Risk
Events (Response Was Not Defined In Advance)
o Additional Risk Response Development Planned
Response May Not Be Adequate
Outputs From Risk Response Control
o Corrective Action Performing The Planned Risk Response
o Updates To Risk Management Plan

Project Risk Management


Tips From Review Guide
o Definition Of Risk: A Discrete Occurrence That May Affect
The Project For Good Or Bad
o Definition Of Uncertainty: An Uncommon State Of Nature,
Characterized By The Absence Of Any Information Related To
A Desired Outcome
o Definition Of Risk Management: The Processed Involved
With Identifying, Analyzing, And Responding To Risk.
Maximize Results Of Positive Events; Minimizing
Consequences Of Negative Events

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Project Risk Management


Tips From Review Guide
o Inputs To Risk Management:
All Project Background Information
Historical Records
Past Lessons Learned
Project Charter
Scope Statement
Scope Of Work
Wbs
Network Diagram
Cost And Time Estimates
Staffing Plan

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Project Risk Management


Tips From Review Guide
o Risk Management Process
Risk Identification Majority During Planning; Onset Of
Project To Close Of Project
2 Types
o Business: Risk Of A Gain Or Loss
o Pure (Insurable): Only A Risk Of Loss
Sources:
o External: Regulatory, Environmental,
Government
o Internal: Schedule, Cost, Scope Change,
Inexperience, Planning, People, Staffing,
Materials, Equipment
o Technical: Changes In Technology
o Unforeseeable: Small (Only About 10%)

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Project Risk Management


Tips From Review Guide
o Risk Management Process
Risk Factors Determine:
Probability That It Will Occur (What)
Range Of Possible Outcomes (Impact, Amount At
Stake)
Expected Timing (When)
Anticipated Frequency (How Often)
o Symptoms Early Warning Signs Determined By PM
o Risk Tolerances Amount Of Risk That Is Acceptable

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Project Risk Management


Tips From Review Guide
o Common Stumbling Blocks
Risk Identification Is Completed Without Knowing
Enough About The Project
Project Risk Evaluated Only By Questionnaire, Interview
Or Monte Carlo; Does Not Provide A Per Task Analysis
Of Risk
Risk Identification Ends Too Soon
Project Risk Identification And Evaluation Are Combined
Results In Risks That Are Evaluated When They
Appear; Decreased Total Number Of Risks And Stops
Identification Process
Risks Are Identified Too Generally
Categories Of Risks Are Forgotten (Technology, Culture)
Only 1 Identification Method Is Used
First Risk Response Strategy Is Used Without Other
Consideration
Risks Are Not Devoted Enough Attention During The Execution
Phase

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Project Risk Management


Tips From Review Guide
o Risk Management Process
Risk Quantification Assess Risks To Determine
Range Of Possible Outcomes; Which Risk Events
Warrant A Response
Probability
Amount At Stake (Impact)
Develop A Ranking (Priority) Of Risks
o Qualitative Take An Educated Guess
o Quantitative Estimation By Calculation
o Risk Assessment = Risk Identification + Risk Quantification

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Project Risk Management


Tips From Review Guide
o Risk Management Process
Monte Carlo Simulation Simulates Cost And
Schedule Results Of Project
Indicates Risk Of A Project And Each Task By
Providing A Percent Probability That Each Task
Will Be On The Critical Path
Accounts For Path Convergence (Where Tasks In
A Network Diagram Converge Into 1 Task More
Risk)
o Expected Monetary Value Multiply Probability By Impact
Helps Define And Prove What The Project Reserve
Should Be
o Decision Trees
Takes Into Account Future Events When Making A
Decision Today
Makes Use Of Expected Value Calculations And Mutual
Exclusivity
Be Able To Draw One; Boxes Are Decisions, Circles Are
What Can Happen As A Result Of The Decision

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Project Risk Management


Tips From Review Guide
o Risk Management Process
Outputs From Risk Quantification
Determination Of Top Risks
Opportunities To Pursue
Opportunities To Ignore
Threats To Respond To
Threats To Ignore

Project Risk Management


Tips From Review Guide
o Risk Management Process
Risk Response Development (What Will Be Done, How
To Make Risk Smaller Or Eliminate)
Not All Risks Can Be Eliminated
Alternative Strategies (Risk Mitigation)
o Avoidance Eliminate The Cause
o Mitigation Effect The Probability Or Impact
Of Risk
o Acceptance Do Nothing
o Deflection (Transfer, Allocate) Make
Another Party Responsible, Insurance,
Outsourcing
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Project Risk Management


Tips From Review Guide
o Risk Management Process
Outputs From Risk Response Development
Insurance Exchange An Unknown Risk For A
Known Risk (Response To Pure Risks)
Contracting Hire Experience To Perform Work
Contingency Planning Specific Actions To Take
If Risk Event Occurs
Reserves (Contingency) Recommended Total
Of 10% To Account For Known And Unknown
Risks
o Risk Management Plan Documents Risks Identified And
How They Are Addressed; Non-critical Risks Should Be
Recorded To Revisit During The Execution Phase

Tips from Review Guide


Risk Management Process
o Risk Response Control Executing And Updating The Risk
Management Plan
Workarounds Unplanned Responses To Risks;
Addressing Risks That Were Unanticipated
Contingency Plans Planned Responses To Risks;
Risk Response Development Actions

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Project Risk Management


Tips From Review Guide
o Risk Mitigation Does Not Involve ID Of Risks (They Are
Already Known)
o Self-Insurance Can Lead To Failure To Ensure Funds For
Low Probability Events And Confuse Business Risks With Pure
Risks
o Risk Mitigation Can Purchase Insurance
o Schedule Risk Critical Path Adjusted By High Risk Activity
Float
o Sensitivity Analysis Estimate The Effect Of Change Of One
Project Variable On Overall Project
o Standard Deviation Of Project Completion Relationship Of
Uncertainty Of Critical Path Activities; Indicator Of Project End
Target Confidence

