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PMP Certification Training

Authored & published by

Simplilearn

Notice
This document contains proprietary information, which is protected by copyright. All
rights reserved. No part of this document may be photocopied, reproduced, or
translated to another language without the prior consent of Simplilearn.

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Table of Contents
LESSON 01INTRODUCTION ..........................................................................................................9

LESSON 02PROJECT MANAGEMENT FRAMEWORK ...................................................................25

LESSON 03PROJECT MANAGEMENT PROCESSES .......................................................................59

LESSON 04PROJECT INTEGRATION MANAGEMENT...................................................................83

LESSON 05PROJECT SCOPE MANAGEMENT............................................................................ 125

LESSON 06PROJECT TIME MANAGEMENT .............................................................................. 161

LESSON 07PROJECT COST MANAGEMENT.............................................................................. 211

LESSON 08PROJECT QUALITY MANAGEMENT ........................................................................ 245

LESSON 09PROJECT HUMAN RESOURCE MANAGEMENT ...................................................... 283

LESSON 10PROJECT COMMUNICATIONS MANAGEMENT ...................................................... 323

LESSON 11PROJECT RISK MANAGEMENT ............................................................................... 351

LESSON 12PROJECT PROCUREMENT MANAGEMENT............................................................. 387

LESSON 13PROJECT STAKEHOLDER MANAGEMENT ............................................................... 421

LESSON 14PROCESS GROUP VIEW .......................................................................................... 447

LESSON 15PROFESSIONAL AND SOCIAL RESPONSIBILITY ....................................................... 464

LESSON 16APPENDIX: PMP LIST OF KNOWLEDGE AND SKILLS ............................................... 483

PMP CERTIFICATION TRAINING ................................................................................................ 501

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SIMPLILEARN CLASSROOM EXERCISES ....................................................................................... 531

SIMPLILEARN CLASSROOM EXERCISESSOLUTIONS ................................................................. 545

PMP MASTER QUIZ ................................................................................................................... 557

PMP MASTER QUIZSOLUTIONS ............................................................................................. 596

SIMPLILEARN PRACTICE TEST PAPER .......................................................................................... 656

SIMPLILEARN PRACTICE TEST PAPERSOLUTIONS .................................................................... 694

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Lesson 01Introduction

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Key Features

Before you start, please spend some time and go through the key features of Simplilearn offerings displayed
here.

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Objectives

After completing this lesson, you will be able to:

Define PMI and PMP


Identify the application requirements for the PMP examination
Identify the guidelines to fill up the PMP application
Describe the PMP exam outline and syllabus

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What are PMI and PMP

Project Management Institute or PMI is a not for profit organization that offers a certification program for
project practitioners for all educational and skill levels. PMI is based in the USA and has local chapters across
the globe. Therefore, if you are based in Singapore, you can look for a PMI chapter in Singapore. Such local
chapters conduct regular knowledge sharing and networking sessions for people interested in project
management.

Project Management Professional or PMP on the other hand is one of the certifications awarded by PMI. It is
a credential industry recognized and demanded worldwide. For many of the project management jobs, it is a
mandatory qualification.

PMP is not restricted to a specific domain. A project manager working in any industry, be it manufacturing,
retail, defense, or information technology, can write the PMP exam and upon successful completion can be a
PMP certified professional.

To sum up, PMI is an organization and PMP is a credential. PMI therefore writes and supervises the PMP
examinations. If you need more information on PMI, you can visit their website, www.pmi.org

A PMP credential is valid for three years. After the completion of this three-year period, it can be renewed for
another three years.

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PMI measures project management experience in the units of PDU. PDU means Professional Development
Unit. You can acquire PDUs in many ways. For example, if you attend a project management class of 1 hour by
an expert, it is considered equivalent to 1 PDU. If you write a white paper on the topic related to project
management, it may be equivalent to 5 PDUs. PMI has detailed guidelines on what kind of project
management activity amounts to how many PDUs. You can look for the CCR handbook on the PMI website
for more details.

Over a three-year period, one must have acquired 60 PDUs to be eligible to renew the PMP certification.

After submitting the information about the acquisition of at least 60 PDUs in the last three-year period, you
need to pay the renewal fee in order to renew the certification for another three years. This can be
conveniently done online at www.pmi.org

PMI releases a guide every four years. It called as PMBOK Guide, i.e., a Guide to the Project Management
Body of Knowledge. PMBOK Guide acts as a textbook for the PMP exam.
PMBOK Guide can be considered as a standard for project management profession.

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Application Requirements for the PMP Exam

PMI-PMP certificate is an experience as well as knowledge based certification. This means, certain
prerequisites are to be met in order to be able to apply for this certification.

The prerequisites depend upon a persons formal education.

As shown in the table, a professional needs to have at least 4,500 hours of project management experience
along with a bachelors degree. A professional, whose highest formal education is a high school degree, will
require 7,500 hours of project management experience.

The experience of 36 months within last 8 years in the table implies that those 4,500 hours of project
management experience should have happened within the last 8 years prior to the application. Similarly, for
the experience of 60 months within last 8 years, 7,500 hours of leading and directing project tasks should
have happened within the last 8 years.

Lastly, one also has to submit details of having attended 35 hours of project management training just before
writing the PMP exam.

R.E.P. stands for Registered Education Provider. PMI R.E.P training institute means, these training companies
are registered with PMI as a registered education provider. These provide 35 PMI contact hours certificate, if

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you attend their 35-hour training program. Their certificate can be used as a proof to be submitted to PMI.
Applications can be submitted online. Once the exam fee is paid, PMI sends an Authorization Letter.

Many companies are PMI R.E.P. and provide project management training. Simplilearn is one of them.

PMI randomly audits some applications from time to time. In the event of the application being selected for
audit, clear instructions will be given on the evidence that has to be physically submitted to PMI. Follow the
instructions and send the evidence before authorization is given to proceed. Examination must be written
within a year of receiving the Authorization Letter.

For more details, refer to the PMP handbook on PMI website.

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Guidelines for Filling up the PMP Application

Following are a few guidelines that will help you fill up your application.

First, you should become a PMI member before applying for the PMP examinationif you are not already a
member. Members get a discount of $150 for the PMP application, which is more than the cost of
membership itself. This will help you save money in the first process itself. Becoming a member is a fairly
straightforward process and can be completed online at www.pmi.org. Make sure you enter the contact
details and name correctly. This is important for you not to miss any correspondence information. Also, ensure
that the details on the certification are correct.

You need to be careful while filling the project experience field in the Experience Verification form. Be brief
in stating what you have done on the project. Focus on specifically the work that YOU have done. Contact all
the primary contacts mentioned in your application prior to submitting it, for they should be prepared to
support you in providing evidence about the experience, if required during the audit process. If you are not
sure, ask an existing PMP professional to review before submitting.

If your application is picked up for audit, follow the instructions given in the email. Gather the evidence and
submit it for a smooth process. Now that you have a fair understanding on the filling process of PMP
application, let us focus on PMP exam process in the next screen.

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About the PMP Exam

PMP exam is conducted for four hours. It covers 200 questions, out of which 25 questions are considered as
pre-test questions used for future tests and are not scored. You will not be communicated about these
questions; they might be any random pick. Therefore, you should answer all 200 questions with the same
seriousness. PMI includes these questions to see how many test takers are getting them right. Based on this,
they might decide to include these questions in the future exam. It is similar to a survey conducted by PMI. Of
the 200 questions, therefore, 175 will be scored. All questions are multiple-choice questions, with only one
correct answer.

You get one point for every question answered correctly. There is no negative marking for the incorrect ones.
You may also mark a question for review and revisit it at the end, if unsure then. However, you should attempt
all the 200 questions in the given time.

PMI grades students on each of the five process groups and based on the grading they declare PMP pass or
fail. The grades are not disclosed to everyone rather a rating is given. They are Below Proficient, Proficient,
and Moderately Proficient in each of the five process groups. The percentage of questions from each of these
aspects is listed on the table.

The result (pass or fail) is determined by a combination of these grades. How many grades or number of points
one has to score to pass the PMP exam is not made public by PMI.

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The questions in PMP exam are related to various aspects of project management. These aspects, which are
known as Project Management Process Groups, are project initiating, planning, executing, monitoring and
controlling, and closing.

The percentage of questions and number of questions that may appear from each process group are listed on
the given table.

For more details, please refer to the PMP Examination Content Outline on the PMI website.

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PMP Exam Syllabus

There are 5 process groups, 10 knowledge areas, and 47 project management processes.

To understand the syllabus, you need to understand the following termsprocess groups, knowledge areas,
and processes. Let us first discuss process group.

The project management discipline is divided into five broad process groups.

When a new project starts, it is first in the project initiation phase, moving to planning phase, then to
execution, followed by monitoring and controlling, and finally it is closed. Project execution and monitoring
and controlling processes go hand in hand.

Therefore, when a new project is initiated, all processes of project initiation process group should be applied
to the project. Similarly, when the project is being closed, all processes of project closing group should be
applied. For instance, Identify Risks is a process of project planning group. So when the project is in planning
phase, you must identify all the risks of the project.

Next, let us see what knowledge area is.

As per PMBOK Guide, there are 10 knowledge areas. A knowledge area is a set of specific processes
performed to meet a project objective.

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Let us now consider processes. There are 47 processes. These processes might be accomplished in the project
planning process group and few others in project monitoring and controlling process group.

For example, Develop Schedule, one of the processes, is a part of the Planning process group and the
Project Time Management knowledge area. Likewise, in Human Resource Management knowledge area,
Develop Human Resource Plan process is in the project planning group and Manage Project Team process
is in project execution group.

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About this Tutorial

Let us take an overview of all the lessons in this tutorial. We have 16 lessons in total. This is the first lesson,
which is an introduction to the PMP certification.

Lesson 2, Project Management Framework, aims to explain what project and project management is all about;
it can be considered as an introduction to the Project Management.

Lesson 3, Project Management Process Groups, aims to explain the five project management process groups.

The ten knowledge areas are covered in lesson 4 to lesson 13. Each lesson is dedicated to each of these ten
areas. Lesson 14 revises the same processes from a process group perspective. This will help clarify the
sequence in which some of the activities are carried out, and understand these processes more holistically.

In addition to the 5 process groups and 10 knowledge areas, PMI gives weightage to professional and social
responsibility, which is explained in Lesson 15.

Lesson 16 covers the new knowledge and skills that are added as part of the latest Examination Content
Outline.

Once you are through with these 16 lessons, you can go ahead and take our online practice tests.

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Thank you

With this, we have come to the end of this lesson. In the next lesson, we will cover project management
framework.

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Lesson 02Project Management Framework

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Objectives

After completing this lesson, you will be able to:

Define project, project management, program management, and portfolio management


Recognize the roles of project management office
Identify the project constraints and their impact on the project
Explain the role of a project manager in stakeholder management
Describe different organization structure
Differentiate between a project life cycle and a product life cycle

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Project

A project is a temporary endeavor undertaken to create a unique product, service, or result. For example,
developing a new product, service, or result; constructing a building, industrial plant, or infrastructure; and
implementing, improving, or enhancing existing business processes and procedures.

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Characteristics of a Project

A project can be distinguished based on its characteristics.

The definition describes two characteristics of a project.

First, it is temporary in nature. Temporary here, does not mean short in duration. A project can extend for long
duration based on the requirements, for example, creating a new Indigenous Missile Defense System for a
country. However, there is always a definite planned start and end date for a project. It cannot go on
indefinitely.

Secondly, the project is supposed to produce a unique output. The output could be a product, service, or
result. There can be many common activities between two projects, but the outcome of each project should
be unique in some way or the other.

Now, let us look at what marks the end of a project. A project ends when either the objectives are met or the
project is terminated because the objectives will not or cannot be met. The other reason to terminate the
project can be that the need for the output of the project does not exist anymore. Usually, the sponsor of the
project takes a call about the closure of the project.

It is important to differentiate project work from regular operational work. For example, your office
receptionist does the same work every day of picking any incoming call and directing the call to the right

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person in the office. This is an ongoing repetitive work and can be classified as Operation. Operations, unlike
projects, are neither temporary, nor unique.

Creating a new Software System to effectively track your customer complaint can be an example of a project.
When the software is successfully developed, the project objective is met which marks the end of the project.
When you start using this software to track customer complaints, you are entering into the operations phase.

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Project Management

As defined in the PMBOK Guide, Project management is the application of knowledge, skills, and tools and
techniques applied to project activities to meet the project requirements.

Project management is achieved by proper application and integration of the 47 processes. Project
application and integration means these processes should be executed in the right manner as well as in the
right order.

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Project Management Activities

In terms of actual activities, managing a project typically requires the following three steps: identifying project
requirements, managing stakeholders, and balancing projects constraints.

At the initiation stage of a project, high-level requirements are identified. However, to meet the project
objectives, it is essential to analyze these requirements in detail, failure of which might sometimes lead to the
failure of a project.

A stakeholder is the one who has an interest in the project. For example, customer, companys senior
management, project team, etc. Managing stakeholder is as important as identifying requirements. All the
stakeholders must work towards the single project objective, for the project to be executed successfully.

The triple constraints are scope, cost, and time. The balancing act between these constraints also has an
impact on the quality of the output. For example, if you want a better quality product, it may require using
better raw material, leading to a higher cost. However, your project might have a limited budget, which might
restrict your ability to do so. Therefore, change in any one constraint affects the other. These are often called
trade-offs that a project manager needs to make, while managing a project.

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Program Management

Program management is defined as the application of knowledge, skills, tools, and techniques to a program to
meet the program requirements and to obtain benefits and control not available by managing projects
individually.

As defined in PMBOK Guide, a program is a group of related projects, which when managed as a group in a
coordinated fashion, provides benefits and control that are not available while managing them individually.
These benefits could be from decreased risk, economies of scale, improved management of dependencies,
delivery of additional capabilities, optimal utilization of shared resources, and so on.

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Features of Program Management

Random projects cannot be grouped to as a program. The projects in a program should be related in some way
or the other and there should be some value added in managing them together.

A project may not be a part of any program, but a program will always have projects. A project can also be
executed as a standalone project.

A program is designed to deliver some strategic benefits value to the organization. These benefits can be
tangible or intangible. Examples of tangible benefit could be increased profit margins, or operational cost
savings. Examples of intangible benefits could be improved team morale or building up certain
competencies.

While a project manager focuses relentlessly on the fulfillment of the projects requirements i.e., scope, cost,
time, quality, a program manager needs to focus on ensuring that the organizational benefits are realized.

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Portfolio

Portfolio is yet another term used along with project and program.

A portfolio may have multiple projects and programs that are managed as a group to achieve strategic
objectives. Note that all projects and programs in a portfolio may not be necessarily interdependent or directly
related.

A portfolio can be created based on the business objectives.

For example, an IT Service Company can have a portfolio named Japanese Projects, which is formed with an
aim to take over the Japanese market by giving more attention to these projects. Within this portfolio, similar
projects can be managed as a program, and all banking projects from Japan can be managed as a banking
program.

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Portfolio Management

Portfolio management is the centralized management of one or more portfolios. This includes identifying,
prioritizing, authorizing, managing, and controlling projects, programs, and other related work to achieve
strategic business objectives.

Therefore, whether the company should have Japanese Projects as portfolio or not, is decided by portfolio
management.

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Relationship between Portfolios, Programs, and Projects

The image on screen will help to understand the terms portfolios, programs, and projects.

A portfolio is part of an organizations overall strategy. It represents a conscious decision by an organization to


invest in the portfolio. The overall objectives of a portfolio are then cascaded down to the lower level
components. The components could be sub-portfolios, programs, or projects.

These components can further be broken down into smaller components for ease of management. Although a
project may not contain operations, a program, or a portfolio, it can include other work. This other work may
comprise training and development, customer support and services, etc. If the other work has synergy with the
overall objectives and adds to the capability to deliver the higher level benefits, then it can be included in the
program or portfolio as well.

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Project Management Office

Project Management Office or PMO is a specific type of body, or department, within an organization.

PMO performs several roles in the organization and these can broadly be classifies as primary roles and other
roles.

Typically, the PMO may take up any one or a combination of the three primary roles. It provides the policies,
methodologies, and tools and templates for managing projects within the organization; it provides support and
training in organization on how to manage projects; and finally it provides project managers for different
ongoing projects in the organization.

PMO may also help in managing interdependencies between the projects; selecting, managing, and deploying
shared or dedicated project resources; if need be, terminating a project; and organizing lessons-learnt sessions
and maintaining the project management knowledge base for an organization.

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Managing the Triple Constraints

Any project can be done successfully, if there is no constraint on time or there is unlimited budget available.
Unfortunately, that is not true in real life.

A project is performed within some constraint and these constraints are usually competing. Therefore, if you
change one, it would affect the other. For example, if the project duration increases, it would lead to increase
in the project cost as well.

Triple constraint is a term that originally referred to the three competing project constraint within which the
projects are performed. These constraints are cost, time, and scope.

Quality is a primary concern for a project manager. Therefore, the project manager has to make tradeoffs to
keep the scope-cost-time-quality plane in balance.

To achieve the balance, the project manager also needs to manage other aspects of the project, for instance,
the people, stakeholders, risks, communication, and procurements.

The project manager plays the essential role of integrating all these different aspects of project
management.

In the PMP examination, you can expect business scenario based questions focusing on the triple constraints.

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Stakeholder

A stakeholder can be defined as the one whose interests may positively or negatively be affected or perceive
to be affected by the decision, activity, or outcome of the project. As per the definition, the project team,
project manager, project sponsor, PMO office, customer, etc. are the stakeholders of the project.

A project sponsor is the one who gives a go ahead for a project and provides the necessary resources to
execute the project. Therefore, the Head of Projects in the organization, who provides a green signal to start a
project and allocates required resources to the project, is the project sponsor. A project sponsor is usually
somebody placed high up in the organizational hierarchy of the performing organization, i.e., the
organization in which the work of the project is being carried out.

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Stakeholder Management

One of the key responsibilities of a project manager is to manage stakeholders. A project manager has to
involve the stakeholders from the beginning of the project until the end, so they are aware of every step.

A project manager has to take up specific activities for stakeholder management.

Identifying both internal and external stakeholders

Missing out any stakeholder can be disastrous for a project. A stakeholder, who is identified towards the end
of the project, may come up with his own requirement at that stage, and incorporating them can be risky.

Determining stakeholder requirements

After identifying all the stakeholders, the project manager also needs to ensure that their requirements are
clearly identified. Sometimes, stakeholders might themselves not know of their requirement and it is the job of
the project manager to get them right by doing a proper stakeholder requirement analysis.

Determining stakeholder expectations

Stakeholders might also have some unstated expectations, which need to be clarified to see if it can become a
project requirement. It is again the role of the project manager to determine the stakeholders expectation.

Communicating with stakeholders

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Once all the stated and unstated stakeholder requirements are known, the project manager as part of
stakeholder analysis should focus on communicating them regularly to keep stakeholders involved in the
project.

Once you understand the practices of stakeholder management, it will be easier for you to answer scenario
based questions in the examination.

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Organization Structure

Projects are performed in an organization and the functioning of the organization might affect the project.

The different organization structure types explained here are based on the level of authority that a project
manager gets into those organizations.

In a functional type of organization, the organization is grouped by the area of specialization within different
functional areas. For instance, marketing, accounting, engineering, etc., are departments within the
organization. Each employee typically reports to a functional manager.

In such types of organization, normally projects are undertaken within the department itself. If a project
requires any assistance from another department, the request moves from the head of the requesting
department to the head of the concerned department. The team members do their normal departmental work
in addition to the project work.

The next type of organization is projectized organization. In such organizations, there are no departments. The
organizations resources mostly work on projects. Team members report to a project manager. The project
manager has complete control over the resources. When the project is completed, either they move on to
another project, or they look for some job outside the company. They do not have a department for
themselves.

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The third type of organization is a matrix organization, which is a blend of functional and projectized
organizational structure. A team member belongs to a department as well as they are part of a project team.
In such organization, team members have two bosses, one, their department head and the second, their
project manager.

Since there are two bosses here, this type of organization is further classified into three different types.

They are weak, strong, and balanced matrix organization. So out of the two bosses that team members have
in matrix organization, if the project manager has more authority over the team member, such organizations
are called strong matrix; where the functional manager has more authority, its a weak matrix organization. If
they both share equal authority, than its a balanced organization.

There is another term that you might find in the exam, called tight matrix. This generally refers to a co-
located team, i.e., a team that has been placed in the same location to enhance their performance.

In the PMP exam, if there is no mention of the organization type you can assume it to be a matrix
organization.

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Functional Organization

In a functional organization, the resources of the organization are grouped by functions sometimes called
departments. Examples of functions could be sales, finance, administration, manufacturing, etc.

Each function plays a definite role in the organization and is headed by a functional head or supervisor.

All the resources in such an organization report directly into their functions. Therefore, a sales person would
report into the sales organizational hierarchy, a purchase executive would report into procurement, and so on.

You would notice that in a functional organization, the project managers role is not explicitly called out. When
a functional organization embarks on a project, each of the functions that are involved may volunteer some
resources to work on the project. One of these resources may end up playing the project managers role. The
resource assignments may not even be full time and sometimes even the project manager is part time.

Since the project manager has no authority over any of the resources, they are dependent on the functional
heads. This makes it more challenging for the project managers to coordinate in the team.

However, functional organizations provide an opportunity for specialization. For example, if a purchase
executive was reporting into the purchase department, that executive would have exposure to all the
purchasing that happens within the organization and has a well-defined career path.

In functional organizations, project management happens at the Functional Head level.

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Projectized Organization

The projectized organization has all the resources aligned around projects.

The project managers have complete control over the resources working on their projects.

The biggest advantage of the projectized organization is that the resources have loyalty to their projects and
project execution becomes easier. This kind of structure is suitable for organizations whose work is in the
nature of projects.

There are few disadvantages in this structure as well. Firstly, the role of the resource is over once the project is
completed. Secondly, highly specialized roles within a project may not be fully occupied all the time. For
example, a purchase executive may have work for selected periods on a project while purchase activities are
going on. However, for the rest of the period, their capability may not be optimally utilized. There is less scope
for functional specialization, as the project boundaries limit the kind of work for the resources.

Each project manager is in-charge of a project and its resources.

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Matrix Organization

In a matrix organization, the resources report to the functional managers and are managed by the project
managers as well. There might even be a function that represents all the project managers in the organization,
which provides project management expertise.

The matrix structure has three variants commonly referred to as weak, balanced, and strong. In a weak matrix,
the authority of the project manager is the weakest, and strongest in a strong matrix structure.

The titles given to project managers in functional or weak matrix organizations are project expeditor or project
coordinator. They would be called project managers in a balanced or strong matrix structure and have slightly
more authority over the time of the team members.

The advantage of the matrix structure is that resources can be optimally utilized, while preserving the capacity
of the project managers to get projects executed efficiently. Resources can specialize in their functions and
have stability in their careers, also contribute to the projects at the same time potentially.

The disadvantage of matrix organization is that the communication overhead increases significantly. This is
because every resource in the organization belongs into a project and into a function, leading to a dual
reporting structure.

In a matrix organization, project management happens at Project Resource Level.

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Advantages and Disadvantages of Organizational Structures

Each organization structure has its own set of advantages and disadvantages.

The advantage of functional organizations is that resources may find clearly defined career paths and achieve
specialization and skill development in their respective fields. It will be a flexible work force since only one
manager will be responsible, avoiding confusion.

The disadvantage of such organization type is that project work is hampered. Department work is always given
higher priority than the project work. In addition, there is no career path in project management, which leads
to lower interest in projects.

In the case of the projectized organization, one of the clear advantages is better communication within the
projects. Since project work is the only work team members are doing, it also leads to loyalty towards the
project goals.

The disadvantage of such organization type is the inefficient use of resources, because every project team has
their own support function. Therefore, this might lead to the duplication of effort. It also leads to the resources
being left with no work, since their roles are over once the project is completed. It also hampers skill
development because the project requirements dictate what kind of work team members perform at different
stages on a project.

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Now, let us look at the matrix organization. It also has the advantage of better coordination and maximum
utilization of resources. However, the disadvantage is the higher potential for conflict among the managers,
which might lead to communication complexity and overhead management.

Business scenario based questions to identify the type of organization structure can be expected in the PMP
exam. When the organization type is not mentioned, it can be assumed to be a matrix type of organization.

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Project Lifecycle vs. Product Lifecycle

Project life cycle spans the initiation of a project until the closure of the project. The product life cycle, on the
other hand, also encompasses the operational and maintenance phases.

A typical product life cycle starts with conception of the product and goes until its withdrawal from the market.
The withdrawal might be because it becomes obsolete or there is no further need for the product in the
market.

A product has a long life cycle. A product can require or spawn many projects over its life. For example, a
project in product conception phase could be to determine customer needs, whereas a project during product
maturity phase could be used to perform competitive analysis. Typically, a product life cycle is longer than the
project life cycle.

A project also has its own lifecycle and this lifecycle depends upon the industry and the organization within
which the project is being executed. Sometimes different organizations within the same industry use different
life cycles.

There can be questions in the exam, based on the comparison of project lifecycle and product lifecycle. So
understanding the differences will be useful in answering such questions.

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Project Life Cycles

A life cycle is composed of phases; each phase represents a discrete unit of work required to be done on the
project. There are different ways of classifying project life cycles.

Let us first discuss the sequential versus overlapping life cycle.

In sequential phases, the subsequent phase starts only after the previous phase has been completed whereas
in overlapping phases, two or more phases may run in parallel for some time. This could help fast tracking and
compressing the amount of time required.

The other way of classifying life cycles is how they go about the process of planning.

In predictive life cycles, there is a large up-front planning phase, where all the details of scope, cost, time, are
planned before beginning the subsequent phases. These phases then are executed in either sequential or
overlapping modes. They are suitable for large projects where all the requirements are likely to be known in
advance and where up-front planning effort is required to get the necessary approvals. Another feature of
predictive life cycles is that each phase may potentially be different in the nature of activities and may require
people with different skill sets. For example, traditional software development life cycle has phases like
requirements, feasibility, planning, design, construction, testing, and transition.

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Project Life Cycles (contd.)

Incremental and iterative life cycles have a short up-front high-level definition and planning phase. The
product is then developed through a series of iterations, where iteration increments (or adds to) the
functionality by a little. All the activities are intentionally repeated in iterations.

Adaptive or Agile life cycles are variants of incremental and iterative life cycles where iteration is very short
(typically 2 to 4 weeks). Agile methodologies are becoming very popular in the software development industry
and in other industries where the requirements are highly changeable and frequent feedback is beneficial.

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ANSWERS:
S.No. Question Answer & Explanation
1 A project manager is working on a a.
project to construct a new bridge. In a functional organization, team members are
The resources report to the more concerned with their daily functional
functional manager and are mainly activities than with the project activities.
occupied with operational work.
The project manager has no
authority to properly assign
resources. What type of
organizational structure is the
project manager in?
2 Which of the following is not a a.
characteristic of a project? Characteristic of a project is based on the
project definition. Except for choice a,
everything else is part of the project definition
itself.
3 As a project manager, you have b.
started a new project. Several Although all the options look correct, informing
stakeholders raise concerns about the PMO is the best choice. The PMO controls
the quality of the new project the project management procedures and tools.
management software being used PMI would like to believe that a mature
and the way project changes would organization would have a dedicated PMO and
be logged. As a project manager deferring to the PMO for this would be the
what should you do? right option.
4 Who does the project team report b.
to in a projectized organization? In a projectized organization, project team
reports to the project manager.
5 How is a project life cycle different b.
from product life cycle? A project life cycle depends on the control
needs of the performing organization. Choice C
is just the opposite, i.e., a product life cycle can
include many projects through its life cycle, not
the other way around.
6 Identify the least important d.
stakeholder from the given Stakeholders are persons or organizations that
options. are actively involved in the project or who may
be positively or negatively affected by the
performance or completion of the project.
Competitor is the least important stakeholder.

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Summary

Here is a quick recap of what was covered in this lesson:

Project management is the application of knowledge, skills, and tools and techniques applied to project
activities to meet the project requirements.
PMO provides the policies, methodologies, and tools and templates for managing projects within the
organization.
Project manager has to integrate various project aspects, like the people, stakeholders, risks,
communication, and procurements with the project constraints (time, scope, cost, and quality).
Identifying internal and external stakeholders, determining their requirements, and communicating with
them regularly is an important role of a project manager.
Functional, projectized, and matrix are the three types of organization structures, based on the level of
authority given to the project manager.
Project life cycle spans the initiation of a project until the closure while product life cycle, also
encompasses the operational and maintenance phases.

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Conclusion

With this, we have come to the end of this lesson. In the next lesson, we will discuss project management
processes.

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Lesson 03Project Management Processes

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Objectives

After completing this lesson, you will be able to:

Differentiate between Project Life Cycle and Project Management Process


Name the five Project Management Process Groups
Describe the Process Group Interactions
Recognize processes aligned to different Process Groups and Knowledge Areas
Identify the inputs and actions of Project Management Process Groups

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Project Life Cycle vs. Project Management Process

Project life cycle addresses the question, What to do to get the work done? It varies industry wise.

For example, let us look at a typical project life cycle in a software industry.

First, you understand what is required and analyze it as part of the requirement analysis phase. Then, as part
of the design phase, you figure out the implementation of it and arrive with the approach. Next, you
implement the functionality by writing the code as part of the coding phase. The code is then verified to
ensure it works right, as part of the testing phase. The tested and verified software is then installed at the
customer locations, as part of the installation phase. After the installation, the system then moves into
operations and support phase.

The project management process addresses the question: What to do to manage the project? The processes
for managing the projects are likely to be the same across industries.

For instance, in the develop schedule process, one needs to develop the project schedule, irrespective of the
industry or domain you are working.

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Project Management Process Group

The project management processes are divided into 5 process groups. They are initiating process group;
planning process group; executing process group; monitoring and controlling process group; and closing
process group.

The initiating process happens at the beginning of the project or a phase. The planning, executing, and
monitoring and controlling processes go together. Therefore, you plan, execute, and re-plan based on the
execution result.

The project closing processes are performed when the project work or a phase within the project is
completed. The typical project management process in the closing phase releases resources back to the
resource pool, so the team members can be assigned to another project.

Note the iteration of processes within the phases is dependent on the scale of the projects. Small projects may
have only one iteration, whereas bigger projects may have multiple iterations before they enter a new phase.

Project management processes are overlapping activities.

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Process Group Interactions

Process groups have overlapping activities that occur throughout the project life cycle.

The output of one process group is generally the input to another or a deliverable of the project.

For example, project management plan is an output of planning process group and an input to execution
process group.

Note that production of the plan is not a one-time activity. As the project progresses, the project management
plan may get updated as a result of the monitoring and controlling processes. The updated project
management plan once again forms an input to the execution process group.

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Project Management Process Map

Given on the screen is the list of the forty-seven project management processes, ten knowledge areas, and
five process groups.

The table shows how each of them is interrelated. You can see that the Project Integration Management
processes can be mapped back to all the five Process Groups, while Project Scope Management processes are
mapped back to only planning and monitoring process group. Study the table to identify processes under
project management and the knowledge area they belong to.

All the 47 processes are described in detail in this tutorial. Each knowledge area is covered in detail as a lesson.
It also covers how the processes map to process groups to help you understand the big picture. Further, the
inputs and outputs of each of these processes, tools and techniques that are used in these processes, and
what exactly happens during these processes are also discussed.

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Initiating Process Group

The initiating process group formally starts a project after considering the business case and establishing the
feasibility of the project. Typically, the initiating processes will result in the authorization or official approval
for a project or a new phase within that project to begin.

Project charter, a document that authorizes a project, is a formal go ahead on the project and is issued by
the senior management of the organization. The project charter has information such as the project manager,
key stakeholders of the project, what the product or service of the project is, high-level data of risk, cost, and
schedule of the project. The project is officially authorized when the project charter is approved.

Let us now look into the inputs to the initiating process group and the actions taken during this process.

The initiating process group receives various inputs. First is the project statement of work. This is provided by
the project sponsor or whoever is initiating the idea.

If the project is started under a contract or an agreement, then the contract or agreement is the input.

If the project is undertaken to meet some business need of the organization, then the business case is the
input.

You will frequently come across the terms Enterprise environmental factors and organizational process assets
throughout this tutorial. Enterprise environmental factors include everything that defines the context in which

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the work of the project will be performed, including the organization structure, culture, and political
environment.

Organizational process assets include all the past data of the organization related to work on similar projects,
the process templates, and know-how that can be used by the project manager.

If the project is being done as part of a contract with an external customer, procurement documents also form
inputs to initiating processes.

Now, lets look at the actions taken in the initiating process group.

The project assessment with key stakeholders such as sponsors, senior management, and project management
office must be carried out using the available inputs, such as project statement of work, the business need, and
agreement. During the assessment, you can consider the historical data from organizational process assets and
environmental factors. This helps in understanding the feasibility of the products or services to be delivered
based on the assumptions and constraints.

After carrying out the feasibility and assessment, you can start identifying the key deliverables such as product,
service, or the results to achieve the project goals. Once the project is decided, an important document will be
developed called the Project Charter. This is developed by the sponsor, PMO, or senior management. The
project charter consists of elements such as project justificationwhich is the benefit analysis and business
values in alignment with organizational strategy, high level scope, schedule, cost, risk, key milestones, and key
stakeholders list. It also identifies the project manager. The project manager needs to participate in the
development of the project charter to ensure stakeholders agreement. The project charter approval to gain
authority and commitment of the stakeholders is required.

The project charter authorizes the project manager to start further activities. Based on this project charter
document, the project manager starts identifying the stakeholders. While identifying the stakeholders, project
manager carries the stakeholder analysis by understanding the power, interest, and influence of the
stakeholders towards the project. Stakeholder identification is a continuous process. It needs to be carried out
at the start of every phase of the project.

It is important for the project manager to identify high level risks using current and past data to propose
implementation strategy. Project manager must seek for project charter approval to gain the authority and
commitment.

Also during the initiating, the project manager communicates the elements of the project charter to
stakeholders to align the expectations and support for the project success.

You may get questions in the PMP exam, based on the inputs and activities of the initiating process group.

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Planning Process Group

The planning process group determines if the objectives laid down in the project charter can be achieved. It
establishes the total scope of effort, objectives, and course of action required to attain those objectives. The
planning process group prepares a blueprint of how the project will be accomplished.

The primary inputs required to carry the planning process groups are project charter, stakeholder register,
project staff assignments, agreements, organizational process assets, enterprise environmental factors, and
resource calendar.

The project charter helps in the development of subsidiary plans, such as scope, cost, schedule, and risk
management plans. A subsidiary plan is a sub-plan within the project management plan, which helps establish
how to execute, control, and close the project.

Stakeholder register consists of the list of stakeholders for the project. Using this document, the project
manager can discuss with the relevant stakeholders to collect the requirements. The document also helps in
getting the teams buy-in. The project staffing assignment document provides the input to who is working on
which activity. Agreements help in understanding the detailed scope, budget, and the time line for the
planning purpose, as it consists of terms and conditions. Organizational process assets and Enterprise
environmental factors help identify the elements which can influence to make the project a success. Resource
calendar supports in planning the schedule, as it contains information on available resources with their
calendar, those who work part-time or full-time, and their leave plans.

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Now, lets look at the actions taken in the planning process group.

By doing the review and assessment of the project charter, you can establish the detailed project deliverables.
The main action that is carried out in the planning process group is development of the project management
plan. It consists of subsidiary plans and the project baselines.

There are sixteen elements within the project management plan. Out of which, thirteen are subsidiary plans as
listed on the screen; and the rest are baseline scope, cost, and schedule. Subsidiary plans provide guidelines on
carrying out the activities within the respective knowledge areas, that is, how to execute, control, and close
the projects. For example, schedule management plan provides guidelines on the estimation techniques to be
used to develop schedule; and ways to maintain and track project schedules. Risk management plan provides
guidelines on identifying the risk, conducting risk analysis, and controlling the risk. Further, human resource
plan provides guidelines on how to acquire, develop, and manage the team.

Project management plan has to be developed along with the team to obtain approval from the key
stakeholders. Kick-off meeting must be conducted to get their buy-in.

Note that planning is not a one-time activity. Re-planning, that is, making changes to the plan in response to
change requests is also an integral part of planning.

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Executing Process Group

The purpose of executing process group is to complete the work as defined in the project management plan to
satisfy the project specifications.

The focus is on stakeholder management, following processes, and ensuring everyone in the project has the
same information on the project objectives. The project status is also updated to the stakeholders.

The primary input to this process group is the project management plan. Other inputs include quality
metrics, which contain the attributes to be measured. Change log provides information on status of all the
change requests submitted, which helps in communicating to the stakeholders.

Enterprise environmental factors and organizational process assets provide data on the necessary factors and
limitations to implement the project.

Further, proposals given by different sellers from whom you may want to procure some goods or services to
complete the project; the approved change requests that need to be implemented; the measurements
resulting from quality control processes that need to be considered; make-or-buy decisions that indicate
which items will be produced in-house and which items will be procured from others; source selection criteria,
which indicate how the procurement decisions will be made; and work performance reports that show the
progress on the project are also the inputs for executing process group.

Lets look into the actions taken during executing process.

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Acquire and manage the project resources per the human resource and procurement management plans. If
the resources are required from the vendors, get them per the procurement management plan using seller
proposals. The action required here is selecting the sellers and awarding the contract. Once the team is on
board, you need to develop, lead the team, and manage the execution to meet the deliverables. Carry out this
action per the human resource management plan. Implement the quality assurance activities using quality
audit and process analysis, per the quality management plan.

Approved changes, corrective and preventive actions, and defect repairs must be implemented per the
project management plan. Implement the approved actions to minimize the threat, which is a negative risk
and maximize the opportunity, which is a positive risk.

Further, produce the project progress report and share it with the stakeholders per the communication
management plan. This keeps the stakeholders engaged and informed about the project progress.

Maintaining stakeholder relationships is important for the success of a project. It involves ensuring
stakeholders expectations are in line with project charter and project management plan; and avoids
unrealistic expectations from the stakeholders.

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Monitoring and Controlling Process Group

The purpose of monitoring and controlling process group is to measure the project performance per the
project management plan and take appropriate action. This process group tracks, reviews, and regulates the
progress and performance of the project; identifies the areas where changes to the plan are required, and
initiates the corresponding changes. The appropriate action can be in the form of corrective and preventive
actions.

Monitoring means observing and controlling, that is, to take actions to bring things under control.

The inputs to the monitoring and controlling process groups are: deliverables produced during execution;
work performance data that tells you about the progress made on the project; change requests that may arise
during execution; organizational process assets; project management plan and other project documents; the
list of selected sellers who will be supplying goods and services to the project.

The specific actions to be performed are measure the project progress with respect to time and cost and
compare with baselines like schedule and cost. For any deviations, recommend the corrective and preventive
actions through change requests. These changes will be addressed using change management plan to align
with business needs. The output of executing process is deliverables. These deliverables must be verified and
validated to check if they are conforming to the standards. If not, necessary actions must be recommended.
Ensure that risk management activities are per the risk management plan and the risk responses implemented
according to the plan are working. Reviewing the issue log helps in identifying the corrective actions. The issue

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resolutions documented in the issue log may become an obstacle for some stakeholders to achieve the project
goals. This information will bring a common understanding among all the stakeholders through control
communications.

Capturing lessons learned enables continuous improvement throughout the project. This is one of the
important actions to be performed. Also, monitor the sellers to ensure the procurement activities are carried
out according to the compliance and the products are delivered per the standards.

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Closing Process Group

A project is considered complete not when the projects product is delivered, but only when all the closure
formalities have been completed. The closing process group includes administrative activities such as collecting
and finalizing all the paper work needed to complete the project and the technical work to verify that the
product is acceptable. Remember that PMI expects a mature organization and a certified project manager to
be diligent about bringing projects to an orderly closure and use the performance data and lessons learned for
planning future projects.

The closing process group finalizes the activities across all Project Management Process Groups to formally
complete the project, phase, or contractual obligations. This process group also includes work related to
transferring the projects product to those who will maintain and use it, and returning all the project resources
to the resource pool.

The key inputs to this process group are the project management plan and project documents; accepted
project deliverables; documentation pertaining to the items being procured for the project; organizational
process assets; and enterprise environmental factors. The actions taken up during the closing process group
are as follows: Confirm that all project requirements are met; obtain sign-off or final acceptance of the
deliverables from the key stakeholders; hand over the deliverables to the stakeholders per the project
management plan, and make payment to all parties, update cost records, and complete contract closure.
Further, update the lessons learned database; archive the project documents; and measure customer
satisfaction.

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ANSWERS:
S.No. Question Answer & Explanation
1 A project manager is validating the b.
scope. Which Process Group is the Monitoring and Controlling (see PMBOK
project manager working in? Guide section 3.6). During project closure the
project manager reviews the acceptance
documentation from scope validation to ensure
that all project requirements are completed.
2 Which of the following is an output a.
of the Initiating Process Group? Project charter is the output of the Initiating
Process Group. All other options are inputs to
the Initiating Process Group.
3 Who is in control of the project a.
during the Planning Processes? The project manager is in control of the project
throughout the project life cycle.
4 The high level project schedule d.
constraints have been determined. The high level constraints of schedule and
Which Process Group is the project budget are determined during the Initiating
in? Process Group. The detailed planning is done
during the Planning Process Group.
5 Which of the following is not true b.
about project life cycle? Stakeholder influences are greatest towards
the beginning of the project.
6 Which of the following Process a.
Groups should be included in all In every project, all five Process Groups must
the projects? be included but the level of attention given to
each Process Group will be governed by the
project manager depending on the project size
and complexity.

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Summary

Here is a quick recap of what was covered in this lesson:

Project life cycle addresses the question, What to do to get the work done? while Project management
process addresses the question, What to do to manage the project?
There are 47 processes in project management grouped into ten Knowledge Areas, and mapped to five
Process Groups.
Initiating Process Group defines a new project or phase. When the project charter is approved, the project
is officially authorized.
Planning Process Group establishes the total scope of effort, objectives, and course of action required to
attain those objectives.
Executing Process Group completes the work defined in the project management plan to satisfy the
project specifications.
Monitoring and Controlling Process Group tracks, reviews, and regulates the progress and performance of
the project; identifies and initiates the changes to the plan when required.
Closing Process Group finalizes the activities across all Project Management Process Groups to formally
complete the project, phase, or contractual obligations.

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Conclusion

With this, we have come to the end of this lesson. In the next lesson, we will cover project integration
management.

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Lesson 04Project Integration Management

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Objectives

After completing this lesson, you will be able to:

Define Project Integration Management


Identify the key role of the project manager, project team, and project sponsor
Explain various project selection methods
Describe the Project Integration Management processes
Identify key terminologies used in Project Integration Management

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Project Integration Management

Project integration management involves unification, consolidation, articulation, and integrative actions that
are crucial for successfully completing the project.

