SCOPE MANAGEMENT

1. Decomposing the major deliverables into smaller, more manageable

components to provide better control is called:
a. Scope planning.
b. Scope denition.
c. Scope base lining.
d. Scope verication.

2. Any numbering system that is used to monitor project costs by category

such as labor, supplies, or materials, for example, is called:
a. Chart of accounts.
b. Work breakdown structure.
c. Universal accounting standard.
d. Standard accounting practices.

3. A person who is involved in or may be affected by the activities or

anyone who has something to gain or lose by the activity of the project
is called a:
a. Team member.
b. Customer.
c. Stakeholder.
d. Supporter.

The following should be used for questions 4 through 6.

A project manager is assigned to a project early in the project life cycle. One
of the things that must be done is to do a justication for the project. Since
very little information is known about the project, the estimates are consid-
ered to be rough estimates. The following table is the project managers
estimate of the cash ows that will take place over the next ve years.

235
236 Preparing for the Project Management Professional Certication Exam

End of Year Cash Flow In Cash Flow Out

1 0 500,000
2 300,000 90,000
3 400,000 100,000
4 100,000 175,000
5 50,000 35,000

4. What is the payback period for this project?

a. One year
b. Two years
c. Three years
d. Four years

5. What is the net cash ow at the end of ve years?

a. 50,000
b. 50,000
c. 850,000
d. 100,000

6. If the net present value for each of the cash ows were calculated at a
10% interest rate, the net present value cash ow at the end of ve years
would be:
a. Greater than the total cash ow without the net present value ap-
plied.
b. Less than the total cash ow without the net present value applied.
c. The same as the total cash ow without the net present value ap-
plied.
d. Cannot be calculated with the information supplied.

7. A group of related projects that are managed in a coordinated way that

usually include an element of ongoing activity is called a:
a. Major project.
b. Project ofce.
c. Program.
d. Group of projects.
 Scope Management 237

8. During the full life cycle of the project, a plot of the projects expected
expenditures will usually follow a characteristic S shape. This indi-
cates that:
a. There is a cyclic nature to all projects.
b. Problems will always occur in the execution phase.
c. There are high expenditures during closeout.
d. The bulk of the project budget will be spent in the execution phase.

9. A temporary endeavor undertaken to create a new product or service is

called a:
a. New product development.
b. Project.
c. Program.
d. Enterprise.

10. A project manager makes a narrative description of the work that must
be done for her project. This is called a:
a. Project plan.
b. Control chart.
c. Statement of work.
d. Project objective.

11. An example of scope verication is:

a. Reviewing the performance of an installed software module.
b. Managing changes to the project schedule.
c. Decomposing the WBS to a work package level.
d. Performing a benet-cost analysis to determine if we should pro-
ceed.

12. The process of establishing clear and achievable objectives, measuring

their achievement, and adjusting performance in accordance with the
results of the measurement is called:
a. Strategic planning.
b. Contingency planning.
c. Detailed planning.
d. Management by objectives.
238 Preparing for the Project Management Professional Certication Exam

13. Conguration management is:

a. Used to ensure that the description of the project product is correct
and complete.
b. The creation of the work breakdown structure.
c. The set of procedures developed to ensure that project design criteria
are met.
d. A mechanism to track budget and schedule variances.

14. A project manager is employed by a construction company and is re-

sponsible for the furnishing of the completed building. One of the rst
things that the project manager for this project should do is to write a:
a. Work breakdown structure.
b. Budget baseline.
c. Project charter.
d. Project plan.

15. A project manager is creating a work breakdown structure for her proj-
ect. In the breakdown structure the lowest level of the breakdown for
the project manager is called the:
a. Activity.
b. Task.
c. Work package.
d. Cost account.

16. A project manager is reviewing the scope of the project and the scope
baseline of the project. This includes which of the following?
a. The original project schedule, budget, and scope
b. The original project description and the project charter
c. The original scope of the project plus or minus any scope changes
d. The current budget of the project

17. A project manager has just become the manager of a project. The docu-
ment that recognizes the existence of the project is called:
a. The statement of work.
b. The project assignment.
c. The project charter.
d. The product description.
 Scope Management 239

18. A project manager is reviewing the work breakdown structure for her
project. The WBS for the project represents:
a. All the tangible items that must be delivered to the client.
b. All the work that must be completed for the project.
c. The work that must be performed by the project team.
d. All the activities of the project.