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Questions and Answers


1. With respect to a project risk, all of the following are true except
A. It may have a negative impact on schedule or cost
B. It may have a positive impact on cost
C. It is sure to have impact in subsequent phase of the project
D. It may have one or more causes
2. Which of the following risk events will surely impact your project
schedule?
A. A dispute on the contract for payments
B. A delay in requirements gathering and customer signoff on
requirements
C. A review meeting on warranty support postponed by 3 weeks
D. Increase in flight costs for travel to customer location
3. There is a 70% chance of making US$ 200,000 profit on a project. The
project also has a 10% chance of making a loss of US$ 300,000. The
Expected Monetary Value for this project is:
A.US$ 200,000 profit
B.US$ 170,000 loss
C.US$ 30,000 loss
D.US$ 110,000 profit

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4. Risk response plan does not addresses


A. List of risks
B. Impact of each identified risk
C. Residual risk
D. Prioritized risks
5. You have decided to buy insurance at a premium of US$10,000, against
certain project risks. You are currently following which Risk Management
Process.
A. Perform Quantitative Risk Analysis
B. Plan Risk Response
C. Plan Risk Management
D. Perform Qualitative Risk Analysis

6. You are in the last phase before delivering the project. You customer
asks you a change that will severely increase the project risk. What should
you do first?
A. Educate the customer of the consequences
B. Do an impact analysis of the change as per the Change Control
Process
C. Discuss with the stake holders
D. Analyses how important is the change and then proceed
accordingly

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7. You are managing a very large and complex project for an


offshore oil drilling company. How often should you do risk
identification?
A. Use a suitable thumb rule to arrive at a weekly or monthly
schedule
B. At the end of each project phase
C. Throughout the project
D. All risks should be identified in the beginning as failure can be
expensive
8. Ravi is a very experienced project manager who has been appointed to
a new project about to begin in 2 weeks time. Ravi has just received the
project charter and the sponsor has asked him to identify the risks as soon
as possible. Ravi would be best helped by
A. Reviewing the project scope and project plan.
B. Consult the project team
C. Review material on the internet
D. Consult project managers with experience on similar projects
within the organization
9. Monte Carlo is a
A. Name of a simulation technique
B. Is a Probability distribution
C. Is an decision tree analysis technique
D.I s a method of seeking expert judgment

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10. You have identified a new, previously unidentified, risk in the project.
What would you do?
A. Determine the value of the risk and add it to the project cost
B. Increase the contingency of the project
C. Analyzes the risk for its probability and impact. Document the
EMV of this risk
D. Increase the project price equal to the risk value
11. X&Y motor company, which builds passenger cars, is working on a
new sports car. X&Y is not confident if the internal engineering skills can
deliver the ABS system for the sports car application. They outsource the
design and development of the ABS system to B&C. X&Y have
A. Transferred to risk
B. Avoided the risk
C. Accepted the risk
D. Mitigated the risk
12. All of the following are true about risk except:
A. May have a positive or negative impact
B. Some risks are desired in a business
C. The event associated with the risk may or may not happen
D. Risks can be eliminated

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Project Procurement Management

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Lets See the First Process Plan Procurement


Managements

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Inputs Plan Procurement Management


Project management plan- The project management plan describes
the need, justification, requirements, and current boundaries for the
project
Requirements documentation
Risk register- The risk register provides the list of risks, along with
the results of risk analysis and risk response planning
Activity resource requirements- Activity resource requirements
contain information on specific needs such as people, equipment, or
location.
Project schedule- Project schedule contains information on required
timelines or mandated deliverable dates.
Activity cost estimates- Cost estimates developed by the procuring
activity are used to evaluate the reasonableness of the bids or
proposals received from potential sellers.
Stakeholder register- The stakeholder register provides details on the
project participants and their interests in the project.
Enterprise environmental factors- The enterprise environmental
factors that can influence the Plan Procurement Management
process include market place conditions, suppliers etc.

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Tools & Techniques- Plan Procurement


Management
Make-or-buy analysis- A make-or-buy analysis is a general
management technique used to determine whether particular work
can best be accomplished by the project team or should be
purchased from outside sources.
Expert judgment
Market research- Market research includes examination of industry
and specific vendor capabilities
Meetings- Research alone may not provide specific information to
formulate a procurement strategy without additional information
interchange meetings with potential bidders.

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Output Plan Procurement Management


Procurement management plan- The procurement management plan
is a component of the project management plan that describes how a
project team will acquire goods and services from outside the
performing organization.
Procurement statement of work- The statement of work (SOW) for
each procurement is developed from the project scope baseline and
defines only that portion of the project scope that is to be included
within the related contract.
Procurement documents- Procurement documents are used to solicit
proposals from prospective sellers like Bid, Tender Quotation
Source selection criteria- Criteria are developed and used to rate or
score seller proposals, and can be objective or subjective.
Make-or-buy decisions- A make-or-buy analysis results in a decision
of whether particular work can best be accomplished by the project
team or needs to be purchased from outside sources
Change requests
Project documents updates

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Lets See the Second Process Conduct


Procurement

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Inputs Conduct Procurement


Procurement management plan- The procurement management plan
describes how the procurement processes will be managed from
developing procurement documentation through contract closure
Procurement documents- Procurement documents provide an audit
trail for contracts and other agreements.
Source selection criteria- Source selection criteria can include
information on the suppliers required capabilities, capacity, delivery
dates, product cost, life-cycle cost, technical expertise, and the
approach to the contract.