The project integration management is high-level work that project manager does and it involves managing
interdependencies among the other knowledge areas. The other nine knowledge areas involve detailed work
in a specific direction. For example, Project Cost Management deals only with how to manage cost in a project.

The project management processes do not happen independently. For example, a new resource added to the
project may require changes in cost or schedule or both. In dealing with such situations, the project manager
integrates the processes of project management. The need for integration drives much of the communication
and the work of the project manager.

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Role of Project Manager, Team, and Sponsor

Project manager, team members and project sponsors have different roles to play in a project.

The project manager is supposed to play multiple roles in the project; the key role is to perform integration.
The project manager puts all the pieces of the project together into a cohesive whole. In doing so, the project
manager tries to ensure that the project is done faster, cheaper, and utilizes resources optimally, while
meeting the project objectives.

As the project progresses, the team members work on completing the project activities.

The role of the project sponsor is to protect project from any unnecessary changes and to ensure that it has
the required resources for completion. The project sponsor is the champion for the project within the
performing organization, i.e., the organization in which the work is being performed.

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Project Selection Methods

An organization can undertake a project under contract with an external organization or take up a project
driven by internal business needs.

There should be a formal process of selecting project in all organizations, to ensure that it is making the best
possible use of limited corporate resources. For example, if the organization has an option to take up any one
out of the two projects, both of which use the same corporate resources, the organization would naturally
select the one, which is more profitable.

There are two broad ways to select a project. One way is the benefit measurement method where one project
is compared with other competing projects. Another approach is based on mathematical models wherein you
examine the most optimal selection of projects by trying to optimize a goal for example, maximize operating
profits. Such methods may be called constrained optimization methods.

There are different methods under both these categories and you should be familiar with the names of these
methods. Broadly, the benefit measurement methods focus on ascertaining the costs and benefits of
undertaking the project. The methods under benefit measurement method include murder board where a
panel of experts shoots down a new project idea, peer review, scoring models, economic models, and benefit
compared to cost.

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The constrained optimization methods rely on mathematical modeling techniques to determine the best
selection of projects to achieve certain business objectives. The methods of constrained optimization method
include linear programming.

In reality, you might not have seen these methods to be followed in project selection. Often, personal
relationship with the sponsor may be more important than anything else. This is quite normal and any
organization worldwide works this way. However, as a certified project manager, it is important for you to be
familiar with more scientific methods of project selection.

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Project Selection Methods (contd.)

A typical question on the PMP exam could be: What type of project selection technique is peer review? and
the right answer is benefit measurement method. You need to understand the characteristics of various
project selection methods to answer scenario based questions.

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Present Value

An organization has limited resources. They cannot execute all the projects that come their way. They can take
only those projects for execution, which are financially sound for the organization.

There are various parameters used in making such decisions.

Some of these terms are present value, net present value; internal rate of return; payback period; benefit cost
ratio; return on investment; and opportunity cost.

Present value is todays value of future cash flows. In order to reduce future cash flows to present values, a
discount factor has to be applied.

What this essentially means is, if a project can give a return of say $100 per year, $200 next year, and $250 the
third year, what is the value of all these returns today? $250 return in the 3rd year will not be the same as $250
today due to inflation or any other constraint.

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Net Present Value

Net present value (NPV) is the present value of the total benefits (income or revenue) less the costs over a
time. Therefore, if multiple items are involved, add the present value of all of them to arrive at the net present
value.

Problems where a project has to be selected over other projects, on the basis of their net present value, can be
expected in the exam. Let us take an example of a typical question that we might encounter in the exam.

You have two projects to choose from. Project X will take 2 years to complete and has an NPV of $35,000.
Project Y will take 5 years to complete and has an NPV of $95,000. Which one will you choose?

The answer is project Y, because it has a higher NPV. Do not get confused with longer duration of the project;
it is important that NPV be more.

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Internal Rate of Return

Another term used in evaluating a project is internal rate of return or IRR.

IRR is the rate of discounting at which the present value of costs matches the present value of benefits. It is the
rate inherent in the project.

Let us look at an analogy to understand the concept of IRR. Consider a project similar to depositing money in a
bank account and earning interest. You will prefer the bank that gives maximum interest. Similar is the project.

Choose from project A and B wherein Project A has an IRR of 25% or project B has an IRR of 15%.

The answer is project A, as the IRR is better for project A.

It is obvious, higher the IRR, the better.

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Payback Period

Payback period is the number of time periods it takes to recover your investment in the project before your
start making profit on the investment made in the project.

You have two projects to choose from; project A with a payback period of 5 months or project B with a
payback period of 12 months. Which one would you go for?

The answer would be project A. It is evident that lesser the payback period, the better.

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Benefit Cost Ratio

Benefit cost ratio is the ratio of the present value of benefits to the present value of costs. A benefit cost ratio
of more than 1 means that benefits are greater than the costs.

If the benefit cost ratio of project A is 2.5 and benefit cost ratio of project B is 1.5, which project would you
select?

The answer is project A as the benefit cost ratio is higher in project A.

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Return on Investment

Return on Investment or RoI is commonly used in financial parlance to indicate how profitable a project is.
Return on investment is the average rate of return (or benefits) expected as compared to the initial
investment.

If a project involves an initial investment of $100,000 and generates an average return of $20,000 per year, it
means the RoI is 20,000/100,000 or 20%.

Higher the RoI, the more profitable the project is.

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Opportunity Cost

Opportunity cost is yet another term used in evaluating competing projects that you might see in the exam. It
means the opportunity given up by selecting one project over another.

Problems where a project has to be selected over other projects, on the basis of their net present value and
opportunity cost, can be expected in the exam. For example, you may come across a question such as: What is
the opportunity cost of selecting project B if Project A has an NPV of $55,000 and project B has an NPV of
$85,000?

The answer is $55,000. This is the NPV of project A, which was selected over project B.

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Project Integration Management Processes

There are six project management processes, which are part of project integration management knowledge
area.

They are the Develop Project Charter done in the Initiation Process Group, Develop project management plan
undertaken in the Planning Process Group, Direct and manage work carried out in the Executing Process
Group, Monitor and control project and Perform integrated change control undertaken in the Monitoring And
Controlling Process Group, and Close project or phase done in the Closing Process Group.

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Reading a Process Diagram

As you can see in the project management process diagram, these elements within the knowledge area
represent the inputs from the same knowledge area. These elements represent the inputs from other
knowledge areas. These represent the tools and techniques used in the process. These are outputs of the
process; these represent the output within the same knowledge area whereas these outputs are fed into the
knowledge areas other than the one that the process is a part of.

You can observe that the process in the image is color coded based on the process group. Initiating process
group is in yellow, planning process group is in blue and so on. You can read the processes and their color
codes in the legend box on the bottom left of the screen. The process group affiliation is also indicated in the
text of the description. It is important to understand the process group context to appreciate what the process
does.

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Develop Project Charter

Develop Project Charter is an initiating process. A project charter is essentially a document that authorizes a
project. Once a project has received a charter, it means that the project manager can start employing the
organizations resources for the project activities.

Let us look at the key inputs to be considered in preparing the project charter.

The first input is the project statement of work. This is created by project sponsors or customers describing
their needs, project scope, and how the project fits into their strategic goal. If the project is taken up under a
contract, the Request for Proposal (RFP) can be considered as project statement of work.

The next input is the business case. This document establishes whether the investment in a project is worth
from a business point of view, the business need for the project, and the cost-benefit analysis. It provides
important information to the project manager about the goals of the project and the boundaries in terms of
the desired results and cost.

If the project is undertaken as part of a contract or agreement, the agreement provides an important input for
the project manager to establish what must be done in the project.

The next input to be considered for project charter is enterprise environmental factors. Any project to be
executed within the organization has to deal with the organizations culture and existing systems. You can

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consider this as an organization baggage that comes with the project. This is the reason a project being
executed in two different organizations is done differently.

Another factor to be considered is organizational process assets. This is a broad term and includes all the
organizational processes, procedures and policies, corporate knowledge base, and historical project
information. Every organization develops a set of processes, procedures, and policies that are based on the
best practices learned by the organization over time. The historical information includes past project
management plans, risks, and lessons learned from similar projects executed.

Now, let us look at the tools and techniques used in this process.

The first technique is expert judgment. Expert judgment is an invaluable input to the process of formally
authorizing a project, because an expert can provide insights into why a project makes business sense or why it
does not. From experience, they may be able to shed light on the validity of the business drivers, feasibility,
assumptions, and constraints that need to be considered for the project.

Another technique is Facilitation techniques. The chartering process is often a collaborative activity involving
many influential stakeholders in an organization. Facilitation techniques help bring all these stakeholders
together and engage in fruitful discussions to arrive at the decision to go ahead with a project or not.

The only output of this process is the project charter. Let us understand what the project charter contains.

The project charter contains the high-level project requirement and it should be created by the project
sponsor and handed over to the project manager. The project manager participates in the development of the
project charter by compiling and analyzing the gathered information to ensure project stakeholders are in
agreement on its elements. While doing so, the project manager carries benefit analysis with relevant
stakeholders to validate project alignment with organizational strategy and expected business value. As part of
this process, the key deliverables will be identified. The project charter must be signed by the project sponsor
or somebody in the performing organization who is higher in authority than the project manager. Once it is
approved, the same will be informed to the stakeholders to have a common understanding of the key
deliverables, milestones, and their roles and responsibilities.

Note that a project charter is not a project management plan. The detailed analysis of risk, schedule, and cost
is part of the project management plan. It should be done during the project planning phase, when the project
is confirmed. The charter should be sufficiently high level to accommodate minor changes that may arise in
the project.

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Develop Project Management Plan

This is the process of documenting the actions necessary to define, prepare, integrate, and coordinate the
subsidiary plans. Examples of subsidiary plans are project time management plan, project cost management
plan, project human resource management plan, etc.

The project management plan does not just describe when the project would start, what activities should be
done, and when the project would get over. It is a detailed document and describes how the project would be
executed, monitored and controlled, and closed.

Many people think that project schedule developed using Microsoft Project is the project management plan.
However, that is not true. Project management plan contains all the subsidiary plans and their baseline value.
It also contains the allowed variance in the baseline value. Performance measurement baseline of projects
time is the total of project baseline time and the agreed time variance for the project.

For example, the time management plan section would have mentioned the time taken by a project. The
period mentioned in the project management plan is 180 days. This 180-day period is also called the baseline
time value. Therefore, the baseline value is the initial agreed value in the project management plan.

So, if the time variance agreed in the plan is 10%, the project should be executed in maximum 180+180*10% =
180+18 = 198 days. Whether the baseline time value should be 180 days or 300 days is decided by analyzing
the project activities and it should not be decided arbitrarily.

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Develop Project Management Plan (contd.)

Let us look at the inputs considered in developing the project plan.

Project charter from the previous process is an important input.

The other inputs include output of the other planning processes, because the project management plan is
supposed to integrate all of these plans. The examples of other plans are time management plan, cost
management plan, and quality management plan, etc. All of these plans are developed over a period as the
project progresses. These will be discussed in detail later in this tutorial.

In addition to these, enterprise environmental factors and organization process assets are also inputs to
developing the project management plan. In fact, these two factors have more influence in developing project
management plan than in developing project charter.

It is recommended that you understand these inputs, outputs, and tools and techniques clearly, as most of
these will be repeated in other processes as well.

The two tools and techniques employed in this process are expert judgment and facilitation techniques.

The very obvious output of this process is the Project management plan.

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Key Terms

Let us look at a few key terms to understand project management processes.

The first is the work authorization system. There should be a formal process of authorizing work within the
project. So be it internal team members or a project contractor, there should be a formal process of giving go
ahead to start work on the project.

The next two related terms are corrective and preventive action. You will come across these terms throughout
this PMP tutorial.

Corrective action is any action taken to bring expected future project performance in line with the project
management plan. For example, if a project milestone is delayed, as a corrective action, you include additional
resources to ensure that the final project deadline is not delayed.

While corrective action involves implementing actions to deal with actual deviations from the performance
baselines, preventive action deals with anticipated or possible deviation from performance baselines. For
example, to ensure that projects are not delayed, you do a proper estimation of the work and assign enough
resources to the project so that they are not delayed.

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Key Terms (contd.)

A very important system that needs to be established early on a project is the change control system. Since
projects are executed in a dynamic environment, it is quite natural to expect changes in the project
requirements. The change control system is the formal documented procedures, paperwork, tracking systems
for authorizing changes. Therefore, the change control system analyzes each of the incoming change requests
and decides whether to accept the change request or reject it.

A configurable item is any product, service, or result within the project, whose characteristics need to be
identified, documented, and placed under change control mechanism. Examples of configurable items are
project documents, source code, physical parts such as tools, recommended settings for machinery, etc. When
a formal configuration management system is put in place, it is essentially establishing a control system that
can preserve the characteristics of these items.

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Direct and Manage Project Work

Direct and manage project work is the process of performing the work defined in the project management
plan to achieve the project objective. This process marks the performance and completion of activities in a
project.

The input to this process is obviously the project management plan, since the project is executed as per the
project management plan.

The other inputs to this process are any approved change requests that need to be implemented. These could
be in the form of corrective or preventive actions upon which the team has decided to work.

The other two inputs are enterprise environmental factors and organizational process assets.

Let us now look at the tools and techniques.

Expert judgment is an important tool used in this process as well.

Another technique is the project management information system or PMIS. The PMIS is a combination of
documents, dashboards, software tools, etc. where the data and information related to the project gets
collected as the work is being done.

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During execution, it is natural to expect that plenty of meetings will take place among the team members and
among other stakeholders as well.

There are several outputs from this process. Project deliverables are produced.

As the deliverables are being produced, there would also be data related to the project performance that will
be generated, such as what was done, how long did it take, how much did it actually cost, etc.

Along with these key outputs, there are chances that new change requests may emerge. This could be
because, during the execution phase, the team or the stakeholders may realize that what is being produced is
not meeting the expectations or needs, and that something else may need to be done.

In the process, project documents and project management plan get updated.

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Monitor and Control Project Work

Monitor and control project work is the process of tracking, reviewing, and regulating the progress to meet
the performance objective or objectives defined in the project management plan.

Now, the estimated time performance measurement baseline is 180 days and 10%. The monitor and control
project work is the process area that tracks whether 180 days and 10% time performance baseline is being met
or not.

Let us also look at the key inputs for the monitor and control project work process.

Project management plan is the key input, as the performance measurement baselines are part of project
management plan.

The other key input to monitor and control project work is work performance information. It is the status of
the project, i.e., the status of the project deliverables, the cost incurred, the time elapsed in the project, etc.

Along with the work performance information, forecasts related to the cost and time form important inputs
upon which the project manager has to act.

Validated changes confirms that the approved changes have been appropriately incorporated.

Enterprise environmental factors and organization process assets are also inputs to this process.

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Expert judgment, Analytical techniques, Project management information system, and meetings are the
various tools and techniques.

One of the outputs of this process area is change requests. Change requests could be in the nature of
corrective and preventive actions or defect repair. If the performance measurement baselines are not being
met, this process ensures that project manager takes appropriate corrective and preventive action to get close
to the performance measurement baselines.

Along with the recommended corrective and preventive action, monitor and control project work also results
in identifying defects, which must be taken care of.

During the defect repair process, many reports related to the performance of the work of the project will be
produced.

Project management plan and project documents are also updated.

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Perform Integrated Change Control

Perform integrated change control is the process of reviewing all change requests, approving and managing
changes to the project deliverables, organizational process assets, project documents, and the project
management plan. This is where all the recommendations for changes, corrective actions, preventive actions,
and defect repairs are evaluated across all the knowledge areas and either approved or rejected.

The inputs to this process are similar to that of the monitor and control project work process; project
management plan, work performance reports, enterprise environmental factors, and organizational process
assets.

The only additional input is the change request, since the perform integrated change control process is
supposed to take care of managing the incoming changes. To make a judgment about the change requests,
project management plan and the work performance reports are also referred to.

Another important tool and technique used in this, along with expert judgment and meetings, is change
control tools, and most important among them is change control board. The team takes up the ownership of
analyzing each of the incoming changes and also does the impact analysis for the changes, and finally approves
or rejects a change. The project manager, project sponsor, and few of the important stakeholders and team
members may be part of the change control board.

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The process should produce change requests that are approved, a log of change requests processed (requests
that were either approved or rejected), and a few updates to the project plan and other documents.

Change management and change control is the theme recurring in many questions in the examination. You can
expect questions in the exam, which test a project manager's response to a particular change in the project.

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Change Management Process

First, the project manager should determine that a change has either already occurred or if the change is
necessary. One of the important qualities of a good project manager is that they will push back on
unnecessary changes.

The next step is to evaluate its impact on the project in totality. The team needs to understand what would be
the impact on the time, cost, quality, risk, resource requirements, and so on.

Once the impact is known, the project manager along with the team should look for various possible options to
accommodate the change. For instance, in order to accommodate an increase in scope, it may be necessary to
extend time line, add resources, increase budget, or a combination of the above.

Once the impact analysis and exploration of possible options are completed, the project manager should
present it to internal as well as external stakeholders for their approval. It should be presented to internal
stakeholders first, because the management of an organization may decide to absorb the change within the
projects reserves without opting to bill the customer.

If the project will have an impact on the agreed baselines of time, cost, scope, and quality, one needs to get in
touch with the external stakeholders and the customer. These steps are an important aspect of a project
managers job, and the ability of a project manager to manage change will be tested in the PMP examination.

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Close Project or Phase

Close project or phase is the last process of the project management integration knowledge area. This process
ensures that the project or a phase is formally closed after completion.

Remember that PMI expects a mature organization and a trained project manager to be diligent in following
closure formalities. Without going through the formal closure formalities, the project cannot abruptly be
closed. The project should be formally closed, even if it is terminated due to some problem.

The key input to this process is the accepted deliverables. The deliverables have to be brought into a state that
they can be properly transitioned. Transition means, they are handed over to the organization or group that
will be responsible for operations, maintenance, and support.

The other inputs are project management plan and organizational process assets.

Expert judgment, analytical techniques and meetings are the commonly used tools and techniques.

The closure of a project or a phase results in a product, service or a transition.

In the process, one of the important outputs is updates to the organizational process assets. These include
the actual performance against the plan, the key lessons learned during the project, the risks identified, the
updates to the skills and experience of the team members, etc. Updating these assets is mandatory as it helps
the organization gain maturity and learn from the experience.

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ANSWERS:
S.No. Question Answer & Explanation
1 With respect to change, which of c.
the following is the most important It is the responsibility of the project manager
for a project manager to focus on? to proactively manage the project. This
includes preventing unnecessary changes. The
changes are actually done by the project team.
2 In the middle of a project, you are b.
informed that the resources Although all the responses here seem feasible,
promised at the beginning of the the first thing to do is to evaluate the impact of
project are no longer available. As not having the promised resources.
a project manager what would you
do?
3 A customer is known for requesting b.
numerous changes on projects. You In real life you might consider doing all the
have been assigned as the project options listed, but the best way to handle such
manager for this customers new a scenario is to involve the customer as early in
project. What would you do in the the project as possible.
beginning of the project to manage
this customer?
4 Who performs project integration? b.
The project managers primary role is to
integrate the various activities and processes in
the project to help fulfill the projects
requirements.
5 As a project manager, what would b.
you do if you received a change Whenever there is a change request, you
request that does not impact the should look at the impact on all of the project
project schedule? constraints, not just the schedule.
6 You have been assigned as the a.
project manager of a project that is In this case, since the customer is directly
half way through execution. You informing that he is not happy, the best option
meet the customer and inform him is to meet the project team and discuss the
that project is within the baselines, customers concerns, before doing anything
but the customer informs you that else.
he is not happy with the
performance of the project. What
should you do first?

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Summary

Here is a quick recap of what was covered in this lesson:

Project Integration Management involves unification, consolidation, articulation, and integrative actions
that are crucial for successfully completing the project.
Integrating the project activities is the key role of a project manager; the project team focuses on
completing the project activities and the project sponsor warrants the team against unsolicited changes.
Benefit measurement methods ascertain the costs and benefits of undertaking the project while
constrained optimization methods rely on mathematical modeling to select the best projects that achieve
business objectives.
Various Project Integration Management processes are Develop Project Charter, Develop Project
Management Plan, Direct and Manage Work, Monitor and Control Project, Perform Integrated Change
Control, and Close Project or Phase.

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Conclusion

With this, we have come to the end of this lesson. In the next lesson, we will cover project scope management.

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Lesson 05Project Scope Management

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Objectives

After completing this lesson, you will be able to:

Define Project Scope Management


Differentiate between project scope and product scope
Identify the key terms used in project scope management
Explain work breakdown structure
Describe the Project Scope Management processes

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Project Scope Management

Project scope management includes the processes required to ensure that a project comprises all and only the
work required to complete the project successfully.

The project scope management is concerned about the scope; what is not there in the scope is also clearly
identified.

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Project Scope Management Activities

Let us look at few of the typical activities that happen as part of the project scope management.

Constant monitoring is essential to make sure that all the project work is being completed.

The gradual, uncontrolled increase in scope of the project is referred as scope creep. It is necessary to define
the project scope boundaries and not let people randomly add to the project scope.

Gold plating is doing more than what is required as part of the project scope. This has to be avoided in
projects.

As per the published statistics about projects done globally, less than 40 percent projects can be considered
successful. Therefore, the focus should be on what is required rather than squandering around with what is
not required. 40 percent might be considered less, but a project is classified as successful only if it meets all its
objectives and is done within time and cost budgets.

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Product Scope vs. Project Scope

Project scope management deals with managing both the product scope as well as the project scope.

Product scope refers to the features and functions that characterize a product, service, or result. The word
product may also include creation of a service. For example, in the banking industry, each of their services is
called as product. Likewise, savings account is one of their products; mutual fund is another.

On the other hand, project scope is the work that needs to be accomplished to deliver the output of the
project, which could be a product, service, or result with the specified features and functions.

For instance, to deliver a product, you may also need to produce a requirements document or a design
document. These are not part of the product scope, but it may very well be part of the project scope.

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Key Terms

WBS (Pronounce as W-B-S) stands for work breakdown structure. It means breaking the project deliverables
into smaller and more manageable components called work packages. The last level of work in such
subdivision is called work packages and the whole structure is called WBS.

For example, a typical software development project would have various activities, like finalizing requirements,
designing the new system, coding, testing, and going live with the new system. Each of these translates into
high level deliverables, which can be further subdivided into smaller activities which are more predictable.

WBS dictionary, like any dictionary contains the explanation of the terms used in WBS. A typical WBS
dictionary has details like the control account, name of the work package, description of the work package,
resource assigned, if there are any assumptions or dependencies to complete the work package, the due date
to finish the work package, technical dependencies, and so on. WBS dictionary is useful for the person or group
working on the work package as it further elaborates the decomposed work package.

Control account is a level within WBS at which management wishes to exercise control, for example, perform
earned value analysis, track performance, etc.

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Work Breakdown Structure

Along with the scope statement and the WBS dictionary, the work breakdown structure forms the scope
baseline of the project, i.e., it should reflect the entire scope of the project. Any deliverables that are not
reflected in WBS are not part of the project.

The creation of the WBS should involve the whole team. The creation of WBS creates common understanding
about the scope and therefore leads to team buy-in.

During decomposing the deliverables, you must ensure that each level is complete i.e., it includes all the work
in the project, before you start to decompose further.

Decomposition continues until the lowest level deliverable cannot be logically sub-divided further or they can
be estimated with reasonable accuracy.

WBS is a deliverable-oriented decomposition. It should only contain deliverables and not activities. While
developing the schedule, converting the deliverables into activities is one of the problems as WBS does not
contain activity level details.

Concept based questions on Work Breakdown Structure can be expected in the exam. So it is essential to have
a clear understanding of the concept of WBS.

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Work Breakdown Structure Example

Work breakdown structure of a core banking software development project is given on the screen.

The scope of project has been divided into WBS elements, like requirements documentation, design and
architecture, code, test, and go live. Further, these elements are decomposed into work package level to make
it easier to manage the deliverables in terms of scope, cost, time. It also helps to estimate or assign the specific
work packages to team members or groups.

The design and architecture has been decomposed to model and prototype. Similarly, code is decomposed
into work package 3.1 and 3.2, test into work package 4.1 and 4.2, and go live into product installer and
warranty sheet. WP 3.1 can be represented as module 1 and WP 3.2 as module 2. Similarly, WP 4.1 may be test
strategy document and WP 4.2 a test plan document. The number here indicates work breakdown code.

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Project Scope Management Processes

There are six project management processes, which are part of project scope management knowledge area.

These processes are: plan scope management; collect requirements; define scope; create WBS; validate
scope; and control scope.

The first four processes, i.e., plan scope management, collect requirements, define scope, and create WBS are
part of the planning process group; and the remaining two processes, validate scope and control scope, are
executed as part of the monitoring and controlling process group.

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Plan Scope Management

Plan scope management process creates a scope management plan that documents how the project scope will
be defined, validated, and controlled. It is usually the starting point of the planning processes on a project.
Understanding the scope and how it will be managed is fundamental to planning the other aspects of the
project.

Let us review the list of inputs to this process.

The project management plan provides other subsidiary plans and will help guide the scope planning activities
on the project.

The project charter provides an overall context and the high-level product and project description, which may
help determining the approach for scope management.

Enterprise environmental factors provide the organizational context to the project, including the culture of
the organization, the infrastructure, key personnel, and so on.

Organizational process assets provide inputs such as policies and procedures, historical information, and
knowledge base.

Now, let us look at the tools and techniques employed in this process.

Expert judgment refers to input received from knowledgeable and experienced resources.

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Meetings may be organized to determine the scope management plan. Everyone responsible for the project
scope management, such as the project manager, sponsor, customer, and other stakeholders must attend
these meetings.

Now, let us look at the outputs of this process.

The scope management plan describes how the projects scope will be defined, like who will be involved in the
process, whose inputs will be sought, what techniques may be used to get those inputs, etc., developed, i.e.,
in what form will the scope be elaborated and documented, monitored and controlled, and verified. The plan
may also describe how WBS will be created from the scope statement, how changes to the scope will be
managed, how deliverables will receive formal acceptance, etc.

The requirements management plan is a subsidiary of the project management plan that describes how
requirements will be analyzed, documented, and managed. A requirement is voiced by a customer or a
stakeholder, whereas scope represents what the project team will do or deliver to meet that need. The
requirement management plan may also describe how the configuration management of the requirements will
be carried out, how they will be prioritized, how the metrics will be used to rationalize these choices and how
the traceability of the requirements will be maintained throughout the project.

You may get questions in the PMP exam, based on the inputs, tools and techniques, and outputs of plan scope
management. So understanding of these topics will help you to answer concept based questions correctly.

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Collect Requirements

Collect requirements is the second of the six project scope management processes. It is the process of
defining and documenting stakeholders needs to meet the project objectives.

Let us look at the inputs to this process.

Scope management and the requirements management plan provide clarity on how the team should go
about collecting and documenting the requirements for the project.

The stakeholder management plan provides insights into the stakeholders communication requirements and
the level of stakeholder engagement needed.

The stakeholder register may provide useful guidance about which of the stakeholders could provide the
requirements for the project. It is very important that all the stakeholders expectations are captured
adequately and represented in the requirements documentation.

The project charter provides high-level requirements and expectations and may be used to detail out the
requirements.

Now, let us look at the tools and techniques that can be employed to collect the requirements.

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It is important for the project team to use a combination of techniques that will give them maximum clarity
about the requirements. Some of the techniques may include direct interaction like interviewing, forming
focus groups, conducting workshops, and using group creativity techniques, like brainstorming, and group
decision making techniques.

It may also include some offline activities like conducting surveys via questionnaires, etc.

Observation can be a very powerful way to capture requirements that may be difficult to state or articulate.

Prototyping is a powerful technique where the team comes up with a model or sample artifact that helps the
users visualize and gain more clarity about what is being developed.

Benchmarking is useful for understanding and learning from the industry and organizational benchmarks
about the bare minimum expectations.

Use of context diagrams and analyzing the documentation provided can also help in collecting requirements.

Requirements documentation is one of the most important output.

The second output of this process is requirements traceability matrix. This table helps trace whether the work
has happened on the requirements, whether all requirements are reflected in the final product of the project,
etc.

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Group Creativity Techniques

Group creativity techniques are used to channelize a groups combined brainpower to solve a problem,
identify requirements or risks, or make a decision.

Some of the popular group creativity techniques are brainstorming, nominal group technique, idea or mind
mapping, affinity diagram, multi-criteria decision analysis.

Brainstorming is used to generate many ideas in a short span of time. It does not involve critique, analysis, or
prioritization. The idea is to stimulate lateral thinking by promoting free, unfettered thinking among a group.

Nominal group technique is used to select from a set of ideas combines brainstorming with a voting process to
identify the select ideas for further thought or prioritization.

Idea or mind mapping combines ideas from individual brainstorming for identifying commonality and
differences in thinking.

Affinity diagram is useful for categorizing ideas into groups for review and further analysis.

Multi-criteria decision analysis utilizes a decision matrix to provide a systematic approach for decision-making
based on multiple criteria.

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Group Decision-Making Techniques

Group decision-making techniques are used to arrive at decisions when many people are involved in the
decision making process.

The commonly used methods are unanimity, majority, plurality, and dictatorship.

Everyone agreeing on a single course of action may take extensive discussions prior to reaching this stage. It
may be preceded by a technique such as the Delphi technique where people answer questionnaires and
reconcile differences with group thinking in a sequential process.

In a majority system, decisions are taken based on the choice of 50 percent or more of the group.

In a system of plurality, there are typically multiple options available and decision is taken by a single group or
block even if they are not in majority.

In dictatorship, one individual makes the decision on behalf of the group.

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Requirements Traceability Matrix

Given on the screen is an example of the requirements traceability matrix.

It lists all the requirements recorded in the requirements documentation in the first column.

In the subsequent columns, it traces how the requirement is being met by specific sections or objects in the
subsequent stages. In case of a software development project, the requirement about enabling multi-user
access may require changes in multiple places. These are specifically called out in the columns titled design,
coding, testing, etc.

This ensures each requirement is specifically addressed through all the stages of the life cycle and also
provides a backwards traceability by clarifying why a particular change is made at each stage (i.e., which
requirement is driving these changes).

A typical question in the PMP exam can be one related to the creation of WBS. So understanding the
requirements traceability matrix will help you to answer concept based questions.

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Define Scope

The next process in the project scope management is define scope.

Define scope is the process of developing a detailed description of the project and product. Collect
requirements lists for all the different requirements or needs expressed by the stakeholders. Define scope
deals with detailing these requirements and determining what will be in the scope of the project and what will
not be.

It belongs to the planning process group.

Let us look at the inputs to this process.

The scope management plan provides the details about the process of capturing and documenting the scope
of the project.

Project charter, which describes the business need of the project, and the requirements documentation
developed as part of the collect requirement process also form inputs to this process.

Organizational process assets are also a part of the define scope process. Organization template may be used
to write the project scope or refer to the lessons learned from previous, similar projects.

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For projects, which have product instead of a service as an output, product analysis is a commonly used
technique. This defines what is required in a projects product.

Alternatives generation is a technique used to see if the project requirements can be completed in a different
way, similar to lateral thinking.

Expert judgment is a technique using an expert, may be an external consultant to look at various requirements
and come up with the project scope statement.

In order to define the scope, you may also conduct specific workshops that are facilitated to generate ideas
around the project scope.

The output of this process is the project scope statement, which describes in detail the projects deliverables
and the work required to create those deliverables.

Therefore, the project scope statement has projects product scope description, product acceptance criteria,
project deliverables, and project constraints.

This process also results in updating the requirements documentation and requirement traceability matrix
developed earlier.

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Create WBS

The final planning process within scope management is Create WBS.

Create WBS is the process of subdividing project deliverables and project work into smaller, more manageable
components. It belongs to the planning process group.

The WBS is created with project scope statement and the requirements document as input.

The scope management plan provides the details about the process of capturing and documenting the scope
of the project, and how the deliverables should be decomposed in the form of a WBS and how it should be
maintained. The templates and standards related to the industry and the specific enterprise may be useful in
creating WBS. If there is an organizations template for writing down WBS, that is also used.

The other two inputs are organizational process assets and enterprise environmental factors.

Decomposition is an important technique used in this process. In decomposition, the project deliverables are
subdivided into smaller, more manageable components until the work and deliverables are defined at the
work package level. The work package level is the lowest level in the WBS and is the point at which the cost
and activity duration of the work can be reliably estimated and managed. The level of detail for work packages
vary as per the size and complexity of the project.

Another technique used is expert judgment.

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The output of this process is scope baseline. The project scope statement, WBS and WBS dictionary are
collectively referred as scope baseline. Scope baseline is part of project management plan.

This process also results in project document updates. Implementing WBS may result in getting more clarity
about the requirements itself. The requirement document or the project scope statement developed earlier
should be updated.

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Validate Scope

Validate scope is the process of formalizing acceptance of the completed project deliverables. Validating scope
includes reviewing deliverables with the customer or sponsor to ensure they are completed satisfactorily and
obtain formal acceptance.

Validate scope is closely related to quality control as well. However, scope validation is primarily concerned
with acceptance of the deliverables; whereas, quality control is primarily concerned with correctness of the
deliverables and meeting the quality requirements specified for the deliverables.

Quality control is generally performed before scope validation, but these two processes can be performed in
parallel as well.

Let us look at the inputs to this process.

The project management plan provides information about how the deliverables will be validated and accepted
by the customer and other stakeholders.

The requirements documentation acts as the basis on which the validation activity is to be carried out.

The requirements traceability matrix documents how each of the requirements has been implemented and
how it can be validated.

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The fourth input is verified deliverables and implies that the verification activity is first carried out by the team
under the control quality process, and only then, the deliverable enters the validation process.

Work performance data gives more inputs on the deliverables that may be useful in validating and getting
acceptance.

The technique used to validate scope is inspection and group decision making. Some of the typical activities
that are done as part of inspection are measuring, examining, and validating to determine whether the work
and deliverables meet requirements and product acceptance criteria.

Group decision-making techniques may be employed if a team is working on the process of validating the
deliverables. It helps in arriving at a decision by either consensus or majority or any other method.

The output of this process is the accepted deliverable. Sometimes deliverable might be acceptable and that
results in another output, i.e., change request.

Due to the validation process, the information about the deliverables, which have been accepted, and any
observations during the validation process may be recorded.

Some documents, like report on status of the projects product, is updated as result of this process, and listed
as one of the outputs.

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Control Scope

Control scope is the process of monitoring the status of the project and product scope and changes to the
scope baseline. Controlling the project scope ensures all requested changes and recommended corrective or
preventive actions are processed through the perform integrated change control process.

The inputs project management plan, requirements documentation, and work performance data are the
same as the inputs for control scope and validate scope.

Work performance data has information about progress of work on the different deliverables.

The other input is requirements traceability matrix, which lists the requirements included in the requirements
document.

Organization process assets also influence control scope in a sense where an organization would have
standard templates for monitoring and reporting scope related updates.

Scope control is performed using variance analysis. The variation is measured from the original scope baseline,
which decides whether any corrective or preventive action is required.

The key output of the control scope is work performance information, which is planned versus actual
technical scope performance.

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If any part of the scope performance does not meet the acceptance criteria, it may result in change requests,
which is the other major output of this process.

All of these may result in updates to the project plan as well as other project and organizational process
documents.

Business scenario based questions on scope control can be expected in the PMP exam. So understanding the
concept of scope control is essential.

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ANSWERS:
S.No. Question Answer & Explanation
1 During which Project Management a.
Process Group is the project scope There are only 6 processes in scope
defined? management. Four are in planning process
group and two are in monitoring and
controlling process group. Project scope is
defined in Planning Process Group.
2 During a project meeting, one of a.
the team members suggests a nice Scope management is about doing the work
feature that the customer may like. needed for the project and only the work
The project manager says no to this needed for the project.
new feature indicating the project
should concentrate only on what is
required for the project to get
completed and nothing else. This is
an example of_______________.
3 What is the most important thing c.
that a project manager should Scope validation involves formal acceptance of
ensure during the Validate Scope the work deliverables.
process?
4 The WBS for your project has been c.
prepared and distributed to the The WBS dictionary provides detailed
project team members. When descriptions about the deliverables listed in the
execution begins, which document WBS.
will provide the detailed
descriptions of the WBS elements?
5 Which of the following is not true b.
regarding subdividing the work in WBS need not be decomposed until it can be
the WBS? done by a single person.
6 Validate scope is the process of c.
formalizing acceptance of the Validate scope is a monitoring and controlling
completed project deliverables. process which can be performed throughout
When should this process be the project. Normally, at the end of each phase
done? of the project you would perform validate
scope to achieve the formal acceptance of the
completed project deliverables.

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Summary

Here is a quick recap of what was covered in this lesson:

Project Scope Management includes the processes required to ensure that a project includes all and only
the work essential to complete the project successfully.
Product scope refers to the features and functions that characterize a product, service, or result, while
project scope refers to the work that must be performed to deliver a product, service, or result with the
specified features and functions.
Work Breakdown Structure breaks the project scope into smaller and more manageable pieces called work
packages which are easy to manage.
WBS dictionary contains the explanation of the terms used in WBS.
The six Project Scope Management processes are Plan Scope Management, Collect Requirements, Define
Scope, Create WBS, Validate Scope, and Control Scope.

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Conclusion

With this, we have come to the end of this lesson. In the next lesson, we will cover project time management.

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Lesson 06Project Time Management

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Objectives

After completing this lesson, you will be able to:

Define Project Time Management


Explain project schedule, Gantt charts and network diagrams
Identify the key terms used in Project Time Management
Describe the Project Time Management processes
Explain various schedule network analysis techniques

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Project Time Management

The purpose of project time management is to ensure that the projects get completed on time.

This knowledge area is primarily concerned with developing a project schedule and ensuring that project goes
as per the agreed schedule. If there is a need to change the project schedule, the change should happen by
following a proper change control procedure.

Another term used in the PMP examination is schedule management plan. Schedule management plan is part
of the project management plan and has information on the planned project schedule and its management
and control.

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Project Time Management Activities

The key activities that are part of the project time management include identifying activities; estimating time
and resources; and sequencing activities.

It is important to identify a list of activities that would be a part of the project. Next, an estimation of time and
resources required for completing the identified activities are done. Finally, these activities need to be
sequenced as per the dependencies.

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Project Schedule

Project schedule represents the time dimension of the project plan and has information like when the project
would start, when each of the project activities would happen, in what order the project activities would
happen, when project would be completed, etc.

Usually, software system is used to develop the project schedule. The project team can enter the list of
activities in the software as well as their dependencies, and the software can produce the project schedule as
the output. Microsoft Project is the most popular tool used for project schedule development.

Generally, project schedule is considered similar to project management plan. Project management plan is
different from project schedule. Project management plan not only has information about the project
schedule, but also other important project related plans, like risk management plan, cost management plan,
etc.

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Gantt Chart

Gantt chart is a type of bar chart that illustrates a project schedule. It shows the dependencies between the
project activities as well as their percent completion.

A sample Gantt chart is shown on the screen.

Two summary elements of the work breakdown structure are depicted.

To complete those elements, there are a number of activities under them.

Some of these activities have dependencies.

For example, Activity B and C have a dependency. Activity C can start only when Activity B is completed.

The chart gives you an idea about when specific activities are planned to finish and when the overall WBS
element will get delivered.

Create tasks and work with the Gantt chart. This will make answering Gantt chart based questions easy and
fun.

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Gantt ChartRelationships

Project activities are related to each other and this relationship can be broadly classified into four types:

Finish to Start: An activity must finish before the successor can start. For example, Activity B can start only
when Activity A completes.

Start to Start: An activity must start before the successor can start. For example, Activity B can start only when
Activity A starts.

Finish to Finish: An activity must finish before the successor can finish. For example, Activity A has to complete
before Activity B can complete.

Start to Finish: An activity must start before the successor can finish. For example, Activity A has to start
before Activity B finishes.

Out of these four types, the Finish to Start is the most commonly used and Start to Finish is the least used
real-life projects.

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Gantt ChartDependencies

There is a subtle difference between a dependency and a relationship. Dependency is how activities are
interdependent in one way or the other. There are two ways of classifying dependencies.

The first classification is mandatory or discretionary. The other way of classifying dependencies is external or
internal.

Mandatory dependencies cannot be passed by. For example, the foundation of a civil structure must be laid
before working on the pillars and slabs.

Discretionary dependencies on the other hand arise out of the preferences of the project team. For example,
painting activities can be started only after all the electrical and plumbing work is done.

External dependencies involve a third party or an entity outside the project team. For example, if a
construction project is dependent on the approval for the structural design by a government authority, it
becomes an external dependency.

Internal dependencies are within the control of a project team. For example, the start of the slab work being
dependent upon the availability of ready-mix concrete may be an internal dependency.

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Network Diagram

Network diagram is extensively used in the project time management knowledge area to plot the activity
dependencies. This is a graphical representation of the project activities in the form of a network.

There are two ways to draw a network diagram.

In Precedence Diagramming method (PDM) or Activity on Node (AON), boxes represent activities and the
arrows indicate the dependency. This type of network can have all four types of relationships between the
activities.

In Arrow Diagramming Model (ADM) or Activity on Arrow (AOA), the arrows represent activities. The
relationships and sequence can be inferred from the direction of the arrows and linkages between the
activities. In such types of network, only Finish to Start relationships can be shown. Such diagrams may need
to make use of dummy activities to indicate some dependency between the activities.

There may be questions in the PMP exam, based on the Network diagram. So create and work with the
diagram. This will make answering Network diagram based questions easy and fun.

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Network DiagramsExample

A sample network diagram is shown on the screen. Activities A and C can happen in parallel. B and D require
both A and C to complete, whereas E requires both B and D to complete.

Activity on Arrow network diagram makes use of Hammock Activities. They are used to show a
comprehensive summary activity combining several other activities underneath for control and reporting
purposes.

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Key Terms

When a successor activity can start before the predecessor activity can complete, it is considered Lead. For
example, you can start preparing the test environment 2 weeks before the development activity finishes.
When the successor activity has to wait for few days after the predecessor activity has been completed, it is
considered Lag. For example, one needs to wait for 2 days for the foundation to settle, before work on the
pillars for the next floor starts.

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.

In the context of estimating techniques, analogous estimating is based on the previous project data.
Therefore, if the last 5 similar projects took 6 months to complete, the next one will also take 6 months. This
technique employs expert judgment.

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Key Terms

Another estimating technique is parametric estimating. This technique uses a mathematical model to
calculate projected time for an activity based on the historical records from previous projects and other
information. Few common parameters are identified based on the previous project data and that parameter is
used to predict the time required to complete the next activity or project. For example, you can normally
complete 10 kilometers of highway construction lanes, a week.

Effort is the total amount of work required to complete the activity.