19. A manager that manages a group of related projects is called a:

a. Project manager.
b. Project expediter.
c. Program coordinator.
d. Program manager.

20. A new project has begun. The project charter has been written and the
project manager has been assigned. The project manager is preparing
the work breakdown structure for the project. The WBS is typically
used for:
a. Explaining the scope of the project relevant to the client.
b. The basis for organizing and dening the total scope of the project.
c. Showing the resource conicts that exist in the project.
d. The logical relationship between tasks in the project.

21. During the life of a project, the project will go through several phases
initiating, planning, execution, and closeout. Which phase of the proj-
ect is likely to have the greatest amount of its funding spent?
a. Initiating
b. Executing
c. Planning
d. Closeout

22. During the course of the project it is important that the stakeholders be
informed of the progress of the project. One of the reports that is fre-
quently used is a progress report. Which of the following is true about
progress reports?
a. They allow stakeholders to judge the performance of the project
according to its plan.
240 Preparing for the Project Management Professional Certication Exam

b. They are generally considered to be overkill on very small projects.

c. They require the use of earned value reports.
d. They must be produced by the project manager.

23. The coordinated undertaking of interrelated activities directed toward a

specic goal that has a nite period of performance is a:
a. Project charter.
b. Project.
c. Set of project objectives.
d. Program.

24. The document that is proof of upper managements commitment to

the project and gives the authority to manage the project to the project
manager is called:
a. The project plan.
b. The project goals and objectives.
c. The project charter.
d. The project denition.

25. A project manager works in a company favoring the weakest authority

for the project manager. The type of organization that holds the project
manager to be the weakest is:
a. Projectized organization.
b. Strong matrix organization.
c. Weak matrix organization.
d. Balanced matrix.

26. A project manager has been asked by the client to meet the promise
date of the project. The project manager analyzes the schedule before
promising a date to the customer. The project manager uses the pro-
gram evaluation and review technique to evaluate the project schedule.
She decides that based on the results of the PERT calculations she can
promise a delivery date of June 30. The expected value of the project
completion date is May 30. If the project manager is willing to accept a
5% probability that the project will be delivered later than June 30,
what is the standard deviation of the durations of the activities on the
critical path? Assume a ve day work week.
 Scope Management 241

a. Ten days
b. Fifteen days
c. One-half month
d. One month

27. A project is proposed to a customer. Price and schedule for delivery are
agreed upon. The work breakdown structure is agreed to as well. The
customer requests that one of the milestones of the project be completed
by a certain date. The project schedule is reviewed, and it is found that
the expected completion date for this milestone is considerably earlier
than the date requested by the customer. The date for this milestone is
which of the following?
a. Consideration
b. Summary activity
c. Constraint
d. Suggestion

28. A project manager is managing a project. The original scope baseline of

the project was budgeted at $100,000. Since work on the project started
there have been seventeen authorized and approved changes to the proj-
ect. The changes have a value of $17,000 and the cost of investigating
them prior to their approval was $2,500. What is the current budget
for the project?
a. $100,000
b. $114,500
c. $117,000
d. $119,500

29. In a very large project having a budget of $5 million and a project team
of over one hundred persons, the project manager constructs a work
breakdown structure. The project manager will do the WBS to the
detail level of which of the following?
a. Task
b. Activity
c. WBS element
d. Work package
242 Preparing for the Project Management Professional Certication Exam

30. A project manager is managing a project that has reached the end of the
planning phase. The work scope has been agreed to and denitive cost
estimates have been completed for the project. The total estimated cost
of the project is $100,000. It is reasonable to expect that the project
will not cost over which of the following values?
a. $100,000
b. $110,000
c. $125,000
d. $175,000

31. The change management plan should be included in which of the fol-
lowing?
a. Scope management plan

Y
b. Communications management plan
c.
d.
FL
Conguration management plan
Quality management plan
AM
32. A project team has made up the work breakdown structure for a project.
Senior management for the company and all of the stakeholders includ-
ing the client have approved the WBS. The client later requests that a
TE

change be made in the project, which will cost a considerable amount

of money. The client says that the companys salesman promised this
feature prior to sign off on the WBS. Who should pay for the change?
a. The client should pay.
b. The company managing the project should pay.
c. Both the company and the client should pay part of the cost.
d. The change should not be implemented.