Inputs Conduct Procurement


Seller proposals- Seller proposals, prepared in response to a
procurement document package, form the basic information that will
be used by an evaluation body to select one or more successful
bidders (sellers).
Project documents
Make-or-buy decisions
Procurement statement of work -The procurement statement of work
provides suppliers with a clearly stated set of goals, requirements,
and outcomes from which they can provide a quantifiable response
ex Specifications, Quality levels, Work location
Organizational process assets

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Tools & Techniques- Conduct Procurement


Bidder conference- Bidder conferences are meetings between the
buyer and all prospective sellers prior to submittal of a bid or
proposal
Proposal evaluation techniques
Independent estimates- Procuring Organization prepares their own
independent estimates
Expert judgment
Advertising-Existing lists of potential sellers often can be expanded
by placing advertisements in general circulation publications such as
selected newspapers or in specialty trade publications
Analytical techniques
Procurement negotiations-Procurement negotiations clarify the
structure, requirements, and other terms of the purchases so that
mutual agreement can be reached prior to signing the contract

Output Conduct Procurement


Selected sellers
Agreements
Resource calendars
Change requests
Project management plan updates
Project documents updates

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Lets See the Third Process Control


Procurement

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Inputs Control Procurement


Project management plan-The project management plan
describes how the procurement processes will be managed from
developing procurement documentation through contract closure
Procurement documents-Procurement documents contain
complete supporting records for administration of the procurement
processes; this includes procurement contract awards and the
statement of work
Agreements-Agreements are understandings between parties,
including understanding of the duties of each party
Approved change requests-Approved change requests can
include modifications to the terms and conditions of the contract,
including the procurement statement of work, pricing, and
descriptions of the products, services, or results to be provided
Work performance reports
Work performance data

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Tools & Techniques- Control Procurements


Contract change control system-A contract change control system
defines the process by which the procurement can be modified
Procurement performance reviews-A procurement performance
review is a structured review of the sellers progress to deliver project
scope and quality, within cost and on schedule, as compared to the
contract.
Inspections and audits-Inspections and audits required by the buyer
and supported by the seller, as specified in the procurement contract,
can be conducted during execution of the project to verify
compliance in the sellers work processes or deliverables
Performance reporting-Work performance data and reports supplied
by sellers are evaluated against the agreement requirements.

Tools & Techniques- Control Procurements


Payment systems-Payments to the seller are typically processed
by the accounts payable system of the buyer after certification of
satisfactory work by an authorized person on the project team.
Claims administration-Contested changes and potential
constructive changes are those requested changes where the
buyer and seller cannot reach an agreement on compensation for
the change or cannot agree that a change has occurred
Records management system-A records management system is
used by the project manager to manage contract and procurement
documentation and records

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Output Control Procurements


Work performance Information
Change requests
Project management plan updates
Project documents updates
Organizational process assets updates

Lets See the Fourth Process Close


Procurement

Inputs Close Procurements


Project management plan
Procurement documents

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Tools & Techniques-Close Procurements


Procurement audits- A procurement audit is a structured review of
the procurement process originating from the Plan Procurement
Management process through Control Procurements
Procurement negotiations-In all procurement relationships, the final
equitable settlement of all outstanding issues, claims, and disputes
by negotiation is a primary goal
Records management system- A records management system is
used by the project manager to manage contract and procurement
documentation and records

Output Control Procurements


Closed procurements
Organizational process assets updates

Project Procurement Management


Project Procurement Management
Processes Required To Acquire Goods And Services From Outside
The Organization
Discussed From The Perspective Of The Buyer
Terms And Conditions Of The Contract Is A Key Input To Many
Processes
Buyer Is The Customer, Thus A Key Stakeholder
Sellers Project Management Team Must Be Concerned With All
Processes Of Project Management, Not Just Their Knowledge Area

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Project Procurement Management


Procurement Planning
Identify Project Needs That Can Best Be Met By Acquiring
Resources
Consideration Whether To Procure, How To, How Much, When To
Purchase
Subcontractor Decisions May Provide Flexibility
Internal Procurement Does Not Involve Formal Solicitation And
Contract

Project Procurement Management


Inputs To Procurement Planning
o Scope Statement Boundary For Needs And Strategies
o Product Description Broad Technical Issues, Not To Be
Confused With A Statement Of Work
o Procurement Resources Formal Contracting Group (RFP)
o Market Conditions Supply And Demand, What Services Are
Available
o Other Planning Outputs Preliminary Cost And Schedule,
Quality Management Plans, Cash Flow, WBS, Risks, Staffing
o Constraints Factors That Limit Buying Options
o Assumptions

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Project Procurement Management


Tools & Techniques For Procurement Planning
o Make Or Buy Analysis Determine If The Service Can Be
Provided From Within
Include Direct And Indirect Costs
Factor Ongoing Need For Items Vs. 1-time Usage
o Expert Judgment Assess Input
o Contract Type Selection
Fixed Price (Lump Sum) Incentives For Meeting
Targets
Cost Reimbursable Contracts Time And Materials
Basis
Unit Price Preset Amount Per Unit Of Service

Chapter 12 Project Procurement Management


Outputs From Procurement Planning
o Procurement Management Plan Describes How
Procurement Process Will Be Managed
Type Of Contract
Independent Estimates Needed?
Autonomy Of Project Team
Standardized Documents
Multiple Provider Management?