Duration is the amount of time it takes in terms of elapsed or calendar days. If you have an activity that
requires 10 people to work for 5 days, the total effort is 50 person days but the duration is only 5 days.

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Project Time Management Processes

There are seven project time management processes; they are plan schedule management, define activities,
sequence activities, estimate activity resources, estimate activity durations, develop schedule, and control
schedule.

The first six processes are executed during the planning process group. The ultimate goal of these planning
processes is to develop the project schedule. The seventh and the last process is a part of the monitoring and
controlling process group.

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Plan Schedule Management

As defined in PMBOK Guide, plan schedule management is the process of establishing the policies,
procedures, and documentation for planning, developing, managing, executing, and controlling the project
schedule. It belongs to the planning process group.

Let us look at the inputs to this process.

The project management plan provides other subsidiary plans and will guide the schedule planning activities
on the project.

The project charter provides an overall context and the high-level product and project description, which
might help determine the approach for schedule management. Few projects might have scheduling constraint.
For example, projects of Olympics 2016 should be completed at the same time.

Enterprise environmental factors provide the organizational context to the project, including the culture of
the organization, the infrastructure like scheduling systems available, key personnel, and so on.

Organizational process assets provide inputs such as policies and procedures, templates, past performance
data and estimates, historical information, and knowledge base.

Now, let us look at the tools and techniques employed in this process.

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Expert judgment refers to input received from knowledgeable and experienced resources. Experts can draw
from their previous experiences the proper approach to govern the schedule on a project.

Meetings may be organized to determine the schedule management plan. Anybody responsible for the project
schedule management, such as the project manager, sponsor, customer, and other stakeholders must attend
these meetings.

Several analytical techniques may be used to determine the schedule management plan. These may include
different planning approaches and philosophies such as rolling wave planning or different scheduling
software that allow to build what-if scenarios, and study the effect of advanced scheduling techniques like
leveling, fast tracking, and crashing.

Now, let us look at the outputs of this process.

Schedule management plan is a component of the project management plan that describes the criteria and
activities required to arrive at the projects schedule, as well as how the project may be baselined, monitored,
and controlled.

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Define Activities

Define activities is the process of identifying the specific actions to be performed to produce the project
deliverables. It belongs to the planning process group.

The important input for the define activities process is the scope baseline. Scope baseline is a term used
collectively to refer to project deliverables, constraints, and assumptions of the project.

In addition to the scope baseline, the other inputs in this process are enterprise environmental factors,
organizational process assets, and schedule management plan.

A reason why enterprise environmental factors is an input to define activities is because the organization
might be using project management software to define activities and that may influence the activity definition
process.

The knowledge base containing historical information, regarding activities lists, used by previous similar
projects is a good example of organization process assets applied to scheduling.

The tools and techniques used in defining activities are decomposition and rolling wave planning.

The last technique is expert judgment, where the experience of project team members is used in developing
detailed activity list.

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The output of the process is activity list, activity attributes, and milestone list. Activity list contains a list of
identified activities. Activity attributes are the additional information about the activity itself.

A milestone is a significant point or event in the project. A milestone list identifies all the milestones and
indicates whether the milestone is mandatory or optional.

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Sequence Activities

Sequence activities is the process of identifying and documenting relationship among the project activities and
is also part of the planning process group

Every activity and milestone, except the first and last one, is connected to at least one predecessor and one
successor.

The inputs to this process are activity list, activity attributes, and milestone list. All these are the outputs of
the define activity process.

The other inputs are schedule management plan and project scope statement. Schedule management plan
provides guidance in terms of methodology to be employed for many of the scheduling activities on the
project.

Organization process assets are also an input to sequencing activities because the organization might have
some kind of knowledge base for scheduling project activities.

The enterprise environmental factors relevant to this process may be scheduling tools in use, project
management information systems, work authorization systems, etc.

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One of the important tools and techniques used in sequencing activities is the precedence diagramming
method. In this method, the activities are drawn on a network diagram and all the different kinds of
dependencies between the activities are determined.

While determining activity dependency, it is important to identify the type of relationship or dependency
between the activities.

The other technique is Leads and Lag, which is widely used for sequencing activities.

The output of the process is the project schedule network diagram, which is a graphical representation of the
project activities in a form of network, which also shows the activity dependencies.

While designing the network diagram, new activities might be identified and that would result in some of the
project document updates, especially the ones that list all the project activities.

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Estimate Activity Resources

After sequencing the activities, the next step in project time management is estimating the resources required
to accomplish each of the identified activities. Estimate activity resources process also belongs to the planning
process group. Here, resources do not mean only the human resources, but includes all other resources like
equipment, raw materials, machinery, etc.

Schedule management plan is the first input. Schedule management plan provides guidance in terms of
methodology to be employed for many of the scheduling activities on the project.

The other inputs to this process are an activity list and activity attributes that are the outputs of the time
management processes.

Risk register is another input. Risks to the project may influence the decisions about the resources that need
to be deployed; hence risk register becomes an input to this process.

In addition, activity cost estimates are another input. Cost and resource estimates on a project are
interrelated and influence each other. For example, the cost might dictate the number and type of resources
that can be employed or the time might dictate the cost that may need to be incurred.

Along with this, the resource calendar is also an important input, because it has the information about the
availability of each of the resources.

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Some of the enterprise environmental factors that can influence estimating activity resources are availability
of required resources within the organization.

The organizational process assets is also an important input as the organization might have standard policies
for staffing or for hiring contractors on the project.

With all these inputs available for estimating activity resources, there are various techniques used for
estimating the required resources. The first technique is using expert judgment. In this technique, an expert in
resource planning and estimating can estimate each of the activities.

The next technique used is alternative analysis. In this, the activities are analyzed to identify different ways of
completing them. This is to ensure only the required resources are assigned to each of the activities. This helps
in resource optimization.

Along with the above two techniques, many organizations routinely publish their estimating data and this
could be used in activity resource estimation.

Another technique that is routinely used in activity estimation is bottom-up estimating, which is decomposing
the activity further down to understand it in more detail and estimating at that level. Later, all such estimates
are added to arrive at the estimate of the activity.

In real projects, one has to use all the above to estimate each of the activities. Sometimes the project
management software also helps in estimating. The software estimates are based on the inputs provided to it.
Software should only be considered as a supporting tool in estimation and never fully rely on its output.

Clearly, the output of this process is the activity resource requirements.

Along with this, resource breakdown structure is also prepared. The resource breakdown structure is the
categorization of all the required resources in various categories, i.e., human resources, equipment, raw
materials, etc.

In the process of estimation, several other project documents may also be updated. For example, the resource
estimates are directly correlated with cost estimates.

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Estimate Activity Durations

The next process is to estimate the duration required to complete each of the activities. The duration
estimation should be done by someone who is familiar with the project. For example, the same activity, if done
by a high skilled resource would take less time compared to a less skilled resource. This may vary regardless of
the resource used due to the project requirements.

In addition, the activity duration estimation should be updated continuously as you move ahead with the
project, because as the project progresses, there will be more clarity on the project.

The inputs of this process are similar to the ones in sequence activities process.

Schedule management plan is the first input. Schedule management plan provides guidance in terms of
methodology to be employed for many of the scheduling activities on the project. For instance, it may contain
information about the estimation techniques to be employed and the people who need to be involved in the
estimation process.

Activity resource requirements is also an input to this process because resources assigned to an activity would
significantly affect the activity duration, i.e., the lower skilled resources would take more time than the high
skilled resources.

The other inputs include activity list, activity attributes, and resource breakdown structure.

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Resource calendars are also an input to this process. The type and skill set of resources available to the team
may have an impact on the time it would take to complete the activities.

Risks to the project may influence the decisions about the time required to complete the activity, hence risk
register becomes an input to this process.

The project scope statement defines the constraints and assumptions affecting the project duration.

An example of enterprise environmental factor that can affect duration is organizations productivity metrics,
which is collected based on the experiences from multiple projects.

The last input in this process is organizational process assets.

Now, let us look at the tools and techniques used for estimating activity durations.

First is the expert judgment, which means using previous project experiences in estimating the current project
duration. This can be used with other estimation techniques; and used to reconcile differences, if different
techniques result in different estimates.

Three-point estimating is a method where three estimates are used instead of one. It is part of a project
management philosophy known as Program Evaluation and Review Technique (PERT).

Estimating activity durations is often done as a team exercise as each activity may require multiple skill sets to
be applied. Therefore, it is important to use group decision-making techniques to arrive at a consensus or at
least an estimate that is acceptable to all the team members.

Reserve analysis adds buffer into the project schedule to deal with any uncertainty. The contingency reserve
may be added as a percentage of the activity duration or fixed number of work periods.

The other tools and techniques are analogous estimating and parametric estimating.

The outputs of this process are the activity duration estimates and project documents updates.

The activity duration estimates is represented in terms of the range of possible results. For example, 10 days
plus minus 2 days: i.e., the activity would take minimum 8 days and maximum 12 days.

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Develop Schedule

Develop schedule is the process of analyzing activity sequences, durations, resource requirements, and
schedule constraints to create the project schedule. It belongs to the planning process group.

Generally, scheduling software is used for developing the project schedule. Entering the activities, durations,
and resources into a scheduling tool generates a schedule with planned dates for completing project activities.

Developing a project schedule is an iterative process. Revising and maintaining a realistic schedule is a task in
itself and it continues throughout the project as the work progresses.

The most of the inputs of this process are the outputs of estimate activity durations process. They are risk
register, project scope statement, project staff assignments, resources calendars, organizational process
assets, enterprise environmental factors, schedule management plan, activity list, activity attributes, project
schedule network diagrams, activity resource requirements, resource breakdown structure, and activity
duration estimates.

Various tools and techniques are used to develop schedule process.

Schedule network analysis is a technique that generates project schedule. It employs various analytical
techniques such as critical path method, critical chain method, modeling techniques, and resource
optimization techniques to create the project schedule. The other tools and techniques include leads and lags,
schedule compression, and scheduling tool.

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Let us now look at the outputs of this process.

The project schedule consists of a minimum planned start date and planned finish date for each activity.
Although project schedule can be represented in tabular format, it is more often represented graphically using
either bar charts or network diagrams or a combination of two.

The final schedule which is the output of the develop schedule process is also called schedule baseline. Once
the scheduled is baselined, it can be changed only through formal approvals. Meeting the schedule baseline is
one of the measures of project success.

Schedule data produced may include number of resources, key milestones, etc.

Project calendars specify the available working days and the number of shifts in each day. It indicates how
many hours and days are available for the work of the project to be completed.

Project management plan updates are a result of the develop schedule process, many of the other subsidiary
plans of the project plan may get impacted, which may include cost management plan, scope management
plan, risk management plan, etc. This may also result in other project documents being updated.

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Schedule Network Analysis

It is essential to know if the required resources are available at that time, along with the time estimate of each
of the activities. Since schedule is calendar based, it helps in estimating the same.

Schedule network analysis technique generates project schedule. There are various schedule network
techniques.

Critical path method relies on determining the critical path on a project schedule.

Critical chain method is a variant of the critical path method wherein the critical chain is determined based on
the logical, resource, and other kinds of dependencies between the activities.

What-if scenario analysis is about trying to vary a certain parameter to observe the impact on the schedule.
For instance, you may want to check result, if you put in more resources on a particular activity to reduce its
duration.

Resource optimization techniques try to arrive at the optimal utilization of the resources used on a project.
Ideally, you would want the resources to be fully utilized, but you would also want to build in sufficient buffers
in case a certain resource is not available due to various reasons.

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Program Evaluation and Review Technique

Program Evaluation and Review Technique is based on three-point estimates for an activity.

The pessimistic estimate refers to the worst-case scenario, whereas most likely estimate is what you expect to
happen in a realistic scenario. The optimistic estimate on the other hand represents the amount of time an
activity would take in the best-case scenario.

Based on these three estimates, the expected duration of the estimate is calculated as per the formula given
on the screen.

The formula for calculating standard deviation of an activity and variance of an activity is also given.

There is no question asked on variance, but the formula is important, because, if the standard deviation of the
whole project is to be calculated, the process is to calculate the variance of the whole project and then take its
square root to calculate the standard deviation of the project.

Concept based questions on PERT can be expected in the PMP exam. So make a note of the formulae while
you prepare for the exam.

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PERTExample

Let us now figure out how we can apply the three-point estimation that PERT uses in order to draw some
useful conclusions.

Assume that the optimistic, pessimistic, and most likely estimates are 20, 70, and 30, respectively.

Using these values, you can determine the expected duration and the standard deviation as indicated.

Now, if the causes of variation are random, you can assume that the actual values would be evenly distributed
about the mean, and will follow the normal distributionsometimes referred to as the Bell curve. Further, you
can use the properties of the normal distribution.

There is 68% probability of the actual value falling within first sigma from the mean, 95.4% probability for
second sigma, and 99.7% probability of the actual value falling within third sigma.

Extending this logic, the notion of Six Sigma is reaching a level of confidence that only 3.4 times out of a million
would the actual value fall outside the stated range.

PERT allows you to plan based on the intended level of confidence in the outcome and determine buffers
accordingly.

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Critical Path Method

Critical path is defined as the longest duration path through a network diagram, which determines the
shortest time to complete the project.

Float can be considered as a buffer time available to complete an activity. Float is calculated once the network
diagram is ready. It is also called as slack. There are three kinds of float.

The first being the total float, which is the amount of time an activity can be delayed without delaying the
project end date or an intermediary milestone. The second type of float is free float, which is the amount of
time an activity can be delayed without delaying the early start date of its successor(s) activities.

The last type is independent float, which is the amount of time an activity can be delayed if all the
predecessors finish at their latest finish dates and you want to start all the immediate successors at their
earliest start dates.

The slack of the activities on the critical path is zero, because there is no scope to delay activities on the critical
path. Critical path actually represents the project duration. Delaying activities on the critical path is as good as
delaying the project duration. Concept based questions on critical path can be expected in the exam. So it is
essential to have a clear understanding of the concept.

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Calculation of Float

Float of an activity can be calculated by two methods.

However, the first step in critical path method is to identify the critical path of the network.

Once the critical path is identified, follow the forward pass to find early start and early finish for each activity.

The float of the activities on the critical path is zero, so they represent the overall project duration.

Use forward pass or backward pass to calculate the total activity time. Calculate late finish and late start using
backward pass method.

Note the total float formula before you start for the exam.

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Calculation of Float (contd.)

In forward pass, you can either go through the network starting with time zero and keep calculating the time
required to complete each of the activity until you reach the last activity of the project. The starting time for
each of the activity in this approach is called early start and the end time for each activity is called the early
finish.

Alternatively, in backward pass, you can travel through the network from the project end date and calculate
the time required to complete each activity. The end date in this approach is called the late finish and the start
date of the activity in this approach is called the late start.

The float of the activity is either the difference between the late start and early start or the difference between
the late finish and early finish. Both the differences work out to be the same.

Before the start of the PMP exam, please make a note of the total float formula.

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Critical Path Example

Let us look at an example for critical path.

There are five activities in this project and two paths in the network diagram.

Start, 1, 2, 4, 5, End is one path and Start, 1, 3, 5, End is the second path. Since the duration of the path Start,
1, 2, 4, 5, End is 18 days, which is more than the duration of the path Start, 1, 3, 5, End, the critical path of the
project is Start, 1, 2, 4, 5, End.

Let us take activity 3 as an example. First, calculate the early start and early finish dates.

Activity 3 can start only after activity 1. Since, the early finish of activity 1 is 3, it becomes the early start of
activity 3. Activity 3 cannot start earlier than 3, because activity 1 can be completed only by then.

Therefore, early start of activity 3 is 3. Since the duration of the activity is 4 days. The early finish of activity 3 is
3 + 4 = 7 days. Now, let us calculate the late start and late finish of activity 3.

Late start of activity 5 is 14 days. The activity 3 happens just before activity 5, so the late finish of activity 3 is
14 days. To calculate the late start, you can subtract the duration from late finish. Therefore, the late start of
activity 3 is 14 - 4 = 10.

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Schedule Compression

Schedule compression is done to optimize the schedule or to meet some externally imposed deadline on the
project. For example, you followed critical path method and arrived at the project duration of, say 100 days,
whereas the customer wants to get the project done in 95 days. In such cases, schedule compression
techniques are used to see if schedule can be compressed to reduce the time by 5 days.

There are two popular schedule compression techniques. They are fast tracking and crashing.

In fast tracking, activities that normally happen in sequence are checked if they can happen in parallel.
Typically, this would involve sacrificing some of the discretionary dependencies. If more activities can be done
in parallel, it speeds up the project. For example, if you look at the diagram, activities B and C were to be done
in sequence. However, if you can find a way to do them in parallel, you may be able to save time.

Crashing involves increasing the cost to save time. For example, if you can use more resources or resources
that are more skilled or advanced techniques in order to compress the time lines, you would end up making
cost and schedule tradeoffs to determine how to obtain the greatest amount of schedule compression for the
least incremental cost while maintaining the project scope.

Concept based questions on schedule compression can be expected in the exam. So ensure that you have a
good understanding of the topic.

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Schedule CompressionExample

Look at the four activities in the table. The normal cost of executing each of the activities as well as how much
each of the activities can be crashed is also provided. Which activity would you crash to reduce the project
time by 1 day?

Activity A will be crashed if the duration of the project is reduced by 1 day, as the per unit cost of crashing the
activity A is the least.

All the activities are assumed to be on the critical path here. While crashing, if you end up saving time on a
path, which is not the critical path, you will not end up saving time on the project.

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Impact of Schedule Compression

Different schedule compression techniques have different impact on the project.

The impact of fast track leads to risk additions and increase in management time for the project manager.
Crash leads to cost addition and increase in management time for the project manager. Reduce scope, on the
other hand saves cost and resources but increases customer dissatisfaction. Likewise, cut quality saves cost
and resources but increases risk. Resource reallocation does not add cost or increase risk.

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Other Scheduling Techniques

There are several techniques that are used in scheduling projects.

What-if scenario analysis: In this technique, questions like, What if a particular Scenario changed on the
project, would that produce a shorter schedule? are put forth to understand the impact of specific changes
on the schedule. The goal is to produce a realistic schedule.

Monte Carlo analysis: In this method, a computer simulates the outcome of a project, making use of randomly
generated values that map the probability distribution of the input variables.

Together, these two techniques are called modeling techniques.

Resource optimization techniques: These are also used to produce a resource-limited schedule. Resource
optimization results in more stable number of resources used in the project.

Critical chain method: This technique develops the project schedule that takes into account, both the activity
and resource dependencies.

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Control Schedule

Control schedule is concerned with determining the status of the project schedule, determining that the
project schedule has changed, and managing the actual changes as they occur.

The project schedule is an important input to this process. It is the actual schedule that needs to be controlled.

Schedule data contains information related to the schedule that may need to be monitored in order to take
actions to bring the project back on schedule.

Project calendar describes the working hours and days for the project.

Work performance data has information like which activities have started, their progress, and which activities
have finished.

The other inputs of this process are project management plan and organizational process assets.

The key tools and techniques of this process are the performance reviews. Performance review is measuring,
comparing, and analyzing schedule performance such as actual start and finish dates, percent complete, and
remaining duration for work in progress.

The other tools and techniques include resource optimization techniques, modeling techniques, schedule
compression, leads and lags, scheduling tool, and project management software. In develop schedule

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process, these techniques are used for the first time to develop the project schedule, where as in control
schedule process, these techniques are used to update the project schedule.

The key output of the control schedule process is the work performance information. This is represented in
the form of schedule variance (SV) and schedule performance index (SPI).

As part of the control schedule process, the project team will generate forecasts, likely schedule for
forthcoming activities, and project as a whole.

The other outputs include organizational process assets updates, change requests, project management plan
updates, and project documents updates.

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ANSWERS:
S.No. Question Answer & Explanation
1 Your customer wants your project d.
to be completed 10 days earlier Overlapping of activities implies taking
than planned. You believe that you activities that would otherwise be executed
can meet the target by overlapping sequentially and executing them by introducing
the project activities. What is the parallelism. This is referred to as fast tracking.
approach that you plan to use?
2 You are managing a project to build a.
a multi-story complex in your city. This is an example of an external dependency
You are waiting for the clearance to that involves relationships between the project
start construction of a building. A and non-project activities which are outside
dependency that originates outside the control of a project manager.
of the project is called
_______________.
3 Which of the following is the best c.
action to take to complete a You should first seek to understand what the
project one week ahead of best course of action is, before going ahead.
schedule? Also, when it comes to schedule compression,
crashing and fast tracking are the two main
options. The project sponsor would approve
any actions after your team develops them.
4 A project team is working on the b.
network diagram of a project and Float is calculated by subtracting either the
wants to determine the float of a Early Finish (EF) from the Late Finish (LF), or the
project activity. Which of the Early Start (ES) from the Late Start (LS), i.e.,
following is the correct formula? Float for an activity = LS-ES or LF-EF.
5 The project manager, along with d.
his team, has defined the All of the above stated options are tools and
dependencies among the activities techniques for the develop schedule process
and estimated their durations and except reserve analysis, which is a tool and
the resources required to work on technique for estimate activity durations.
them. He is now in the process of
creating the project schedule. All of
the following tools and techniques
will assist him in creating the
project schedule, except
____________.
6 What is a summary activity that b.
represents a group of related Hammock is a summary activity that represents
activities called? When should this a group of related activities.
process be done?

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Summary

Here is a quick recap of what was covered in this lesson:

Project time management includes the processes required to manage the timely completion of the project.

A project schedule defines the start and end dates of the project and the project activities. These activities
are assigned a duration and sequenced in a logical order.

Gantt charts and network diagrams are used to identify project activities, and determine the relationships
and dependencies between them. Gantt chart displays the start and end dates of project activities, the
overall project schedule, and the logical task relationships while network diagram is used to plot the
activity dependencies.

Plan Schedule Management, Define Activities, Sequence Activities, Estimate Activity Resources, Estimate
Activity Durations, Develop Schedule, and Control Schedule are the seven processes under Project Time
Management.

Schedule network analysis technique generates project schedule based on the estimates of time and
resource requirements.

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Conclusion

With this, we have come to the end of this lesson. In the next lesson, we will cover project cost management.

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Lesson 07Project Cost Management

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Objectives

After completing this lesson, you will be able to:

Define Project Cost Management


Differentiate between cost estimation and cost budgeting
Explain control accounts
Describe the Project Cost Management processes
Apply earned value management technique to track project performance
Identify key terminologies used in Project Cost Management

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Project Cost Management

Project cost management involves activities like estimating the cost of each of the project activities, adding the
cost estimates of the related activities to arrive at the cost budget, and controlling the cost to ensure that
project activities are completed within the defined budget.

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Cost Management Plan

The cost management plan is a vital step in Project Cost Management. It contains information like planning
the project cost, managing and controlling the project in relation to the cost baseline, and managing cost
variances.

Project cost management plan is a part of the project management plan.

The methods used in estimating the cost of each of the project activities are similar to the ones used in
estimating project time. For example, time estimation methods like expert judgment, analogous estimating,
bottom-up estimating, and reserve analysis are few of the techniques that are also used in estimating activity
cost.

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Control Account

Control account is an important concept in the project cost management.

Project cost is generally estimated at individual activity level. It becomes difficult to manage cost at the activity
level in large projects; therefore, the cost is managed at a higher level. This requires related activities to be
clubbed and their cost being managed together as one unit. This unit is called control account.

While estimating the project time, WBS is created to breakdown the project into smaller deliverables.

These deliverables are broken down into work packages and these work packages are in turn, broken into
activities.

Control account is defined at a level higher than the work packages.

For example, if 5 work packages are part of the one control account, the cost of all activities belonging to these
5 work packages are managed as one unit.

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Project Cost Management Processes

Project Cost Management has four processes. They are Plan Cost Management, Estimate Costs, Determine
Budget, and Control Costs.

The three processes Plan Cost Management, Estimate Costs, and Determine Budget are a part of planning
process group and Control Cost process is a part of monitoring and controlling process group.

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Plan Cost Management

Managing costs on a project is a critical exercise. If the activities are planned well, it becomes easier to achieve
harmony with the overall cost and budget of the project.

Plan cost management is the process of establishing the policies, procedures, and documentation for planning,
managing, expending, and controlling the project costs.

Let us look at the inputs required for this process.

The project management plan provides other subsidiary plans and guides the cost planning activities on the
project.

The project charter provides an overall context, and high-level product and project description, which help
determine the approach for cost management. For example, for some projects, budget could be a constraint,
whereas for others, budget would not be a constraint, but subject to the other objectives.

Enterprise environmental factors provide the organizational context to the project, including the culture of
the organization and the infrastructure (for instance, the scheduling systems available, the key personnel, and
so on).

Organizational process assets provide inputs such as policies and procedures, templates, past performance
data and estimates, historical information, and knowledge base.

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Now, let us look at the tools and techniques employed in this process.

Expert judgment refers to input received from knowledgeable and experienced resources. Experts can devise
an approach to govern the costs on a project by using their previous experiences.

Meetings may be organized to determine the cost management plan. Everyone responsible for the project
schedule management, such as the project manager, representatives from the appropriate accounting or
financial organization, sponsor, customer, and other stakeholders must attend these meetings.

Several analytical techniques may be used to determine the cost management plan. These techniques help to
map the impact of various decisions on cost. For example, how do risk management processes impact cost,
etc.

Cost management plan is the primary output of this process. It establishes the units of measure, levels of
precision, organizational process links, control accounts to be used, rules for performance measurement and
reporting, frequency and methodology of monitoring the costs, and various other details that lay the overall
framework for cost management on a project.

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Estimate Cost

Estimate cost is the approximation of the monetary resources required to complete a project activity. Cost of a
specific activity is estimated based on the information available at that point of time. As the project team gets
more information about the project, the activity cost estimation may change.

Let us look at the inputs of this process.

Scope baseline is the most important input as it details out the projects scope of work.

Along with that, project schedule is also important. This contains information like when and which resource is
required for the project. It is good to remember that the same kind of resources may have different costs at
different points of time.

Human resource management plan is another important input. Various elements like personnel rates,
rewards or recognition programs, etc. are covered in the human resource management plan, which is
important in approximating the cost estimate. Human resource management plan will be discussed in detail in
the human resource management knowledge area.

Risk register is also an input because risk mitigation cost should be considered in cost planning. More
information on risk and its affect in the project will be looked at, in detail, in risk management knowledge area.

Another input, enterprise environmental factors, provides organizational context to the project.

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Organization process asset is listed as an input as organizations might have standard set of cost estimation
policies or templates.

Cost management plan is another important input. The cost management plan lays the framework for the cost
management processes in the project. It provides guidelines such as the units of measure, accuracy desired,
methodologies and tools to be used, etc.

Let us now look at the tools and techniques used in this process.

Expert judgment, Reserve analysis Analogous estimating, Cost of quality, Parametric estimating, Project
management software, Bottom-up estimating, Three-point estimating, Vendor bid analysis and Group-
decision making are the various tools and techniques used in this process. Most of the tools and techniques
used here are similar to the ones used in the time management knowledge area.

Vendor bid analysis is a technique used to estimate project cost. For e.g., a project requires material procured
externally through suppliers. In order to get that, you invite bids from three to four suppliers and assess their
quotations. Based on their quotations, you can get an idea of the cost that will be involved in getting the
material for the project.

Group decision-making technique is another important technique for project cost estimation. Cost estimation
is an exercise, which may be carried out by a group or committee in order to gather well-rounded input.
Therefore, group decision-making techniques may be used to arrive at a decision that team can work with.

The outputs of this process are quite straightforward.

Estimates of each of the activities are arrived at.

Basis of the estimate includes things like how the estimate was developed, what were the assumptions made
in estimating, etc.

Project document updates is also one of the outputs because the cost estimates may result in updates to
other aspects of the project (e.g., quality, risk, time, etc.).

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Determine Budget

Once the estimate of each of the activities is arrived at, the next project cost management process is to
determine budget. It is the process of aggregating the estimated costs of individual activities or work packages
to establish an authorized cost baseline. This is where the control account concept comes into picture.

The estimated costs of the activities are aggregated to arrive at the cost budget at the control account level.

Once approved, this cost budget becomes the cost baseline of the project. Project cost performance is
measured against this cost baseline, i.e., how much more would the project cost be compared to the original
cost baseline. The cost baseline includes all authorized budgets, but excludes management reserves.

The inputs used in determining the project budget are the activity cost estimates and the basis of estimates,
which are the output of the previous cost management process.

The cost management plan lays the framework for the cost management processes in the project. It provides
guidelines such as the budgeting cycle, tools and techniques used to prepare and approve the budget, etc.

In addition to these two important inputs, scope baseline, is also looked at.

Project schedule provides aggregate cost in a particular calendar period to ensure how much money can be
made available during that time.

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Similarly, resource calendar provides information on the resource, which is assigned to the project at a
particular point of time. This information is then used to indicate resource costs over the duration of the
project.

Risk register gives an understanding of the overall level of risk on the project and, therefore, the level of
contingency reserves that need to be built into the budget.

Agreements entered into with the suppliers are also required to finalize the budget.

Again, organizational process asset is an input because organization may have few policies for reporting the
cost budget or there might be some cost budgeting tools being used.

There are various tools and techniques used in determining budgets.

Cost aggregation technique involves adding up the cost and aggregating them at the control account level, so
that the cost can be managed in a better way.

In reserve analysis, once the costs are estimated, some extra amount is added to the estimate as a
management reserve, to take care of any unplanned activities.

Expert judgment is a technique in which an experts help is sought to estimate the activity cost. Expert is
someone who might have worked on a similar project in the past and has a good idea to estimate the activity
cost involved.

Historical relationships are used to predict the total project cost using mathematical model. This is similar to
analogous estimate or parametric estimate method.

Funding limit reconciliation technique is used to ensure that cost on the project is budgeted or spent as per
the availability of the fund. For example, if the project can get the funding of only $50,000 a month, the project
budget should be planned accordingly.

The output of this process is the cost baseline. This is an authorized project budget over a period. This is used
to measure, monitor, and control overall cost performance of the project.

In addition to this, the project funding requirements are also arrived at. Funding requirements means, how
much fund the project requires monthly, quarterly, or yearly for the execution.

The last output of this process is project document updates.

An understanding of determining budget may be useful when answering questions in the PMP exam. So make
a note of the inputs, tools and techniques, and outputs of determining budget.

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Control Costs

Control costs is the process of monitoring the status of the project to update the project budget and managing
changes to the cost baseline. Updating the budget involves recording actual costs spent until date. Any
increase to the authorized budget can only be approved through the perform integrated change control
process.

Some of the typical activities that happen as part of the control costs process are ensuring that cost
expenditure does not exceed the authorized funding; monitor the cost performance to understand variance;
and, monitoring the work performance against the funds expended.

The inputs to the process are Project management plan, Organizational process assets, Project funding
requirements, and work performance data.

Work performance data contains the information about the project progress.

The important tools and techniques used in controlling cost are earned value analysis management,
forecasting, to-complete performance index.

Other important aspects of controlling costs are to review the performance, analyze the reserves to make
sure the project has enough budgetary reserves to meet the expenses and project management software,
which helps in tracking and managing costs.

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Now, let us look at the output of this process.

The key outputs of this process are work performance information in terms of cost variance (CV), schedule
variance (SV), and earned value (EV) and forecasts about the cost performance.

This process may also result in change requests arising out of cost control measures, as well as updates to
project documents, the project management plan, and organizational process assets.

Business scenario based questions on project cost control can be expected in the exam. So if you have
questions on these concepts, get them cleared as that will help you score higher.

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Earned Value Management

Earned value technique is an excellent way to track the project progress against the project plan. It is a method
of measuring the project performance objectively and comparing it against the project baseline. Results from
an earned value analysis indicate deviation of the project from cost and schedule baselines.

Baseline is the initial approved value along with approved changes. Therefore, schedule baseline is the first
approved project schedule along with approved changes.

There are various terms used in earned value technique.

Planned value is the authorized budget assigned to the scheduled work.

Earned value is the work performed in terms of budget authorized for that work.

Actual cost is the cost incurred in work performed.

Budget at completion is the budgeted amount for the total work.

Estimate at completion is the expected total cost for the project.

Estimate to complete is the expected cost to finish all the remaining project work.

Variance at completion is the projected budget surplus or deficit at the end of the project.

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All the parameters displayed on the screen are measured in terms of cost.

You may come across business scenario based questions on earned value management, in the PMP exam. So
ensure that you develop a clear understanding of this topic.

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Planned ValueExample

Planned value is the estimated value of the work planned. This value is measured in terms of currency, say
dollar. If the planned value is $340, then the work planned is worth $340. How do you calculate earned value?

The solution is: add the budget allocated to each of the activities that have been completed at that point of
time. The resulting value is the earned value.

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Earned Value Formulae

In cost variance, negative means the project is over budget, positive means the project is under budget.

Similarly, in schedule variance, negative means the project is behind schedule whereas positive means the
project is ahead of schedule.

The value of the next two parameters, cost performance index (CPI) and schedule performance index (SPI)
values vary between 0 and 1.

For example, a CPI of 0.8 implies that 80 cents of work is obtained for every dollar spent in the project.

Similarly, if SPI is 0.9, it implies that project is progressing at only 90% of the speed originally planned.

The next parameter is estimate at completion or EAC. There are different ways of calculating the EAC value;
the method used depends on how the cost and schedule variances are expected to play for the rest of the
project.

BAC/CPI is used if you expect that the current cost performance will continue until the end of the project.

AC + (BAC EV) is used if you expect that the rest of the project will be managed at the budgeted rate.

AC + [(BAC EV)/(CPI * SPI)] is used if you want to factor in the impact of the cost as well as schedule
variances.

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AC + ETC is used if you want to re-evaluate the project based on a forecast value for the estimated cost of the
remainder of the project.

The next parameter is estimate to complete or ETC, which is the cost of project from this point to the end. This
is calculated by subtracting the actual cost from the estimate at completion.

In addition, variance at completion can be calculated by subtracting the estimate at completion from the
budget at completion. Variance at completion is the cost estimation whether it is over or under budget.

Another parameter is the to-complete performance index or TCPI. This is the cost performance needed to
achieve a desired outcome.

For example, if the project needs to be managed to the original budget (BAC), then TCPI i.e., the CPI that must
be maintained for the rest of the project, is calculated as (BAC EV)/(BAC AC).

Similarly, if it has to be managed within a revised target (say EAC), then TCPI is calculated as (BAC EV)/(EAC
AC).

Before the start of the PMP exam, please make a note of the formulas of earned value technique.

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Earned Value ManagementExample

Let us take the example of a software development project. There are four phases and each phase takes a
month to complete and is expected to cost $10,000. The phases are planned to be completed one after the
other.

The status of the project at the end of the month 3 is summarized in the table.

Requirements definition is completed and actual spending on this is $10,000.

Architecture and design is done and actual spending on this is $12,000.

Development and unit testing is only 50% done, though it was supposed to be completed by 3rd month. It has
cost $9,000 until date.

System testing and go live has not yet started.

Note, S indicates start time, F indicates finish time, and PF indicates that it is partly finished at the end of the
month.

Based on the above information, calculate the CV, SV, CPI, and SPI of the project.

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Earned Value Problem Solution

To calculate the planned value, you need to add the amount of work that was supposed to be done by the
third month. Three phases were supposed to be completed. The budget to complete each of the three phases
was $10,000. So the planned value, is $10,000 + $10,000 + $10,000 = $30,000.

However, by the third month, two phases are complete and the third phase is only 50% done. Hence, the
earned value is $10,000 + $10,000 + $5,000 = $25,000.

The actual cost of the work is $10,000 + $12,000 + $9,000 = $31,000.

Cost Variance is Earned Value minus Actual cost which is $25,000 - $31,000 = -$6,000.

Schedule Variance is Earned Value minus Planned value which equals to -$5,000.

CPI is Earned value by Actual cost which equals to 0.80.

SPI is Earned Value by Planned value, which equals to 0.83.

Spend some time to interpret each of these values and their implications on the project.

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Key Terms

Before we end this lesson, let us also look at few definitions that might be useful for your PMP examination.

Law of diminishing return: This means the more you put into something, the less you get out of it. For
example, doubling the number of resources working on a project will not necessarily halve the time.

Working capital: The amount of money the company has to invest on the project and the day-to-day company
operations.

Funding limit reconciliation: The process of comparing the planned expenditure in a given period with the
available funding for that period.

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Key Terms (contd.)

Large assets purchased by the company lose value time. This is called depreciation. There are two forms of
depreciation Straight line and Accelerated:

Straight line depreciation: Same amount of depreciation is taken every year. For instance, a car with a price
tag of $10,000 and useful life of 10 years is depreciated $1,000 per year. At the end of 10th year, the value of
the car is considered zero for all accounting purposes.

Accelerated depreciation: Depreciates faster than the straight line depreciation. For instance, a car with a
price tag of $10,000 depreciates $3,000 the first year, $1,500 next year, $1,000 the third year, and so on.

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ANSWERS:
S.No. Question Answer & Explanation
1 If Earned Value (EV) is $550, Actual a.
Cost (AC) is $650, and Planned Apply the formula CV = EV AC to get the
Value (PV) is $600, what is the Cost answer. Note that although PV is provided, it is
Variance (CV)? not used in solving this problem.
2 You, as a project manager, are in d.
the process of midway review at SV = (EV-PV)=$20K-$25K= -$5K. CV = (EV-
the end of the first year of a $50K AC)=$20K-$15K = $5K. Looking at the data, it is
project. The earned value analysis evident that the project is behind schedule and
shows that the PV is $25K, the EV is is also under budget.
$20K, and the AC is $15K. What can
be determined from these figures?
3 What does a Cost Performance d.
Index (CPI) of 0.73 mean? CPI = EV/AC, therefore if the CPI is 0.73, it
means that the EV is less than the AC.
4 What does a Schedule c.
Performance Index (SPI) of 0.67 Since the SPI (SPI = EV/PV) measures all project
mean? work, the critical path must also be analyzed to
determine whether the project will finish
ahead or behind schedule.
5 As a project manager, when you b.
present your initial cost estimate to A project manager is responsible for managing
the project sponsor for approval, cost overruns. If you have estimated it in a
you are asked to cut the cost of the certain way and its required to be reduced,
project by 10%. What would you you should determine the impact of any cost
do? reduction actions. Replacing the originally
planned resources with lesser skilled resources
is also an option, but the risks associated with
this action should be carefully investigated.
6 Which of the following is not a tool d.
or technique used in the process of All the above tools and techniques are used for
determine budget? the determine budget process except resource
calendars, which is an input to this process.

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Summary

Here is a quick recap of what was covered in this lesson:

Project cost management includes the processes involved in estimating, budgeting, and controlling costs
so that the project can be completed within the approved budget.
Cost management plan contains details on how to plan, manage and control the project cost in relation to
the cost baseline, and manage the cost variances.
Cost estimate is an educated guess of how much an activity or a project will cost. Budget considers the
cost estimate and accordingly sets aside funds for the completion of the project.
Under control account technique, related activities are clubbed and their costs are managed as one unit.
The four Project Cost Management processes are Plan cost management, Estimate costs, Determine
budget, Control costs.
Earned Value Management technique indicates potential deviation of the project from the cost and/or
schedule baselines.

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Conclusion

With this, we have come to the end of this lesson. In the next lesson, we will discuss Project Quality
Management.

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Lesson 08Project Quality Management

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Objectives

After completing this lesson, you will be able to:

Define quality and quality management

Differentiate between quality planning, quality assurance and quality control

Explain cost of quality and its categories

Describe the Project Quality Management processes

Explain the seven basic tools of quality

Explain Six Sigma

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Quality

The project manager is responsible for quality in a project. However, it is also the responsibility of each and
everyone in the project to ensure that whatever they do, meets project quality expectations.

Quality is defined as the degree to which a set of inherent characteristics fulfills requirements.

A project is said to meet quality expectations, when all the project requirements agreed in the beginning of the
project are met, and the resulting product is usable. Usable means that the intended users can use the product
without any problem.

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Quality Related Terms

It is important to discuss a few terms to understand the concept of quality better.

Customer satisfaction is defined as conformance to requirements and fitness for use.

It is important to understand the subtle distinction between quality and grade. Grade is a classification based
on technical characteristics. Low quality is always a problem, but low grade may not be a problem rather it
would be a matter of choice.

Similarly, it is important to understand the distinction between precision and accuracy. Precision is the
granularity of measurement, i.e., how fine-grained can you measure the outcome.

Accuracy is how correct you are, i.e., how close you are to the desired value.

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Optimal Level of Quality

Quality comes at a cost. More effort put in quality will give better results. However, you cannot keep on
investing on increasing the quality, as there is no limit to how much a product can be improved.

Investment in quality is determined by knowing the optimal level of quality.

Optimal level of quality, as shown in the diagram, is said to be achieved at the point where the incremental
revenue from improvement equals the incremental cost to secure it.

Suppose you are the manufacturer of toys, but the toys are below quality and the sales are low. To improve
the quality, you invest in identifying the demands of children, sharing few samples, and recording their
feedbacks. Once all these are captured and implemented in the products, you lure the parents to buy them. As
the investment is increased to manufacture good quality toys, the cost will therefore increase, and it might
become prohibitive for parents to buy. Optimal level of quality is reached at a point where you get maximum
number of buyers for the toys manufactured.

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Quality Management

Quality management involves performing activities like creating standard policies and procedures and
ensuring that those standard procedures are being followed properly in the project. It aims to ensure that
project meets all the initial agreed requirements without any deviation and that the specified approach to
quality is implemented on the project.

Three broad activities are done as part of quality management. They are quality planning, quality assurance,
and quality control.

Quality planning is the first step when quality related activities of the project are planned; quality assurance is
the next stage of implementing those quality plans; and quality control is the last stage when periodic checks
are done to see if project quality is improving.

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Quality Planning vs. Quality Assurance vs. Quality Control

It is important to understand the different kind of activities that come under quality planning, quality
assurance and quality control.

Once the quality planning is done, the quality management plan is ready. This quality management plan has
standards, templates, policies, and procedures to be followed in the project. It contains information on the
level of quality being aimed and the plan to achieve that level.

It is the aim of quality assurance activities to ensure that the activities planned under quality planning phase
gets executed for the project. It is the task of quality assurance to determine if the project is complying with
the organizational (as well as project) policies and procedures. This is ensured by conducting regular process
audits to identify deviation from what is planned in the quality management plan. These audits are generally
done by quality department of the organizations. Quality assurance focuses on the process, not on specific
products.

The role of quality control is to measure specific project data or results against standards to inspect and verify
the projects product, defect repair, and measure whether quality indicators are improving. Quality control is
about the product and data.