33. A project manager is managing a software development project for a

hospital. There is a new computer available that will speed up the devel-
opment process considerably. The new computer costs $50,000 includ-
ing shipping, installation, and startup. The computer will cause a gross
savings of $100,000. What is the net present value of the savings if they
occur one year after the expenditure for the computer? Assume a 10%
interest rate.
a. $90,000
b. $40,909
 Scope Management 243

c. $45,555
d. $91,110

34. A project manager is managing a project during the planning phase.

She chooses to use a precedence network diagram as a graphic planning
tool to assist in making the project schedule. The most important reason
for using the network diagram as a graphic planning tool is that it makes
it easier to see which aspect of the project plan better than the other
tools available?
a. The probability that the tasks will be completed on time
b. The logical relationships between activities in the schedule
c. The start and nish dates of the activities
d. The oat between activities
 SCOPE MANAGEMENT

1. Answer: b
Scope denition is dened by PMI as decomposing the major deliverables into
smaller, more manageable components to provide better control.

2. Answer: a
The chart of accounts is the system used to monitor project costs as dened by
PMI.

3. Answer: c
A stakeholder is an individual or organization that is involved in or may be
affected by project activities.

4. Answer: c
The actual payback period is between two years and three years. It is the point
where the net or cumulative cash ows equal zero. This occurs between year 2
and 3 and is 2 and 29/30 of a year from the rst cash ow. Cumulative cash
ow in years are: 1, 500,000; 2, 290,000; 3, 10,000.

5. Answer: b
The net cash ow is the total of all the cash ows in and out of the company
caused by the project. In this example 850,000 in and 900,000 out for a nega-
tive 50,000.

6. Answer: b
Calculating the net present value of the cash ows for the project involves
adjusting the future cash ows to allow for diminishing value due to the time
that we must wait to get them. Money received today is more valuable to us
than money that is received in the future.

7. Answer: c
From the Guide to the PMBOK 2000: Program. A group of related projects
managed in a coordinated way. Programs usually include an element of ongoing
activity.

319
320 Preparing for the Project Management Professional Certication Exam

8. Answer: d
Most of the project money will be spent during the execution phase. At the
beginning of execution the rate of expenditures rises as people and materials are
brought into the project. Later the expenditures peak and slow down. By the
end of the execution phase expenditures are approaching a minimum.

9. Answer: b
From the Guide to the PMBOK 2000: Project. A temporary endeavor under-
taken to create a new product or service.

10. Answer: c
A statement of work is the description of what the project is about and what
will be delivered. The project plan is complete and contains the detailed work
that the project will do, complete with task descriptions and schedule, cost, and
scope baselines containing a real schedule and budget. An exception report
describes items that are not as planned and a Pareto analysis is a quality manage-
ment tool used to prioritize defects according to those most frequently occur-
ring.

11. Answer: a
Verifying scope is the process of verifying that the project made or delivered is
what was asked for.

12. Answer: d
In management by objectives, the employee and supervisor meet to discuss the
objectives of the employee over the next review period. At the end of the review
period the performance of the employee is reviewed relative to the objectives,
and adjustments are made. This is generally considered a good approach for
project managers to use when managing the project team. In many cases the
review period is as little as two weeks.

13. Answer: c
Conguration management is the process of making sure that the product
meets the design criteria in terms of form, t, and function.

14. Answer: c
The project charter is one of the rst things that must be done in any project.
The project charter according to the Guide to the PMBOK 2000 is: A docu-
 Scope Management 321

ment issued by senior management that provides the project manager with the
authority to apply organizational resources to project activities.

15. Answer: c
In the work breakdown structure the lowest level of breakdown is the work
package. This does not mean that work cannot be divided any further. Work
packages are usually broken down into tasks, and tasks can be further broken
down into activities. The point here is that the project manager is concerned
about things down to the work package level. In a relatively large project the
project manager would have subproject managers or work package managers
that would further breakdown the work in their own work breakdown struc-
tures.

16. Answer: c
The current project baseline for scope includes the original scope of the project
plus or minus any scope changes that have taken place since the baseline for
scope was established.

17. Answer: c
A project charter is a document that formally recognizes the existence of a
project. It should include, either directly or by reference to other documents,
the business need that the project was undertaken to address and the product
description.

18. Answer: b
The work breakdown structure represents all the work that must be done in
order to complete the project. Doing all the work will deliver all the tangible
results to the client. In most projects there will also be deliverables that will be
delivered to other stakeholders. Work that is done by contractors and those not
on the project team is included in the WBS. The lowest level of the WBS is
the work package (according to PMI). Work packages can be broken down into
tasks, and tasks can be broken down into activities.