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Incorporate With Other Project Aspects (Scheduling And


Performance Reporting)
o Statement Of Work (SOW) Describes The Procurement In
Detail Clear, Concise Description Of Services
Can Also Be A Statement Of Requirements For Problemsolving Activities

Project Procurement Management


Solicitation Planning
o Preparing Documents Needed
Inputs To Solicitation Planning
o Procurement Management Plan
o Statement Of Work
o Other Planning Outputs
Tools & Techniques For Solicitation Planning
o Standard Forms And Procedures
o Expert Judgment

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Chapter 12 Project Procurement Management


Outputs From Solicitation Planning
o Procurement Documents Used To Solicit Proposals From
Prospective Sellers
Bids, Request for Proposal, Request For Quotation,
Contractor Initial Response, Etc.
Structure To Receive Complete And Accurate
Responses
Description Of Desired Form Of Response And Any
Required Contractual Provisions (E.G. Nondisclosure Statements)
May Be Defined By Regulation
Flexible To Allow Seller Suggestions

Chapter 12 Project Procurement Management


Evaluation Criteria Rate Proposals; Objective Or Subjective
(Previous Experience)
o Price
o Understanding Of Need By Seller
o Overall/Life Cycle Cost (Purchase Plus Operating Cost)
o Technical Capability
o Management Approach
o Financial Capacity
Statement Of Work Updates

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Project Procurement Management


Solicitation
o Obtaining Information From Prospective Sellers
Inputs To Solicitation
o Procurement Documents
o Qualified Seller Lists Preferred Vendors
Tools & Techniques For Solicitation
o Bidder Conferences Mutual Understanding Meetings
o Advertising Primarily With Government Projects
Outputs From Solicitation
o Proposals Seller Prepared Documents Describing
Willingness And Ability To Provide The Service

Project Procurement Management


Source Selection
o Apply Evaluation Criteria (Seldom Straight-forward)
Price (Lowest Price May Not Always Result In Lowest
Project Cost)
Technical (Approach) Vs. Commercial (Price)
Multiple Sourcing May Be Needed For Same Service
Inputs To Source Selection
o Proposals
o Evaluation Criteria
o Organizational Policies
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Project Procurement Management


Tools & Techniques For Source Selection
o Contract Negotiation Clarification And Mutual Agreement
On Structure And Requirements Of Contract Prior To Signature
Responsibilities And Authorities
Applicable Terms And Law
Financing
Price
Technical And Business Management

Project Procurement Management


Weighting Quantifying Data To Minimize Personal Prejudice Of
Source Selection
o Assign Numerical Weight To Evaluation Criteria
o Rating Sellers
o Multiply Weight By Rating And Totaling Overall Score
Screening System Establish Minimum Performance Criteria
Independent Estimates Should Cost Estimates

Project Procurement Management


Outputs From Source Selection
o Contract Mutually Binding Agreement Obligates Seller
Provide Goods And Services And Buyer To Make Payment.
Legal Relationship
Legal Review Is Most Often Necessary

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Project Procurement Management


Contract Administration
o Ensuring That The Sellers Performance Meets Contractual
Requirements
o Project Team Must Be Aware Of Legal Ramifications Of All
Actions Taken
o Apply Project Management Processes To Contractual
Relationships And Integrate Outputs Within The Project
Project Plan Execution (Authorize Work)
Performance Reporting (Monitor Cost, Schedule)
Quality Control (Verify Contractors Output)
Change Control
Financial Management

Project Procurement Management


Inputs To Contract Administration
o Contract
o Work Results Sellers Deliverables, Quality Standards,
Actual Costs
o Change Requests Modify Contract, Or Description Of
Product/Service
May Result In Disputes, Claims, Appeals
o Seller Invoices

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Project Procurement Management


Tools & Techniques For Contract Administration
o Contract Change Control System Defines How A Contract
May Be Modified
Includes Paperwork, Tracking System, Dispute
Resolution Procedures And Approval Levels
o Performance Reporting
o Payment System Accounts Payable

Project Procurement Management


Contract Close Out
o Similar To Administrative Closure; Involves Product Verification
And Administrative Paperwork
Early Termination Is A Special Case
Contract Terms And Conditions May Prescribe
Procedures
o Inputs To Contract Close Out
Contract Documentation Supporting Schedules,
Documentation

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Project Procurement Management


Tools & Techniques For Contract Close Out
o Procurement Audits Structured Review Of Entire
Procurement Process; Identify Successes And Failures That
Warrant Transfer To Other Procurement Items
Outputs From Contract Close Out
o Contract File Complete Index Of Records
o Formal Acceptance And Closure Contract Administration
Responsibility To Provide A Formal Notice That Contract Has
Been Completed

Project Procurement Management


Tips From Review Guide
o Most Questions Are Process Oriented
o Most Questions Are From The Buyers Perspective
o Contracts Are Formal Agreements
o All Requirements Should Be Specifically Stated In The
Contract
o All Contract Requirements Must Be Met
o Changes Must Be In Writing And Formally Controlled
o US Government Backs All Contracts By Providing A Court
System

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Project Procurement Management


Tips From Review Guide
o What Forms A Contract
An Offer
An Acceptance
Consideration - Something Of Value
Legal Capacity Separate Legal Parties, Competent
Parties
Legal Purpose Can Not Perform Illegal Goods Or
Services

Project Procurement Management


Tips From Review Guide
o Project Managers Role For Procurement
Risk Identification And Evaluation
Work Within The Procurement Process
o Procurement Process
Procurement Planning = Make Or Buy
Solicitation Planning = Request For Proposal
Solicitation = Questions And Answers
Source Selection = Pick Vendor
Contract Administration = Admin
Contract Closeout = Finish
Tips from Review Guide
Make Or Buy: Consider Out Of Pocket Costs And Indirect Cost
Of Managing Procurement
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Buy To Decrease Risk (Cost, Schedule, Performance, Scope Of


Work)
Make
o Idle Plant Or Workforce
o Retain Control
o Proprietary Information/Procedures
o Buy Vs. Lease Questions (Use X = Number Of Days When
Purchase And Lease Costs Are Equal)

Project Procurement Management


Tips From Review Guide
o Contract Type Selection Reasonable Risk Between The
Buyer And Seller And Greatest Initiative For Sellers Efficient
And Economic Performance
Scope Well Defined?
Amount Or Frequency Of Changes Expected After Start
Date
Amount Of Effort And Expertise The Buyer Can Devote
To Manage The Seller
Industry Standards

TYPES OF CONTRACTS
1. Fixed Price Contracts
Firm Fixed Price Contracts (FFP)
Fixed Price Incentive Fee Contracts (FPIF)