For example, it was planned as part of quality management, that project would get completed plus or minus
10 percent within the cost budget. Three months back when the measurement was done, project was over

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budget by 20 percent. When the measurement was done a day before, it was only 15 percent over budget.
Therefore, the project has showed an improvement of 5 percent in last three months and it is quite likely that
over the next three months, project may get within the planned limit of 10 percent. Instead of showing
improvement, if the data shows cost increase, then corrective and preventive actions are required to get the
project within the 10 percent limit. This is quality control.

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Quality Management Concepts

Let us look at some terms that are commonly used in quality management parlance.

Total quality management or TQM is a quality management philosophy that involves holistic thinking about
meeting the objectives of an organization. It places the responsibility of quality squarely on the management.

Kaizen is a Japanese term that stands for change for better. Kaizen philosophy is one that should always be
looking for small and continuous improvements in the process.

Deming cycle or PDCA cycle, (i.e., plan-do-check-act) is a process control and improvement approach
propagated by the famous quality guruEdward Deming. It means, you plan for something, execute it, check
the output, and based on the lessons you act to bring the deviations under control.

Kanban is a pull-based management system that originated in Japan, based on just-in-time (JIT) inventory
management. The idea behind Kanban is to minimize the work-in-progress and achieve a smooth flow in the
process from start to finish, because building up inventory only to paper over the imperfections in the system
tends to hide the problems.

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Cost of Quality

Cost of quality is the cost that needs to be incurred to make a quality product. The sum of all the
costs incurred in ensuring that project conforms to requirement is cost of quality.

Cost of quality can be broken down into two major categories. First is the cost of conformance or the money
spent during the project to avoid failures. This can further be sub-divided into prevention costs which is the
cost to prevent errors, like training the team, creating documents, on equipment, and in time to do it right.
The other subdivision is appraisal costs or the cost for assessing quality, like testing, destructive testing loss,
and inspections.

The second category is the cost of non-conformance. It is the money spent during and after the project
because of failures. This is sub-divided into internal failure costs. It is the cost of failures that occur before the
product is released to customers, for example, rework and scrap. The second sub-division is external failure
costs. It is cost incurred on failures that occur after it has been released by the team, for example, liabilities,
warranty work, and lost business.

Concept based questions on cost of quality can be expected in the exam. So please make a note of the
categories of cost of quality.

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Project Quality Management Processes

There are three project quality management processes, of which, the first process, plan quality management,
is done as part of the planning process group, the next process, perform quality assurance, is done as part of
the executing process group, and the last process, control quality, is done as part of the monitoring and
controlling process group.

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Plan Quality Management

The aim of the plan quality management process is to identify the relevant requirements or standards to
execute the project effectively to achieve the desired quality level. Quality planning results in the creation of
the quality management plan.

Aim of the plan quality process is to identify the standards. A standard is an agreed upon process to work or
achieve a result. A standard can be set from within the organization or government. Once all the standards for
the project are identified, the aim of the quality planning activities involves determining what work needs to
be done to meet those standards.

Before adhering to the standards, you should question their relevance with the project. Implementing all
possible standards applicable to the project in random will have cost and time implications.

Let us look at the inputs to this process.

The project management plan provides the scope, schedule, and cost baseline; all of which have an
implication on the quality management plan. Quality plan has a direct correlation with these. It might also
have an impact on and be impacted by other subsidiary management plans, such as risk management.

The stakeholders of the project may have specific requirements and views about the quality parameters of the
project and these have to be considered.

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The risk register gives an indication about the kind of risks that are inherent in the project and also those
which must be considered while planning the activities, to ensure quality.

The requirements for the project need to be considered for planning quality related activities because quality
is all about meeting the requirements.

In addition to these, enterprise environmental factors and organization process assets are also listed as
inputs, because the standards can be either from within the organization, or from government or other
external bodies. Standards from within the organizations are usually the best practices learned over a period
while executing numerous projects. An example of government standards can be standards to control air
pollution by the motor vehicles, which vehicle manufacturers must adhere to.

To accomplish quality planning, first, analyze the benefits versus the costs of meeting quality requirements.

Next, identify the cost of quality and confirm if that kind of investment in quality is justified.

In addition to these two, benchmarking helps in analyzing the quality of activities of similar projects executed
in the past. This helps in identifying the particular quality of output of the previous project, which in turn acts
as a basis for the current projects quality planning.

Design of experiments can also be used for quality planning. This is a statistical way to determine what
variables will improve quality the most. For example, in case of manufacturing doors, it can be determined that
increasing the quality of the wood can have maximum impact on improving the quality of the door.

In addition, the seven basic quality tools, also known as the 7 QC tools, are used to determine the plan to
achieve the desired level of quality.

Statistical sampling as a tool becomes relevant whenever the quality plan cannot be applied to all the artifacts
produced. For example, if destructive testing is a requirement, then it can be carried out only on a sample, not
the entire population. Statistical sampling helps in arriving at a representative sample that can give useful
information.

Other additional tools such as brainstorming, force-field analysis, etc. may be used to determine the quality
management plan for the project.

Conducting regular meetings is another important tool. The quality management plan has to be determined in
a collaborative manner by consulting the team members and other stakeholders.

Quality management plan is a key output of this process.

Checklist is a list of items to inspect. For example, many of the office buildings have housekeeping checklist to
ensure that all floors, cabins, etc. are cleaned. Checklists are created during quality planning and used in
quality control.

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Metrics are project specific data that needs to be measured to check the status of the project. The simplest
project metrics can be cost and schedule. Metrics are also decided during quality planning and used in quality
control.

One of the role of the project manager is to not only manage the project but also improve processes in the
project to decrease the instances of defects, which in turn saves time and money. Such activities are listed in
the process improvement plan, which eventually becomes part of project management plan.

As a result of the planning activities, other project documents may also get updated. For example, the quality
management plan may result in updates to the cost or resource requirements.

There may be questions in the PMP exam, based on the plan quality management process. So please ensure
you have a fair understanding of the concept before you take the exam.

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Perform Quality Assurance

Once the quality planning is over, the next process in project quality management is quality assurance, which
involves determining whether the standards are being met and the processes are being followed.

Therefore, the input for this process is the work that has been completed during the quality planning stage.
They are project documents, quality management plan, process improvement plan, quality metrics, and
quality control measurements.

Let us look at the tools and techniques used in this process.

Quality audit is the process to check whether the project is complying with the organization policies,
standards, and procedures and determine whether these policies, standards, and procedures used are efficient
and effective. So a good audit not only looks at this compliance, but also for the new lessons learned from the
current project that can help make the future projects better.

Process analysis involves using the lessons learned from doing the initial few work to make the remaining
work more efficient. For example, if the project involves installing a software package, then the lesson learned
from the first few installations can be used to improve the process on remaining installations.

Apart from these, all the quality management and control tools (such as the 7 basic quality tools) will be
relevant to this process.

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The key output of this process is project documents updates to ensure that if there is any deviation from
agreed standards, it is corrected.

Also, if there are any lessons learned that can help improve the future projects, the organization process
assets get updated.

As quality assurance may result in improvement suggestions, change requests may be generated, and the
project management plan may need to be updated.

Understanding characteristics of quality assurance tools and techniques may be useful while answering the
exam. So prepare this topic well before you take the exam.

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Control Quality

The key focus of the quality control activities is on the correctness of the work. Quality control helps answer
questions like: Is everything OK with the project? Does the project plan require changes to successfully execute
the project? Will the project succeed? Etc.

Let us look at the inputs to this process.

The quality metrics measurements are done continuously to see whether the project quality is improving. The
project deliverables are inspected against the planned checklists.

Quality control acts upon the deliverables and work performance data produced in execution. It also refers to
the project management plan for understanding deviations from the plan. It also considers the approved
change requests, information from other project documents and organizational process assets.

There are seven popular tools and techniques used in doing the quality control activities. They are collectively
known as seven basic tools of quality. Other relevant tools are statistical sampling, inspection (or testing),
and review of the approved changes.

Quality control activities result in quality control measurements, the verified deliverables, validated changes,
information about the work being performed, recommended changes, and updates to the organizational
process assets, project management plan, and other project documents.

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Seven Basic Quality Tools

There are seven basic quality control tools and they are: control charts, cause and effect diagram,
flowcharting, histogram, Pareto diagram, check sheets, and scatter diagram.

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Control Charts

Control chart graphically determines if the process is within acceptable limit.

If you look at the graph on the slide, the expected value is 16.3, but a range of values between 16.0 and 16.6
may be deemed as acceptable. Knowing these specification limits, you may want to set up your control limits
at 16.1 and 16.5.

A control chart can be used to monitor project performance figures such as cost or schedule variance.

For example, you want your project to get completed within plus or minus 10 percent of the planned schedule.
Therefore, you set plus 10 percent as upper control limit and minus 10 percent as lower control limit, and plot
the actual schedule variation over time.

If the values are always within these control limits, the project is on track.

If the schedule variance goes out of the limit, it is said to be out of control. You need to investigate and find
the reason for the same and take necessary corrective actions.

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Cause and Effect Diagram

Cause and effect diagram is also known as fishbone diagram or Ishikawa diagram. This tool was proposed by
Kaoru Ishikawa. This diagram looks similar to the bone of a fish; therefore, it was named as the fishbone
diagram.

This tool can be used in quality planning to look forward to what might contribute to the highest quality on the
project.

It helps to organize and structure the analysis. In quality control, it is used backward to identify the root cause
of the problem. The steps to draw fishbone diagram are to first identify the broad level reasons and then try to
find specific reasons within that.

For example, if you refer to the diagram on screen, the first step is to identify the defects at a broad level, like
defects are because of people, machine, materials, measurements, etc.

Further, within these broad categories, specific reasons can be identified. Once all possible reasons are
identified, further analysis is done to locate the root cause of the defects, from the list of identified reasons.

It is essential that you practice Cause and effect diagram for various business scenarios. This will be useful
while answering questions based on this topic in the exam.

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Flowcharting

Flowcharting shows how a process or system flows from beginning to end and how the elements interrelate.
Its graphical nature helps in analyzing where the problems occur, and is used in identifying redundancies and
bottlenecks. The image on screen helps to understand how the related information is flowing from the supplier
to the customer. It can also indicate the feedback loops.

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Histogram

Histogram is a vertical bar chart showing how often a particular variable occurred. The height of each column
represents the relative frequency of the variable. For example, the bar chart shown can be used to indicate the
number of issues that may arise from a specified root cause.

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Pareto Diagram

Pareto diagram helps identify the critical few from the uncritical many.

Pareto diagram is based on the 80/20 rule. This rule states that 80 percent of the problems are because of 20
percent reasons. It helps focus attention to the most critical issues and prioritize potential causes of the
problem, as shown in the graph on the screen.

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Check Sheets

Check Sheets are useful reference sheets that help in ensuring that the relevant data or relevant steps during a
process are captured or carried out. They are also used extensively during inspections for identifying defects.

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Scatter Diagram

Scatter diagram tracks two variables to see if they are correlated or have no relationship. It is also used to
estimate how a change to one variable will influence the value of the other variable.

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Six Sigma

Six Sigma is a highly disciplined process that focuses on developing and delivering near-perfect products and
services consistently.

If large volume of data is plotted over a period of time, you would most probably have a bell shaped graph.
Such graphs are also called normal distribution graph. Its called as normal distribution, because any large
volume of data if plotted, with the intent to track variations, would most probably be in a bell shaped curve.

The line corresponding to the top of the bell curve is the median of the data sample.

Standard deviation concept is used to measure how far any data is from the mean. Standard deviation is also
called Sigma.

One standard deviation from the mean covers 68 percent of the data. Six Sigma means six standard deviations
from the mean. This would cover 99.99966% of the data.

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Six SigmaExample

To understand Six Sigma let us look at an example. A tire manufacturing company produces 100,000 tires a
day. It is not possible to verify each and every tire manually to ensure it is defect free. Instead, random sample
of these manufactured tires are taken and checked for defects.

Assuming that the thickness of the tires is a parameter to measure defect, any tire that has a thickness more
than or less than 10 mm is considered to be defective. Now, if you measure the actual thickness of all these
100,000 tires manufactured daily, and plot them on a graph, you get normal distribution graph.

One standard deviation from the mean covers 68 percent of the data. Meaning, if the thickness of the 100,000
tires are plotted, 68,000 of them lie within one standard deviation above or below the mean.

Now, if a company operates at Six Sigma level, they would ensure that all tires, that are up to six standard
deviations from the mean, are defect free. Therefore, in such cases, you can expect only three defective tires
out of a million tires manufactured.

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ANSWERS:
S.No. Question Answer & Explanation
1 Which of the following tools and d.
techniques is most likely used in Inspection is a quality control tool. Flowchart
quality assurance? and Fishbone diagrams are part of the seven
basic quality tools which are tools and
techniques used for planning and control.
Process analysis is used in quality assurance,
which focuses on the process rather than the
product.
2 The management wants to ensure d.
that a project is following defined A quality audit periodically reviews quality
quality standards. Which of the management activities and assures that the
following should be used by the project deliverables meet the expected quality
management? standards.
3 As a project manager, which would a.
you give the highest priority: Since quality, cost, and schedule are part of the
quality, cost, or schedule? project constraints, they are equally important.
However, depending on the specific
circumstances of the project, one may take
precedence over the others.
4 A project manager is encountering a.
numerous problems on his project. Fishbone diagram tool specifically helps in
He wants to identify the root understanding the root cause of the problems.
causes of the problems so he can
focus his attention on those
causes. Which of the following
tools should he use?
5 As a project manager, you are c.
ensuring that quality standards are Plan Quality Management defines what quality
followed on your project. In which standards should be chosen for the project and
process are the quality standards how to satisfy them.
identified?

6 Which of the following is an a.


example of cost of conformance? Quality training helps to increase productivity
and reduces the probability of errors occurring,
i.e., helps in prevention. Hence, it can be
classified as the cost of conformance.

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Summary

Here is a quick recap of what was covered in this lesson:

A project is said to meet quality expectations, when all the project requirements agreed in the beginning of
the project are met, and the resulting product is usable.
Quality management includes creating and following policies and procedures that meet the projects
defined quality needs.
Quality planning defines the standards, templates, policies, and procedures; quality assurance determines
if the project is complying with the policies and procedures; quality control measures specific project
results against standards.
Plan Quality Management, Perform Quality Assurance, and Control Quality are the three Project Quality
Management processes.
Seven basic quality tools are used to plan and achieve the desired levels of quality.
At Six Sigma level, there would be only three defects out of a million units manufactured.

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Conclusion

With this, we have come to the end of this lesson. In the next lesson, we will cover project human resource
management.

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Lesson 09Project Human Resource Management

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Objectives

After completing this lesson, you will be able to:

Define Project Human Resource Management


Differentiate between functional manager and project manager
Describe the Project Human Resource Management processes
Identify the stages of team formation, powers of project manager, and conflict management techniques
Explain organization theories and leadership styles

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Project Human Resource Management

Project human resource management includes the processes that organize, manage, and lead the project
team.

One of the key elements of human resource management is that each of the project team members should
have clear assignment of their roles and responsibilities.

In addition, even the team working on project management tasks should be a part of the project team and
they are responsible for project management functions like initiating, planning, executing, monitoring and
controlling, and closing, along with other leadership activities.

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Functional Manager vs. Project Manager

An organization may have both functional managers and project managers. The differences are:

Functional manager is the one who handles a business function or department. For instance, an HR manager is
responsible for the HR department in an organization. Therefore, an HR manager will be a functional manager.
Generally, a functional manager is also a subject matter expert. The roles and responsibilities of the functional
manager depend upon the core business of the organization and overall organization structure. Functional
managers normally own the resources and provide the projects with necessary resources. They also negotiate
with the project manager regarding resources.

The project manager, on the other hand is responsible and accountable for the success or failure of a project
and the quality of the project. They are not technical experts. The project manager may not have authority
over the resources, depending upon the organizational structure. They often have to negotiate with the
functional manager for the resources and are responsible for the product quality. A project manager will credit
the team with the success of the project and accept the blame for the failure.

The CEO of an organization initiates a new project to secure an ISO 9001:2008 certification for the company.
Now, this project would require team members from each of the company departments and whoever is the
project manager of this project will have to request the functional manager to assign one of their team
members to the project. Resources assigned to the project go back to their respective departments once the
project is completed.

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Project Human Resource Management Processes

There are four project human resource management processes. The first process, plan human resource
management, is done as part of the planning process group. The next three processes are part of the
executing process group. These processes are acquire project team, develop project team, and manage
project team.

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Plan Human Resource Management

Plan Human Resource Management is the process of identifying and documenting project roles,
responsibilities, required skills, reporting relationships, and creating a staffing management plan. This process
is part of the Planning Process Group. In addition to that, finalizing the project hierarchy of who reports to
whom and designing the staffing management plan is also part of this process.

The first input to this process is the project management plan. There could be a lot of information in the
project management plan and subsidiary plans that may be relevant to the creation of the human resource
management plan; for example, the project life cycle processes, the time lines, how the work will be
accomplished, etc.

The other key input for this process is the activity resource requirement. Team members can be identified
based on these requirements.

In addition to this, enterprise environmental factors, like current employment outlook, etc. are also
important. For example, if the economy is booming and there are ample job opportunities for the team
members, the reward and recognition system can keep the project team interested in the project.

Organizational process asset is also an input to this process. An example of the organization process assets can
be template or a form to request for a new resource.

Let us now look at the tools and techniques used to develop human resource plan.

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The roles and responsibilities are captured in the form of organization charts and position descriptions. There
are various ways to draw this chart; it can be either hierarchical chart, which shows the reporting function, or
it can be text based.

The other technique used for developing the human resource plan is networking. This involves formal or
informal interactions within the organization and outside, by the project manager to identify the best team for
the project depending upon various interpersonal factors.

Organizational theory helps to understand how individuals come together and function as an organization.

Expert judgment and meetings are required to put the human resource plan together.

The output of this process is human resource management plan. This plan contains documents like staffing
management plan, project organization chart, and roles and responsibilities matrix.

The staffing management plan is a comprehensive document that describes when and how team members
would be added to and released from the project. Another component of the staffing management plan is the
recognition and reward system. Recognition and reward system helps project managers motivate their team.

The staffing management plan is relevant to the projects of a functional or matrix organization, where project
team members are always caught in a dilemma about prioritizing project work against regular departmental
work.

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Organization Charts and Role Descriptions

A project manager needs to make sure that there is an organization chart prepared specifically for the project.
It should clearly identify the roles and the reporting relationships between them. A sample organization chart
is shown on the screen.

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Responsibility Assignment Matrix

Another way of clearly delineating responsibilities among team members is by using a responsibility
assignment matrix. One form of responsibility assignment matrix is the RACI chart. In the RACI chart, R stands
for Responsible, A for Accountable, C for Concerned or Consulted and I for Informed.

For each important activity or deliverable on the project, it needs to be clearly identified who is responsible or
contributes to it, who is ultimately accountable, who is merely concerned about the success, and who needs to
be informed or kept in the loop.

An example of the RACI chart is shown on the screen. In this case, project manager, John is accountable for the
project plan and the other team members Kris, Sally, and Ting are responsible for completing the plan.
Similarly, you can note the roles of each resource in the other activities.

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Resource Histogram

Resource histogram is a method of depicting how many resources are required for the life of a project.

If you observe the chart shown on the screen, it indicates that the number of staff hours required on the
project increases to a peak in 2014 and then slowly tapers off.

Especially for long running projects, the level of staffing needed may vary considerably over a period. This has
implications for other parts of the plan as well; for example, the cost will vary as the number of resources
change. This piece of information helps a project manager to understand at what time they need to on-board
and off-board resources on a project.

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Acquire Project Team

Acquire Project Team is the process of confirming human resource availability and obtaining the team
necessary to complete project activities. This process belongs to the Executing Process Group.

Acquiring resources may not be required in the planning phase; therefore, it is done in execution phase.
Though you may plan to acquire few in the planning phase, major acquisition is done in execution phase. This
may be true where large projects are run spanning over many years, with several detailed activities.

The key input is the human resource management plan.

Enterprise environmental factors help understand which team members will be available to work on the
project, how much will they cost, etc.

Organizational process assets will help understand the hiring procedure of the company, the policies that
govern the use of team members on the project, etc.

The key technique for acquiring the project team is negotiation. As a project manager, you have to negotiate
with the companys senior management, resource manager, or with prospective candidates to secure the most
suitable resources on the project.

Sometimes, the resources may be pre-assigned to a project. This typically happens when they are the key
resources, without which the project cannot take off.

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Sometimes project team is acquired by getting required resources through external vendors. Most of the
bigger organizations have approved list of vendors, who provide resources on a contractual basis.

Nowadays, the concept of virtual team is also quite popular to get a project team. So even though the project
is being conceived in, one country, a big part of the team can be in another country. For example, if the project
is conceived in the USA, majority of the team can be in Germany and both the teams can co-ordinate over
phone, email, chat, etc.

Multi-criteria decision analysis is also an important tool to achieve the objectives. While acquiring the human
resources for the project, it is important to consider a number of factors, such as availability, cost, skill set,
experience, attitude, re-location needs, etc. These criteria have to be considered in totality and balanced out
against the project's requirements.

The output of this process is project staff assignments, resource calendars, and updates on project
management plan.

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Develop Project Team

Once the project team is acquired, the next step is developing the project team. Develop Project Team is the
process of improving competencies, team member interaction, and overall team environment to enhance
project performance. This process belongs to the Executing Process Group.

The inputs to this process include project staff assignments, resource calendars, and human resource
management plan.

One of the techniques used in developing project team is interpersonal skills. It is more of an art than science
and this is where individual characteristics of project managers matter a lot. If the project manager genuinely
commands trust and respect the team members, developing the team becomes easy. Team members look up
to the project manager not only for getting project specific instructions, but also for their career advancement
as well.

Social activities, like celebrating a team members birthday, going for parties outside the office, etc. helps in
team building.

Training is also an important tool for developing the project team, as it helps in increasing the knowledge and
competencies of the team members.

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Sometimes, co-locating the team members at a single place also helps in developing team bonding. This is
especially important, if team members work from different geographical location. Knowing a person face to
face does help in reducing conflict.

Project managers can also encourage the team members by providing recognition and rewards.

Personnel assessment tools give the project manager insights into the strengths and opportunities for
improvement in the team members. These tools also help in understanding members aspirations so that the
project manager can better align the project goals with the individual aspirations.

Finally, the project manager should also set some ground rules in the project to ensure that team performs
their work without any problems. Some such rules can be everyone should reach office for daily meeting by
9.30 AM sharp; if there is more than 10 percent delay in completing any activity assigned, it should
immediately be escalated to project manager; if there are any unforeseen circumstances, it should be
immediately brought to the notice of the project manager, etc.

The output of this process is team performance assessments. This is done by the project manager to evaluate
and enhance the effectiveness of the team as a whole. This is a document which explains team effectiveness.

As information about the team evolves, the enterprise environmental factors may also be updated.

Questions that test a project manager's role in developing a project team can be expected in the PMP exam.
So ensure that you have a fair understanding of the role before you take the exam.

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Manage Project Team

Manage Project Team is the process of tracking team member performance, providing feedback, resolving
issues, and managing team changes to optimize project performance.

To measure team members performance, manager should know the work assigned to them as well as their
performance on the assigned work. Hence, project staff assignments and team performance assessments are
listed as input to this process.

The human resource management plan serves as a guideline for managing project teams.

Some organizations have template and procedures to do such assessment and that being the reason why
organization process asset is also one of the inputs to this process.

The work performance reports as well as issue logs will be inputs because the team management activities
have to be performed in this context.

Observation and conversation is a technique where the project manager monitors and discusses the tasks
done by the team. This does not imply formal project status reports, but having an informal interaction with
the team before documenting the project status report. Knowing about the issue early helps in resolving them
early.

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Formal performance appraisals are helpful in evaluating the team members performance on the project. The
project manager creates these with the help of the team supervisors. It is an established practice in most
organizations to evaluate team members for their work. This may have a bearing on their future assignments,
salary, promotions, etc. Since the power of appraising lies with the project manager, the project manager can
use this as an effective tool for managing the team.

Since multiple resources work on a single project, it is quite natural to expect conflicts. It is the responsibility of
project manager to resolve conflicts. Conflict management has been discussed in detail, later in the lesson.
You can expect questions on conflict management in the exam.

The other tool is interpersonal skills.

The output of managing a project team includes corrective action recommendations like which team members
to be changed, implementing some reward system to motivate the team, etc.

Updating the project management plans, documents, organization process asset, and enterprise
environmental factors are the other outputs of this process.

There can be questions in the PMP exam that test a project manager's skill in managing a project team. So
ensure that you are aware of the inputs, tools and techniques, and outputs of managing a project team.

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Team Dynamics

Any team naturally goes through several stages as it gets together. These stages are forming, storming,
norming, performing, and adjourning.

In forming stage, a team formally comes together for the first time. In storming stage, disagreements start to
surface. This is followed by norming, when the team start working together and trusting each other. In
performing stage, they are able to deliver results as a team. Finally, the team is adjourned when the work of
the project is completed or the project is terminated.

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Conflict Management

Many organizations look for people with diverse background to get different perspectives about work. If
people with diverse background and culture work on a project, it is quite natural to expect conflict. Conflict
often results in opportunities for improvement. The root causes of conflict can be scarce resources, scheduling
priorities, and personal work styles. While the popular belief is that personality or ego can be the key reason
for conflict, it is the least possible reason for conflict.

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Conflict Management (contd.)

As a project manager, if you find yourself in between a conflict with a team member, sit across the table and
resolve it. If not, they should get their immediate managers involved and try to resolve it. To avoid conflicts, a
project manager should let everyone involved have complete clarity about the project.

Assign the roles and responsibilities to each of the team member clearly. Ensure that there are no overlapping
responsibilities, which could be a possible cause for conflict. Sometimes boredom at work can also lead to
conflict. So one of the responsibilities of project manager is to keep motivating the team members and let
them work on interesting and challenging assignments.

Business scenarios based questions on conflict management can be expected in the PMP exam. So it is
essential to have a fair understanding of the topic.

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Conflict Resolution Techniques

There are five techniques of resolving conflict. They are withdraw or avoid, smooth or accommodate,
compromise or reconcile, force or direct, collaborate or problem solve.

In withdraw or avoid, one retreats from a potential conflict situation or defers the resolution to a later date.
This does not resolve the conflict, but allows for more time. In smooth or accommodate, areas of agreement
are emphasized to reduce the intensity of the conflict. Again, this does not, on its own, result in a resolution,
but it may succeed in changing the perceptions about the situation.

In compromise or reconcile, there is some give and take in order to bring some satisfaction to all parties.
Depending on how the process went, this may be perceived as a "win-win" or a "lose-lose" situation, because
none of the parties really get what they want. In Force or Direct, a person in a position of authority directs how
the matter should be resolved. It may be necessary to do this when the matter has to be resolved immediately.
However, this may result in upsetting one or more of the conflicting parties.

In collaborate or problem solving, the parties in the conflict are asked to come together to collaborate and
look for a resolution to the problem. This offers the greatest likelihood of a satisfactory and permanent
resolution and should be resorted to whenever possible.

Business scenario based problems, where a resolution technique has to be selected, can be expected in the
PMP exam. So understanding the conflict resolution techniques is essential.

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Powers of the Project Manager

One of the key responsibilities of a project manager is to get work done by the team. There are certain powers
that a project manager can use to get the work done. A project manager has to use a combination of
techniques to get this accomplished.

Various powers of a project manager are legitimate or formal, reward, penalty, expert, and referent. In
legitimate or formal, project manager can formally assign a work to a team member that he or she has to do.

Project manager can reward and recognize the team members. The reward could be as simple as assigning
challenging or sought after work to a team member. This can motivate good performers on the project.

Sometimes project manager can penalize the team members for poor performance. Some project managers
are able to command authority because of their expertise in a certain field. Project manager can be considered
as a reference of higher authority to get the work done. Sometimes referent authority also arises from the
personal charm or charisma of the project manager.

Legitimate, reward, and penalty are the powers derived from the project managers position in the company.
Expert power exists when the project manager is an expert on the subject matter. Reward and expert are
usually the best forms of authority to use. Penalty is the worst way of influencing and managing the team. A
project manager should resort to this, only as a last option.

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Organizational Theories

It is important for a project manager to understand the various motivational factors to reward the team
members and keep them motivated.

The three popular theories on motivation are McGregors Theory of X and Y, Maslows Hierarchy of Needs, and
Herzbergs theory.

McGregors Theory of X and Y was proposed by McGregor. He believed that there are two categories of
managers and the classification is based on what they think about their team members.

Managers who accept Theory X believe that people need to be watched every minute. People are not capable
and they avoid work wherever possible.

Managers who accept Theory Y believe that people are willing to work without supervision and want to
achieve.

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Organizational Theories (contd.)

Maslows Hierarchy of Needs was proposed by Maslow. According to this theory, peoples needs change as
they grow in their career. The need begins from physiological and ends as self-actualization. The hierarchy runs
from bottom to top.

Physiological needs include breathing, food, water, sex, sleep, homeostasis, and excretion. Safety needs
include safety of body, employment, resources, morality, the family, health, and property. Social includes
friendship, family, and intimacy. The esteem need includes self-esteem, confidence, achievement, respect of
others, and respect by others. The last need, self-actualization includes morality, creativity, spontaneity,
problem solving, lack of prejudice, and acceptance of facts.

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Organizational Theories (contd.)

Herzberg classifies factors as hygiene factors and motivating agents. Hygiene factors are mandatory, without
which you cannot motivate people. Hygiene factors could include things like personal safety, fair
compensation, working conditions, etc. In addition to the hygiene factors, you need to bring in the motivating
agents like recognition, higher responsibility, etc. to motivate team members.

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Leadership styles

Regardless of the project manager having formal reporting authority over the team, they are naturally looked
upon as the leaders for their projects. Project managers need to be familiar with the leadership styles and be
able to tailor their style according to the needs of the project and that of the team.

There are three leadership styles.

The first one is authoritarian or autocratic. In this style, the leader sets clear expectations of the team and
expects complete compliance. In a participative or democratic style, the leader offers guidance, but also
involves the team in decision-making. In a delegative or laissez faire style, the leader leaves the work to the
team without offering much guidance.

In most circumstances, you would want your leader to employ a participative style, but there may be occasions
when other styles might be appropriate.

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McKinseys 7-S Framework

A popular framework in management science is the McKinseys 7-S framework. There are seven elements that
are divided in to two categories.

An organization working on a project will have these elements already in place and hence these become the
hard elements. The first three elements of the 7-S framework are the strategy, structure, and systems.

The leader or project manager is expected to step in and exhibit soft elements to earn the mantle of
leadership. The next four elements are shared values, skills, style, and staff.

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ANSWERS:
S.No. Question Answer & Explanation
1 Which conflict resolution c.
technique is best for a long lasting Problem solving is the best way to resolve
solution? conflict, because it has the greatest probability
to reach a permanent solution. All other
methods may at best lead to temporary
solution.
2 As a project manager, you are b.
deciding the inputs that you need The Manage Project Team process uses an
to use on your project. Which issue log to manage and close all team member
process uses an issue log as one of related issues.
the inputs?
3 What type of power would a d.
project manager have if others Expert is the power that comes with expert
believe he or she is highly knowledge in a specific knowledge area.
knowledgeable in their technical
area?
4 You have been assigned as the a.
project manager of an existing Responsibility assignment matrix lists the
project involving 50 company resources against the work assigned to them.
employees and 10 sub-contractors.
You want to know who is assigned
to do what. Where should you look
for this information?
5 While assessing the performance a.
of your team members, you find It is the most appropriate answer in terms of
that some of them are not strong the performance management life cycle. You
enough to handle the tasks need to first communicate the needs (plan),
assigned. What will you do in this and then ensure that these are being met
situation? (review and monitoring).
6 Your software project is in the d.
critical system testing stage when Collaborating or problem solving approach is
two of the senior members of the the best bet as all the parties actively seek to
team come to you with a conflict solve the problem.
on usage of the simulation
software during testing. One senior
member claims that the other
person keeps the software engaged
nearly all of the working hours of
the project. You decide to change
their working schedules so that

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they no longer overlap. You are
using which of the following
techniques for conflict resolution?

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Summary

Here is a quick recap of what was covered in this lesson:

Project human resource management includes the processes that organize, manage, and lead the project
team.
A functional manager is in-charge of a business function and owns the resources; a project manager is
responsible for an organizations projects.
Plan Human Resource Management, Acquire Project Team, Develop Project Team, and Manage Project
Team are the four Project Human Resource Management processes.
Forming, storming, norming, performing and adjourning are the five stages of team formation.
Reward and expert are usually the best forms of authority that a project manager can use. Penalty should
be resorted to as a last option.
Organization theories help a project manager to identify what motivates the team members and
accordingly design a reward plan.
A project manager needs to establish a leadership style that matches the needs of the team.

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Conclusion

With this, we have come to the end of this lesson. In the next lesson, we will cover project communication
management.

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Lesson 10Project Communications Management

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Objectives

After completing this lesson, you will be able to:

Define communication and Project Communications Management


Identify the different communication methods, technology, and channels
Explain the elements of a basic communication model
Describe the Project Communications Management processes

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Communication

Communication can be best defined as a two way process of exchanging information between two entities.

As you can see on the screen, if project is an entity, the project needs to communicate with other entities in
the organization, like project managers, senior management of the organization, and any other stakeholder of
the project. Similarly, these entities may also have to communicate with the projects. The communication
between project and the stakeholders is always two-sided.

Project manager is responsible for ensuring proper communication to and from the project. In fact, a project
manager spends almost 90 percent of his or her time on communication. You can now understand how
important it is for a project manager to plan this activity well.

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Communication Methods

Communication can be done in two ways. It can be done written or verbal. Both, written as well as verbal
communication can either be formal or informal.

Formal means communicating by following some basic rules, whereas informal means taking a casual
approach. These two combinations result in four different communication methods. They are formal written,
formal verbal, informal written, and informal verbal.

Formal written method is used for project management plans, project charter, and over long-distance
communication. Formal verbal method is used during presentations. Whereas, informal written method is
applicable while writing notes or emails. Informal verbal, on the other hand, is applied during conversations.

You can expect questions in the PMP exam, which require choosing a communication method for a given
situation. So a fair understanding of the communication methods can help you score higher.

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Communication Technology

Communication technology refers to the different media used for communicating. A few such technologies
are listed on screen. Among which email, fax, and telephone are few popular communication technologies.

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Communication Channels

Communication takes place between four people in a team. The lines across the members represent there can
be six unique channel of communication existing within the team.

Now, if the team comprises ten members, how many unique channels of communication will be calculated?

You can use the formula; N multiplied with N minus 1 and the resulting sum divided by two.

N is the total number of people involved in communication. In this case, N equals to 10.

If this is put into the formula, you will get 45 as the result.

Therefore, 45 unique communication channels exist in a team of 10 people.

It is difficult to manage such large number of communication channels. Therefore, it is important to structure
communication, otherwise everyone starts communicating everything to everyone, and it can become a real
chaos in the project.

In the PMP exam, you may be asked to calculate the number of communication channels in a scenario based
question. So please make a note of the formula to answer the question correctly.

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Basic Communication Model

The process of communicating involves several steps. Let us now look at a basic communication model.

The sender encodes the message and sends it to the receiver. The receiver should know how to decode the
message. Receiver in turn sends his response, which the sender should know how to decode. Communication
happens through a medium and the message may be corrupted at any stage, because of the noise.

Let us look at an example to understand this model. A Japanese tourist calls up a hotel in Dubai to book a
room. When the tourist talks in Japanese, encoding of the message is happening in Japanese language. The
telephone serves as a medium, but at the receivers end, the message is not getting decoded, as the
receptionist does not understand Japanese. So is the case in the scenario, wherein the receptionist
communicates in Arabic. However, if both of them communicate in a common language understood by each
other, say English, the communication can happen effortlessly.

Sometimes, people communicate through their body language. Its again a kind of encoding and the
communication can only happen, if the receiver knows how to interpret it; it is similar to decoding the
message.

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Basic Communication Model (contd.)

If a project has communication problems, by analyzing the communication model, you can pin point where the
problem lies. You can identify, whether the problem is with encoding and decoding or there is a problem with
the medium itself. Let us now understand the different elements of communication model.

Click each highlight to learn about the elements of communication model.

Encode is to translate thoughts or ideas into a language that is understood by others.

Decode is to translate the message back into meaningful thoughts or ideas.

Message is the output of encoding.

Feedback message is the output of encoding.

Medium is a communication method to convey the message.

Noise is anything that interferes with the transmission and understanding of the message. Examples include
distance and unfamiliar technology.

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Project Communications Management

Project communications management includes the processes required to ensure that information about timely
and appropriate generation, collection, distribution, storage, and ultimate disposition of project is prepared
and circulated to all project stakeholders. It is the responsibility of a project manager to ensure that the
information requested by the stakeholder is communicated to them. The frequency at which the information
needs to be shared may also vary from stakeholder to stakeholder.

For example, think about a simple process of sharing a project status report with the customer and senior
management. This knowledge area explains how it should be done as per PMI.

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Project Communications Management Processes

There are three project communications management processes. Each process is carried during different
process groups: plan communication management is done during planning process group, manage
communications is done during executing process group, and control communications is done during
monitoring and controlling process group.

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Plan Communications Management

Plan Communications Management is the process of developing an appropriate approach and plan for project
communications based on stakeholders information needs and requirements, and available organizational
assets. This belongs to the Planning Process Group.

Stakeholder register is an important input to this process. It is a list of all the stakeholders.

The project management plan has information about a large number of the project's requirements, and the
stakeholders who need to receive communication of various kindsare therefore a critical input to this
process.

In addition to these two, organization process assets and enterprise environmental factors are also inputs to
this process. Many organizations have standard templates to prepare communication management plan,
which are part of the organizational process assets and enterprise environmental factors.

The first technique used in this process is the communication requirements analysis where the
communication requirements of each of the stakeholders are analyzed and categorized. In this, you try to find
how many of the stakeholders need similar kind of information, which can be grouped together. If you send
information through an email system, all those stakeholders who need similar information can be marked in
CC in the email.

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Next, you can decide on the communication technology. These days, email is the most widely used
technology, but in few cases, you might have to send information using some other technology like fax or
registered post. For example, all government communications are done using registered post to keep a written
record.

Finally, you need to understand how communication really happens, that is the communication models and
the various communication methods used.

You may need to conduct meetings before agreeing on and finalizing the communications management plan.

The communications management plan is the primary output of this process, which lays down the procedures
around communications in the organization. Communication management plan has information like which
stakeholder needs what kind of information, at what frequency, and how.

As a result of this process, some other project documents may also get updated.

There may be questions in the PMP exam, based on the plan communications management process. So a fair
understanding of the process will help you answer such questions correctly.

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Manage Communications

Manage communications is the process of creating, collecting, distributing, storing, retrieving, and the ultimate
disposition of project information in accordance to the communications management plan. It belongs to the
Executing Process Group.

Manage communications is done throughout the project lifecycle. Everything cannot be planned during
communication planning, so manage communications takes care of responding to unexpected request for
information as well.

Communications management plan is an important input.

Work performance reports have information regarding project performance and status information.

Organizational process assets are the standard templates created for the status report by organizations. In
some organizations, there are guidelines for communication distribution.

Enterprise environmental factors are the other inputs to this process.

Various tools and techniques are used in this process.

Communications technology represents the means of technology (i.e., email, instant messaging, telephone
conferencing, etc.) that are used to exchange information.

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The use of Communication models helps you determine the technique that is best suited for a particular
situation.

Communication methods are the various methods used to communicate. For example, whether it is
interactive or offline, whether information is being pushed by the provider or pulled by the recipient, etc.

Information management systems help design a framework for managing the information within a project,
that is, how it is acquired, where it is stored, and how it is distributed and destroyed.

In Performance reporting all the information is synthesized in the form of performance reports that are later
distributed to the appropriate stakeholders, and forms an important part of the communications strategy on a
project.

The first and primary output of this process is the communications messages that are generated during the
project.

The other outputs include project management plan updates, project document updates, and organizational
process assets updates.

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Control Communications

Control Communications is the process of monitoring and controlling communications throughout the entire
project life cycle to ensure the information needs of the project stakeholders are met.[5] It is part of the
Monitoring and Controlling Process Group.

The inputs to this process are the project communications, project management plan, and issue log, which
have a list of issues that are raised by different project stakeholders, data related to the work being performed
on the project, and various other project documents (which may have to be communicated). Other inputs
include work performance data and organizational process assets.

Let us look at the tools and techniques in detail.

The information management systems provide tools to collect, consolidate, and present the information in
the form of cogent, concise communications. Expertise must be sought from different stakeholders on how
you should go about this process. Several meetings may be needed to ensure the efficiency and efficacy of the
communications.

The major outputs of this process are the work performance information, which indicates that the work
performance data has been analyzed, interpreted, and presented in an easily comprehensible form. This
process may also give rise to change requests, updates to the project management plan, project documents,
and organizational process assets.

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ANSWERS:
S.No. Question Answer & Explanation
1 As a project manager, you have a a.
problem with a team members Informal verbal communication is a good
performance. Which is the best option. If this does not solve the problem, it
way of communicating this should be followed up with a formal written
problem with the team member? communication.
2 You are managing a project with a.
project teams in different This is directly based on the formula n*( n-1 )/2
geographical locations. There are . If n is the number of stakeholders in the
approximately 25 team members project, the total possible communication
plus a team lead at 3 different channels = n*( n-1 )/2. So the project has 25
locations. Additionally, there are 3 team members, 3 team leads, 3 support team
members from a supporting group members, and the project manager. That
that are working part-time on the makes 32 people and 496 possible
project. How many communication communication channels. Please refer to
channels are possible in your PMBOK Guide5th edition Project
project? Communications Management Pg. 292.
3 You have a project team spread c.
across 5 different countries. As a Communication is a big issue if team members
project manager, what is the best are geographically distributed and it is always a
communication method that you good practice to use formal written
should follow? communication in such cases.
4 Project information may be d.
distributed using a variety of All the methods mentioned are commonly
methods including hard copy known as information management system.
document distribution, shared
access to networked electronic
databases, fax, electronic mail,
voice mail, video conferencing, and
electronic tools for project
management. These are known as
___________.
5 As part of a joint venture, a project c.
manager working with another A communication management plan will
company needs to share some capture the details of the person responsible
confidential information related to for authorizing release of the confidential
intellectual property rights. He information on the project.
wants to know the person
responsible for authorizing the
release of this confidential

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information. To which project
document should he refer?
6 A project manager of an d.
information technology project is In the communication model, it is the sender's
discussing a complex algorithm responsibility to make the message clear,
with a new team member. After a complete, and concise so that the recipient can
long and thorough verbal receive it. The sender must also confirm that
discussion, the project manager the recipient truly understands the message.
asks the person if he has Therefore, here the responsibility lies with the
understood the algorithm and can project manager.
put it in the document. The team
member implies that he has
understood. However, when the
project manager goes through the
document, he realizes that the
member hasnt understood what
was actually said, thus resulting in
an inefficient use of time and
effort. Who is responsible for this
loss of time and how could it have
been avoided?