19. Answer: d
A program manager is a manager that manages a group of related projects in a
coordinated way.

20. Answer: b
A work breakdown structure is a deliverable-oriented grouping of project ele-
322 Preparing for the Project Management Professional Certication Exam

ments that organizes and denes the total scope of the project: work not in the
WBS is outside the scope of the project. Although the WBS can and is used for
many other project related things, the best answer is b, since it is the most
comprehensive answer.

21. Answer: b
The execution phase of projects will nearly always cost the bulk of the project
budget. This is because there are more people working on the project, and they
are spending more money than at other times.

22. Answer: a
Progress reports should be used even on the smallest of projects. They allow all
of the stakeholders to judge the performance and progress of the project accord-
ing to the project plan. It is not necessary to use the earned value reporting

Y
system. The overhead of using a formal reporting system may not be justied
on very small projects. Reporting may frequently be delegated to someone on
FL
the project team or even a member of the project management support ofce.
AM
23. Answer: b
This is the denition of a project.

24. Answer: c
TE

The project charter is the rst document to be created in the project. It gives
the project manager the authority to manage the project. It will frequently
contain a business case and a set of goals and objectives for the project as well.

25. Answer: c
Balance is the strength or weakness of the project manager to have authority
over the people who actually do the work in the project. In the projectized
organization the project manager has complete authority over the people on
the project team. In the strong matrix organization the project manager has
more inuence over the people on the project team than the functional man-
ager. In the weak matrix organization the functional manager has more author-
ity to direct the project team members than the project manager. In a balanced
matrix organization the project manager and the functional manager are at
about the same authority level.

26. Answer: c
In order for the project to have a 5% probability of being late, there is a 95%
 Scope Management 323

probability that the project will be delivered on time or earlier. In terms of the
PERT calculation this means that 2 standard deviations should be added to the
expected value date of May 30. Since there is a one month difference between
the 95% promise date of June 30 and the expected value of May 30, the stan-
dard deviation must be one-half month. This is a better answer than fteen
days because on the basis of a ve-day work week this is close to three weeks.

27. Answer: c
The request and agreement to a specic date for completion of a particular
milestone in the project is called a constraint. Constraints for project tasks and
activities that do not put them on the critical path are not necessarily a problem
as long as delays in the schedule do not ultimately place them on the critical
path. Some process constraints may be predened as constraints. For example,
management may specify a target completion date rather than allowing it to be
determined by the planning process. Constraints are factors that will limit the
project management teams options. For example, a predened budget is a con-
straint that is highly likely to limit the teams options regarding scope, stafng,
and schedule.

28. Answer: d
The current budget of the project contains all of the authorized funding for the
project including additions to the project since the setting of the original base-
lines. This includes any and all authorized work done on the project, including
the investigation of work that may be done to investigate the feasibility of
changes.

29. Answer: d
The project manager will normally break the WBS down to the work package
level. Work packages can be broken down further into tasks and activities.

30. Answer: b
It is generally accepted that for most projects, once a projects denitive esti-
mate has been completed, the actual project cost will be not more than 5%
below the denitive estimate and not more than 10% above it.

31. Answer: a
The change management plan is generally a document or procedure that is
normally found in the scope management plan.

32. Answer: a
324 Preparing for the Project Management Professional Certication Exam

The client should pay, because the signing of the WBS constituted an agree-
ment between the company managing the project and the client. Work that is
not specied in the WBS is not part of the project scope. In reality this is
sometimes not the case. Companies will frequently do work that is outside of
the project scope as dened by the WBS in order to ensure the goodwill of the
client.

33. Answer: b
The calculation for net present value is based on the compound interest for-
mula.
FV PV ( 1 r )n
Where FV is future value and PV is present value.
Solving this for the present value gives:
PV FV / (1 r )n
NPV 50,000 (100,000 / 1.1 ) 40,909
Note that all the negative cash ows occur at the beginning of the year when
the machine is purchased and that the positive cash ows all occur at the end
of one year.

34. Answer: b
The precedence network diagramming tool is used because it best shows the
logical relationships between the activities in the schedule. The Gantt chart
shows the project schedule graphically indicating the start and nish for each
activity. The milestone chart shows the start or completion for specic groups
of activities on a summarized chart.