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Fixed Price with Economic Price Adjustment Contracts (FPEPA)


2. Cost Re-imbursable Contracts
Cost Plus Fixed Fee Contracts (CPFF)
Cost Plus Incentive Fee Contracts (CPIF)
3. Time and Material Contracts (T&M)

Project Procurement Management


Tips From Review Guide
o Cost Reimbursable (CR); Sellers Cost Are Reimbursed; Buyer
Bears Highest Risk (Cost Increases)
CPFF Cost Plus Fixed Fee, Buyer Pays All Costs Fee
(Profit) Established
CPPC Cost Plus Percentage Of Costs; Bad For Buyers
(Seller Not Motivated To Control Costs)
CPIF Cost Plus Incentive Fee; Seller Costs + Fee +
Bonus For Meeting/Exceeding Target (Incentive Clause)

Project Procurement Management


Tips From Review Guide
o Time And Materials; Priced On Per Hour Basis, Elements Of
Fixed Price Contract And Cost Reimbursable Contracts
Buyer Has Medium Risk
o Fixed Price (Lump Sum, Or Firm Fixed Price) - Most
Common (1 Price For All Work), Risk Of Costs Is Upon Seller
FPIF Fixed Price Incentive Fee

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FPEPA Fixed Price Economic Price Adjustment Long


Duration Projects
o Incentives Help Bring Sellers Objectives In Line With
Buyers

Project Procurement Management


Tips From Review Guide
o Incentive Fee And Final Price Calculations
o Must Have:
Target Cost
Target Fee
Target Price
Sharing Ratio (Buyer/Seller)
Actual Cost
o Fee = (Target Cost Actual Cost) X Seller Ratio (%)
o Total Fee = Fee + Target Fee
o Final Price = Actual Cost + Total Fee

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Project Procurement Management


Tips From Review Guide
o Procurement Documents, Contract Type And Scope Of
Work
Request For Proposal Cost Reimbursable
Performance Or Functional Scope (Can Be Somewhat
Loosely Defined)
Invitation For Bid Time & Materials Design Scope
(Moderately Defined)
Request For Quotation Fixed Price Any Scope
(Must Be Detailed)

Project Procurement Management


Tips From Review Guide
o Terminology (Terms And Conditions)
Force Majeure Act Of God
Indemnification Who Is Liable
Liquidated Damages Estimated Damages As A Result Of
Contract Breach
Material Breach A Breach So Large The Project May Not
Continue
Special Provisions Provided By The Project Manager To
Contracts So That Particular Needs Are Addressed
Privity Contractual Relationship
Single Source Contract Directly With Preferred Seller
Sole Source Only One Supplier Available In Market

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Project Procurement Management


Tips From Review Guide
o Evaluation Criteria
Understanding Of Need
Overall Or Life-cycle Cost
Technical Ability
Management Approach
Financial Capacity
Project Management Ability
Invitation For Bids Are Usually Not Evaluated With
Entire Criteria (Lowest Rate Is Chosen)

Project Procurement Management


Tips From Review Guide
o Solicitation
Bidders Conference
Benefit Both Buyer And Seller
Watch Out For
o Collusion
o Sellers Not Asking Questions In Front Of
Their Competition
o Make Sure All Questions And Answers Are In
Writing And Issued To All Sellers (Respond
To Same Scope In Work)

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Project Procurement Management


Tips From Review Guide
o Source Selection
Negotiation Objectives
Obtain A Fair And Reasonable Price
Development A Good Relationship With Seller
o Project Manager Must Be Involved
Main Terms To Negotiate
o Responsibilities
o Authority
o Applicable Law
o Technical And Business Management
Approaches
o Contract Financing
o Price

Project Procurement Management


Tips From Review Guide
o Contract Administration Assure That Sellers Performance
Meets Contractual Requirements
Project Managers Must Understand The Contract And
Manage Its Completion
Sometimes Contract Is In Conflict With Scope Of
Work
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Only The Contracting Officer (CO) Can Change


Contract Language
o Often A Source Of Conflict
o Need To Deal With A Different Companys
Set Of Procedures
o It Is Not As Easy To See Problems
o Greater Reliance On Reports To Determine If
A Problem Exists
o Greater Reliance On Relationships Between
Buyer And Sellers Project Managers

Project Procurement Management


Tips From Review Guide
o Contract Closeout More Attention To Documentation And
Completion Of Files
All Documentation Must Be Preserved And Filed
Centralized Vs. Decentralized Contracting
o Contract Interpretation
Based On Analysis Of Intent

Project Procurement Management


Tips From Review Guide
o Fee = Target Cost Actual Cost X Seller Ratio ($)
o Total Fee = Fee Plus Target Fee
o Final Price = Actual Cost Plus Total Fee

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o Contractor = Seller
o Purchasing Cycle Define Need, Prepare And Issue
Purchase Order
o Functional Spec Delineates Specific End-use Capabilities
That Are Tested In Acceptance Procedure
o Measurable Capabilities = Performance Specifications
o Requisition Cycle Review Of Specification Completeness
o Requirements Cycle Develops The Statement Of Work

Questions and Answers


1. Once a contract is signed, it is legally binding on all sides unless
a. Vendor declares it cannot finish the work
b. Either side's lawyers declares it null and void
c. It violates an applicable law
d. Buyer is unable to finance the work

2. Your customer has rejected a deliverable and sighted a specific section


of the specifications. After reviewing the specifications you agree with the
clients point of view. Your next step would be:
A. Call the project team and review the situation
B. Review the specifications document and the WBS with the team
responsible for that part of the scope
C. Create a change request
D. Explain to the customer and change the specifications

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3. Suresh's vendor discovered some issues that may escalate the vendor's
cost and timelines. What is the best way to proceed forward?
A. Sign a new contract
B. Follow the Change Control System
C. As a new SOW signed by Suresh and given to the vendor