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Summary

Here is a quick recap of what was covered in this lesson:

Communication is a two way process of transferring information from one entity to another.
The four commonly used communication methods are formal written, formal verbal, informal written, and
informal verbal.
The total number of unique channel of communication can be calculated using the formula N multiplied
with N minus 1 and the resulting sum divided by two.
By analyzing the communication model, problems in project communication can be identified.
Project manager is responsible for timely availability of information to all the stakeholders.
The three project communications management processes are plan communication management, manage
communications, and control communications.

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Conclusion

With this, we have come to the end of this lesson. In the next lesson, we will cover project risk management.

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Lesson 11Project Risk Management

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Objectives

After completing this lesson, you will be able to:

Define risk
Identify key terms related to risk
Calculate risk
Identify different categories of risk
Describe Project Risk Management processes

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Risk

Risk is an uncertain event or condition that can affect a project positively or negatively. Although most of the
time you view this uncertainty as bad, sometimes it also has a likely positive outcome.

Let us look at an example of risk having a positive outcome. You are using a software for managing time sheet
of your team members. Due to budget constraints, you are forced to use a new software. Though you were
initially reluctant to use it, you found the new software to be better than the current one. It is more efficient
and has better reporting facility.

An example of bad uncertainty can be swine flu. Government declares a mandatory holiday to check flu spread
which may affect your project work.

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Key Terms

Bad risks are also called threats. Positive events or conditions are also called opportunities or good risks. A
risk that can have a positive or negative consequence is called business risk. A risk that can only have a
negative consequence is called pure risk.

The other risk related terms are:

Risk averse: One who does not take risk is called risk averse.

Risk tolerance is the degree, amount, or volume of risk that an organization or individual will withstand. For
example, a company might have a policy that any risk that affects their customer relationship will not be
tolerated.

Risk threshold is the measure of level of uncertainty or the level of impact at which a stakeholder may have a
specific interest. Below that risk threshold, the organization will accept the risk, and above that, the
organization will not tolerate the risk. This helps identifying the level of risk, beyond which specific responses
are needed. For example, a company may have a policy that a risk that increases the project cost by 10 percent
or less is OK, but not more than that.

It is essential that you have a fair understanding of the key terms of project risk management. This will be
useful while answering questions in the exam.

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Calculation of Risk

Risks can be managed only if they are measured quantitatively.

Suppose there are many risks identified in a project and you have limited resources to manage them, you
should know which risk is most important that has to be managed first. Therefore measuring risk becomes very
critical.

Risk is measured by assigning a monetary value to it and that value is arrived at by multiplying the probability
and impact of the risk.

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Calculation of RiskExample

Calculate total expected monetary value for the three work packages, given their probability and impact.

Let us look at package X. The value of the risk is 25 percent of the impact, $10,000, which is $2,500. The
expected monetary value or EMV of the risk sometimes called the exposure to the risk.

The impact where the value is negative, is called threat and the impact where value is positive, is called
opportunity.

Calculate the EMV for the next two packages.

Also determine the overall EMV for a project by analyzing all the identified risks and adding them up. In this
example, if all the risks materialize then there is threat of $1,300.

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Risk Categorization

Risk can be categorized in various ways. One such categorization is external, internal, technical, or project
management related risk.

External risk arises out of external policies or regulations. For example, government policy that the river water
can be used for drinking purposes, may hinder your production, which is dependent on the river water.

Internal risk arises from within the projectfor example, the complexity of the work may result in time and
cost escalation.

Technical risks arise from the technology being used. Projects in space exploration have a lot of technical
complexity.

Risks could be related to project management. For example, if there are many interdependencies between the
sub-projects, it is a risk from the project management standpoint.

The categorization of risk can be based on the origin. Risks can be classified as scope risk, resource risk,
schedule risk, cost risk, and quality risk.

Scope risk can include redoing the same task, if the scope is not well understood. When the only resource is
assigned to some other project, it is called resource risk.

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Decision Tree

A decision tree helps in analyzing risk and its impact on taking decisions in a scenario where there is
uncertainty on the outcome.

Suppose you want to buy a car. You can buy either a new car or an old car. Which one should you buy? Which
has more risk over a period of 5 years?

Consider the concept of decision tree to solve this problem.

The initial cost of buying a new car is $20,000 and the cost of buying the old car is $15,000.

For a new car, the probability of it having any problem (fail scenario) is only 10 percent, i.e., there is a 90
percent likelihood that it will just work without any problems (pass scenario) and if at all it does have, the
impact of the problem is $15,000. The reason is that it was bought at a higher cost.

An old car has 70 percent probability of having a problem. The reason being the probability is high because the
car was already used by someone else in the past. However, the impact here is low, say, $10,000.

If you add probability multiplied by impact of both the options at the decision nodes, you will find buying an
old car over a period more risky than buying a new car.

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Risk Reserve

The project cost will be arrived at, after considering the risk reserves of both, the known risks and unknown
risks. There is a specific order in which these reserves are calculated in the project cost.

First, the cost of all activities is identified. Activities are the smallest, unique project tasks.

All the activities cots add up to the cost of the work packages. Work packages are the last level of classification
in a work breakdown structure

Work packages cost adds up to the control account cost. One or more work packages are clubbed together to
create a control account and manage the cost of the work packages.

Next, the project costs are identified. There can be multiple control accounts in a project.

Now, once the project cost is calculated, some reserve is added to take care of any uncertainties. You may
have made some assumptions to calculate the cost of the activities, and by adding some reserve, you would
want to take care of those uncertainties. In this case, make a note that you are accounting for the assumptions
made and it can be said that this reserve takes care of known uncertainties. This reserve is also called
contingency reserve.

At this point, you have arrived at the cost baseline, i.e., the cost for the project that will be used for budgeting
and tracking purposes.

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Once the planned cost is arrived, there is another reserve that gets added, called management reserve. Note
that management reserves are not part of the cost baseline and are used during emergencies only. By adding
contingency reserve, you have taken care of known uncertainties, and by adding management reserve, you
take care of unknown uncertainties, i.e., those risks that perhaps have not yet been identified.

Unknown uncertainties are added based on experience or expert judgment.

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Project Risk Management

Project Risk Management includes the processes of conducting risk management planning, identification,
analysis, response planning, and controlling risk on a project.

The key objective of risk management is to increase the probability and or impact of positive events and
decrease the probability and or impact of negative events.

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Business ScenarioProblem Statement

Cynthia is a subject matter expert and the Director of New Store Construction in Small Markets. Because of her
expertise and experience in managing complex store build out for the corporation, she has been appointed as
the manager of a new, large, and complex construction project involving a gas station. None of the previous
construction projects included a gas station and convenience store component. Since this is a new initiative
and way for the company to diversify their business, this project is business critical, very visible to senior
management and can be a career maker or breaker. The senior management team is anxious to see the
project brought to life, but the company lacks a strong risk management process. They would like Cynthia to
prepare a risk response plan and submit it prior to the projects first milestone in 3 weeks. What should
Cynthia do?

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Business ScenarioSolution

Because the company lacks a risk management structure and has handled risk poorly in the past, Cynthia
should first search internally for risk experts. Internal experts would be knowledgeable of risks that exist within
the business as it deals with construction. Then she should identify subject matter experts external to the
organization knowledgeable of risk management as it relates to convenience stores with a gas station
component. Another viable resource would be the historical documents around risk from previously
completed projects, which will also point out other stakeholders and/or SMEs who can contribute to the risk
response planning process. After having the key players in place, Cynthia can work with them to go through
the identification and prioritization process of risk that leads up to the development of their plan.

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Project Risk Management Processes

There are six risk management processes. Plan risk management, identify risks, perform qualitative risk
analysis, perform quantitative risk analysis, and plan risk responses belong to the project planning group and
Control Risks belongs to the monitoring and controlling process group.

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Plan Risk Management

Plan Risk Management is the process of defining how to conduct risk management activities for a project. The
key benefit of this process is it ensures that the degree, type, and visibility of risk management are
commensurate with both the risks and the importance of the project to the organization. It is part of the
planning process group.

This is an important process and requires involvement of project sponsor, customer, and other key
stakeholders along with the project manager.

Risk management is one of the key project management activities and hence it requires proper planning. In
some cases, the impact of the risk is not worth the time spent to plan and manage it. All such decisions and
more are taken during risk management planning.

Key inputs to this process are project management plan and project charter.

The project management plan and its subsidiary plans form a key input to the plan risk management process.
The process for managing risk is closely aligned with the processes for managing cost, schedule, quality, and
scope.

Project charter contains high-level information about the project and the important objectives, the plan will
contain details.

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The other important input is the stakeholder register that contains the list of stakeholders. The stakeholders
can provide valuable inputs to the risk management processes on the project.

Enterprise environmental factors and organization process assets are also listed as input.

Analytical techniques are one the important techniques used. The rigor and level of risk management
processes depend on the risk threshold of the projects stakeholders and the level of risk on the project.
Analytical techniques help us find a balance between these factors.

There is no substitute to expert judgment as it brings in many years of experience on the projects.

Risk management planning is the outcome of several meetings between the project team and the stakeholders
of the project.

The output of this process is the risk management plan, which has information like, methodology used for risk
management, roles and responsibilities of key people involved in risk management, budget for the risk
management activities, and timing of the risk management activities.

Note, since risk management plan has information like budget and schedules for risk management activities, it
is an input for processes like cost estimation, time estimation, schedule development, and cost budgeting.

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Definition of Impact ScaleExample

The impact on scope, cost, time, and quality is provided in the table. The impact is scaled as per the perception
of risk by the manager. This kind of table can also be obtained from PMO. The scaling varies from organization
to organization. For a risk-averse person, a 15 percent slippage in schedule may appear to be high, however,
for a risk-seeking person it may not be so. It is in the interest of the project to define these clearly in the form
of an impact scale, so that there is no ambiguity. During the planning stage, this table should be agreed by all
the stakeholders, which is a best practice.

The risk management plan defines what is high impact and high probability, so that everyone involved in the
project interprets the risk data in the same manner. Similarly, look at the examples for other tools and
techniques and the contents of the risk management plan as described in the PMBOK Guide.

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Identify Risks

Risk identification is an ongoing and iterative process. It is the process of determining which risks may affect
the project and documenting their characteristics. It belongs to the Planning Process Group. Risks can arise at
any time during the project execution cycle. Even when the project starts, the customer or the project sponsor
can inform the possible project risks to the project manager.

Generally, the project team should look for possible risks in project management plan, project schedule, cost,
and scope data.

The plan would include the risk management plan, activity cost and duration estimates, stakeholder register,
schedule management plan, human resource management plan, project documents, scope baseline, cost
management plan, quality management plan, and procurement documents.

If the organization has executed similar projects in the past, project managers can look in the old project
archives for some possible sources of risks, known as organizational process assets.

Sometimes, risks can be identified from industry studies or surveys, i.e., enterprise environmental factor.

There are various tools and techniques for risk identification. One of them is documentation reviews and this
is a necessary technique for risk identification. It is a structured way to go through the different project
documents, like project management plan, project scope statement, etc., to look for possible risks.

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If there are any assumptions listed in these documents, the analysis of those assumptions can also be
potential risks. You can use several information gathering techniques for identifying risksincluding
interviews, questionnaires, etc.

Diagramming techniques such as process flow diagrams, schedule network diagrams, etc., can help identify
potential risks on the project.

Expert judgment is an important factor as many risks can be pointed out based on experiences.

Some organizations have ready-made checklist for risk identification. These checklists are generally in the form
of questionnaires that help in risk identification.

SWOT analysis, which stands for strength, weakness, opportunities, and threats, is also used to analyze project
risks. Usually these analyses are done at organization level first and later the findings are applied at project
level too.

For example, organization that has very good technology strength is applicable for the project as well.
Similarly, if the organization infrastructure is not that good, it can be a potential risk for the project as well.

The output of the risk identification process is risk register, which is the list of identified risk. Sometimes,
potential threats are also listed in the risk register and they are monitored to check if they are actually
becoming a project risk or not.

Information gathering techniques like brainstorming, interviewing, root cause analysis and others are used to
get risk related information.

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Perform Qualitative Risk Analysis

While risk identification is the process of identifying all possible risks, it is not realistic to work on all those
risks, due to the impact of the risk, which may be negligible in some cases and not worth the worry.

To identify the risk that you would work on priority, you need to analyze it. Perform qualitative risk analysis is
the process of prioritizing risks for further analysis or action by assessing their probability of occurrence and
impact, which is part of the planning process group.

The inputs to this process are risk register and risk management plan.

Apart from these, the scope baseline for the project forms an important input as the scope defines all the
work that needs to be done.

The enterprise environmental factors and organizational process assets are also inputs for all risk
management processes.

Qualitative risk analysis is the technique of risk probability and impact assessments.

One of the most important techniques is risk data quality assessment, which is to find out the accuracy of the
risk data, i.e., whether the risks are real risks.

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Once the accuracy of the risk data is verified, the next step is to find out which risks needs to be addressed on
priority and analyzing them on priority. The analysis can be done by using a probability and impact matrix,
where you can classify risks as high, medium, and low priority.

With this analysis, if a risk has both high probability as well as high impact, it needs to be addressed before any
other risks.

Risks can be further categorized, for example, as technical, project management, etc.

The urgency of the risk can be considered. Urgency indicates whether a risk event is likely to happen in the
near future.

Expert judgment also plays a role in qualitative risk analysis.

The output of this process is prioritized risks with their probability and impact ratings. These are updated and
reflected in the various project documents. The process also results in a list of risks that requires further
analysis, because the data available might not be sufficient to determine their probability and impact.

Concept based questions on qualitative risk analysis can be expected in the PMP exam. So prepare this topic
well to answer such questions correctly.

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Probability and Impact MatrixExample

The probability and impact matrix tabulates the probability and impact scales for the opportunities and threats
on the project. Probability multiplied by impact gives you an exposure figure, which is mentioned in the
individual cells. For example, look at fourth cell in the first row, which has a probability of 0.9 and impact of
0.20. The exposure value is 0.18. Likewise, you can verify for all other cells.

After filling up this table, you can define a risk threshold, beyond which a risk becomes a candidate for active
management. For example, any risk with exposure value of 0.15 or more should be actively managed. You can
see from the table that the cells marked in grey are those, which correspond to this value.

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Perform Quantitative Risk Analysis

Perform quantitative risk analysis is the process of numerically analyzing the effect of identified risks on overall
project objectives.

Usually, quantitative risk analysis is done for the highest risk on the project to investigate them further.

Therefore, the updated list of risk register is the input to quantitative risk analysis. The inputs for quantitative
risk analysis are similar to the qualitative risk analysis.

Since numerical analysis is being considered here, the cost and schedule management plans would be
important inputs here.

The other inputs include enterprise environmental factors, organization process assets, and risk management
plan.

The first technique used is data gathering and representation techniques. The numerical quantitative risk data
is usually collected by analyzing past project data or by expert judgment. Sometimes numerical data are also
used for simulation and one of the simulation techniques is Monte Carlo Analysis. For example, by using
Monte Carlo Analysis you can check if the project is executed 100 times, and the probability of completing the
project is on a specific date. Similar analysis can be done for the risk as well. Numerical data also helps in using
decision tree concept to analyze project risks and impact objectively.

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The other techniques include expert judgment and quantitative risk analysis and modeling techniques. The
quantitative risk analysis should only be done when it is worth doing it. Usually large multi-year project may
require quantitative risk analysis.

The output of this process is the quantified list of prioritized risks. Along with this, sometimes the amount of
contingency reserve in terms of time and cost is also calculated as part of this process. This will be reflected in
updates to the project documents.

Concept based questions on quantitative risk analysis can be expected in the exam. So understanding the
inputs, techniques, and outputs of quantitative risk analysis is essential.

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Plan Risk Responses

Once the risks are identified and analyzed, the next step in risk management is to plan what can be done about
these risks. Plan risk responses is the process of developing options and actions to enhance opportunities
and to reduce threats to project objectives. It is part of the Planning Process Group

The inputs for this process are the risk register, which has now been updated with the identified risks and the
information from qualitative and quantitative risk analysis; and risk management plan, which provides
guidance about the risk management processes on the project.

There are different strategies used for negative risk and positive risks.

One of the strategies for the negative risk or threats is to avoid the risk. For example, one of your team
member is not punctual, which is a risk; replace him with another team member who is.

The next strategy is to transfer the risk to someone else. For example, your factory is prone to catching fire.
You can transfer this risk to an insurance company by purchasing fire insurance cover.

The third strategy is to mitigate the probability and impact of the risk. For example, your project is being
delayed and that is a risk, you can mitigate it by either reducing certain part of the scope or adding more team
members to the project.

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The final strategy is to accept the risk and do something about it, only when it occurs. The plan that states
what can be done when risk actually occurs is called contingency plan. For example, suppose your building is
damaged in a natural disaster, you can have a contingency plan to move into another building, which was pre-
identified.

The strategies to handle positive risks or opportunities are exploit, share, enhance and accept.

Exploit corresponds to avoid and enhance corresponds to mitigate in the negative risks.

Accept is a common strategy for both positive and negative risks.

An example of sharing a positive risk or opportunities can be getting into a joint venture to exploit the
opportunity together.

Contingent response strategy is another technique of risk response planning. This refers to planning the
response whenever a contingency or planned risk event occurs.

Expert judgment is useful for planning for risk responses.

The output of this process is the updated risk list, which will result in the updates to project management plan
and project documents.

Those risks that remain in the system after all the response plans have been laid down are called residual risks.
Contingency plans need to be developed for those (i.e., what you can do when the risk actually occurs).
Sometimes, the implementation of a response gives rise to additional risksthese are called secondary risks.
For example, you may decide to outsource some work to a third party. Since, the act of outsourcing also
introduces a dependency; you have to worry about the reliability of the third party.

The risk response owner is also identified as part of this process.

The project risk reserve is also updated because of this process. During this process, the actual amounts are
identified.

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Control Risks

The last step in risk management is controlling of the risk management activities that involves implementing
risk response plans, tracking identified risks, monitoring residual risks, identifying new risks, and evaluating risk
process effectiveness throughout the project. It is part of the monitoring and controlling process group.

The inputs to this process are risk register, project management plan, and work performance data.

Work performance reports, in the form of earned value analysis, give an accurate status of the project health,
and risk management effectives can be analyzed in light of the project progress.

The techniques used for monitoring and controlling the risk are risk audits, in terms of checking whether the
project is identifying risks and working on a plan to resolve the risk.

The other strategy is to do continuous risk re-assessment, which is a kind of periodic review of the risk
management plans.

Risks are also one of the key discussion topics in project status review meeting, as team members can point
out to new risks. Regular meetings also ensure that team members are aware of their responsibilities to look
for new risks and opportunities for project.

Reserve analysis is also done throughout the risk monitoring and controlling process to check if any new
identified risk requires additional reserve to take care of any eventuality.

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Variance and trend analysis helps us identify additional risks or monitor changes to existing risks.

The process also makes use of the technical performance measurements.

The outputs of this process are updated risk list, for example, some risks that are no longer applicable will be
removed from the risk register. This will result in updates to project management plan and project
documents.

Any monitoring process also results in some work performance information, corrective or preventive action to
ensure that same mistakes are not repeated in future.

This process also results in organizational process asset updates, like updating lessons learned database about
best practices in risk management, and change requests.

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ANSWERS:
S.No. Question Answer & Explanation
1 Purchasing insurance coverage for your a.
project equipment is an example of It is an example of transfer as the
which risk response? financial risk is transferred to the
insurance company.
2 What action should a project manager d.
first take when an unidentified risk event The right project management practice
occurs? dictates that a work around should be
created as a response to the event.
3 You are a project manager with a b.
financial firm that has multinational Someone who doesn't want to take risk is
dealings. You feel the financial meltdown called risk averse and the attitude of the
in one of the client countries could affect organization seems to be the same.
your project adversely, so you want to
hedge your risks. Although the
probability of occurrence of the event is
low, you are advised to play it safe. In
terms of risk attitude, your organization
could best be described as?
4 Decision tree analysis can be classified as a.
a __________. Decision tree analysis is a quantitative risk
analysis technique that involves a
diagram describing different decisions
under consideration and the impact on
the project of choosing one over the
other.
5 How early can a comprehensive risk b.
analysis be done on a project? Only after the entire scope has been
defined in the Work Breakdown Structure
(WBS), a comprehensive risk analysis can
be done.
6 A project manager is managing a short d.
duration pilot project and has started The amount of rigor in the analysis is
the risk management planning process. dependent upon the duration and
He has identified new risks and complexity of the project. For a short
prioritized them based on the duration project, it may not be necessary
probability and impact matrix. The to perform numeric (quantitative) risk
project manager now proceeds to plan analysis.
responses for the risks without analyzing
the risks numerically. According to you,
this decision of project manager is:

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Summary

Here is a quick recap of what was covered in this lesson:

Risk is an uncertain event or condition that, that has a positive or negative effect on a projects objectives.

Risk is calculated by multiplying probability and impact of risk. Risk Weighting = Probability * Impact

Risk can be classified in various ways. Under one category, risks are classified as external, internal, technical
and project management; and on the basis of origin, risks can be classified as scope, resource, schedule, cost
and quality risks.

A decision tree is used to analyze risk and its impact on decisions, in the face of uncertainties.

The six Project Risk Management processes are Plan Risk Management, Identify Risks, Perform Qualitative Risk
Analysis, Perform Quantitative Risk Analysis, Plan Risk Responses, and Control Risks.

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Conclusion

With this, we have come to the end of this lesson. In the next lesson, we will cover project procurement
management.

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Lesson 12Project Procurement Management

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Objectives

After completing this lesson, you will be able to:

Define contract
Differentiate between centralized and decentralized contracting
Explain the different types of contract
Identify the key terms used in Procurement Management
Describe the Project Procurement Management processes

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Contracts

A contract represents a mutually binding agreement that obligates the seller to provide the specified products,
services, or results, and obligates the buyer to provide the monetary or other valuable consideration in return.
A contract can also be called an agreement, understanding, undertaking, or a purchase order.

There are at least two parties involved in a contract. The party that provides the goods or services is called the
seller and the party that buys the goods or services is called the buyer. The compensation can be in monetary
or any other form.

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Characteristics

A contract always has at least two parties.

A contract must be formal and in written, and it must have legal remedies, if either party fails to honor their
commitment, the other party can go to the court and appeal against the misdeeds. The legal processes being
cumbersome, both the parties, in case of dispute should try settling the differences among themselves or
through a mutually agreed mediatorsometimes called arbitrator.

Changes to contracts must also be subject to the same checks as the contract itself.

Larger organizations have full-time managers called contract managers or procurement managers. They are
the ones responsible for creating and managing contracts.

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Centralized vs. Decentralized Contracting

When all the contracts of the organization are managed by a central contracting or purchasing department, it
is called centralized contracting.

Sometimestypically, for large projectsthere can be a separate contract manager assigned to the projects;
this is called decentralized contracting. In decentralized contracting, the contract manager is assigned to the
project and reports are given to the project manager.

Both centralized and decentralized contracting methods have advantages and disadvantages.

Centralized contracting results in increased expertise in contracting and helps in standardizing the best
practices. However, it may be difficult to get assistance from the centralized contracting department as they
may be serving multiple projects.

In decentralized contracting, the project manager has more control and procurement process can be speeded
up. It gives easier access to contracting expertise, but it may result in duplication of contract related expertise
across multiple projects. It also prevents standardization and optimization of practices.

In some cases, both types of contracting are used. For example, suppose British Petroleum has a project of
setting up a new refinery plant in Nigeria. They might procure key machinery through their centralized

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purchasing department, and they can have a full-time contract manager for this refinery project who can
procure few items locally.

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Types of Contract

There are three types of contract. They are cost based, time and material based, or fixed price based.

Cost reimbursable type of contract is used when the scope is not clear for the buyer. In this type of contract,
the buyer carries the risk. To motivate the sellers, the buyer pays addition fixed fee, incentive, or award based
on the performance in addition to the actuals. Cost based contract can be further classified under various
other categories as well. For instance, cost plus a fixed fee, cost plus a percentage of cost, etc.

For example, suppose you want to construct a new building. You sign up with an architect. The architect
charges you a fixed fee of $50,000 plus all the costs incurred as fee for his services.

CPF: In case of cost plus fee, the seller will be paid actual plus a fee of about $1000, which is being agreed in
terms and conditions.

CPPC: In Cost plus percentage of cost the seller is going to get the money as per the actual plus percentage of
say 10% from the actual.

CPFF: Cost plus fixed fee is similar to CPPC instead of percentage a fixed fee will be paid.

CPIF: In case of cost plus incentive fee if the seller saves money from the estimated, the saved money will be
shared between the buyer and seller with some ratio. For example if estimated is $200K, the buyer to seller

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ratio is 80/20 and actual price is $150K. The saved money is $50K and the seller gets 20% of $50K, which is
$10K as incentive in addition to the actual price $150K.

CPAF: In case of cost plus award fee, the seller will be paid the actuals and if is meets the performance level of
the project as award. The award can be performance or early delivery. If this performance is not met then
award will not be paid.

Time and material (T and M) or unit price contracts are generally used for smaller projects, wherein customer
pays on per item or per hour or per day basis.

An example for such contracts can be call center contracts. Suppose, you want 5 people team to answer your
customer queries. A company in Bangalore can provide you call center executives for 25 dollars an hour
month, and the material cost.

Fixed price contracts (or lump sum contracts) are generally signed when the scope of the work is very clear.
For example, a new bridge needs to be constructed on a junction. The length and required strength of the
bridge is well defined. In such case, City Corporation can ask for fixed price proposal from the bidders.

FPIF: In fixed price contracts, sometimes an incentive fee is also introduced to incentivize the seller to
complete the work before time. For example, City Corporation can ask bidders to complete the bridge in 12
months. For this, they get a fixed price bid for $2.5 million. In addition to this, if the bridge is completed in less
than 12 months, they get $10,000 as incentive per week. Therefore, if they finish the bridge in 11 months, they
get $40,000 as incentives for completing 4 weeks before time.

FPEPA: Fixed price economically price adjustable type of contract is used where the project cost fluctuates
because of economic condition. For example in case of construction project, the raw material price varies over
a period. So here, the buyer and seller will have an agreement saying that whenever there is a variation in raw
material prices the contract will also be renewed.

FFP: Firm Fixed Price is used when the scope is clear and is in favor to buyer as the seller is carrying the risk.
Here any increase in the cost will be borne by the seller. If the buyer raises the change request, it can increases
the cost to the buyer.

You may want to pause and think of the scenarios in which you want to choose a specific type of contract. For
example, who bears the risk of cost escalation in a fixed price contract as opposed to a cost reimbursable
contract?

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Business ScenarioProblem

Scott is the Project Manager on a global project. His Project Sponsor is confident in his teams ability to finish
the project under budget and ahead of schedule, although the project is very demanding and critical to the
business. To manage the huge demand, Scott has to make a decision to procure additional resources. The
additional resources would be responsible for activities requiring more specific skills, which his project team
lack. The customer has an incentive clause in the projects agreement that yields a bonus for early completion.
Scott has a vision for the work the additional resources will complete, but there is also an opportunity to
expand their scope of work, especially if he runs into scheduling problems that will require him to crash the
critical path. What contract should Scott establish to procure the additional resources?

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Business ScenarioSolution

Although Scott wants to complete his project early so the team can receive the early completion bonus, he has
to pick a contract that is less risky, also one that makes sense based on the scope of work. Out of the available
contracts, the best choice for Scott is the Time and Material Contract. Time & Material Contract allows Scott to
have more flexibility. Fixed Fee contracts require a well-defined scope of work and Time & Material is the only
option that accommodates open-ended work arrangements.

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Types of ContractAdvantages and Disadvantages

Each type of contract has certain advantages and disadvantages.

The advantages of cost reimbursable contracts are that they turn out to be less costly than fixed price because
the seller is assured that the cost will be covered and carry lesser risk. Such contracts tend to be simpler to
draft.

The disadvantage is that the buyer needs to audit all the invoices and exercise cost control. Since the seller
makes more money if the costs go higher, there is no incentive for the seller to control cost and the buyer
carries the risk.

In case of fixed price contract, the advantage is that the seller tries to control the cost and the buyer does not
have to worry about managing the cost.

However, the disadvantage is that the seller can under quote initially less to get the contract and later try to
overcharge if there are any change requests to cover the costs. Therefore, the statement of work needs to be
drafted carefully as the seller may try to wriggle out of the commitment.

The time and material contracts are easy to create. Such contracts are suitable for resource augmentation
projects, where cost risk is shared by buyer and seller.

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However, there is no incentive of seller to control cost. Therefore, such situation requires the buyer to monitor
the work being delivered on a day-to-day basis and is suitable for small contracts only.

There may be business scenario based questions in the PMP exam, where a contract type has to be chosen
based on its advantages and disadvantages. So understanding the advantages and disadvantages of different
contracts will help you answer such questions correctly.

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Key Terms

Earlier to procuring goods and services by means of contract, the organization must identify what it requires.
In case it is not clear on the requirements, it can issue an RFI or request for information.

After receiving the RFI, the organization is aware of the process, and it can now issue an RFP or request for
proposal. The sellers can submit their proposals against RFP. RFP is also called as RFB or request for bids.

RFQ or request for quotation is issued for purchasing standard items off the shelf. In such cases, buyer
generally compares prices from multiple vendors and selects the lowest bidder.

Request for Bid (RFB) is used by the buyer to get bids from the shortlisted sellers.

Purchase order or PO is the simplest type of commercial contract. In such contracts, buyer mentions item
type, quantity, and price. PO is generally issued for small purchases.

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Earlier to procuring goods and services by means of contract, the organization must identify what it requires.
In case it is not clear on the requirements, it can issue an RFI or request for information.

After receiving the RFI, the organization is aware of the process, and it can now issue an RFP or request for
proposal. The sellers can submit their proposals against RFP. RFP is also called as RFB or request for bids.

RFQ or request for quotation is issued for purchasing standard items off the shelf. In such cases, buyer
generally compares prices from multiple vendors and selects the lowest bidder.

Request for Bid (RFB) is used by the buyer to get bids from the shortlisted sellers.

Purchase order or PO is the simplest type of commercial contract. In such contracts, buyer mentions item
type, quantity, and price. PO is generally issued for small purchases.

Statement of work or SOW defines the scope of the deliverables as per the contract. Generally, contracts are
drafted by the legal department, whereas SOW is drafted by the project team to define the deliverables
required as per the SOW. Its a good practice to make reference of SOW in a contract.

A quotation is a submission of a response by a vendor to a request from the buyer. A quote contains the
commercial terms for the work being done.

NDA stands for non-disclosure agreement. NDA is signed to maintain the confidentiality of the information of
each other. For example, as a seller, you have the right to know about the buyer, and by signing NDA, you

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abide by the agreement to not disclose the information with any of the sellers competitors. It is applicable for
the seller as well.

LOI or letter of intent is generally issued by the buyer to the seller. It indicates to the seller (without yet being
legally bound) that the buyer is interested in buying their services. For example, a buyer states that he or she
will purchase the software only when ten new additional features are integrated. The seller in turn gets the
buyer to sign LOI, so that he or she can be sure of buyers interest in purchasing the software after the
modification.

The key term T and C stands for terms and conditions. In any contract, there are various terms and conditions.
Similarly, a procurement agreement includes certain terms and conditions (T and C), and may incorporate
other items that the buyer specifies regarding what the seller should perform or provide.

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Some other legal terms that may be found in contracts are:

Force majeure: This clause essentially frees either party from the terms of a contract in the event of an
unforeseen incident that is outside the control of either party, such as a WAR or a RIOT or act of God, like
earthquakes or hurricanes.

Doctrine of waiver: Waiver is a voluntary act by a person or party that surrenders a legal right. For example, if
an insurance company has prior knowledge of facts that may bar its liability to pay compensation, but choose
to still collect premiums from the insuredthen it implicitly waives its rights to use that fact as an excuse to
refuse payment.

Privity of contracts: The doctrine of Privity implies that the contract cannot confer rights or obligations to any
party other than those directly involved in the contract.

Dispute resolution: In the event of a dispute regarding the terms of a contract, the parties need to stipulate
how those disputes would be resolved. Either they can choose to assign an arbitrator explicitly or they could
take legal action.

Termination for convenience of the buyer: These provisions allow the buyer to terminate the contract even in
the absence of a breach or default by the seller.

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Project Procurement Management

Project procurement management includes the processes required to purchase or acquire products, services,
or results that are needed from outside the project team.

So, by following the procurement management process, you can determine whether issuing a fixed price
contract is the right thing to do for the project, or a time and material contract should be issued. These
processes also guide on how to manage the contracts, once issued to the seller.

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Project Procurement Management Processes

There are four project procurement management processes. Plan procurement management belongs to
planning process group, conduct procurements belong to executing process group, control procurements
belong to monitoring and controlling process group, and close procurements belong to closing process group.

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Plan Procurement Management

Planning procurement is the first step in project procurement management. In this step, what needs to be
procured from outside the project is identified.

Once the items to be procured are identified, the next step in project procurement planning is to decide on the
procurement approach and identifying the potential sellers. Plan procurement management is, therefore, the
process of documenting project purchasing decisions, specifying the approach, and identifying potential
sellers. It belongs to the planning process group.

The inputs of this process are as follows. The project scope comes from the project management plan and the
requirements documentation, because what needs to be procured externally must be the part of the project.
You also need to make sure that you go through the risk register, because procuring from outside might
introduce additional risk.

Even though the project items are being procured externally, these items must be within the project schedule
and activity cost estimates.

Suppose, you have the project schedule ready for the whole project and some items are being procured
externally. Now, if the seller is not providing those items on time, it may delay the other dependent project
activities. This is why project schedule is an input to this process and when awarding the contract to a seller,
project schedule should be clearly communicated to the seller.

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Similarly, when you procure items externally, the seller price quotation should be within the cost estimates
created for the project.

The stakeholder register is record of what the project stakeholders need in making the determination about
what should be procured for the project.

Organizational process asset is the standard set of processes for procurement management, for example,
standard template for RFP, RFI, etc. Projects should use them.

Other inputs include activity resource requirements and enterprise environmental factors.

The technique for procurement planning is, make-or-buy analysis i.e., to decide whether the item to be
procured needs to be procured externally, or to get it done internally. For example, if you do not have
competency within the project, you have to look for a seller who can do this for you, this can be easier and
cheaper to buy than to build internally. In procurement planning, it is also important to know which contract is
best suited for the purpose.

Other techniques are expert judgment, market researchwhich helps in understanding what is available in
the marketand meetings for making decisions about procurement.

The key output of this process is the procurement management plan. Along with that, it is important to
specify what needs to be procured externally in the form of make-or-buy decisions and the procurement
statement of work. For the government projects, it is important to publish the source selection criteria to
ensure transparency in the procurement process.

Sometimes, some other procurement related documentations like RFP, RFI, etc. are also created as output of
this process.

Due to these decisions about procurement, there may be change requests raised on the project and updates
to the project documents.

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Conduct Procurements

Conduct procurement is the process of selecting the seller by evaluating the proposals submitted by different
sellers and awarding them a contract. It belongs to the executing process group.

Most of the inputs of this process are the outputs of the previous processes, such as procurement
management plan, procurement documents, make-or-buy decisions, source selection criteria, and
procurement statement of work. The addition to these is the seller proposals.

Once the procurement documents and qualified seller list are ready as part of the procurement planning
process, you can ask these sellers to submit their proposals against the RFP.

Project documentation and Organizational process assets help in conducting procurements.

Let us now look at the tools and techniques used in this process. Most of the sellers, when they get
procurement documents, usually have some doubt on the project scope. To ensure that all sellers get the
same information, you can organize a bidder conference, wherein all sellers can participate. In these
conferences, sellers put forth their queries, which are clarified by the buyers, and are conducted when all the
sellers are present. In this way, no seller has undue advantage of having information, which others might not
have.

Various other proposal evaluation techniques might be used.

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Suppose, four different sellers submit their proposals, which vary in the cost quoted. To evaluate the proposal,
you get the cost estimation done by an independent expert who can provide independent estimates.

Sometimes, advertisements are also used to reach the potential sellers. These techniques are used when you
do not have sufficient list of qualified sellers to submit proposal on your project. Analytical techniques might
be used to analyze the seller proposals received.

Once the qualified list of sellers is further narrowed down, negotiations are done with two to three best
vendors to finalize the contract to the winning vendor. The reason why more than one vendor is finalized,
because, the chosen best vendor might not agree on few terms and conditions, which you think is very
important. In such cases, you would want to keep your options open by negotiating with more than one
vendor.

The output of this process is obviously the selected sellers and the agreements or contract documents.

Along with this, change requests, resource calendars, and updates to project management plan and project
documents may also result from this process.

It is essential to study the process of conducting procurements to answer scenario based questions on this
topic.

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Control Procurements

Control procurements is the process of managing procurement relationships, monitoring contract


performance, and making changes and corrections to contracts as appropriate. It belongs to the Monitoring
and Controlling Process Group.

The key inputs to this process are procurement documents, agreements, and work performance data. Work
performance data has the information on the progress of the work, i.e., how much work is completed and the
cost incurred to complete that work. In this case, it has information like how much work is completed and
money spent to get that work completed as per the contract.

Work performance reports are the reports created by the seller on what they have completed. Change
requests that are approved may also be an input to the control procurements process.

The project management plan is also listed as input because the contract work should progress as per the
project plan.

There are several tools and techniques used for administering procurement.

The contract change control system is similar to a normal change control system, but used specifically for
managing changes to the contract. Usually, the process of making changes to the contract, i.e., contract
change control system, is listed in the contract document itself.

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The next technique is procurement performance reviews. This is the process of formally reviewing the seller
deliverables. This is also documented in the contract document. In many large contracts, the procurement
performance reviews are done once a month.

Sometimes unscheduled inspection and audits can also be performed by the buyer to ensure that seller is
following the processes that they claim they do. This is often done to ensure compliance. For example, as a
buyer you can have a policy that all your sellers should comply with ISO 9001:2008 standards. You can do your
own audit on seller to check whether they really comply with that standard or not.

Performance reporting is also one of the tools and techniques used in this process. Releasing the payment of
the work performed by the seller is also part of this process.

Sometimes buyer and seller may get into a dispute regarding a change. The seller may ask for additional
money for the change and buyer may claim that it is the part of the original scope. Such contested changes are
also called claims or disputes. The contracts usually have claims administration process to settle such disputes.
The best way to settle such disputes for the buyer and the seller is to sit across a table, negotiate, and agree on
a midway. Records, related to an agreement or contract, are kept carefully in records management system.

The key output of the process is the change request. In addition to this, project management plan updates,
organizational process asset updates, and project document updates also happen as part of this process,
because, if there were a delay in getting a contract deliverable, they would result in delay of the whole project.
Any such delay needs to be updated. Work performance information may be generated through this process.

It is advisable to study the process of controlling procurements to answer scenario based questions in the
exam.

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Close Procurements

Close procurements is the last process of the project procurement management. This is the process of formally
closing the contract and it belongs to the Closing Process Group

The input of this process is the project management plan and the procurement documentation, like contract,
RFP, performance reports, etc. These are the inputs, because all such documents need to be archived for
future reference purposes.

The key technique for this process is procurement audits. The aim of procurement audit is to identify
successes and failures of the contract administration process and use the findings for the lessons learned
documentation.

Any claims or disputes should also be resolved through negotiation before closing the contract.

The records related to the closed procurements must be maintained using the records management system.

The output of the contract closure is actual letter handed over by the buyer to the seller informing about the
contract closure or closed procurement.

Organization process assets also are updated because of this process, mainly the part, which covers lessons,
learned. It is advisable to study the process of closing procurements to answer scenario based questions in the
exam.

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ANSWERS:
S.No. Question Answer & Explanation
1 What is the primary objective of a.
negotiation? Negotiation should result in a positive
feeling on both parties so that their
commitment towards the contract is
assured.
2 You are in the process of selecting a c.
seller from the shortlisted ones and This is Conduct Procurements process. The
awarding a contract. The process will inputs to this process are the project
involve receiving bids or proposals and management plan, procurement
applying defined selection criteria to documents, source selection criteria, seller
select the seller(s) who is (are) proposals, project documents, make-or-buy
qualified to perform the work. Which decisions, and organizational process
of the following is not an input to this assets. Bidder conferences is the tool and
process? technique of this process.
3 You have been asked to assist the c.
contract manager in drafting the In cost plus fixed fee project, the seller can
contract for a large project with limited exercise control over the cost, rather than
scope clarity. What type of contract getting locked into a rate or a price. In a
would you suggest, such that your project with limited scope clarity, incentives
organization does not incur any are hard to define and agree.
financial losses?
4 A Cost Plus Incentive Fee (CPIF) a.
contract has an estimated cost of The estimated cost of project is $150K, the
$150K with a predetermined fee of actual cost of project is $120K. This implies
$15K and a share ratio of buyer to a net savings of $30K. The sharing ratio is
seller equal to 70/30. The actual cost 30% for the seller which is $9K. The total
of the project is $120K. How much value of the amount received by seller is =
savings did the seller make in total, $120K+$9K+15K = $144K (actual cost +
and out of total savings how much did incentive + fixed fee).
he make because of the incentive?
5 As a project manager of a construction c.
project, you are inviting requests for This situation presents a potential conflict
proposal from eligible vendors. Going of interest. The best option for the project
through the list, you find the name of manager is to discuss it with his project
your good friend and ex-colleague sponsor and then disassociate himself from
from university. He was a methodical, the process.
sharp student and excelled in his
subjects. What should you do next?
6 Which of the following is not an d.
advantage of a fixed price contract?

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Inflating the price to cover risks will only
result in increasing the price for the buyers.
This is definitely not an advantage.

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Lesson 13Project Stakeholder Management

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Objectives

After completing this lesson, you will be able to:


Define stakeholders
Identify different stakeholders on a project
Describe stakeholder classification models and stakeholder engagement assessment matrix
List the skills needed to manage stakeholders
Describe the Project Stakeholder Management processes

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Stakeholders

A stakeholder is anybody who has a stake in the project. A stakeholder may be an individual, a group, or an
organization, who may affect or be affected by or perceive to be affected by a decision, activity, or outcome of
a project.

Further, the nature of the impact can be positive or negative, thus giving rise to the notion of positive or
negative stakeholders.

Irrespective of whether a stakeholder is positive or negative, it is important to engage with the stakeholders
and get them involved in the project. This can make a critical difference to the success or failure of the project.
A single disgruntled stakeholder can bring the entire project to its knees, whereas an actively engaged and
influential stakeholder can have the opposite effect.

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Stakeholders (contd.)

There are several examples of stakeholders.

The project managers themselves are important stakeholders.

The project team members represent stakeholders in the project.

The senior management of the organization, which is working on the project, has a stake in the project.

The sponsor (i.e., the person or entity that provides the money and resources for the project and essentially
champions the project) is an important stakeholder.

The customer (which may be different from the sponsor) is a stakeholder as well. For instance, in many of the
projects in the social sector, the sponsor may be the government or a development agency, whereas the
customers would be the people who actually benefit from it.

The end users (which may be different from the customers or the sponsors) are stakeholders too.

The vendors or suppliers who provide goods or services to the project are important stakeholders.

People, whose lives may be impacted by the output of the project, are also stakeholders. For example, if a
highway project requires possession of privately owned land, people whose land is being taken away are the

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stakeholders. If the construction of a dam or water reservoir benefits the downstream farming communities,
they are the stakeholders here.

Competitors, who provide alternative goods or services, are stakeholders too.

Sometimes, environmentalists or other social groups may become stakeholders.

The government or political leadership may become stakeholders for projects in the public domain.

It is sufficient to state that there could potentially be hundreds of stakeholders for a large project. It is in the
interest of the project manager and the project team to clearly identify all such stakeholders up-front and then
actively manage them throughout the project.

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Classification Models for Stakeholder Analysis

Not all the stakeholders have the same amount of influence or power over the project. Therefore, the way to
manage each stakeholder needs to be calibrated based on a proper classification of the stakeholders. This is
the role of the classification model.

You can come up with a grid that maps the power of the stakeholders, the interest they have, the influence
they may have, or the impact that they can have on the project through the Power/Interest, Power/Influence,
or Influence/Impact grids.

It can be represented by mapping stakeholders to a power (or) interest grid. The diagram on the screen has X
axis which represents interest level and Y axis which represents the power level. Based on the various
combinations of power levels and interest levels, the grid can be divided into four quadrants.

The stakeholders on the top-right quadrant (with high power and high interest), need to be managed closely,
i.e., you have to monitor their involvement and engagement very closely. The stakeholders on the bottom-
right quadrant (with high interest, but low power) need to be kept in the loop, i.e., you should share
information with them and keep them regularly informed. The stakeholders on the top-left quadrant (with
high power, but low interest) can be managed by keeping them happy (for example, by making sure that their
interests and opinions are taken into consideration). The stakeholders on the left-bottom quadrant (with low
power and low interest) may be managed less actively, by simply monitoring how things are going with them.

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The Salience model describes classes of stakeholders based on their power (ability to impose their will),
urgency (need for immediate attention), and legitimacy (appropriateness of their involvement level). This is a
useful framework to guide the stakeholder management strategy on a project.

Practice creating power grids for business scenarios. This will help in understanding the level of engagement a
project manager needs to maintain with various stakeholders.

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Stakeholder Engagement Assessment Matrix

The stakeholder engagement assessment matrix allows visualizing the current and desired states of a
stakeholders involvement in the project.

The five levels of involvement are as unaware, resistant, neutral, supportive and leading.

Unaware is where the stakeholder is not aware of the project or its impact.

Resistant is where the stakeholder is aware of the impacts and is resistant to change.

Neutral is where the stakeholder is aware of the project and is neither supportive nor in opposition to the
project.

Supportive is where the stakeholder is aware of the project and its impact, and is supportive of the change.

Leading is where the stakeholder is aware of the project and impacts, and is actively engaged to ensure that
the project is successful.

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Stakeholder Engagement Assessment Matrix (contd.)

Let us now look at the matrix.

The table has one row per stakeholder identified. You place C in the column which best indicates the current
level of engagement for that stakeholder. Then you place D in the column which best indicates the desired
state of engagement. This table can be a quick visualization tool that helps understand where work has to be
done in the stakeholder management activities.

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Stakeholder Management Skills

Stakeholder management is both an art and a science. Since it involves dealing with people and people are
inherently non-linear and unpredictable, there is no one size that fits all strategies or tools that will work while
managing them.

However, a project manager may use few traits and techniques while managing stakeholders, which are
classified as inter-personal skills and managerial skills.

A project manager must possess good interpersonal skills, that is must invest the time and energy to build
trust. This involves multiple things, such as establishing a personal rapport, following through on
commitments, being punctual, etc. Once the trust is established, it helps in smoothing many difficult bends.

Conflict management is an important skill for a project manager.

While communicating with stakeholders, the project manager must practice active listening. They must not
assume that they have all the answers; instead, they should spend some time to understand the issues and the
stakeholders point of views. This alone can go a long way in smoothing ruffled feathers and building
constructive relationships.

Resistance to change is natural. A project manager must know how to convert that into a positive energy in its
favor.

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Managerial skills that may help in accomplishing the project objectives.

A project manager must be able to build consensus among the group. While absolute uniformity may not
always be possible (or desirable); the project manager must use techniques to ensure widespread discussions
and arrive at a path that the group can buy into.

The project manager must be able to influence peopleoften without necessarily being in the position of
authority.

The project manager must be skillful to negotiate agreements.

The project manager must be able to understand and modify organizational behavior in order to move the
project in a certain direction.

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There are four processes in Project Stakeholder management.

The first process is identify stakeholders, which is performed during the initiating process group.

The second process is plan stakeholder management, which is performed during the planning process
group.

The third process is manage stakeholder engagement, which is performed during the executing process
group.

The fourth process is control stakeholder engagement, which is performed during the monitoring and
controlling process group.

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Identify Stakeholders is the process of identifying the people, groups, or organizations that could impact or be
impacted by a decision, activity, or outcome of the project, analyzing and documenting relevant information
regarding their interests, involvement, interdependencies, influence, and potential impact on project success.
It belongs to the Initiating Process Group.

Clearly, the process of stakeholder management begins with the identification of the stakeholders in a project.

The first input is the project charter. The charter provides a high-level overview of the project, its customers,
and is a useful document to help you start with stakeholder identification.

The procurement documents help to identify the suppliers, and hence those are useful in identifying
stakeholders.

The enterprise environmental factors and the organizational process assets provide the context within the
organization and are useful for this process as well. It helps to identify the key people in the organization, who
may be interested, or be able to offer something for the project.

The tools and techniques for this process are pretty straight forward. Apart from identifying the stakeholders,
their interest in the project needs to be identified. This is done through stakeholder analysis, series of
meetings, and by consulting experts who can provide valuable guidance.

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The primary and only output of this process is the stakeholder register. The stakeholder register is a document
that enlists all the stakeholders on the project, their interest, how to ensure their involvement and
engagement throughout the project, and so on. This document will be generated in this process, and needs to
be updated as and when the project progresses.

It is essential to study the process of identifying stakeholders to answer concept based questions on this topic.

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Plan Stakeholder Management is the process of developing appropriate management strategies to effectively
engage stakeholders throughout the project life cycle, based on the analysis of their needs, interests, and
potential impact on project success. It belongs to the Planning Process Group.

The project management plan and the various subsidiary plans give valuable insights into the stakeholder
management strategy.

The stakeholder register is prepared during the identify stakeholders process.

The enterprise environmental factors and the organizational process assets provide the tools, templates, and
policies for devising the stakeholder management plan.

The tools and techniques for this process involve various analytical techniques, which are needed to analyze
various alternative strategies for dealing with the stakeholders. Expert judgment and meetings help to devise
proper strategy.

The outcome of this process is the stakeholder management plan, which lays down the procedure for
managing the stakeholders.

It may also affect other project documents. For instance, what you decide to do about the stakeholder
engagement may have a bearing on the communications plan or the procurement management plan.

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Manage Stakeholder Engagement is the process of communicating and working with stakeholders to meet
their needs or expectations, address issues as they occur, and foster appropriate stakeholder engagement in
project activities throughout the project life cycle. It belongs to the Executing Process Group.

The stakeholder management plan is an important input. It is the master plan, which guides the actions
related to stakeholder management.

The communications management plan contains information about the content, frequency, format,
technology, etc. that governs all aspects of communication on the project.

Change log is needed to communicate with the stakeholders on all aspects related to changes that occurred or
are likely to occur during the project.

The organizational process assets guide us with the normal operating procedures with regard to
communication, change management, etc.

The primary tools and techniques for this process are various communication methods.

It also involves interpersonal and managerial skills. The project manager and the team need to bring all these
skills to bear effective management of the stakeholder engagements.

Managing the stakeholder engagements may give rise to issues that need to be captured in the issue log.

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It may also give rise to change requests to the product or the project.

It may cause changes to the project management plan and various other project documents.

As you manage the engagements, it may trigger an update to the organizational process assets with items
such as records, reports, feedback, and lessons learned from these engagements.

In the PMP exam, you may get concept based questions. So ensure that you study the process of managing
stakeholder engagement to answer such questions correctly.

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Control Stakeholder Engagement

Control Stakeholder Engagement is the process of monitoring overall project stakeholder relationships and
adjusting strategies and plans for engaging the stakeholders. It belongs to the Monitoring and Controlling
Process Group

The inputs to this process are the project management plan, the issue log, which was generated in the
previous process, data related to the work being performed on the project, and various other project
documents (which may need to be shared with the stakeholders).

The information management systems provide tools to collect, consolidate, and present the information to
various stakeholders.

Expertise must also be sought from different stakeholders on how you should perform with this process.

Several meetings may be required to exchange and analyze information on stakeholder engagement and to
evolve corrective actions in this regard.

One of the major outputs of this process is the work performance information, which is the work performance
data that has been analyzed, interpreted, and presented in an easily comprehensible form. The other outputs
are similar to the manage stakeholder engagement, as this process may also give rise to change requests,
updates to the project management plan, project documents, and organizational process assets.

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ANSWERS:
S.No. Question Answer & Explanation
1 The power/interest grid is a tool b.
that helps to: The power/interest grid is a tool to determine
the most appropriate type of engagement with
a stakeholder based on an assessment of their
degree of influence and their interest in the
project.
2 Which of the following is the d.
best/preferred level during the Support is the best level of engagement.
stakeholder engagement?
3 A project has been in execution for c.
many months and you have been It seems like either the mode of
regularly sending updates to all the communication was not appropriate, or the
stakeholders as per the stakeholder might not have understood those
communications management communications about the project. So the best
plan. Suddenly at a phase-gate thing to do is to review these plans and see if
review, one of the stakeholders any changes are needed.
complains that she has not been
informed about the changes in the
project. What is the best thing for
you to do?
4 A project manager has recently a.
been assigned to a long running The stakeholder register lists the stakeholders
project and wants to know who are on a project and their involvement with the
the key influencers on the project project.
and what their level of involvement
is. The best document to get this
kind of information is:
5 What is the best way to manage b.
stakeholders who are extremely The low power, high interest stakeholders need
supportive and have a high level of to be kept informed, but they cannot
interest in the project, but do not necessarily become champions due to their
have a large influence on the low degree of influence in the organization.
project?
6 Which of the following is not an d.
input to the control stakeholder Change requests are an output of the control
engagements process? stakeholder engagements process.

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Summary

Here is a quick recap of what was covered in this lesson:

Stakeholder is an individual, group, or organization who may affect, be affected by, or perceive itself to be
affected by a decision, activity, or outcome of a project.

The different stakeholder classification models are power/interest, power/influence, or influence/impact grids
and Salience model.

Stakeholder engagement assessment matrix helps in visualizing the current and desired states of a
stakeholders involvement in a project.

Project managers need to demonstrate certain interpersonal and managerial skills to manage the stakeholders
and accomplish the project objectives successfully.

The four Project Stakeholder Management processes are Identify Stakeholders, Plan Stakeholder
Management, Manage Stakeholder Engagement, and Control Stakeholder Engagement.

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Conclusion

With this, we have come to the end of this lesson. In the next lesson, we will discuss process group view.

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Lesson 14Process Group View

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Objectives

After completing this lesson, you will be able to:

Describe the project management process


Explain the process group interactions
Identify how each process in project management functions
Describe the major data flows between project management processes

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Project Management Process

A project manager is supposed to fulfill a projects requirements, that is, to deliver a unique output in a timely
manner. It starts in the form of an idea that is approved by a project initiator or sponsor. The project manager
and the project team then elaborate their understanding of the requirements and produce the final
deliverable, which can be a product, a service, or a result.

Throughout the project, the project management team needs to ensure that the stakeholders are engaged in
the project and their expectations are being managed. The project management team also needs to ensure
that there is good communication between the project team and the stakeholders. In addition, the team
should make sure that the constraints of scope, cost, time, quality, and others are balanced.

In addition to producing deliverables, a project generates data. Such historical data, archives, or records are
important for planning future projects.

There are five major process groups in project management.

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Process Group Interactions

The five process groups in project management are initiating, planning, executing, monitoring and controlling,
and closing processes. The image shows how these process groups interact with each other. The initiating
processes occur only once during a project or a phase within a project, at the beginning, whereas, the closing
processes occur only once, towards the end.

However, planning, executing, and monitoring and controlling processes are repeated several times during a
project. The planning processes take information from the initiating processes and help to prepare an initial
baseline version of the plan. As the team starts execution, they understand the ground realities better. The
deliverables produced and the data of the progress are fed into the monitoring and controlling process group.

In the monitoring and controlling process group, the information generated during execution is processed and
utilized in three different ways. Firstly, it can be used for revising the plan, which is termed as re-planning;
secondly, it can be fed back into execution as defects or corrective and preventive actions or approved
changes; and thirdly, the information can result in the cancellation of the project or the successful completion
of the project upon validation of the deliverables produced.

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Initiating Processes

While discussing processes, consider it from the perspective of project manager or as part of the project
management team. This implies that you are essentially functioning in the integration management knowledge
area.

The initiating process includes two steps, which include getting the project charter approved and identifying
stakeholders.

Click each tab to learn more.

A project manager is concerned about getting the charter for the project approved. Project charter sets the
beginning of the project where the management has decided in its favor and is ready to commit resources for
it. The other process in the initiating process group is identifying stakeholders. The project manager and the
project team should know the stakeholders and their requirements, which is the starting point for planning.

You may get concept based questions in the PMP exam. So study the initiating process to answer such
questions easily.

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Planning Processes

Planning accounts for most of the processes in the project management framework. As many as twenty four
out of the forty-seven project management processes belong to the planning process group.

The basic objective of the planning processes is to produce the project management plan collectively. The
developed project management plan under integration management assimilates the output of all the planning
processes under various knowledge areas.

The project management plan is the collection of all subsidiary plans that address different aspects of the
project. The project management team integrates all these plans and ensures that they are in harmony with
one another. The team also prepares a blueprint of how the project needs to be executed, controlled, and
closed.

The planning process starts with scope planning, which is to understand exactly what you are trying to achieve.
This is translated into a project scope statement, which can be decomposed into a Work Breakdown Structure
or WBS, which forms the basis of other planning processes. Any change to the scope invariably has a bearing
on other parameters that can affect the project.

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Following the same logic, it is easier to understand how the planning processes in other knowledge areas such
as quality, cost, and time can influence the time that will be taken, the cost that will be incurred, and the way
quality will be managed.

To satisfy the scope, cost, time, and quality equilibrium, the project team needs to manage communications,
risk, stakeholders, procurements, and human resources. This is where the planning processes under these
knowledge areas come in.

All these planning processes interact with each other. Planning is an iterative activity that gets elaborated,
refined, and adjusted as more and more information about the project is discovered.

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Executing Processes

Planning without execution is futile, but execution without planning is fatal. However, in execution processes,
the project team spends a lot of time putting the plan into action. When you perform the executing processes,
you often blend the execution and controlling processes. Execution is all about performing the plan that is
producing the deliverables and providing information on the progress. Processing of this information and the
validation of the deliverables is a control function.

The executing process is the direct and managed project work, where the project manager essentially puts
certain mechanisms in place to ensure that the work is being carried out. The project manager primarily
focuses on ensuring that the procurements are conducted. These procurements are deliverables or services
that the project needs to buy from external sources. The project manager also needs to ensure smooth flow of
communication within the project team and with the external stakeholders. The manager should make sure
that stakeholders are engaged in the project, and that the processes for managing quality are being followed
correctly.

It is important for the project manager is to make sure that the right team is being used, they have the
knowledge and competencies to do the job, and they work together as a team. The project manager should
also manage the team to make sure they are positioned for success.

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Monitoring and Controlling Processes

Monitoring is observing and getting data about how things are going within the project, whereas, controlling is
taking actions to bring things back on track.

Monitoring and controlling apply to different aspects of project management. The image shows the various
areas of project management where monitoring and control applies. However, the knowledge area that has a
corresponding control process is human resources, because human resources should be managed, not
controlled.

An important aspect of controlling is having an elaborate mechanism to handle changes.

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Closing Processes

Closing processes bring a project or a phase within the project to an orderly conclusion. Only two knowledge
areas include a closing process. These are integration management and procurement management. Closing a
project or a phase falls under integration management and applies to the overall project. Before the project is
formally closed, all the procurements or contracts that are entered into for the project must be formally closed
as well.

Study the closing processes in detail to answer concept based questions in the PMP exam.

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Important Data Flows in Project Management

The image given on the screen is a valuable source of information that helps to understand how data flows
between the processes of project management.

The major repository of data and information in a project includes the project documents, which is at the
center of the image. Information can originate from four external sources. These sources are the organization
or enterprise, the customer, the project sponsor or initiator, and the sellers or suppliers to the project.

Observe how the five process groups interact with the different sources of information and then exchange
information internally. Please review the data flow diagram before the PMP exam as you may get questions
based on this concept.

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ANSWERS:
S.No. Question Answer & Explanation
1 A team is trying to determine the c.
interested parties in a project that Identifying stakeholders is the process in which
is about to start. Which process are the interested parties are identified.
they working on?
2 In which process group are change d.
requests approved or rejected? Change requests are processed in the perform
integrated change control process that is a part
of the monitoring and controlling process
group.
3 Which of the following is not an c.
input to conducting procurements? Conducting procurements is a part of the
executing process group where the basic
objective is to finalize the purchase decision
and issue agreements and contracts. Therefore,
contracts are the outputs and not inputs to this
process.
4 Which of the following is not an c.
expectation from a project The project manager is expected to perform
manager? the actions mentioned in options a, b, and d.
But the project manager is not a legal expert
and cannot be held accountable for ensuring
that the organizational policies are within the
legal framework.
5 What is the normal sequence in a.
which processes will be carried out The processes in a project are carried out in the
on a project? sequenceInitiating, planning, executing,
monitoring and controlling, and closing.
6 Which process group has accepted b.
deliverables as the output? The deliverables are produced in the executing
process group, but they are validated (accepted
or rejected) in the monitoring and controlling
process group.

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Summary

Here is a quick recap of what was covered in this lesson:

The project management process starts with an idea being approved by the project initiator or
sponsor. The project manager and the project team then understand the requirements and produce
the final deliverable.

The five process groups in project management are initiating, planning, executing, controlling, and
closing processes.

The objective of the planning processes is to produce the project management plan collectively.

Execution deals with performing the plan to produce the deliverables.

Information originates from four external sources. These are the organization or enterprise, the
customer, the project sponsor or initiator, and the sellers or suppliers.

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Conclusion

With this, we have come to the end of this lesson. In the next lesson, we will discuss professional and social
responsibility.

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Lesson 15Professional and Social Responsibility

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Objectives

After completing this lesson, you will be able to:

Explain how to ensure individual integrity


Identify ways to contribute to project management knowledge base
Explain how to enhance professional competence
List the ways to promote stakeholder collaboration

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Ensuring Individual Integrity

The Project Management Institute or PMI expects project managers to display a high standard of integrity.
Project managers should always demonstrate this by giving a true picture about the project status. The project
status reports should not try to conceal discomforting facts about the project. Project managers should always
report the truth even if it shows the project in a bad structure.

The managers should also respect copyright rules and never use unlicensed products. They should deal with
conflicts pro-actively. The project managers should stay away from illegal activities like accepting or giving
bribe to get the work done. However, what is considered as bribe in one country might be legal in another.
Therefore, project managers should judge all such payments with respect to the local laws and normally
accepted standards of fairness.

A project manager should treat everybody with respect and prioritize the interests of the project over personal
interests. They should make use of their knowledge and try to follow the right process in doing the right thing
for the project.

Project managers should maintain the confidentiality of information and never disclose company information
to any unauthorized parties. Similarly, intellectual property rights must be respected.

The PMI has published a code of conduct for certified project managers. This code of conduct can be accessed
from the PMI website. There are two reasons why project managers should be aware of the code of conduct.

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One reason is that they will have to agree and abide by it as a PMI member and/or a certified professional. The
second reason is that it will help them answer any question in the exam that tests the professional and ethical
responsibilities of a project manager.

Understand the individual integrity required in project managers to answer questions that test professional
and ethical responsibility.

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Business ScenarioProblem

You are the project manager for a global project. The project is being delivered in another country and most of
your team members are spread out across multiple regions. Your Project Sponsor is confident in your teams
ability to finish the project under budget and ahead of schedule. This is great because the customer has an
early completion incentive linked to the project. After using parametric estimates in the planning process and
developing a well-documented basis of estimates, the project begins reaping the benefits of the investment
made at the planning phase because the CPI has been trending over 1.3 in the past 4 project team meetings. In
addition to being under budget, the project is also under schedule with an SPI 1.2. After your on-site meeting
with local officials about the status of the project, one of the officials pulls you aside to have a conversation.
He tells you that he could ensure the next phase of the project is completed immediately if you agree to pay
him $250 in US currency. What should you do as the project manager?

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Business ScenarioSolution

You want to keep your project on this positive path because it will help your career. Further, your project team
will be happy to earn an incentive for their hard work. The offer is a great way to ensure the incentive is
awarded. Unfortunately, paying the official the money would be considered as bribe. Therefore, the next steps
would be for you, as the project manager, to meet with the sponsor and discuss the offer made by the official.

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Contributing to the Project Management Knowledge Base

As a practicing project manager, you are expected to contribute towards the growth of the project
management profession. You can do this in a number of ways.

You can share the best practices learned during your project with other project managers in your organization.
You can also mentor the team members on project management concepts.

You can write blogs on your project management experiences for the benefit of the wider audience or
participate in project management discussion groups. This will help you to accumulate professional
development units PDUs that are required to renew your certification.

PMI emphasizes on archiving lessons learned and data from past projects, because it helps building a
knowledge base, which is the foundation for enhancing project management competence. Therefore, a project
manager must actively participate in archiving, analyzing, and using metrics and data from the projects.

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Enhancing Professional Competence

The Project Management Institute expects practicing project managers to work on their strengths and
weaknesses and increase their project management competence.

The project managers should analyze their strengths and weaknesses. They should identify a senior project
manager as their mentor and discuss their day-to-day project management problems with the latter. The
mentor will help the project managers assess their weak areas and raise their competence on such areas.
Learning on the job or applying their knowledge on projects is a wonderful way in which project managers can
improve their skills.

Reading books on project management tools and techniques is another way project managers can enhance
their competence. The project managers can also subscribe to project management journals that have good
case studies about the projects across the globe.

Discussing challenges and issues with their peers and colleagues in the project management profession is a
good way of raising professional competence.

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Business ScenarioProblem

You wrapped up a project 3 months ago that produced parts for one of your service customers. You
successfully gained final acceptance and signoff by the customer on the deliverable. Managing the project
went well because your parts consistently met your quality metrics, fitness for use tests and passed all control
charts. There was no indication of issues with quality and grade that would prompt a need for change. A fellow
project manager in the company is preparing for a similar project with a different customer and they want to
meet with you to glean insight on what to expect. During your meeting, you discover an error in the results
communicated in the deliverable that may potentially turn into a safety issue in the future. The risks involved
with these newly discovered safety issues are very small. How should you handle this?

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Business ScenarioSolution

You should first get in touch with your old Project Sponsor and management to communicate your findings
both verbally and in writing (formally). Then you and/or the sponsor should communicate your findings to the
customer. According to PMIs Code of Ethics and Professional Conduct, you must uphold the policies, rules,
regulations, and laws that govern your work, professional and volunteer activities.

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Promoting Stakeholder Collaboration

Stakeholder collaboration is the key to project success. Being a project manager, you should ensure that
stakeholders are informed about the project benefits and they extend all possible support to make the project
successful.

Some activities can be proactively performed to promote stakeholder collaboration. Resolving competing
interests is one of them. Remember, any scenario that puts your personal interest and the interests of the
project at odds with each other, is in a potential conflict of interest and be handled carefully.

Taking charge and dealing with conflicting scenarios is another action that needs to be taken. Respecting
cultural differences that may occur when projects span geographies and keeping stakeholders informed about
the true status of the project are other activities that a project manager needs to perform.

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Business ScenarioProblem

The Deere Company prides itself on providing excellent customer service and providing high quality work. This
brand strategy has served the company well because they maintain a strong customer loyalty record. The area
that hurts them at times is the fact that some of their products are at a lower grade. Jim is a project manager
at the company and he is leading a computer build out project for one of their repeat customers. The project is
nearing its completion date and it is time to check the correctness of the computer build out. During the
evaluation, it is brought to Jims attention the systems speed is not fast enough for the software to function as
designed. A team member suggests they increase the systems speed by 10% as a courtesy to the customer
since they have excess parts and it will not cost the company any additional dollars. In addition, there were
issues on the last project worked for this customer and this would be a great way to make up for the past
problems. What should Jim do?

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Business ScenarioSolution

The additional speed would make a huge difference and allow them to meet their defined quality metrics and
fitness for use requirements. However, if Jim allows the systems to be upgraded without talking to the
customer and getting their approval and the change documented, this would be a violation of his PMI ethical
code because this is considered gold plating.

Study the business scenarios to get familiar with questions that test professional and ethical responsibilities.

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ANSWERS:
S.No. Question Answer & Explanation
1 You are about to send a deliverable a.
to your customer when you realize It is ethically incorrect to send a deliverable
there is a defect. The customer with a defect to the customer. The best option
may probably not notice it, but it is is to communicate with the customer and send
not in accordance with the the deliverable only if they agree.
contract. What should you do?
2 What activity should a project a.
manager perform when confronted When a project manager is not clear about the
with a situation in which a business processes in a foreign country, it is
payment to facilitate an activity is necessary to seek legal advice to ensure such
advised by a liaison agent, for a payments are legitimate and not construed as a
project with a foreign destination bribe or an illegal practice.
country?
3 A university has contacted you to b.
aid in its research. This assistance Never disclose the information without the
will need you to provide it with permission of its source or owner. According to
some client data from your files. the PMIs Code of Ethics and Professional
What should you do? Conduct, you should maintain the
confidentiality of the information.
4 You are on a time and materials d.
contract. You have finished your According to the PMI's Code of Ethics and
work product an hour earlier than Professional Conduct, you should provide
expected and can go home. accurate and truthful representations in your
However, the billing was expected reports. You should submit your billing for the
for full eight hours and would actual hours worked.
affect income goals. What should
you do?
5 There is a previously scheduled c.
project status review meeting and It is unacceptable to counsel a team member in
one of your team leads sends you front of others. So the best option is to
his report just an hour before the postpone the meeting and ask the team lead to
meeting. You find unacceptable fix the report.
discrepancies within the report.
What should you do?

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Summary

Here is a quick recap of what was covered in this lesson:

The Project Management Institutes (PMI) Code of Ethics and Professional Conduct should be followed by
project managers during a project.

Project managers can contribute to the project management knowledge base by actively analyzing past project
data and compiling project management related metrics to be used within the organization.

The project managers should analyze their strengths and weaknesses, and look for a senior professional to
mentor them on areas where they need to improve.

The project managers should always keep stakeholders informed about the true status of their projects. This
will help to promote stakeholder collaboration.

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Conclusion

An appendix listing all the knowledge and skills in the latest examination content outline follows this lesson.

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Lesson 16Appendix: PMP List of Knowledge and Skills

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Objectives

After completing this lesson, you will be able to:

List all the knowledge and skills according to the latest PMP exam content outline
Describe briefly the cross-cutting knowledge and skills

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Knowledge and SkillsExisting

PMI expects the project manager to possess these knowledge and skills to perform the tasks mentioned in the
examination content outline and make the project a success.

We will first briefly discuss the knowledge and skills in the older exam outline and then look at the newly
added ones in later screens. As these knowledge and skills have already been discussed in detail in earlier
lessons as well as the PMBOK, only a brief description of each is presented here.

The elements of a project charter are:

Project purpose or justification


Measurable project objectives and related success criteria
High-level requirements
Project description and risk
Summary milestone schedule and budget
Key stakeholder list
Project approval requirements such as what constitutes success, who decides it, and who signs off the
project
Assigned project manager, their authority level, and responsibility
Name and authority of the sponsor or other persons authorizing the project charter

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Estimation tools and techniques for schedule, effort, and cost estimation include analogous and parametric
tools, as well as three point estimation or PERT. You can also use simulation methods, such as Monte Carlo.

Cost management planning provides guidelines on estimating the cost at the activity level, deciding which
estimation technique to use, determining the overall budget, and tracking expenditure. It also covers the
frequency of monitoring and the contingency reserve.

Communication management plan describes the communication-related needs of stakeholders, and how to
manage and control communication.

Human resource planning provides guidelines to assign roles and responsibilities, acquire the team, release the
team, set safety and compliance for employees, and define skill levels required to make the project a success.

Procurement planning outlines processes to select vendors, award contracts, monitor and control
procurement-related activities, and close procurements. It also covers contract types and source selection
criteria.

Quality management planning provides guidelines on how to perform quality assurance using quality auditing,
and measure the quality of deliverables using quality control processes.

Requirements gathering techniques include planning sessions to decide who should be involved, decide who
will be the facilitator or moderator, schedule meetings, and plan the agenda for the meetings. Teams also use
brainstorming techniques to generate ideas. Focus groups involve bringing together prequalified stakeholders
and subject matter experts to elicit their expectations, opinions, and attitudes for a proposed product, service,
or result.

Risk management planning provides guidelines for risk management, identifying risk using different
techniques, performing risk analysis, selecting risk response strategies, and controlling risk.

Scope deconstruction tools include the Work Breakdown Structure, which involves the decomposition of scope
into smaller components called work packages; and scope backlog, which is a list of all requirements for an
iterative project lifecycle.

Scope management planning offers guidelines to collect requirements, define the scope, decompose the scope
into manageable components, accept deliverables after validation, and control the scope.

Time management planning describes estimation techniques for scheduling and effort estimation, such as
critical path. It also covers strategies to maintain the project schedule, and track and review project progress.

Work flow diagramming techniques help to graphically represent the flow of activities and the dependencies.
Examples include flowcharts or network diagrams.

Continuous improvement processes are performed throughout the project by conducting process analysis,
including removing bottlenecks, identifying redundancies, and others.

The elements of a statement of work are business need, product scope description, and strategic plan.

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Knowledge and SkillsExisting (contd.)

Project budgeting tools and techniques include revenue projection model, forecasting, expense budgeting,
cash flow for a given period, depreciation calculation, and profit and loss maintenance. Organizational tools or
Excel sheets are used for the purposes of budgeting, accounting, and controlling.

Quality standard tools include fishbone diagram, control charts, flow charts, scatter diagram, run charts,
Pareto charts, and check sheets. These help in measuring quality and matching it with the standard. Deviations
from the standard require corrective and preventive action to be taken.

Performance measurement and tracking techniques such as earned value management provide a comparison
between planned and actual values. Based on this, we can predict the future of the project from time and cost
perspective.

Project control limits like tolerance and threshold are to be set for every parameter. Tolerance is the limit to
which deviation can be withstood, for example a 10% for the project timeline. Threshold is the level beyond
which corrective action has to be taken, for example, the threshold for the timeline can be set as 15%.

Risk identification techniques, including SWOT analysis, assumptions analysis, documentation reviews and
analysis, can be both qualitative and quantitative. Qualitative techniques help in prioritization and quantitative
techniques provide the numerical value for the project objectives, that is, the contingencies.

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Risk response techniques differ based on positive and negative risks. Negative risk responses are Avoid,
Transfer, Mitigate, and Accept. Positive risk responses are Exploit, Share, Enhance, and Accept.

Archiving practices and statutes outline a set of practices based on organizational rules to store documents
and materials once the project is closed.

Compliance requirements are defined at the country and organizational levels. These include regulations,
standards, culture, practices, and law.

Contract closure requirements include the mode of payment, deliverables acceptance and sign-off procedures,
and Terms and Conditions mentioned in the contract.

Close-out procedures are the steps performed either due to the termination or successful completion of a
project. Some of the steps are Final Acceptance, Sign-Off, Contract Closure, Lessons Learned Documentation,
Archival of Documents, and Customer Satisfaction.

Feedback techniques use different formats such as face-to-face, written, or survey types. The frequency of
feedback collection and the format have to be agreed on.

Project review involve meetings, or using software such as MS project, and EVM techniques.

Transition planning and techniques are defined in the project management plan; transition can happen at the
end of every deliverable or at the end of the project. The transition plan defines how, when, where, what, and
between whom the transition occurs.

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Knowledge and SkillsNew

Analytical skills refer to the ability to visualize, analyze, break down complex problems, and solve them,
followed by decision making. The project manager needs analytical skills especially during the initial stages of
the project when there are more unknowns.

Benefit analysis helps justify the business case, and results in the decision: whether to start or continue the
project under consideration. Benefits analysis is done during project initiation and at the start of each project
phase.

Strategic management is required to achieve project deliverables as well as realize benefits, and meeting
organizational goals.

Change management planning outlines procedures to manage, track and document change requests, and
describes the conditions for approving change requests, and the tools that can be used.

Different types of contract are fixed price, cost reimbursable, time and material contracts. The contract type
depends on the scope and whether the project will be outsourced. Selection criteria are developed to rate
seller proposals and can be either objective or subjective. For this technique, the project follows existing
organizational practices.

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Lean methodology involves reducing waste to improve efficiency. This is a continuous improvement process,
which can be adopted within the project.

Regulatory requirements to consider during planning include government and industry standards that may
impact the project outcome. Environmental factors such as the weather, available infrastructure, and
economical factors are also considered.

Contract management techniques include defining the contract, terms and conditions, and negotiations with
vendors. It is important for the project manager to read, understand, and agree on the project contract.

Interdependence among project elements cover how the change in one element can affect the other and so
affect the project outcome.

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Knowledge and SkillsNew (contd.)

Vendor management techniques involve selecting the best sellers based on source selection criteria. Project
managers use them during procurement-related activities for the project.

Process analysis techniques help identify better or faster ways to perform work, that is optimize the process.
Process analysis involves the application of tools and methodologies such as Lean, Six Sigma, and Kanban.

Project finance principles cover the different project selection methods using parameters such as PV, NPV, IRR,
and other cost and earned value calculation techniques.

Project quality best practices and standards provide the mechanism to align to the industry or government.
ISO, or international organization for standards, is designed to help organizations ensure that they meet the
needs of customers and other stakeholders while adhering to statutory and regulatory requirements. The
CMMI Institute helps organizations discover the true value they can deliver by building capability in their
people and processes.

Quality validation and verification help ensure processes are performed in accordance to expectation, follow
best practices, and measure the project output to verify if deliverables meet the standards. The techniques
include quality audits, process analyses, problem analysis using check sheets, fishbone or scatter diagrams, and
run, bar, control, and Pareto charts.

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Performance measurement techniques involve using parameters to decide the acceptance, rejection, or
satisfaction criteria. Key Performance Indicators or KPIs include SLAs and baselines. Success factors include key
deliverables, and organizational benefits.

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Cross-cutting Knowledge and SkillsExisting

Active listening is an important interpersonal skill the project manager needs to manage stakeholders.

Brainstorming is a data gathering and idea generating technique used to identify risks and problem areas, and
devise solutions. It generally involves a group of team members or subject matter experts.

Change management involves change control boards, expert judgment, and meetings between different
stakeholders. The outcome of these meetings are either approval or rejection of the change requests.

The potential number of communication channels within the project environment can be calculated using the
formula n into n-1 by 2. Tools and techniques used for communication are face-to-face communication, video
conferencing, teleconferencing, and social media. Communication methods can be interactive, push, or pull.

Conflict resolution techniques include different resolution methods such as, problem solving, forcing, avoiding,
smoothing, and compromising.

Data gathering techniques are used to collect, organize, and present data and information.

Decision-making can be on an individual basis or with a group of stakeholders. If a group is involved, it is called
group decision-making.

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Facilitation techniques have broad applications within project management processes and guide the
development of documents such as the project charter. Brainstorming, conflict resolution, problem solving,
and meeting management are some of the key techniques used by facilitators to help teams and individuals
accomplish project activities.

Information gathering techniques include brainstorming, interviewing, the Delphi technique, and root cause
analysis.

Leadership involves focusing the efforts of a group of people towards a common goal and enabling them to
work as a team.

Negotiating means holding discussions with stakeholders to get the best resources, budget, and timeline in a
win-win proposition. Influencing is a strategy of sharing power and relying on interpersonal skills to get
stakeholder and team member buy in towards common goals.

Presentation tools and techniques include visual aids such as pictures, videos, dashboards, traffic lights, stores,
tubes, and so on.

Prioritization is to order deliverables and activities based on stakeholder and business needs. In doing this,
time management plays an important role, that is, activities and deliverables are prioritized based on the
project schedule.

Problem-solving techniques include brainstorming, SWOT analysis, fishbone diagram, and Five Whys. Steps to
follow in problem solving are: Define the problem, Generate alternatives, Evaluate and select alternatives, and
Implement solutions.

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Cross-Cutting Knowledge and SkillsNew

Applicable laws and regulations include labor law, country-specific standards, guidelines, and statutory
requirements. The project manager has to keep jurisdiction-appropriate laws and regulations for project
contract considerations.

Benefits realization is a set of processes defined to ensure project deliverables are aligned with organizational
strategies and create value. Note that the new examination content outline lays particular emphasis on
benefits realization, in addition to the earlier focus on meeting project deliverables.

Business acumen is an individuals quickness and aptitude to understand the business situation and choose an
appropriate response, and is an important skill for a project manager to possess.

Coaching is a means of developing the project team to higher levels of competency and performance.
Mentoring is guiding less-experienced people to reach the next level. Training is a formal or informal method
to enhance the teams skill levels. Motivation involves creating an environment in which the project objectives
are achieved while keeping the teams morale high. All these fall under interpersonal skills necessary for the
project manager.

Configuration management is a collection of procedures used to track, monitor, and manage project artifacts
such as hardware, documentation, software code, and drawings.

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Customer satisfaction metrics are set by identifying parameters that help to measure whether the customer
requirement is fulfilled. Some of these metrics are standards, technical specification, and Service Level
Agreements.

Delegation is assigning an activity to the appropriate team member or stakeholder and is an important skill as
project managers themselves cannot execute all the activities.

Emotional intelligence is the capability to identify, assess, and manage ones own emotions and that of other
people, as well as the collective emotions of a group. Emotional intelligence, an interpersonal skill, requires
the project manager to be aware of and sensitive to people, their culture, and background.

Expert judgment is provided based on expertise in an application area, knowledge area, discipline, or industry,
as appropriate for the activity being performed. Such expertise may be provided by any group or person with
specialized education, knowledge, skill, experience, or training.

Generational sensitivity and diversity refers to understanding team members belonging to different age
groups, and also be sensitive to the skill and cultural diversity within the team. The manager can establish a
good rapport with team members with the help of one-on-one meetings and organizing team activities.

Interpersonal skills refer to the ability to establish and maintain relationships with other people. This includes
leadership, team building, motivation, communication, influencing, decision-making, political and cultural
awareness, negotiation, trust building, conflict management and coaching.

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Cross-Cutting Knowledge and SkillsNew (contd.)

Knowledge management entails having an understanding of the DIKW or Data-Information-Knowledge-


Wisdom model. This model is used to generate data, gather information and create reports on work
performance. Knowledge management is added newly in the fifth edition.

The lessons learned management technique refers to the documentation of the knowledge gained during a
project showing how project events were addressed or could have been addressed with the aim of improving
future performance. According to the latest guidelines, the lessons learned technique must be performed
throughout the project. This is also part of continuous improvement.

Meeting management techniques involve preparing an agenda, setting ground rules, and dealing with conflicts,
and other meetings-related duties.

Organizational and operational awareness refers to situational awareness based on organizational practices,
and is an enterprise environmental factor.

Peer-review process is performed by people at the same level of expertise and is a horizontal channel of
feedback.

Relationship management refers to managing relations with customers, suppliers, and other stakeholders and
ensuring smooth communication.

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Risk assessment techniques cover qualitative and quantitative risk analysis using different tools such as
decision trees, Monte Carlo simulation, and probability and impact assessment.

Situational awareness refers to an understanding of current trends and practices in law, culture, skills,
technology, as well as changes within the organization.

Stakeholder management planning refers to different strategies to engage with stakeholders, which vary from
stakeholder to stakeholder. The five levels of engagement are: Unaware, Resistant, Neutral, Supportive, and
Leading.

Team building techniques are used throughout the project to ensure they communicate and operate efficiently
and deliver value to the customer.

Virtual or remote team management involves managing the team when it is spread across different locations,
time zones, or shifts.

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Thank You

This concludes the PMP Certification Course offered by Simplilearn.

Thank you and happy learning!

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PMP Certification Training

Brain Dump for PMP Preparation

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Simplilearn Classroom Exercises

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Project Management Framework

Exercise 1: Enterprise Environmental Factors vs. Organization Process Assets

S. No. Items Enterprise Organization Process


Environmental Factors Assets
1 Historical data of past projects
2 Local regulatory requirements
3 Organizations process documents
4 Political scenario of the country
5 Organizations culture
6 Standard organization templates
7 Economic scenario of project location
8 Trainer/Participants to identify three
more EEFs or OPAs
9
10

1. Identify which of the above is Enterprise Environmental Factors (EEF) and which is
Organizational Process Assets (OPA).

2. Identify couple of more EEFs and OPAs

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Project Management Processes

Exercise 2: Execution vs. Monitoring & Controlling

S. No. Items Execution Monitoring &


Controlling
1 A team member approaches the
Project Manager to getting their
doubts clarified.
2 Weekly status review meetings to go
over project progress.
3 Daily team meetings with the Project
Manager to reinforce that each of the
team members are aware of their
daily task.
4 Organizing training for team
members.
5 Quality audits
6 Quality control
7 Team members appraisal
8 Testing a deliverable

Identify which of the above items are Execution related works and which ones are Monitoring & control
work.

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Project Selection Methods

Exercise 3: Net present Value

The following table indicates the yearly revenues of a 5 year project. The cost of capital is 10% and the
initial investment is $10,000. What is the Net Present Value of your project?

Years Revenue Present Value


0 0 -10,000
1 1000
2 2000
3 2000
4 5000
5 2000

Exercise 4: Benefit to Cost Ratio

The present value of your project revenues is calculated to be $80,691. The present value of the project
costs is calculated to be $51,265

What is the benefit to cost ratio?

Exercise5: Breakeven Analysis

The estimated cost of a project is $10 million. The project is expected to yield $2 million per year. What is
the breakeven point?