Vendor should, anyway do the additional work and invoice it to the client
(Suresh's Organization)

4. Rajesh wants to construct a house. He engages an architect-cumbuilder. What kind of contract should Rajesh go for to have minimum risk
for himself?
A. Lump-sum
B. Cost plus fixed fee
C. Cost plus % fee
D. Cost plus incentive fee

5. Which is the most risky type of contract for Rajesh?


A. Cost plus Percentage of Cost
B. Lump-sum
C. Fixed Price with Economic Price Adjustment
D. Cost plus incentive fee

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6. Half way through the project Gaurav (the PM) realises he needs to
procure one server for his project. Given the small size of the purchase
value he prepares a unilateral contract. This is also known as the?
A. SOW
B. Contract
C. Purchase Order
D. RFP

7. Sandeep a project manager has sent a Letter of Intent to ABC


consulting. Sandeep has
a. Committed himself to buying services and is obliged to
pay the applicable cost
b. Shown interest in purchasing goods or services from
ABC
c. Shown interest in working for ABC consulting
d. Sent them a feedback on a service he took from them
and intends to take legal action against ABC

8. Of the 4 options below, which best describes the role of a Project


Manager while contracting goods or services from a vendor?
a) PM's role is not very critical and so he/she need not spend time
on any procurement for his project.
b) PM should negotiate all legal and commercial aspects of the
procurement
c) Project manager should guide the contract manager on the
contracting process
d) PM should bring his understanding of the project risks to the
procurement process and ensure that they are adequately
addressed
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9. Rahul is negotiating a contract with a vendor. During negotiation Rahul


should try to
A. Ensure that he negotiates a prices substantially lesser than
quoted by the seller
B. Ensure a fair deal with adequate risk-reward for both sides
C. Ensure that all or as many of the project risks are transferred to
the vendor c
D. Learly state his authority as PM for taking decisions

10. In a fixed priced contract the profit of the seller is:


A .Discussed and agreed during negotiations and are part of the
contract
B. Unknown
C. known
D. Discussed and agreed at the end of the project

11. Your vendors have submitted their proposal with a price. Which of the
following is a technique to check the proposal pricing?
A. Evaluation criteria
B. Independent estimates
C. Seller rating system
D. Contract negotiation

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12. within your project records management systems, you would document
and archive all of the following procurement related documents except:
A. Statement of Work
B. Proposal
C. Negotiation Process
D. Seller's marketing material related to the contracted work

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Project Stakeholder Management

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Lets See the First Process Identify


Stakeholders

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Inputs Identify Stakeholders


Project charter-The project charter can provide information about
internal and external parties related with the project and affected by
the result or the execution of the project, such as project sponsor(s),
customers, team members, groups and departments participating in
the project, and other people or organizations affected by the project.
Procurement documents-If a project is the result of a procurement
activity or is based on an established contract, the parties in that
contract are key project stakeholders
Enterprise environmental factors
Organizational process assets

Tools & Techniques- Identify Stakeholders


Stakeholder analysis-Stakeholder analysis is a technique of
systematically gathering and analyzing quantitative and qualitative
information to determine whose interests should be taken into
account throughout the project
Expert judgment
Meetings

Output Identify Stakeholders


Stakeholder register

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Lets See the Second Process Plan


Stakeholder Management

Inputs Plan Stakeholder Management


Project management plan
Stakeholder register
Enterprise environmental factors
Organizational process assets

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Tools & Techniques- Plan Stakeholder


Management
Unaware-Unaware of project and potential impacts.
Resistant- Aware of project and potential impacts and resistant to
change.
Neutral-Aware of project yet neither supportive nor resistant.
Supportive- Aware of project and potential impacts and supportive to
change.
Leading-Aware of project and potential impacts and actively engaged
in ensuring the project is a success.
Expert judgment-Based on the project objectives, the project
manager should apply expert judgment to decide upon the level of
engagement required at each stage of the project from each
stakeholder
Meetings-Meetings should be held with experts and the project team
to define the required engagement levels of all stakeholders.
Analytical techniques-The current engagement level of all
stakeholders needs to be compared to the planned engagement
levels

Output Plan Stakeholder Management


Stakeholder management plan
Project documents updates

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Lets See the Third Process Manage


Stakeholder Engagement

Inputs Manage Stakeholder Expectations


Stakeholder management plan
Communications management plan
Change log
Organizational process assets

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Tools & Techniques- Manage Stakeholder


Expectations
Communication methods
Interpersonal skills-Project manager applies interpersonal skills to
manage stakeholdersexpectations. For example: Building trust,
resolving conflict, Active listening, and overcoming resistance to
change.
Management skills

Output Manage Stakeholder Expectations


Issue log
Change requests
Project management plan updates
Project documents updates
Organizational process assets updates

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Lets See the Third Process Control


Stakeholder Engagement

Inputs Control Stakeholder Expectations


Project management plan
Issue log-The issue log is updated as new issues are identified and
current issues are resolved
Work performance data
Project documents

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Tools & Techniques- Control Stakeholder


Expectations
Information management systems-An information management
system provides a standard tool for the project manager to capture,
store, and distribute information to stakeholders about the project
cost, schedule progress, and performance.
Expert judgment
Meetings

Output Control Stakeholder Engagement


Work performance information
Change requests
Project management plan updates
Project documents updates
Organizational process assets updates

STAKEHOLDER REGISTER
This contains all details related to the identified stakeholders
including, but not limited to:
Identification information. Name, organizational position, location,
role in the project, contact information;
Assessment information. Major requirements, main expectations,
potential influence in the project, phase in the life cycle with the most
interest;
Stakeholder classification. Internal/external,
supporter/neutral/resistor, etc.