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Project Integration Management

Exercise 6:

Align the sub processes with the appropriate major process group

Develop Project Charter Monitoring and Controlling


Collect Requirements Executing
Define Activities Initiating
Control Communications Planning
Identify Stakeholders Monitoring and Controlling
Conduct Procurements Planning
Validate Scope Initiating

Connect each sub process with a major project management process group.

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Project Scope Management
Exercise 7:

Create a WBS code of accounts numbering scheme.

Web Site Project


Infrastructure
Design
Contact
Blogs
Surveys
Develop Survey Template
Site Documentation
Updates
Training
Test

Exercise 8:

Arrange the following WBS components into a box type WBS structure.

Project Move the Office to a new location


Office Move

Office Layout

Office Equipment

Physical Move

Layouts drawn

Office layout proposal

Telephone system

Computer services

Pack personal materials

Move office furniture

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Project Time Management
Exercise 9:

Referring to the following table, determine the cost to crash the project schedule to 7 days

Task Duration Predecessor Normal Cost Crash Cost Max Crash


days
A 3 - $1,500 $300/day 1
B 5 A $1,000 $200/day 2
C 4 A $2,400 $300/day 2
D 3 B $1,100 $100/day 1
E 2 C $ 500 $100/day 1

Exercise 10:

A project activity has been determined to have the following potential durations:
An optimistic completion time of 12 days, a pessimistic completion time of 25 days and a most likely time of 15
days. What is the estimated activity duration using the weighted average technique?

Exercise 11: Network Diagram

Construct a network diagram using the following information

Task name Predecessor Duration


A None 5
B None 6
C A 2
D A,B 5
E B 4
F C,D,E 4

a) What is the critical path?


b) What is the project duration?
c) What is the float at task C?
d) What is the early start of task E?
e) What is the late finish of task A?

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Project Cost Management

Exercise 12: Earned Value Drill

Complete the table using earned value formulas to determine Cost variance, Schedule variance, Cost
Performance Index and Schedule Performance Index

EV AC PV CV SV CPI SPI
1000 1000 800
1000 800 1200
1200 1000 1200
1200 1400 1000
400 600 800
800 900 800

Exercise 13:

The project Earned value is 100,000. The Planned Value is 120,000. The actual cost is 115,000. The Project
BAC is 175,000. Calculate the EAC based on CPI.

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Project Quality Management

Exercise 14:

Refer to the control chart below and provide an interpretation of what is happening with this process?

Exercise15:

What are the four components of the Deming / Shewhart Chart?

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Project Human Resource Management
Exercise16:

Identify the 5 Levels of Maslows Hierarchy of needs:

Exercise17:

List the 5 stages of Team Building. Also explain what occurs in each of the phases.

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Project Communications Management
Exercise 18:

Your team increases in size from 12 members to 15 members. You are now managing a team of 15
people. What is difference in the total number of communications channels, including yourself and your
team members, between the original team and the team after the increase?

Project Risk Management

Exercise 19: Expected Value

Referring to the information provided in the table, determine the net path value for each scenario and
calculate the expected value of building the new plant.
Situation: You must determine the expected value of the decision to build a new plant. The cost to build
the plant is $120 million. There are two probable outcomes. A 60% chance of a strong market which will
result in a $200 million reward and a 40% chance that there will be a weak demand resulting in a $90
million reward.

Decision Cost of decision Scenario Net Path Value Expected value


probability and
Reward
Build new plant $120 million 60% Strong
Demand
200 million
reward

40% Weak
Demand
90 million
reward

Expected monetary value of the build new plant decision _______________.

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Exercise 20: Risk Response Examples

S. No. Risk Response Examples


Method
1 Avoid
Do not travel to avoid accidents.



2 Transfer
Buying insurance coverage



3 Mitigate
Putting new team members through training




4 Accept
Creating contingency plans


Identify more examples of each type of Risk Response method.

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Project Procurement Management

Exercise 21:

Using the following information, determine the total price to be paid by the customer.
This is a Cost Plus Incentive Fee Contract. The sharing ratio is 80/20. The target cost is 150,000. The price
ceiling is 180,000. The target profit is 10,000. The actual cost of the project was 140,000.

Exercise 22: Identifying Suitable Contract Types

S. No. Contract Types Scenario


1 Cost Based Contracts Hire a lawyer to represent your case


2 Time and Material Signing up with a training company



3 Fixed Price Large outsourcing contracts



Identify more examples of each of the contract types.

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Project Stakeholder Management

Exercise 23: A Google Earth for the body

The symptoms werent too hard to spot. Left to contend with nearly 11,000 inpatient beds and more than
65,000 outpatient visits per year, the doctors at Thy-Mors Hospital in Copenhagen, Denmark were
suffering from information overload. Operating on a tight schedule, they have to mentally download and
process entire medical histories from files scattered across systems, take in what patients say, and then
make decisions that can literally mean life or death.

Looking for a way to incorporate all that stray information, the hospital kicked off the development of
new medical imaging software developed by IT giant IBM at its research lab in Zrich, Switzerland.
Heralded as a Google Earth for the human body, the ground-breaking technology lets doctors click on
any part of a 3-D avatar of the human body to trigger a search of medical records.

The system was dubbed intelligent electronic patient records, but its really a complete encapsulation of
each patients current chart and medical history in a transparent body model that can be rotated,
magnified and written on. I can see much more information than just what the patient tells me is
bothering him or her that dayinformation for which I would otherwise have to spend considerable time
searching through our current records system, says Dr. Hardy Christoffersen, head of the hospitals
surgical outpatient clinic.

The technology can help doctors spot data that may be indirectly related to current health problems but
still relevant to the treatment. Search results for heart trouble, for example, wouldnt simply include
those two words. It would also cover terms such as right ventricle or radiating pain in left armand
show them off on a 3-D avatar.

1. Who are the stakeholders for this project? Identify and put together a stakeholder register.
2. For at least 3 of the stakeholders you identified above:
o Draw a power/interest grid and place the stakeholders on the grid
o Write one or two sentences explaining your stakeholder management strategy with regard to
these stakeholders

PMP & PMBOK are registered trademarks of Project Management Institute, Inc.

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Simplilearn Classroom ExercisesSolutions

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Project Management Framework
Solution 1:

. No. Items Enterprise Organization Process


Environmental Factors Assets
1 Historical data of past projects Yes
2 Local regulatory requirements Yes
3 Organizations process documents Yes
4 Political scenario of the country Yes
5 Organizations culture Yes
6 Standard organization templates Yes
7 Economic scenario of project location Yes
8 Trainer/Participants to identify three
more EEFs or OPAs
9
10

Project Management Processes


Solution 2:

S. No. Items Execution Monitoring &


Controlling
1 A team member approaches the Yes
Project Manager to getting their
doubts clarified.
2 Weekly status review meetings to go Yes
over project progress.
3 Daily team meetings with the Project Yes
Manager to reinforce that each of the
team members are aware of their
daily task.
4 Organizing training for team Yes
members.
5 Quality audits Yes
6 Quality control Yes
7 Team members appraisal Yes
8 Testing a deliverable Yes

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Project Selection Methods
Solution 3:

Determine the present value for each year of the project.


The formula for Present Value is PV = FV / (1+r)n where PV = present value, FV = Future Value, r = cost of
capital, n = year
Sum up the present values and then subtract the initial investment (10,000) from the sum of the present
values.
Years Revenue Present Value
0 0 -10,000
1 1000 909
2 2000 1653
3 2000 1503
4 5000 3415
5 2000 1242

Sum of present values = 8722


Initial cost = 10,000
8722 10,000 = -1278
The NPV is negative and the project should not be selected.

Solution 4:

Benefit to cost ratio = Benefit/Cost


80,691/ 51,265 = 1.57
A B/C greater than one indicates that revenue is greater than cost.

Solution 5:
Breakeven = total cost/yearly revenues
10,000,000 / 2,000,000 = 5 years

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Project Integration Management
Solution 6:

Refer to page 61 of the PMBOK Guide.

Develop Project Charter Initiating


Identify Stakeholders Initiating
Collect Requirements Planning
Define Activities Planning
Conduct Procurements Executing
Control Communications Monitoring and Controlling
Validate Scope Monitoring and Controlling

Project Scope Management


Solution 7:

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Solution 8:

Project Time Management


Solution 9:

1. Prepare a network diagram and determine the critical path and the duration of the project. In this
example the project duration is 11 days and critical path is ABD
2. To crash the schedule, begin with the critical path. Task A can be crashed 1 day at an additional cost
of $300. Task B can be crashed 2 days for a total cost of $400. Task D is also on the critical path and can
be crashed 1 day at a cost of $100. This reduces the critical path to 7 days and adds a total of $800 to
the project cost.
3. The project critical path has now shifted to ACE which is 8 days. You can Crash E one day at a cost of
$100. This reduces the total project duration to 7 days but the project now has two critical paths. The
total cost to crash the project to 7 days is $900 which is added to the initial project cost.

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Solution 10:

Use the formula {Optimistic + 4(most likely) + pessimistic} / 6


{12 + 4(15) + 25} / 6 = 16.17

Solution 11:

a) What is the critical path? BDF


b) What is the project duration? 15
c) What is the float at task C? 4
d) What is the early start of task E? 6
e) What is the late finish of task A? 6

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Project Cost Management
Solution 12:

EV AC PV CV SV CPI SPI
1000 1000 800 0 200 1 1.25
1000 800 1200 200 -200 1.25 .83
1200 1000 1200 200 0 1.20 1
1200 1400 1000 -200 200 .86 1.20
400 600 800 -200 -400 .67 .50
800 900 800 -100 0 .89 1

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Solution 13:

CPI = EV / AC or 100,000 / 115,000 = .87


EAC = BAC / CPI = 175,000 / .87 = 201149.

Project Quality Management


Solution 14:

The class must determine what condition exists in this sample of a control chart. This chart indicates a
run. There are seven consecutive data points above the process average. This indicates that a specific
cause resulted in the position of the data points and an analysis is necessary to determine the cause and
to improve the process.

Solution 15:

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Project Human Resource Management
Solution 16:

Self-Actualization
Esteem
Social
Safety
Physiological

Solution 17:

Phase 1 - Forming: Team forms and learns about the project. Team members tend to think individually.
Phase 2 - Storming: Team begins to address the work on the project and disagreements arise.
Phase 3 - Norming: Team begins working together and adjusts individual habits to support the team.
Phase 4 - Performing: Team functions as a well-organized unit and become interdependent.
Phase 5 - Adjourning: Team completes the work and moves on from the project.

Also refer to page 276 on PMBOK Guide.

Project Communications Management


Solution 18:

Use the formula: # of channels = N * (N-1) / 2

In this situation you must also add the project manager in the equation. Therefore the original team will
be calculated as 13 * (13-1)2 = 78

The larger team is 16 * (16-1) / 2 = 120

120 78 = 42 (The increase in the number of channels from the team of 12 to the team of 15 with the
project manager included.)

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Project Risk Management
Solution 19:

The decision to build a new plant would cost $120 million. There are two possible outcomes associated
with that decision:
1. There is a 60 % chance that there will be a strong demand for your product which will result in a
$200 million dollar reward or payout. The net path value for that scenario is $200 - $120million
(the reward minus the cost) or $80 million. There is a 60% probability that the strong demand
will occur. 60% * 80 million = expected value of $48 million.

2. There is a 40 % chance that there will be a weak demand for your product which would result in
a $90 million reward or payout. $90million - $120,000 = $-30 million. The net path value is -
$30,000. 40% * 30 million = -$12 million. The expected value of this decision is -12 million.

3. Adding the 48 million and the -12 million will result in an expected monetary value of the
decision of $36 million.

Hint: Preparing a decision tree that illustrates the possible outcomes will assist in solving these types of
problems.

Project Procurement Management


Solution 21:

Target Cost = 150,000


Target Profit = 10,000
Actual cost = 140,000
Savings = 10,000

Contractor share of the savings = 20% x 10,000 or 2000


Total Profit = target profit plus incentive = 10,000 + 2000 = 12,000
Total price paid = 12,000 + 140,000 = 152,000

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Project Stakeholder Management
Solution 23:
Stakeholder Interest Power Strategy
Doctors High High - Involve in requirements
gathering, sign-off, inter-mediate
demos
- Recruit some doctors in the team
to act as Subject Matter Experts
and have intelligent
conversations with the hospital
Nurses/Assistants High Low - Understand their requirements
to Doctors early in the life-cycle as they may
be end users too
- Train them on usage of the
system and answer queries
Patients Low Low - Choose a sample of patients to
show demos
- Answer queries and allay any
fears about data privacy
Hospital High High - Get requirements, involve in
management contracting and early prototypes
- Develop reports for them,
explaining the RoI and efficiency
gained by using the system
Team High High - Send a few team members onsite
for requirements gathering and
observation of the actual work
- Provide training on the domain
and recruit some doctors in the
team
Senior Low High - Provide information and updates
management - Showcase success and leverage
them to get more customers for
the system
PMP & PMBOK are registered trademarks of Project Management Institute, Inc.

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PMP Master Quiz

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Lesson 2 & 3 Project Management Framework and Processes

2/3-1 The processes in project management have been classified into knowledge areas and
_______________.

a) Methods
b) Process Group
c) Categories
d) Best practices

2/3-2 The application of knowledge, skills, tools and techniques to project activities to meet the project
requirements is referred as:

a) Project initiation
b) Project coordination
c) Project administration
d) Project management

2/3-3 All of the following are examples of Enterprise Environmental Factors except:

a) Organizational culture
b) Political climate
c) Performance measurement criteria
d) Existing facilities and infrastructure

2/3-4 The person or organization that provides the funding or financial resources for the project is referred
to as the:

a) Customer
b) Sponsor
c) Steering committee
d) Project Management Office

2/3-5 During the project lifecycle stakeholder identification is expected to be:

a) A continuous and sometimes difficult process


b) The responsibility of the project sponsor
c) Completed prior to the approval of the project charter
d) Focused only stakeholders who will be impacted favorably as a result of the project

2/3-6 The end of a project phase is generally considered to be:

a) The formal authorization to begin the next project phase

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b) A natural point to assess project performance and determine if the project should continue
c) The points in the project life cycle where risk is at its lowest level
d) The point where formal control procedures of the project are generally enforced

2/3-7 All of the following statements about the project life cycle are true, except:

a) Cost and staffing are at the highest levels during the start of the project
b) Risk is at the highest levels of uncertainty at the start of the project
c) The control needs of the organization will determine how many phases will be included in the project life
cycle
d) Project phases are typically completed sequentially but can be overlapped to accelerate completion of a
project

2/3-8 As you are defining the project in more detail and moving through the phases of the project, you are
engaged in which of the following?

a) Progressive elaboration
b) Project selection
c) Monitoring and Controlling
d) Decomposition

2/3-9 All of the following are generally considered characteristics of a project except:

a) Unique undertaking
b) A temporary endeavor with specific starting and ending dates
c) Ongoing and continually supporting organizational operations
d) Completed when all objectives are achieved or terminated when the project objectives are no longer viable

2/3-10 Your company is introducing a new product to be available in the first quarter of the next business
cycle. The product will support an existing product as an add-on optional feature. Which of the following is
true?

a) This is an ongoing operation because the previous product is already in use by customers
b) This is a project because it involves a new product that has not been previously developed
c) This is an operation because it adding a feature will be part of an ongoing sales effort
d) This is a program that supports the operations of the company

2/3-11 Generally, a project managers level of authority during their project assignment can be directly
related to which of the following?

a) The project managers relationship with the project sponsor


b) The organizational structure
c) The project managers communications skills
d) The project managers technical competency

2/3-12 A significant advantage of the functional organizational structure is:

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a) All employees are grouped by expertise and assigned to one clear manager
b) Communication between the elements of each functional group is fast and efficient
c) Project work is considered to be priority work in all functional groups
d) Resources are easily shared across functional groups

2/3-13 You have been assigned as project manager in a balanced matrix organizational structure. This
presents a challenge to you in obtaining and assigning project resources because:

a) The project manager has extremely low authority in a balanced matrix


b) The project manager has an equal level of authority with the functional managers
c) In a balanced matrix the project budget is controlled by the functional managers
d) The project manager is assigned to the project on a part time basis.

2/3-14 The initiating process group includes all of the following except:

a) Stakeholder identification
b) Business case development and review
c) A contract or statement of work
d) Project scope statement

2/3-15 Which of the following process groups is specifically targeted to complete the project work and to
satisfy project requirements?

a) Planning process group


b) Executing process group
c) Monitoring and Controlling process group
d) Closing process group

2/3-16 The project manager should communicate the need for a change control process mainly because:

a) The cost of project changes will not change significantly as the project progresses but it is important to
maintain a record of all changes for budget tracking purposes
b) The cost of project changes will likely increase through the project lifecycle and a process should be in place
to ensure that only necessary changes are considered and implemented
c) This will minimize the number if changes that can be introduced into the project which will result in better
quality, higher customer satisfaction and reduced rejects
d) The change control process will ensure that only stakeholders with significant authority can submit change
requests

2/3-17 Success in portfolio management is generally defined as:

a) Compliance with schedule, budget, and specifications requirements


b) Realization of the business benefits and financial objectives
c) Aggregate investment performance and benefit realization
d) Control of changes to specific products and services

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Lesson 4: Project Integration Management
4-1 The set of combined processes implemented by the project manager to ensure all the elements of the
project are effectively coordinated are known as:

a) Project execution
b) Inputs, Tools and Techniques, Outputs
c) Project Integration Management
d) Project Monitoring and Control

4-2 The document that assigns a project manager and officially authorizes a project to use organizational
resources for the purpose of planning, executing and controlling a project is the:

a) Project Charter
b) Project Plan
c) Scope Statement
d) Work Authorization Form

4-3 A project manager schedules meetings for many different reasons. Status review meetings are typically:

a) Held to provide all stakeholders with critical project information


b) Held to exchange information about the project between project team members
c) Held to update departmental staff of project status
d) Held only when there is a need for a workaround

4-4 _____________________ is any documented procedure used to apply technical and administrative
direction and surveillance for the purpose of identifying, recording, and controlling any changes to product
characteristics.

a) Scope Change Control


b) Schedule Change Control
c) Quality Control
d) Configuration Management

4-5 A _________________ consists of the data sources, tools and techniques used to gather, integrate,
analyze and disseminate the results of the combined outputs of the project management processes.

a) Project management planning system


b) Project controls system
c) Project communication system
d) Project management information system

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4-6 Assumptions are factors used for planning purposes and may be communicated to a project team by
several different stakeholders. These factors, when stated, are generally considered to be true, real or
certain and are:

a) Absolute and non-negotiable


b) Not always based on factual information
c) Estimates
d) Easy to understand and communicate

4-7 The project management plan is used to:

a) Provide project inputs, tools and techniques, and outputs to be used on the project for the purpose of
managing the product of the project
b) Guide project execution, document project planning assumptions, and facilitate communication among
stakeholders
c) Provide general management, product quality, and project management information which is
communicated to all stakeholders
d) Create organized policies using stakeholders skills and knowledge, then itemized and catalogued in the
corporate knowledge base

4-8 ______________ are usually included to support the overall project management plan and are
developed for the purpose of providing more detailed information, guidelines and control processes for
specifically defined project elements or planning components.

a) Change request forms


b) Performance reports
c) Subsidiary plans
d) Statements of work

4-9 During the planning process the project manager should be aware that assumptions generally involve:

a) A degree of risk
b) Direction from the Sponsor
c) Financial controls
d) Detailed, factual information

4-10 _________________ are applicable restrictions that will affect project performance

a) Organizational policies
b) Performance guidelines
c) Constraints
d) Additional planning requirements

4-11 __________________ is a formal, approved document that includes the collection of outputs of the
planning process and is used to manage and control project execution.

a) The project management plan

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b) The organizational process asset document
c) The organizational procedures document
d) The work authorization system

4-12 Risk plans, quality plans, and change control plans are all ______________ to the project plan.

a) Constraints
b) Appendixes
c) Additions
d) Subsidiaries

4-13 _________________ is the primary process for carrying out the project plan.

a) Configuration management
b) Direct and Manage Project Work
c) Administrative management
d) Monitor and Control Project Work

4-14 As a project manager, you must ensure that changes are coordinated across the entire project life cycle
from conception to completion. The process that focuses on this requirement is:

a) Managing the Triple Constraint


b) Change management integration
c) Perform integrated change control
d) Configuration management

4-15 A project is being executed and is progressing through its life cycle. You notice a significantly large
percentage of project changes occurring on the project have been originated by the research department.
What should you do?

a) Assign a team member to work solely with the research department


b) Change your communication plan to ensure that you, as the project manager, are the only person assigned
to interface with the research department
c) Ask the research department to assign one person to be your liaison
d) Schedule a meeting with the research department to review the change process and determine the causes
of the changes

4-16 You are managing an information technology project. A technical specialist on your team, after having
an informal meeting with a low ranking customer representative working on the project, determines that a
simple alteration would be a great addition to the project. You and the project sponsor have already signed
off on the scope and a change control process is in place. The technical specialist installs the change with no
negative effect to the project schedule and at no additional cost. What management action should be
taken?

a) The technical specialist should be recognized for exceeding customer expectations without affecting project
cost or schedule

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b) The project manager should add a task to the project plan with no additional scheduled time and note that
there was no increased budget
c) The technical specialist should be informed their actions were not authorized and was inconsistent with the
change management plan
d) The project manager should create a change control form, and have the customer sign-off, since the change
has already been made

4-17 Two months into a design project, the customer requested a modification to the product specifications.
The change was immediately implemented by the project team without notifying the project manager.
During the final testing phase, results were different than what was planned. This scenario is an example of
which of the following?

a) Poor adherence to the change control process


b) Poor adherence to the communication plan
c) Poor development of the quality management plan
d) Poor definition of the test plan

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Lesson 5: Project Scope Management
5-1 Determining if the project scope has been completed relies mostly upon the use of:

a) Project Charter
b) Project Scope Statement
c) Statement of Work
d) Project Plan

5-2 You have been selected as the project manager for a major infrastructure upgrade at your company
headquarters. This means that:

a) A project charter has been approved and signed by management


b) Project selection processes have been initiated
c) The project plan has been progressively elaborated
d) The scope of the project has been verified

5-3 As a project manager you should become familiar with the description of the product that will be
delivered to ensure that:

a) A relationship exists between the product and the business need


b) No changes to the product scope will occur
c) The project scope can be changed without detailed analysis
d) All constraints have been removed

5-4 The process of planning in increments, adding detail as the plan is developed is known as:

a) Scope definition
b) Decomposition
c) Progressive elaboration
d) Rolling Wave Planning

5-5 The scope statement includes all of the following except:

a) Project business objectives


b) Project deliverables
c) Detailed work breakdown structure
d) Product summary

5-6 You and your team are working together, subdividing the major deliverables of the project into smaller
components. You are involved in the process of:

a) Scope Planning
b) Decomposition
c) Initiation
d) Scope statement development

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5-7 The process that will help to improve the reliability of cost, duration, and resource estimates is:

a) Define scope
b) Product analysis
c) Cost/Benefit analysis
d) Initiation

5-8 The document that describes in detail, the objectives, project work, deliverables, and product of a
project is the:

a) Scope statement
b) Project Charter
c) Work breakdown structure
d) Work breakdown structure dictionary

5-9 Completion of the product scope is measured against:

a) Product requirements
b) Project requirements
c) Project objectives
d) Scope statement

5-10 A work package is:

a) A task with a unique identifier


b) The first level of the work breakdown structure
c) A deliverable oriented grouping of project components
d) The work package is the lowest level of the WBS

5-11 You receive a verbal change request from your client that will impact the agreed upon scope of work.
You should:

a) Accept the change, document the request then assign someone to oversee it
b) Advise the customer that changes to the scope are not acceptable
c) Review the change control process with the client
d) Accept the change only after ensuring you are not held accountable for additional work.

5-12 All of the following are included in scope change control except:

a) Influencing factors that create scope changes


b) Determining that a change has occurred
c) Verifying the correctness of work results
d) Managing the actual changes when and if they occur

5-13 A term used to describe the magnitude of unauthorized variations to the scope of work is:

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a) Re-planning
b) Feasibility analysis
c) Scope creep
d) Performance measurement

5-14 Reviews, audits, and walk-throughs are examples of:

a) Formal acceptance
b) Inspection
c) Additional planning
d) Internal failure

5-15 The _____________ aids in creating a more detailed definition of the scope of the project and can be
used to validate the work of the project.

a) Scope baseline
b) Work breakdown structure
c) Project charter
d) Alternatives identification

5-16 The scope baseline is defined as the:

a) Project Scope statement, work breakdown structure and work breakdown structure Dictionary
b) Approved project scope statement and charter
c) Approved project scope, schedule and budget
d) Validated measurements and approved changes

5-17 The _________ contains detailed descriptions of work packages.

a) Work breakdown structure dictionary


b) Scope of work statement
c) Task-level budget estimates
d) Activity cost estimates

5-18 A scope statement is important because it:

a) Provides an executive summary of the project for sponsors


b) Documents authorization of the project for the stakeholders
c) Provided criteria for determining total project cost
d) Defines the product, the project deliverables and user acceptance criteria

5-19 A stakeholder wants to make a change to the work breakdown structure that does not affect the time
or cost of the project. What is the BEST thing to do?

a) Tell the stakeholder that the change cannot be made without revising the project plan

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b) Make the change since it does not affect the schedule or the project budget
c) Meet with management to discuss the change control processes
d) Have a change request initiated and look for other impacts on the project

Lesson 6: Project Time Management


6-1 Determining activity sequences, developing activity duration estimates and estimating resource
requirements are necessary to:

a) Define the project


b) Develop the work breakdown structure
c) Develop the schedule
d) Initiate the project

6-2 All of the following are inputs to the process define activities, except:

a) Scope baseline
b) Organizational process assets
c) Enterprise environmental factors
d) Decomposition

6-3 The software cannot be tested until coding is completed. This is an example of:

a) Discretionary dependency
b) Soft logic
c) Preferential logic
d) Mandatory dependency

6-4 You have been asked to reduce the schedule duration of a major project. Your team suggests
overlapping several project activities to reduce the overall duration. This process is known as:

a) Crashing
b) Fast tracking
c) Leveling
d) Monte Carlo technique

6-5 A functional manager for the engineering team has provided you with this information: A work package
for the engineering activities will most likely require 12 weeks to complete. If everything goes well, it could
take 8 weeks, but there have been times when this work has taken 24 weeks to complete. Based on this
information, what is the expected duration of the work package?

a) 13.33
b) 14.27
c) 44
d) 12

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6-6 A work package is behind schedule. You decide to add more resources to the activities and use overtime
to correct the schedule slippage. This is an example of the technique known as:

a) Resource leveling
b) Heuristics
c) Crashing
d) CPM

6-7 The start of an activity must be delayed until 5 days after the finish of its preceding activity. The correct
term for this modification of the logical relationship is:

a) Lead
b) Lag
c) Slack
d) Float

6-8 The most common type of relationship in the precedence diagramming method (PDM) is the:

a) Start to Finish
b) Finish to Finish
c) Finish to Start
d) Start to Start

6-9 Which of the following is not a tool or technique in the Control Schedule process?

a) Schedule compression
b) Performance reviews
c) Resource optimization techniques
d) Change requests

6-10 The technique used to modify the project schedule to account for limited resources or to develop a
resource-limited schedule is known as:

a) Precedence Diagram Method


b) Critical Path Method
c) Critical Chain Method
d) Schedule Network Analysis

6-11 What kind of dependencies can be shown by the Arrow Diagramming Method (ADM)?

a) Finish to Start
b) Start to Finish
c) Start to Start
d) Finish to Finish

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6-12 You are in the process of calculating the early and late start and finish dates for your project activities.
This form of mathematical analysis is known as:

a) Critical Path Method


b) Monte Carlo simulation
c) Program Evaluation Review Technique
d) Activity duration estimating

6-13 Your sponsor has informed you that a major project activity must be scheduled with a date to start no
earlier than June 1. This is an example of:

a) A major milestone
b) A lag
c) A constraint
d) An activity duration estimate

6-14 Your project sponsor contacts you and asks you to provide an estimate on the total duration of a newly
approved project. He wants the estimate to be available for a meeting with project stakeholders that has
been scheduled for later in the afternoon. The most appropriate estimating technique to meet this need
would be:

a) A bottom-up estimate
b) A definitive estimate
c) A PERT estimate
d) An analogous estimate

6-15 How does Free Float differ from Total Float?

a) Total Float is the accumulated amount of Free Float


b) There is no real difference the two terms are functionally equivalent
c) Activity free float is calculated by subtracting its Total Float from the critical path Total Float
d) Free Float affects only the early start of any immediately following activities

6-16 You are working on a software development project, and are about to enter the testing phase. The
project requires the installation of specific hardware which is associated with another project that has been
delayed. This is an example of:

a) Mandatory dependency
b) External dependency
c) Internal dependency
d) Discretionary dependency

6-17 The tools and techniques of the process Define Activities include all of the following except:

a) Decomposition
b) Rolling wave planning

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c) Scope baseline
d) Expert judgment

6-18 You have been asked to develop a schematic display of the logical relationships of your projects
activities. The result of your efforts is the:

a) Project network diagram


b) Resource breakdown structure
c) Work breakdown structure
d) Schedule network template

Create a network diagram using the following information:

Activity Duration Predecessor


A 2 -
B 3 A
C 1 A
D 4 B,C
E 1 D
F 2 E
G 3 E
H 2 F,G

6-19 What is the duration of this project?

a) 12
b) 13
c) 14
d) 15

6-20 What is the critical path for this project?

a) ABCDEH
b) ACDEGH
c) ABDEGH
d) ABDEFH

6-21 What is the earliest that activity G can start?

a) 9
b) 10
c) 13

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d) 15

6-22 Typically, during the project planning process, a detailed project network schedule can be created
after:

a) A scope statement is approved


b) The work breakdown structure is created
c) An escalation process is agreed upon
d) A project control plan is created

6-23 Generally, projects are planned by developing phases that are performed sequentially. In some cases, it
is necessary to accelerate the project life cycle by overlapping project phases. Which of the following best
describes this technique?

a) The technique of overlapping requires the elimination of minor project activities which results in higher
quality
b) Overlapping project phases will compress the schedule but will not generally have an effect on project risk
c) This technique is known as fast tracking and the risk level should be acceptable before it is implemented
d) This technique is known as crashing and can increase the cost of the project but will not affect project risk

Lesson 7: Project Cost Management

7-1 All of the following are inputs to the Determine Budget process except:

a) Scope Baseline
b) Project Schedule
c) Activity cost estimates
d) Human Resource Plan

7-2 Your projects earned value (EV) = 350, its actual cost (AC) = 400 and its planned value (PV) = 325. What
is the cost variance (CV)?

a) +350
b) -75
c) +400
d) -50

7-3 Measuring the square footage of a building and then multiplying that figure by a set cost factor for
construction is an example of:

a) Analogous estimating
b) Parametric estimating
c) SWAG
d) Bottom up estimating

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7-4 Your team is in the process of finalizing and producing the cost baseline for the project you are working
on. Your team is involved in which of the following?

a) Cost Estimating
b) Determine Budget
c) Resource leveling
d) Bottom up estimating

7-5 You are involved in the process of developing an assessment of the likely quantitative amount of funding
that will be required to complete the project. You are involved in:

a) Pricing/Costing
b) Alternatives analysis
c) Estimate costs
d) Risk assessment

7-6 Which of the following is not generally an example of direct cost?

a) Materials
b) Subcontractor expenses
c) Employee benefits
d) Project manager salary

7-7 Your project actual cost has been reported at $200.000. This is equal to the Earned Value. The Budget at
completion for your project is $400.000. It is assumed that all future work will be accomplished at the
budgeted rate. The EAC (Estimate At Completion) is:

a) $200,000
b) $600,000
c) $400,000
d) Cannot be determined with the information provided

7-8 You are requested to produce the estimated cost of the project, as closely and as accurately as possible.
Which of the following techniques would you use?

a) Bottom-up estimating
b) Order of Magnitude
c) Parametric
d) Analogous

7-9 Doubling the number of resources will not necessarily halve the time taken on a project. This is an
example of:

a) Marginal analysis
b) Pareto rule

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c) Parkinson's law
d) Law of diminishing returns

7-10 Opportunity cost is associated with:

a) Project selection when one project is selected over another


b) Selecting one project and taking it through completion
c) Careful and detailed estimating of project benefits
d) Definitive estimating to realize project profits

7-11 You have allocated the project costs over the life cycle of the project. The main output of this process is
a (an):

a) Project schedule
b) Cost control plan
c) Time-phased budget
d) Estimate At Completion

7-12 Earned value management is a tool and technique that can be used in:

a) Cost baseline development


b) Controlling costs
c) Parametric estimating
d) Cost budgeting

7-13 You are reviewing an earned value report and observe that the CPI is 1.2 and the SPI is 1. You will
report to your sponsor that the project is:

a) Right on plan according to schedule and budget baselines


b) Ahead of schedule and over budget
c) On schedule and under budget
d) Not enough information to determine the project condition

7-14 Your earned value analysis report is due. Project information indicates the following: EV = 150,000, PV =
140,000, AC = 160,000. You will report to your project sponsor that the project is:

a) The project is ahead of schedule and under budget


b) The project is ahead of schedule and over budget
c) The project is behind schedule and over budget
d) The project is behind schedule and under budget

7-15 As projects progress through their lifecycles, a graph of project cost expenditures will follow a
characteristic S shape. Typically the information provided in this type of graph indicates that:

a) Projects run in cycles


b) Problems often occur near the beginning and the end of projects
c) Projects inherently are prone to experiencing ups and downs

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d) Project costs start at low levels, rapidly increase, plateau and then decline

7-16 If the cumulative CPI falls below the baseline plan, all future work must be performed at:

a) The TCPI to achieve the planned BAC


b) Below the TCPI to achieve the planned BAC
c) The planned CPI to achieve the planned BAC
d) The planned ETC to achieve the planned BAC

7-17 The average cost of a 6 year project is estimated to be $6 million per year and the estimated total profit
is expected to be $12 million. The annual ROI for this project is:

a) 33%
b) 0%
c) 50%
d) 25%

7-18 Generally, Earned Value Management is a technique used for measuring variance on:

a) Small, short duration projects


b) Large, complex projects
c) Only projects external to an organization
d) Only Government projects

Lesson 8: Project Quality Management


8-1 A product that is produced at a high level of quality but does not include many of the features of similar
products is referred to as:

a) Inaccurate
b) Imprecise
c) Low grade
d) Non-conforming

8-2 Quality planning involves documenting how the project will demonstrate compliance in meeting
requirements and should be performed:

a) In parallel with the other planning processes


b) During the initial phase of the project
c) After the work breakdown structure has been developed
d) By the organization prior to the approval of the project charter

8-3 To ensure that a product has been properly prepared for safe use, which of the following should be used
by the inspector operating the product?

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a) Check list
b) Quality control plan
c) Cause and effect process
d) Work breakdown structure

8-4 Your team is analyzing defects and attempting to isolate the root cause of a problem. Two variables have
been isolated through analysis of the data that is available. There is a concern that one of the two variables
is compounding the problem by causing an effect on the other. Which of the following tools or techniques
will assist in identifying the relationship between variables?

a) Flow chart
b) Pareto diagram
c) Scatter diagram
d) Run chart

8-5 A classification according to technical characteristics for items having the same functional use is:

a) Grade
b) Quality
c) Accuracy
d) Precision

8-6 All of the following are tools and techniques used in Control Quality except:

a) Pareto diagram
b) Quality metrics
c) Control charts
d) Scatter diagram

8-7 You are managing a project and have discovered during a walk through inspection that a large amount of
scrap material has been generated by a team of newly hired workers. The scrap material is an example of:

a) Internal failure
b) External failure
c) Cost of conformance
d) Appraisal costs

8-8 You have been asked to identify the primary reasons for the high percentage of product returns your
company is experiencing. Which of the following tools will most effectively assist you in further identifying
the reasons for the failures?

a) Pareto chart
b) Fishbone or Ishikawa diagram
c) Scatter Diagram
d) Attribute sampling

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8-9 The total cost of all efforts including prevention, appraisal and defect repair to achieve product or
service quality is known as:

a) The Quality Plan


b) Cost of quality
c) Cost baseline
d) Total Quality Management

8-10 A project team is inspecting specific outputs based on defined criteria and rejecting the defective
outputs. Which process group is the team working on?

a) Execution
b) Planning
c) Monitoring and Controlling
d) Closing

8-11 You have contracted a team of experts to define the right mix of ingredients that will produce the
desired product, ensuring optimization of the process, while reducing the sensitivity of the product
performance. Which of the following techniques is being used?

a) Statistical sampling
b) Brainstorming
c) Nominal group technique
d) Design of experiments

8-12 You have developed a graphical display of process results gathered over time and have used the
information to determine that the process is not performing within expected parameters. You have
identified eight consecutive data points that are above the process average. This is an indication of
________________.
a) A trend
b) Process out of control
c) A random cause
d) An alpha risk

8-13 Inspections are utilized by the project manager to assess the quality of deliverables produced during
the project life cycle. The costs incurred during the inspection process are associated with:

a) Prevention costs
b) Cost of non-conformance
c) Cost benefit analysis
d) Appraisal costs

8-14 Monitoring specific project results to determine if they comply with relevant quality standards is:

a) Quality control
b) Quality assurance

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c) Quality planning
d) Earned Value Management

8-15 Fitness for use and the legal aspects of quality are key items emphasized by:

a) Crosby
b) Juran
c) Kerzner
d) Heerkens

8-16 You have gathered information about product defects through analysis and have compiled a list of
defects that have been repeating over a period of time. You notice that some of the defects are appearing
more frequently than others. You want to address the defects that occur most often. Which tool would you
select to display and prioritize the frequency of defects?

a) Pareto diagram
b) Run chart
c) Control chart
d) Scatter diagram

8-17 "You are performing root cause analysis to figure out the reason behind a problem that was discovered
during testing. Which process are you performing?".

a) Perform Quality Assurance


b) Inspection
c) Process analysis
d) Control Quality

8-18 All of the following are tools and techniques in Control Quality process except:

a) Cause and effect diagram


b) Histogram
c) Expert Judgment
d) Run chart

8-19 As the project manager for the Step-Fast Personal exercise product you contract with a subject matter
expert to determine if the project activities comply with organizational and project policies and procedures.
The SME is specifically interested in identifying gaps and shortcomings in your processes. You have initiated
which of the following?

a) Quality plan review


b) Develop quality control measurements
c) Prevention process
d) Quality audit

8-20 Comparing actual or planned project practices to those of other projects to generate ideas for
improvement is known as:

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a) Benchmarking
b) Benefit/cost analysis
c) Flowcharting
d) Pareto diagram

Lesson 9: Project Human Resource Management


9-1 A project manager has the least amount of authority in the_________ organizational structure.

a) Matrix
b) Strong Matrix
c) Projectized
d) Functional

9-2 Choose the right sequence of stages during team formation:

a) Forming, Storming, Developing, Performing


b) Forming, Norming, Performing, Storming
c) Forming, Performing, Norming, Storming
d) Forming, Storming, Norming, Performing

9-3 Project managers must develop skills to ensure that work is completed and deliverables are produced.
This means developing an understanding of formal and informal structures of all organizations involved in
the project, plus an understanding of power and politics. Understanding all of these elements will assist in
improving the project managers:

a) Formal reporting process


b) Upward communication
c) Influencing skills
d) Writing style

9-4 A project manager realizes that more IT system administrators are urgently needed to manage the IT
systems on a project. Who is responsible for providing these resources?

a) The head of the IT department


b) The project manager
c) HR department
d) Senior management

9-5 In the balanced organization matrix, the project manager generally shares authority with or has
relatively the same authority as the:

a) Sponsor
b) Customer
c) Functional manager
d) Executive staff

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9-6 A project manager's authority is lowest in:

a) Projectized
b) Strong matrix
c) Weak matrix
d) Balanced matrix

9-7 You have just completed negotiations to acquire additional resources for your project. During the
negotiations there was considerable conflict about which resources would be provided by the functional
group. A solution was reached in which you were able to obtain most of the resources you needed, but you
had to agree to give up some of those resources at an earlier date than you had planned. This conflict was
resolved using which type of conflict handling?

a) Forcing
b) Collaboration
c) Compromise
d) Smoothing

9-8 You have just joined an informal group of people who meet to discuss new trends and issues in project
management. The satisfaction that you gain from associating with that group is most closely aligned with:

a) The first level of Maslows hierarchy of needs


b) The 5th level of Maslows hierarchy of needs
c) The 3rd level of Maslows hierarchy of needs
d) Herzbergs Hygiene Theory

9-9 Which tool is used to specify the role played by the team members on various activities of a project?

a) A resource pool description


b) A responsibility assignment matrix
c) A work package
d) A cost account code

9-10 The project manager is likely to be most successful in developing a strong and supportive high
performing team in which structure?

a) Projectized
b) Strong matrix
c) Balanced matrix
d) Functional

9-11 Collective bargaining agreements are an example of a (an) ____________ during organizational
planning.

a) Assumption
b) Constraint

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c) Pre-determined project team selection
d) Expected staff assignment

9-12 You have decided that your best approach to keep your team working effectively is to monitor their
performance very closely and to carefully analyze their work output. This style of management is referred to
as:

a) Theory Y
b) Hygienic motivation
c) Theory Z
d) Theory X

9-13 All of the following are tools and techniques for team development except:

a) Reward and recognition


b) Collocation
c) Acquisition
d) Training

9-14 Referring to the Tuckman Model, the greatest level of conflict in the phases of team building is most
likely to appear in the____________ phase.

a) Forming
b) Adjourning
c) Mourning
d) Storming

9-15 You are reviewing previous work experience, personal interests and personal characteristics of a
potentially available group of people and preparing to negotiate for the resources you need. You are
engaged in the process of:

a) Organizational Planning
b) Acquire Project Team
c) Team development
d) Pre-assignment

9-16 A project manager has the greatest amount of authority in the_________ organizational structure:

a) Strong Matrix
b) Projectized
c) Functional
d) Departmentalized

9-17 The project manager and a functional manager cannot reach agreement about the assignment of
resources for a project. The functional manager insists that the resources are not available due to other
priorities. In this case the conflict will require the assistance of the___________ to reach a solution.