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Stakeholder Analysis
Power/interest grid, grouping the stakeholders based on their level of
authority (power) and their level or concern (interest) regarding
the project outcomes;
Power/influence grid, grouping the stakeholders based on their level
of authority (power) and their active involvement (influence) in
the project;
Influence/impact grid, grouping the stakeholders based on their
active involvement (influence) in the project and their ability to
effect changes to the projects planning or execution (impact);
Salience model, describing classes of stakeholders based on their
power (ability to impose their will), urgency (need for immediate
attention), and legitimacy (their involvement is appropriate).

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Power/Interest Grid

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The engagement level of the stakeholders can be classified as follows:


Unaware. Unaware of project and potential impacts.
Resistant. Aware of project and potential impacts and resistant to
change.
Neutral. Aware of project yet neither supportive nor resistant.
Supportive. Aware of project and potential impacts and supportive
to change.
Leading. Aware of project and potential impacts and actively
engaged in ensuring the project is a success.

STAKEHOLDER ENGANEMENT ASSESSMENT


matrix

C indicates the current engagement and D indicates the desired


engagement

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STAKEHOLDER MANAGEMENT SKILLS


The project manager applies management skills to coordinate and
harmonize the group toward accomplishing the project objectives.
Facilitate consensus toward project objectives,
Influence people to support the project
Negotiate agreements to satisfy the project needs
Modify organizational behavior to accept the project outcomes.

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Questions and Answers


1. Analyzing stakeholders is a part of the identify stakeholders process.
Common approaches for analyzing stakeholders in a qualitative
manner includes all the following two-axis grids, EXCEPT
a. Comparing power and influence
b. Comparing power and interest
c. Comparing influence and location
d. Comparing influence and impact

2. You are responsible for a project in your organization that has


multiple internal customers. Because many people in your
organization are interested in this project, you decide to prepare a
stakeholder management strategy.
Before preparing this strategy, you should
a. Conduct a stakeholder analysis to assess information
needs
b. Determine a production schedule to show when each
stakeholder needs each type of information produced
c. Determine the potential impact that each stakeholder
may generate
d. Prioritize each stakeholders level of interest and
influence

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Questions and Answers


1. Recognizing the importance of preparing a stakeholder management
plan, you met with your team to obtain their buy in and to discuss it.
You explained the key benefit of plan stakeholder management is
to
a) Determine appropriate strategies for a continual focus on
identifying stakeholders throughout the life cycle
b) Provide a clear plan that is actionable to interact with
stakeholders to support the projects interests
c) Develop appropriate management strategies to effectively
engage stakeholders
d) Plan a series of meetings to ensure stakeholders remain
interested and to address their concerns

Questions and Answers


1. Assume you are actively working, along with your team, to manage
stakeholder engagement on your project to develop a new drug to
prevent any retina problems of any type. You know you must
manage their engagement throughout the project life cycle. This
means some organizational process assets will need updating
including
a. Informal and formal project reports
b. The stakeholder register
c. The stakeholder management plan
d. Work performance information

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THANK YOU

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EXAMINATION PROBLEMS and Questions

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Problems
Question 1: The activity Ship Container in your network diagram has
an early start of day 17, a late start of day 22 and a late finish of day 37.
What is the activity duration?
A.) 15 days
B.) 16 days
C.) 59 days
D.) 14 days
Question 2: Your project has a CV of -200. This means:
A.) Your project is under budget
B.) Your SPI is also negative
C.) Your project is above budget
D.) CV cannot be negative and there must be an error in the
calculation

Question 3: After the last project meeting your sponsor has asked you to
give her a new estimate of the cost at the end of the project. This is
because during the meeting it was found that so much has gone wrong
until now, that the numbers are probably off. It is expected, that from now
on things will progress normally. You gather all the necessary numbers
from your PMIS. Which formula will you use to create the expected total
cost of the project?
A.) EAC = BAC/CPI
B.) EAC = AC+ETC
C.) EAC = AC+BAC-EV
D.) ETC = EAC-AC

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Question 4: PV = 100, EV = 105, BAC = 400, AC = 102, CV = 3, EAC =


390. How much is the VAC?
A.) VAC = 205
B.) VAC = 10
C.) VAC = 3
D.) VAC = -10
Question5: Your project is budgeted at 500,000 with a schedule duration
of 8 months. You are currently at the end of month 4 and you know that
you are 20,000 ahead of schedule. Your estimated earned value is
350,000. How much of the project budget is complete?
A.) 70%
B.) 42%
C.) 5%
D.) 50%

Question 6: You are the project manager of the Sterling project. The goal
is to explore 2 possible new products for your company. Over 150,000
have been spent on this exploratory project. Market studies with focus
groups show that there is a need for both products. However, your sponsor
is worried that you are only 60% finished and that the current ETC tells you
that another 175,000 is required to finish. What should you do?
A) Stop the project because you are over budget
B) Ignore the sunk cost in the decision making process
C) The SPI is positive, therefore we can continue
D) Defer the decision to the project control board

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Question 7: PV = 100, EV = 105, BAC = 400, AC = 102, CV = 3, ETC =


300. How much is the EAC if the variances from the BAC are expected to
continue at the same rate?
A.) 388
B.) 402
C.) 397
D.) 400

Question 8: PV = 100, EV = 105, BAC = 400, AC = 102, CV = 3, ETC =


300, EAC = 407. The ETC is given as 300. However, how much would the
Estimate to complete be if we assume that current variances are thought to
be atypical?
A.) 298
B.) 300
C.) 305
D.) 295
Question 9: Which of the following projects would you select?
A.) Gold
B.) Silver
C.) Platinum
D.) Diamond

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Question 10: Inspection shows that roughly 72% of your products are
produced defect free. What sigma level is this?
A.) 1 Sigma
B.) 2 Sigma
C.) 3 Sigma
D.) 4 Sigma

Question 11: You are the project manager of the Gutenberg project. One
major activity in this project is the purchase of a printing press at a cost of
CHF 2,500,000. The printing press has an expected life of 25 years but it
will only be used for the project for 5 of these. Using straight line
depreciation, what is the value of the printing press at the end of its usage
for the project?
A.) CHF 500,000
B.) CHF 1,500,000
C.) CHF 2,000,000
D.) CHF 2,500,000

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Question 12: You have received the following values from your statistical
sampling: 80, 83, 85, 90, 82, 88, 90, 91, 94, and 79. What is the mean of
this number set?
A.) 10
B.) 86.5
C.) 90
D.) 86.2

Question 13: Your Company is holding their annual employee get


together. This year 123 employees have attended. Lets assume that each
employee had a brief conversation with each of the other employees. How
many conversations took place?
A.) 15,006
B.) 123
C.) 7,503
D.) 15,129

Question 14: You have received the following values from your statistical
sampling: 80, 83, 85, 90, 82, 88, 90, 91, 94,79. What is the median of this
number set?
A.) 10
B.) 86.5
C.) 90
D.) 86.2

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Question 15: Your project has an SPI of 1.1 and a CPI of 0.9. What does
this mean?
A.) We are over budget and ahead of schedule
B.) We are ahead of schedule but under budget
C.) We are over budget and behind schedule
D.) We are behind schedule and under budget

Question 16: Your Project has the following 4 tasks:


Task a starts at the beginning of the project and has duration of 2 days
Task B starts after the completion of task A and has a duration of 3 days
Task C starts after the completion of task A and has a duration of 7 days
Task D starts after the completion of both tasks B and C and has duration
of 4 days what is the critical path on your project? A.) 7 days B.) 10 days
C.) 13 days D.) 16 days

Question 17: What is the EMV of the following event?


A.) 2,000
B.) -8,000
C.) -6,100
D.) -4,500

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Question 18: You have received a number of bids for your project. You
are now using a weighting system to determine which of the bids meets
your needs best. The weighting system contains weights for Price, Quality,
Vendor Experience, Duration, Risk Management and Distance. Which of
the following bids would you select?
Question 23: What is the ES of Task Six?
A.) 4
B.) 5
C.) 6
D.) 7

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Question 19: Your Project has the following 4 tasks:


Task a starts at the beginning of the project and has duration of 2 days
Task B starts after the completion of task A and has a duration of 3 days
Task C starts after the completion of task A and has a duration of 7 days

Question 20: Task D starts after the completion of both tasks B and C
and has duration of 4 days what is the critical path on your project?
A.) 7 days
B.) 10 days
C.) 13 days
D.) 16 days

Question 21: You recently installed a new PMIS tool that also allows
you to perform Earned Value Analysis. The tool gives you the
following EV data: EV = 231,000, PV = 261,000, AC = 256,000.
Which of the following do you expect to see in your PMIS tool?
A.) CV = -25,000, SV = +30,000
B.) CV = -25,000, SV = -30,000
C.) CV = +25,000, SV = +30,000
D.) CV = +25,000, SV = -30,000

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THANK YOU

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Professional Responsibility

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Supplement Professional Responsibility


6th Process Area Added
o Insuring Integrity And Professionalism
o Contributing To The Project Management Knowledge Base
o Enhancing Individual Competence
o Balancing Stakeholders Interests
o Interacting With Team And Stakeholders In A Professional And
Cooperative Manner
Could Be Approx. 30 Questions In This Area
Understand Project Management Professional Code Of Conduct
o Ethics
o Legal Issues
o Cultural Sensitivity
o Managing Conflicts of Interest

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Supplement Professional Responsibility


Integrity And Professionalism
o Provide Accurate And Truthful Representation To The Public
o Maintain And Satisfy The Scope And Objectives Of
Professional Services
o Maintain The Confidentiality Of Sensitive Information
o Ensure A Conflict Of Interest Does Not Compromise Legitimate
Interests Of Client/Customer Or Interfere With Professional
Judgment
o Refrain From Accepting Gifts, Inappropriate Payments,
Compensation For Personal Gain Unless In Conformity With
Applicable Laws Or Customs

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Supplement Professional Responsibility


Contribute To Advancing The Project Management Profession
o Overall Understanding Of Project Management Principles
o Understand The Community And Media Surrounding Projects
o Knowledge Of Research Strategies Available And Proper
Communication Techniques
o Learn To Communicate And Transfer Knowledge Effectively As
A Coach And Mentor And To Use Available Research
Strategies
o Respect And Recognize Intellectual Property
Enhance Individual Competence
o Understand The Project Managers Strengths And
Weaknesses And Learning Style Become Aware Of
Instructional Processes And Tools
o Know The Useful Competencies For Project Managers And
Possible Training
o Be Able To Perform Self-assessment And Competencies
Development Plan
o Ability To Apply Lessons Learned

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Supplement Professional Responsibility


Balance Stakeholders Objectives
o Understand The Various Competing Stakeholders Interests
And Needs
o Comprehend The Conflict Resolution Techniques Useful In
Handling Differing Objectives
o Be Able To Resolve Conflicts In A Fair Manner
o Exercise Negotiation Skills Based On Proper Information
Interact With Team And Stakeholders In A Professional And
Cooperative Manner
o Understand Cultural Diversity, Norms And Stakeholders
Communication Styles
o Show Flexibility Towards Diversity, Tolerance And Self Control
o Becoming Empathetic To Differences

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Aads Education and AXELOS Limited. Permission can be requested at info@aadseducation.com and licensing@AXELOS.com.
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under license from AXELOS. No part of this document may be reproduced in any form without the written permission of both the
Aads Education and AXELOS Limited. Permission can be requested at info@aadseducation.com and licensing@AXELOS.com.
360

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Copyright Aads Education and AXELOS Limited 2014. All rights reserved. Material in this document has been reproduced
under license from AXELOS. No part of this document may be reproduced in any form without the written permission of both the
Aads Education and AXELOS Limited. Permission can be requested at info@aadseducation.com and licensing@AXELOS.com.
361