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a) Customer
b) Project Sponsor
c) A new project manager
d) Contractor

9-18 The motivational theory in which the manager thinks he/she needs to watch the employees every
minute is called:

a) Theory X
b) Theory Y
c) Theory Z
d) Hygiene Theory

9-19 The project manager of a project that you have been observing appears to remain distant from his
team and often places one of his team members in charge for days at a time. This style of management is
generally considered to be:

a) Motivational
b) Participatory
c) Laissez Fair
d) Conciliatory

9-20 A project manager is relying on personal charisma and charm for getting the project work done. What
form of authority is being used?

a) Coercive
b) Referent
c) Formal
d) Penalty

Lesson 10: Project Communications Management


10-1 The senderreceiver model is designed to assist project managers and team members improve their
communication skills by emphasizing:

a) The need for the project manager to engage in downward communication


b) The importance of horizontal communications during project execution
c) Potential communications barriers and the importance of feedback loops
d) The need to communicate information verbally

10-2 You have been asked to provide information about your projects current performance in terms of the
relationships between scope, schedule and budget. The most appropriate type of report that will accomplish
this is:

a) Progress report
b) Earned Value Analysis report

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c) Jeopardy report
d) Status report

10-3 There are 15 people in a team, an addition of one person was made. How many communication
channels are present in the team now?

a) 16
b) 105
c) 120
d) 56

10-4 As a project manager for a new and highly complex project, when is it important for you to develop
your communications plan?

a) During execution
b) At the earliest stages of the project
c) Upon completion of the project plan
d) Evenly throughout each project phase

10-5 Project resources should be expended only on communicating information that:

a) Contributes to project success or where a lack of communication can lead to failure.


b) Originates from the sponsor or the project management office
c) Has been generated internally by the organizations executive team
d) Is developed by the project team

10-6 Which of the following roles of the Project Manager best explains the fact that project managers spend
90% of their time on communication?

a) Servant Leader
b) Integrator
c) Single point of contact
d) Customer management

10-7 The collecting, storing, analysis and distribution of project information is accomplished most effectively
by using:

a) Information management systems


b) The communications management plan
c) The scope statement
d) The project change control plan

10-8 During project execution, the project manager is required to submit several reports that will
communicate information about the project. Describing the project conditions at the present moment in
relationship to schedule and other metrics is found in the:

a) Status report

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b) Progress report
c) Project Forecast
d) Quality report

10-9 A project team has 10 members. An eleventh member has just been added. How many communication
channels does the team have?

a) 11
b) 55
c) 45
d) 355

10-10 The cost performance index (CPI) is used to indicate:

a) The sum of individual earned value budgets


b) Cost efficiency
c) The variance between EV and PV
d) The variance between actual cost and budgeted cost

10-11 Your project currently has ten people assigned to the project team including yourself. At the end of
the month you will be adding three additional team members to your project. What is the change in the
number of communications channels after you add the new team members?

a) 13
b) 45
c) 33
d) 78

10-12 In the communications model the sender transmits information to the receiver. Communication is
most effective between sender and receiver when the _________ between the sender and receiver overlaps.

a) Area of responsibility
b) Personality screen
c) Region of experience
d) Perception screen

10-13 Which of the following is NOT a best practice for project meetings?

a) Send the agenda in advance


b) Note the minutes of the meeting and follow up
c) Summarize the outcome at the end of the meeting
d) Get the widest possible audience

10-14 In the communication process, the basic communications model includes all of the following except:

a) Noise
b) Medium

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c) Urgency
d) Message

10-15 Which of the following is NOT an output of the Manage communications process?

a) Communication technology
b) Project communications
c) Project management plan updates
d) Project documents updates

10-16 Which of the following does NOT represent "noise"?

a) Distance
b) Cultural differences
c) Body language
d) Accent

10-17 Which of the following is most tightly linked to the Plan Communications Management process?

a) Project Performance Reports


b) Reporting systems
c) Interpersonal skills
d) Enterprise environmental factors

Lesson 11: Project Risk Management


11-1 All of the following are inputs to the process of Plan Risk Management except:

a) Project Charter
b) Project Management Plan
c) Organizational Process Assets
d) Risk Register

11-2 Outputs from Control Risks include all of the following except:

a) Change requests
b) Project documents
c) Risk register
d) Organizational process assets updates

11-3 You are managing a project and have a major decision to make about a change in the plan. You decide
to contact several subject matter experts to obtain their opinions before making a decision. Each expert is
unaware of the participation by any of the other experts you have contacted. The process being used is:

a) Nominal group technique


b) Delphi technique

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c) Brainstorming
d) SWOT analysis

11-4 You have just completed an analysis of project risks and have prioritized them using a probability and
impact matrix. The approach you used to prioritize the risks is:

a) Qualitative analysis
b) Quantitative analysis
c) Sensitivity analysis
d) Earned value analysis

11-5 Defining _____________ will provide a structure for systematically identifying risks to a consistent level
of detail during the project planning process. The areas defined in this process should reflect common
sources of risk for the industry or application area.

a) Assumptions
b) Constraints
c) The product description
d) Risk categories

11-6 All of the following are tools and techniques for risk identification except:

a) Monte Carlo simulation


b) Interviewing
c) SWOT analysis
d) Delphi technique

11-7 A team implemented planned responses for some of the identified risks, but some risks remained.
What are these risks called?

a) Risk events
b) Risk triggers
c) Primary risks
d) Residual risks

11-8 The Ishikawa or fishbone diagram is used to display:

a) System flows
b) Predecessors and successor tasks
c) Cause and effects
d) Casual influences and relationships between activities

11-9 The enterprise environmental factors that can influence the Identify Risk process include all of the
following except:

a) Assumptions analysis

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b) Risk attitudes
c) Industry studies
d) Commercial data bases

11-10 Your team is using a probability impact matrix. The scales on each axis of the matrix are labeled Very
High, High, Moderate, Low and Very Low. Which process is your team performing?

a) A cardinal scale
b) An ordinal scale
c) SWOT analysis
d) Quantitative risk analysis

11-11 The two dimensions of risk used to determine expected value are:

a) Consequence and contingencies


b) Probability and assumptions analysis
c) Probability and consequence
d) Probability and data precision
11-12 Your team is using a model that translates the uncertainties specified at a detailed level into their
potential impact on project objectives at the level of the whole project. The technique being used is:

a) Modeling and Simulation


b) Data precision analysis
c) Decision tree analysis
d) Quantitative trends

11-13 You believe the projects product design effort would be a major challenge to the teams abilities and
you do not have the tools or material to manage it effectively. You decide to seek a supplier who specializes
in the specific technical area. You sign a fixed-price contract to execute this piece of the project work. This is
an example of:

a) Risk avoidance
b) Risk transfer
c) Risk mitigation
d) Risk acceptance

11-14 Your team has utilized all of the appropriate tools and techniques for responding to identified project
risks and has discovered that some risks have been reduced in impact but remain a potential threat. These
risks require further monitoring and are referred to as:

a) Secondary risks
b) Primary risks
c) Cumulative risks
d) Residual risks

11-15 All of the following are tools and techniques for Control Risks except:

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a) Reserve Analysis
b) Project risk audits
c) Technical performance measurements
d) Exploitation

11-16 Project risk is typically characterized by what three elements:

a) Severity of impact, duration of impact and cost of impact


b) Identification, type of risk category and probability of impact
c) Risk, probability, and impact
d) Occurrence, frequency and cost

11-17 Purchasing insurance is considered an example of risk:

a) Mitigation
b) Transfer
c) Acceptance
d) Avoidance

11-18 You are the project manager assigned to a critical project, which requires that you handle project risk
intentionally and methodically, so you have assembled only the project team. They have identified 32
potential project risks, determined what would trigger the risks, rated and ranked each risk using a risk
rating matrix. You have also reviewed and verified all documented assumptions from the project team and
verified the sources of data used in the process of identifying and rating the risks. You are continuing to
move through the risk management process. What have you forgotten to do?

a) Conduct a Monte Carlo simulation


b) Determine which risks are transferable
c) Determine the overall riskiness of the project
d) Involve other stakeholders

11-19 A project manager is faced with a product design risk issue. It has been determined that the materials
used to house a critical component of the product are subject to significant corrosion as a result of exposure
to the typical work environment. The project team has decided to modify the design using very expensive
corrosion-resistant materials in this component, which will basically eliminate the risk. The technique used
by the team is:

a) Risk avoidance
b) Risk acceptance
c) Risk transference
d) Risk deflection

11-20 Using the following information and a normal distribution curve, what is the probability that the
project will be completed in 64 days?

Optimistic time is 48 days. Pessimistic time is 72 days. Most likely time is 60 days
a) 16%

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b) 84%
c) 50%
d) 100%

Lesson 12: Project Procurement Management


12-1 When you decide to give up your rights under contract to expedite an activity by circumventing a
process you have decided to:

a) Enter into contract default


b) Terminate the contract
c) Execute a waiver
d) Submit an informal change request

12-2 The tools and techniques of Control Procurements include all of the following except:

a) Performance reporting
b) Payment systems
c) Inspections and audits
d) Change requests

12-3 The process that ensures that each party meets their contractual obligations and that their legal rights
are protected is:

a) Control procurements
b) Contract payment systems
c) Claims administration
d) Contract change control

12-4 Ending a contract before all contractual objectives have been reached due to a buyers decision to
change business direction is an example of:

a) Breach of contract
b) Contract close out
c) Termination for convenience
d) Letter of intent

12-5 As the buyer during the contract negotiation process, you are interested in a contract that would have
the least amount of risk to your organization. Which of the following contracts would be preferred to meet
your risk-averse needs?

a) Firm Fixed Price


b) Cost Plus Percentage of Cost
c) Cost Plus Incentive Fee
d) Cost Plus Fixed Fee

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12-6 The buyer has negotiated a cost plus incentive fee contract with the seller. The contract has a target
cost $300,000, a target fee of $40,000, a sharing ratio of 80/20, a maximum fee of $60,000 and a minimum
fee of $10,000. If the actual cost of the project is $380,000 how much will the buyer pay as a fee to the
seller?

a) $56,000
b) $104,000
c) $30,000
d) $24,000

12-7 You are involved in finalizing contract negotiations. The definitive contract has not yet been signed and
may take an additional two weeks but it is critical to start several work packages within the three days work
to avoid schedule problems later. You should utilize a:

a) Verbal agreement to get started


b) Letter of intent or letter contract
c) A project charter
d) A statement of work update

12-8 A contract can be described as:

a) An informal agreement between two parties


b) A mutually binding agreement involving an offer and an acceptance
c) A type of project scope statement
d) A document approved by the sponsor defining project manager authority

12-9 Buyers may wish to review the qualifications of potential sellers before they actually meet with them.
This process is known as:

a) Obtaining independent estimates


b) Screening
c) A weighting system
d) Contract negotiation

12-10 As the project manager for a new project you have been given the responsibility to provide all
potential contractors with the information they need to determine if they would like to continue with the
contracting process. To accomplish this you may want to schedule a:

a) Project stakeholder meeting


b) A bidders conference
c) A make or buy analysis conference
d) A project kickoff meeting

12-11 All of the following are examples of procurement documents except:

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a) Request for Information
b) Request for Proposal
c) Project Scope Statement
d) Request for Quote

12-12 A cost reimbursable contract introduces greater risk to the:

a) Buyer
b) Seller
c) Project team
d) Functional managers

12-13 The seller is protected from liabilities and penalties when a project is impacted by a natural disaster
through the:

a) Liquidated damages clause


b) Penalty clause
c) Force Majeure clause
d) Statement of work

12-14 A high level description of the scope issued by the buyer, specifying the work expected to be
completed by the seller is called:

a) Statements of work
b) Acceptance criteria
c) Considerations
d) Teaming agreements

12-15 The legal contractual relationship that exists between a buyer and a seller after the contract is signed
is known as:

a) Privity
b) Obligation
c) Bilateral agreement
d) Legally bonded relationship

12-16 In a cost reimbursable contract, the risk of cost escalation is borne by the:

a) Buyer
b) Seller
c) Project manager
d) Shared between seller & buyer

12-17 A cost-plus-incentive-fee (CPIF) contract has an estimated cost of $150,000 with a predetermined fee
of $15,000 and a share ratio of 80/20. The actual cost of the project is $130,000. What is the total fee that
will be awarded to the seller?

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a) $31,000
b) $19,000
c) $15,000
d) None of the above

12-18 Under which type of contract does the seller accept all liability for poor workmanship, engineering
errors and consequential damages?

a) Incentive fee
b) Fixed price
c) Cost plus
d) Cost plus fixed fee

12-19 Contractual language does not preclude the possibility of misunderstandings and situations that could
adversely affect project progress. Therefore, it is considered a best practice to have a ______ committee
established as a means of removing the obstacles and managing conflicts.

a) Top management
b) Disputes resolution
c) Steering
d) Engagement

12-20 Which of the following contract types does not encourage the seller to control costs and, as a result,
places the greatest risk on the buyer?

a) Cost exclusive
b) Cost Plus Fixed Fee
c) Cost Plus Incentive Fee
d) Cost Plus Percentage of Cost

Lesson 13: Project Stakeholder Management


13-1 Project information has been distributed according to the communications plan. Some project
deliverables have been changed and were made according to the change control plan. One stakeholder
expressed surprise to the project manager upon being informed of a previously published change to a
project deliverable. All other stakeholders received notification of the change. What should the project
manager do?

a) Inform the stakeholder of the date when the change was approved
b) Review the communications plan with the stakeholder and explain his responsibility
c) Review the communications plan and make revisions, if necessary
d) Address the situation in the next steering committee meeting so others do not miss publish changes

13-2 During stakeholder analysis the project manager and team may use many different models to classify
stakeholders. The model that helps to analyze a stakeholders ability to impose his or her will or power and

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influence the need for immediate attention from the project team along with the legitimacy of the
stakeholders involvement is the:

a) Power / interest grid


b) RAM
c) Salience model
d) Stakeholder registers

13-3 Which of the following may NOT be a stakeholder to a project?

a) Project Manager
b) Project Team
c) Everybody in the customers organization
d) Suppliers to the project

13-4 Stakeholder management involves all of the following EXCEPT:

a) Identifying the stakeholders


b) Keeping all stakeholders happy
c) Analyzing stakeholder expectations
d) Managing stakeholder engagement

13-5 Which of the following should you be most concerned about, during stakeholder analysis?

a) Their interest in the project


b) Their influence on the project
c) Both A and B
d) Neither A nor B

13-6 What is the best way to manage stakeholders which are low on power and interest?
a) Monitor them
b) No need to worry about them
c) Treat all stakeholders equal
d) Keep them informed

13-7 Which of the following is a tool to assess the current and desired state of engagement of a stakeholder
on the project?

a) Stakeholder registers
b) Stakeholder management plan
c) Stakeholder engagement assessment matrix
d) Stakeholder issue log

13-8 Which of the following is an input to the plan stakeholder management process?

a) Stakeholder registers
b) Stakeholder management plan

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c) Stakeholder engagement assessment matrix
d) Impact/Power grid

13-9 Which conflict resolution technique is most likely to result in a permanent resolution?

a) Compromise
b) Negotiation
c) Confrontation
d) Smoothing

13-10 All of the following is true about critical path activities EXCEPT:

a) They have zero float


b) Any delay in these will delay the project
c) It is the shortest possible path from start to finish
d) There may be more than one critical path on a project

13-11 An important stakeholder in a project is at an unaware state at present, i.e. he does not know what
is going on in a project. You reckon that his support could be very important. Which of the following is the
BEST way to get him to a supportive state?

a) Send him regular reports about the project and its benefits
b) Assign some work or review activity to him
c) Send him tickets to his favorite opera show
d) Give topmost priority to the issues that he has raised

13-12 Which of the following is a tool and technique used in manage stakeholder engagements process?

a) Communication management plan


b) Change log
c) Issue log
d) Inter-personal skills

13-13 A project manager is reviewing the stakeholder management plan and communications management
plan and sending appropriate information to the stakeholders. She sets up meetings with the stakeholders
and ensures that their expectations are being realized. She makes sure that any issues that get raised are
addressed promptly as far as possible. Which process in stakeholder management is being worked on here?

a) Plan stakeholder management


b) Manage stakeholder engagements
c) Control stakeholder engagements
d) Close stakeholder engagements

13-14 One of the important inputs to the Control stakeholder engagements is:

a) Change request
b) Issue log
c) Information management system

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d) Work performance information

13-15 During the execution of a construction project, excavation activities unearth some artifacts that seem
to have some archaeological importance. What should the project manager do?

a) Ignore the findings and continue work as scheduled


b) Inform senior management and continue work as scheduled
c) Stop excavation work and call up the archaeological department to quickly research the findings
d) Raise a change request

PMP & PMBOK are registered trademarks of Project Management Institute, Inc.

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PMP Master QuizSolutions

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Chapter Quiz - Answer Key
Lesson 2 & 3 Lesson 4 Lesson 5 Lesson 6
Project Project Integration Project Scope Project Time
Management Management Management Management
Framework and
Processes
Question Answer Question Answer Question Answer Question Answer
2/3-1 B 4-1 C 5-1 B 6-1 C
2/3-2 D 4-2 A 5-2 A 6-2 D
2/3-3 C 4-3 B 5-3 A 6-3 D
2/3-4 B 4-4 D 5-4 C 6-4 B
2/3-5 A 4-5 D 5-5 C 6-5 A
2/3-6 B 4-6 B 5-6 B 6-6 C
2/3-7 A 4-7 B 5-7 A 6-7 B
2/3-8 A 4-8 C 5-8 A 6-8 C
2/3-9 C 4-9 A 5-9 A 6-9 D
2/3-10 B 4-10 C 5-10 D 6-10 C
2/3-11 B 4-11 A 5-11 C 6-11 A
2/3-12 A 4-12 D 5-12 C 6-12 A
2/3-13 B 4-13 B 5-13 C 6-13 C
2/3-14 D 4-14 C 5-14 B 6-14 D
2/3-15 B 4-15 D 5-15 B 6-15 D
2/3-16 B 4-16 C 5-16 A 6-16 B
2/3-17 C 4-17 A 5-17 A 6-17 C
5-18 D 6-18 A
5-19 D 6-19 D
6-20 C
6-21 B
6-22 B
6-23 C

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Lesson 7 Lesson 8 Lesson 9 Lesson 10
Project Cost Project Quality Project Human Project
Management Management Resource Communications
Management Management
Question Answer Question Answer Question Answer Question Answer
7-1 D 8-1 C 9-1 D 10-1 C
7-2 D 8-2 A 9-2 D 10-2 B
7-3 B 8-3 A 9-3 C 10-3 C
7-4 B 8-4 C 9-4 A 10-4 B
7-5 C 8-5 A 9-5 C 10-5 A
7-6 C 8-6 B 9-6 C 10-6 B
7-7 C 8-7 A 9-7 C 10-7 A
7-8 A 8-8 B 9-8 C 10-8 A
7-9 D 8-9 B 9-9 B 10-9 B
7-10 A 8-10 C 9-10 A 10-10 B
7-11 C 8-11 D 9-11 B 10-11 C
7-12 B 8-12 B 9-12 D 10-12 C
7-13 C 8-13 D 9-13 C 10-13 D
7-14 B 8-14 A 9-14 D 10-14 C
7-15 D 8-15 B 9-15 B 10-15 A
7-16 A 8-16 A 9-16 B 10-16 C
7-17 A 8-17 D 9-17 B 10-17 D
7-18 B 8-18 C 9-18 A
8-19 D 9-19 C
8-20 A 9-20 B

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Lesson 11 Lesson 12 Lesson 13
Project Risk Project Procurement Project Stakeholder
Management Management Management
Question Answer Question Answer Question Answer
11-1 D 12-1 C 13-1 C
11-2 C 12-2 D 13-2 C
11-3 B 12-3 A 13-3 C
11-4 A 12-4 C 13-4 B
11-5 D 12-5 A 13-5 C
11-6 A 12-6 D 13-6 A
11-7 D 12-7 B 13-7 C
11-8 C 12-8 B 13-8 A
11-9 A 12-9 B 13-9 C
11-10 D 12-10 B 13-10 C
11-11 C 12-11 C 13-11 B
11-12 A 12-12 A 13-12 D
11-13 B 12-13 C 13-13 B
11-14 D 12-14 A 13-14 B
11-15 D 12-15 A 13-15 C
11-16 C 12-16 A
11-17 B 12-17 B
11-18 D 12-18 B
11-19 A 12-19 B
11-20 B 12-20 D

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Lesson 2 & 3 Project Management Framework and Processes

2/3-1 The processes in project management have been classified into knowledge areas and
_______________.

a) Methods
b) Process Group
c) Categories
d) Best practices

Answer: B Process Group. Each project management knowledge area is subdivided into specific process
group, each of which is characterized by their inputs, tools and techniques, and outputs.

2/3-2 The application of knowledge, skills, tools and techniques to project activities to meet the project
requirements is referred as:

a) Project initiation
b) Project coordination
c) Project administration
d) Project management

Answer: D Project management. The question refers to the specific definition of project management as
provided in the PMBOK Guide, 5th edition, Page 5.

2/3-3 All of the following are examples of Enterprise Environmental Factors except:

a) Organizational culture
b) Political climate
c) Performance measurement criteria
d) Existing facilities and infrastructure

Answer: C Performance measurement criteria. This is an example of an organizational process asset.


Enterprise environmental factors are those internal and external factors that surround and influence project
success. Organizational process assets include policies, procedures, templates and other items that will assist
in guiding the completion of project work. Refer to pages 27 and 29 in the PMBOK Guide, 5th edition.

2/3-4 The person or organization that provides the funding or financial resources for the project is referred
to as the:

a) Customer
b) Sponsor
c) Steering committee
d) Project Management Office

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Answer: B Sponsor. The sponsor provides the financial resources and is considered to be a key stakeholder.
The customer or user is considered to be the recipient or end user of the product of the project. Refer to page
31 of the PMBOK Guide, 5th edition.

2/3-5 During the project lifecycle stakeholder identification is expected to be:

a) A continuous and sometimes difficult process


b) The responsibility of the project sponsor
c) Completed prior to the approval of the project charter
d) Focused only stakeholders who will be impacted favorably as a result of the project

Answer: A Stakeholder identification will continue throughout the project life cycle. As the project proceeds
through each phase, additional stakeholders may become involved while others will be released. Stakeholder
identification is conducted primarily by the project management team but some stakeholders may be
identified in the project charter. Stakeholders may include people and organizations that may be affected
either negatively or positively by the project outcome.

2/3-6 The end of a project phase is generally considered to be:

a) The formal authorization to begin the next project phase


b) A natural point to assess project performance and determine if the project should continue
c) The points in the project life cycle where risk is at its lowest level
d) The point where formal control procedures of the project are generally enforced

Answer: B At the conclusion of a project phase the project manager and team should assess the
performance of the project and determine if acceptable conditions exist to support a decision to move forward
or discontinue the project. Risk levels will vary as the project progresses and the end of a phase is generally
considered to be a good point to reassess risk. Project control procedures should be enforced throughout the
project life cycle. Refer to page 39 of the PMBOK Guide, 5th edition.

2/3-7 All of the following statements about the project life cycle are true, except:

a) Cost and staffing are at the highest levels during the start of the project
b) Risk is at the highest levels of uncertainty at the start of the project
c) The control needs of the organization will determine how many phases will be included in the project life
cycle
d) Project phases are typically completed sequentially but can be overlapped to accelerate completion of a
project

Answer: A Cost and staffing is generally at the lowest levels during the startup and first phase of a project.
Refer to page 40 of the PMBOK Guide, 5th edition.

2/3-8 As you are defining the project in more detail and moving through the phases of the project, you are
engaged in which of the following?

a) Progressive elaboration

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b) Project selection
c) Monitoring and Controlling
d) Decomposition

Answer: A Progressive elaboration is defined as moving forward in increments and adding more detail as
the project progresses. Project selection precedes the detail or progressive planning of a project. Monitoring
and controlling is ongoing throughout the project lifecycle and is utilized during and after detailed planning
and elaboration of the project. Decomposition is generally associated with the development of the work
breakdown structure and refers to the breakdown of large items into smaller, more manageable components.

2/3-9 All of the following are generally considered characteristics of a project except:

a) Unique undertaking
b) A temporary endeavor with specific starting and ending dates
c) Ongoing and continually supporting organizational operations
d) Completed when all objectives are achieved or terminated when the project objectives are no longer viable

Answer: C Projects have some characteristics that are similar to operations. Projects and operations require
resources, they are planned and scheduling is involved. Projects, however, are generally considered
temporary, regardless of total scheduled time. Operations are ongoing and support the day to day functions of
an organization. Refer to page 3 in the PMBOK Guide, 5th edition.

2/3-10 Your company is introducing a new product to be available in the first quarter of the next business
cycle. The product will support an existing product as an add-on optional feature. Which of the following is
true?

a) This is an ongoing operation because the previous product is already in use by customers
b) This is a project because it involves a new product that has not been previously developed
c) This is an operation because it adding a feature will be part of an ongoing sales effort
d) This is a program that supports the operations of the company

Answer: B This is a project to develop something new and unique and will have a defined end date. It is not
part of operations, nor is it a program. The new product is separate from the existing product. Refer to pages 3
& 4 of the PMBOK Guide, 5th edition.

2/3-11 Generally, a project managers level of authority during their project assignment can be directly
related to which of the following?

a) The project managers relationship with the project sponsor


b) The organizational structure
c) The project managers communications skills
d) The project managers technical competency

Answer: B The project managers level of authority usually depends on the type of organizational structure.
These structures include Functional, Matrix (Weak, Balanced and Strong), and Projectized. Communications
skills and technical ability may affect level of authority in some organizations but managerial structure is
generally the major factor. Refer to page 21 26 of the PMBOK Guide, 5th edition.

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2/3-12 A significant advantage of the functional organizational structure is:

a) All employees are grouped by expertise and assigned to one clear manager
b) Communication between the elements of each functional group is fast and efficient
c) Project work is considered to be priority work in all functional groups
d) Resources are easily shared across functional groups

Answer: A In a functional structure, people are grouped by technical expertise and are a assigned to one
clearly defined manager. This establishes efficient internal operations and communications. The functional
structure can create difficulties with communication between groups. Technical skills are not generally shared
with other functional groups or operations. Functional work generally receives the highest priority.

2/3-13 You have been assigned as project manager in a balanced matrix organizational structure. This
presents a challenge to you in obtaining and assigning project resources because:

a) The project manager has extremely low authority in a balanced matrix


b) The project manager has an equal level of authority with the functional managers
c) In a balanced matrix the project budget is controlled by the functional managers
d) The project manager is assigned to the project on a part time basis.

Answer: B In a balanced matrix, the project managers authority is low to moderate and usually at an equal
level with the functional managers. This can result in conflict regarding resource assignments, priorities, and in
the general management of the project. The project manager is assigned full time and control of the budget is
shared between project manager and functional manager.

2/3-14 The initiating process group includes all of the following except:

a) Stakeholder identification
b) Business case development and review
c) A contract or statement of work
d) Project scope statement

Answer: D The project scope statement is an output of the Define Scope process and is part of the Planning
process group.

2/3-15 Which of the following process groups is specifically targeted to complete the project work and to
satisfy project requirements?

a) Planning process group


b) Executing process group
c) Monitoring and Controlling process group
d) Closing process group

Answer: B The executing process group is intended to ensure that the work defined in the project plan is
performed. Refer to page 53 of the PMBOK Guide, 5th edition.

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2/3-16 The project manager should communicate the need for a change control process mainly because:

a) The cost of project changes will not change significantly as the project progresses but it is important to
maintain a record of all changes for budget tracking purposes
b) The cost of project changes will likely increase through the project lifecycle and a process should be in place
to ensure that only necessary changes are considered and implemented
c) This will minimize the number if changes that can be introduced into the project which will result in better
quality, higher customer satisfaction and reduced rejects
d) The change control process will ensure that only stakeholders with significant authority can submit change
requests

Answer: B As a project proceeds the cost of changes will, in most cases, increase. This requires project
managers and team members to control changes effectively and to emphasize the need for proper and well
organized planning. A change control process is not designed to minimize change, it is intended to manage
change and prevent unauthorized changes.

2/3-17 Success in portfolio management is generally defined as:

a) Compliance with schedule, budget, and specifications requirements


b) Realization of the business benefits and financial objectives
c) Aggregate investment performance and benefit realization
d) Control of changes to specific products and services

Answer: C Portfolio management is generally associated with the relationships between components in the
portfolio, effective resource management to protect priority components, and the aggregate results of the
portfolio as they relate to strategic performance. Refer to page 8 of the PMBOK Guide, 5th edition.

Lesson 4: Project Integration Management


4-1 The set of combined processes implemented by the project manager to ensure all the elements of the
project are effectively coordinated are known as:

a) Project execution
b) Inputs, Tools and Techniques, Outputs
c) Project Integration Management
d) Project Monitoring and Control

Answer: C Project integration management combines all of the processes within the entire project life cycle
through the five major process groups Initiating, Planning, Executing, Monitoring & Controlling, and Closing.

4-2 The document that assigns a project manager and officially authorizes a project to use organizational
resources for the purpose of planning, executing and controlling a project is the:

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a) Project Charter
b) Project Plan
c) Scope Statement
d) Work Authorization Form

Answer: A The Project Charter is part of the initiating processes and provides the authorization to move
forward. The project scope statement, the project plan, and work authorization process are developed after
the charter has been approved.

4-3 A project manager schedules meetings for many different reasons. Status review meetings are typically:

a) Held to provide all stakeholders with critical project information


b) Held to exchange information about the project between project team members
c) Held to update departmental staff of project status
d) Held only when there is a need for a workaround

Answer: B Generally project status meetings provide the project team and those stakeholders directly
involved in project activities with up to date information about the project. Other stakeholders and higher
level managers may receive information through formal reports or specifically scheduled meetings.
Workarounds are temporary responses to an unplanned situation and generally require immediate action.

4-4 _____________________ is any documented procedure used to apply technical and administrative
direction and surveillance for the purpose of identifying, recording, and controlling any changes to product
characteristics.

a) Scope Change Control


b) Schedule Change Control
c) Quality Control
d) Configuration Management

Answer: D Configuration management is considered a component of change control and is specifically


associated with changes to features, functions and physical characteristics of a product or deliverable.

4-5 A _________________ consists of the data sources, tools and techniques used to gather, integrate,
analyze and disseminate the results of the combined outputs of the project management processes.

a) Project management planning system


b) Project controls system
c) Project communication system
d) Project management information system

Answer: D The Project management information system is used to track project information and
performance. These systems may be either manual or electronic. Such information kept by these systems can
include the tracking of time worked, project costs, and other factors that would be communicated to project
stakeholders.

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4-6 Assumptions are factors used for planning purposes and may be communicated to a project team by
several different stakeholders. These factors, when stated, are generally considered to be true, real or
certain and are:

a) Absolute and non-negotiable


b) Not always based on factual information
c) Estimates
d) Easy to understand and communicate

Answer: B Assumptions documented during the project planning process are generally considered to be non-
factual and require validation.

4-7 The project management plan is used to:

a) Provide project inputs, tools and techniques, and outputs to be used on the project for the purpose of
managing the product of the project
b) Guide project execution, document project planning assumptions, and facilitate communication among
stakeholders
c) Provide general management, product quality, and project management information which is
communicated to all stakeholders
d) Create organized policies using stakeholders skills and knowledge, then itemized and catalogued in the
corporate knowledge base

Answer: B The project plan is based on estimates, past experience of the project team, and other available
information. Generally, the project plan is considered to be a guide that is expected to change throughout the
project life cycle. The initial project plan provides an approach to achieving objectives and guidelines for
communicating information.

4-8 ______________ are usually included to support the overall project management plan and are
developed for the purpose of providing more detailed information, guidelines and control processes for
specifically defined project elements or planning components.

a) Change request forms


b) Performance reports
c) Subsidiary plans
d) Statements of work

Answer: C The project management plan is a combination of several plans that provide overall guidance to
the project team. These plans include Schedule Management, Scope Management, Cost management,
Resources management and other depending on size and complexity of the project.

4-9 During the planning process the project manager should be aware that assumptions generally involve:

a) A degree of risk
b) Direction from the Sponsor
c) Financial controls
d) Detailed, factual information

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Answer: A Assumptions are not based on factual information and failure to validate may result is significant
risk events.

4-10 _________________ are applicable restrictions that will affect project performance

a) Organizational policies
b) Performance guidelines
c) Constraints
d) Additional planning requirements

Answer: C Constraints are restrictions or limitations and must be managed throughout the project life cycle.
Examples include resource availability, predetermined schedules and predetermined budgets.

4-11 __________________ is a formal, approved document that includes the collection of outputs of the
planning process and is used to manage and control project execution.

a) The project management plan


b) The organizational process asset document
c) The organizational procedures document
d) The work authorization system

Answer: A The project management plan is a document that combines the results of all planning processes.
Subsidiary plans, such as Time Management and Cost management are the outputs or results the planning
processes.

4-12 Risk plans, quality plans, and change control plans are all ______________ to the project plan.

a) Constraints
b) Appendixes
c) Additions
d) Subsidiaries

Answer: D Subsidiary plans are the outputs of some of the other planning processes associated with Scope,
Time, Cost, Quality, Human Resources, Communications, Risk, and Procurement management. Additional plans
that can be added to the project management plan include Change Management, Process Improvement,
Requirements Management and Configuration Management plans.

4-13 _________________ is the primary process for carrying out the project plan.

a) Configuration management
b) Direct and Manage Project Work
c) Administrative management
d) Monitor and Control Project Work

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Answer: B As described in the PMBOK Guide, Direct and Manage Project Work is the major process for
carrying out the plan. Refer to page 61 of the PMBOK Guide, 5th edition, to review the five major process
groups and the 47 project management processes.

4-14 As a project manager, you must ensure that changes are coordinated across the entire project life cycle
from conception to completion. The process that focuses on this requirement is:

a) Managing the Triple Constraint


b) Change management integration
c) Perform integrated change control
d) Configuration management

Answer: C Perform Integrated Change Control includes all of the lower level processes and subsidiary plans
that will be used to manage project change throughout the project life cycle.

4-15 A project is being executed and is progressing through its life cycle. You notice a significantly large
percentage of project changes occurring on the project have been originated by the research department.
What should you do?

a) Assign a team member to work solely with the research department


b) Change your communication plan to ensure that you, as the project manager, are the only person assigned
to interface with the research department
c) Ask the research department to assign one person to be your liaison
d) Schedule a meeting with the research department to review the change process and determine the causes
of the changes

Answer: D The most appropriate action to take in this case is to ensure that the research department fully
understands the project scope of work, the change control process, and to determine why change requests
continue to be submitted.

4-16 You are managing an information technology project. A technical specialist on your team, after having
an informal meeting with a low ranking customer representative working on the project, determines that a
simple alteration would be a great addition to the project. You and the project sponsor have already signed
off on the scope and a change control process is in place. The technical specialist installs the change with no
negative effect to the project schedule and at no additional cost. What management action should be
taken?

a) The technical specialist should be recognized for exceeding customer expectations without affecting project
cost or schedule
b) The project manager should add a task to the project plan with no additional scheduled time and note that
there was no increased budget
c) The technical specialist should be informed their actions were not authorized and was inconsistent with the
change management plan
d) The project manager should create a change control form, and have the customer sign-off, since the change
has already been made

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Answer: C The change control process should be followed by everyone on the project team. Failure to
manage change effectively can result in significant scope creep and could result in serious implications and
additional risk and liability.

4-17 Two months into a design project, the customer requested a modification to the product specifications.
The change was immediately implemented by the project team without notifying the project manager.
During the final testing phase, results were different than what was planned. This scenario is an example of
which of the following?

a) Poor adherence to the change control process


b) Poor adherence to the communication plan
c) Poor development of the quality management plan
d) Poor definition of the test plan

Answer: A The change control process was not followed. Failure to follow the agreed upon change control
processes may create serious risk situations and jeopardize the entire project.

Lesson 5: Project Scope Management


5-1 Determining if the project scope has been completed relies mostly upon the use of:

a) Project Charter
b) Project Scope Statement
c) Statement of Work
d) Project Plan

Answer: B The project charter authorizes the project but is not a detailed plan. The statement of work
generally precedes a contract and provides a narrative description of work to be completed. The project plan is
derived from the project scope statement. The scope statement answers the questions of what, why, who,
where, how and in combination with the work breakdown structure provides a detailed description of what
must be accomplished.

5-2 You have been selected as the project manager for a major infrastructure upgrade at your company
headquarters. This means that:

a) A project charter has been approved and signed by management


b) Project selection processes have been initiated
c) The project plan has been progressively elaborated
d) The scope of the project has been verified

Answer: A Generally, if a project manager is assigned, the project has been approved and authorized. Project
selection processes will determine if a project should be approved. The selection of a project manager

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indicates that planning will begin soon. The scope of the project will be determined during the planning
process and verified as the project progresses.

5-3 As a project manager you should become familiar with the description of the product that will be
delivered to ensure that:

a) A relationship exists between the product and the business need


b) No changes to the product scope will occur
c) The project scope can be changed without detailed analysis
d) All constraints have been removed

Answer: A The project manager should understand the purpose and functions of the product and the needs
of the organization that will receive the product.

5-4 The process of planning in increments, adding detail as the plan is developed is known as:

a) Scope definition
b) Decomposition
c) Progressive elaboration
d) Rolling Wave Planning

Answer: C This is the essence of progressive elaboration. Scope definition and decomposition are included in
the broad definition of progressive elaboration. Rolling Wave planning is a form of progressive elaboration.

5-5 The scope statement includes all of the following except:

a) Project business objectives


b) Project deliverables
c) Detailed work breakdown structure
d) Product summary

Answer: C The work breakdown structure is developed after the project scope statement has been defined
and accepted.

5-6 You and your team are working together, subdividing the major deliverables of the project into smaller
components. You are involved in the process of:

a) Scope Planning
b) Decomposition
c) Initiation
d) Scope statement development

Answer: B Decomposition is the specific process used to develop a detailed work breakdown structure.

5-7 The process that will help to improve the reliability of cost, duration, and resource estimates is:

a) Define scope

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b) Product analysis
c) Cost/Benefit analysis
d) Initiation

Answer: A The Define Scope process produces a detailed description of the project and product. The result is
the project scope statement, which provides a basis for more detailed planning. Product analysis is included in
the define scope process. Cost/Benefit analysis is generally associated with project selection. Initiation
precedes the detailed planning process.

5-8 The document that describes in detail, the objectives, project work, deliverables, and product of a
project is the:

a) Scope statement
b) Project Charter
c) Work breakdown structure
d) Work breakdown structure dictionary

Answer: A The project charter does not provide project details. The work breakdown structure is developed
from the information in the Scope Statement. The work breakdown structure dictionary provides detailed
information about elements of the work breakdown structure.

5-9 Completion of the product scope is measured against:

a) Product requirements
b) Project requirements
c) Project objectives
d) Scope statement

Answer: A Product scope refers to the complexity of the product in terms of features, functions, and physical
characteristics. Project requirements, project objectives, and the scope statement are associated with project
scope.

5-10 A work package is:

a) A task with a unique identifier


b) The first level of the work breakdown structure
c) A deliverable oriented grouping of project components
d) The work package is the lowest level of the WBS

Answer: D Answers A and B are associated with components of a work breakdown structure. The work
breakdown structure is a deliverable-oriented grouping of components but the work package is the lowest
level deliverable in a branch of the work breakdown structure and contains several activities or an activity list.

5-11 You receive a verbal change request from your client that will impact the agreed upon scope of work.
You should:

a) Accept the change, document the request then assign someone to oversee it

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b) Advise the customer that changes to the scope are not acceptable
c) Review the change control process with the client
d) Accept the change only after ensuring you are not held accountable for additional work.

Answer: C The appropriate action when change requests are submitted is to follow the established and
agreed up change control process.

5-12 All of the following are included in scope change control except:

a) Influencing factors that create scope changes


b) Determining that a change has occurred
c) Verifying the correctness of work results
d) Managing the actual changes when and if they occur

Answer: C Verifying the correctness of work is associated with quality management and scope verification.

5-13 A term used to describe the magnitude of unauthorized variations to the scope of work is:

a) Re-planning
b) Feasibility analysis
c) Scope creep
d) Performance measurement

Answer: C Scope creep is the general term used to describe work that has been added to the project scope
without proper authorization.

5-14 Reviews, audits, and walk-throughs are examples of:

a) Formal acceptance
b) Inspection
c) Additional planning
d) Internal failure

Answer: B Inspection of products may be accomplished through reviews, audits and walk-through visits.
Walk-throughs are commonly associated with projects that produce physical deliverables that can be observed
and tested. Formal acceptance usually follows a successful inspection. Internal failure results from non-
conformance to processes.

5-15 The _____________ aids in creating a more detailed definition of the scope of the project and can be
used to validate the work of the project.

a) Scope baseline
b) Work breakdown structure
c) Project charter
d) Alternatives identification

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Answer: B The scope baseline is an output of Create WBS. The project charter initiates the project and
provides high level information. Alternatives identification does not provide detailed descriptions of project
work.

5-16 The scope baseline is defined as the:

a) Project Scope statement, work breakdown structure and work breakdown structure Dictionary
b) Approved project scope statement and charter
c) Approved project scope, schedule and budget
d) Validated measurements and approved changes

Answer: A The scope baseline is an output of the Create work breakdown structure process. Page 131
PMBOK Guide, 5th edition.

5-17 The _________ contains detailed descriptions of work packages.

a) Work breakdown structure dictionary


b) Scope of work statement
c) Task-level budget estimates
d) Activity cost estimates

Answer: A The work breakdown structure dictionary provides the project team with more detailed
information about components of the work breakdown structure. Page 132 PMBOK Guide, 5th edition.

5-18 A scope statement is important because it:

a) Provides an executive summary of the project for sponsors


b) Documents authorization of the project for the stakeholders
c) Provided criteria for determining total project cost
d) Defines the product, the project deliverables and user acceptance criteria

Answer: D The scope statement is not an executive summary. The project charter authorizes the project. It
does not include all of the information needed to develop a complete cost estimate. The scope statement does
define the project in detail and includes descriptive acceptance criteria.

5-19 A stakeholder wants to make a change to the work breakdown structure that does not affect the time
or cost of the project. What is the BEST thing to do?

a) Tell the stakeholder that the change cannot be made without revising the project plan
b) Make the change since it does not affect the schedule or the project budget
c) Meet with management to discuss the change control processes
d) Have a change request initiated and look for other impacts on the project

Answer: D The correct action is to analyze the change and determine the potential impact on other area of
the project. Impact analysis is a key factor in project change control.

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Lesson 6: Project Time Management
6-1 Determining activity sequences, developing activity duration estimates and estimating resource
requirements are necessary to:

a) Define the project


b) Develop the work breakdown structure
c) Develop the schedule
d) Initiate the project

Answer: C Sequence activities, activity duration estimates, and estimating resources provide the inputs to
the develop schedule process. Page 141 PMBOK Guide, 5th edition. Time management overview.

6-2 All of the following are inputs to the process define activities, except:

a) Scope baseline
b) Organizational process assets
c) Enterprise environmental factors
d) Decomposition

Answer: D Decomposition is included in the tools and techniques of the define activities process.

6-3 The software cannot be tested until coding is completed. This is an example of:

a) Discretionary dependency
b) Soft logic
c) Preferential logic
d) Mandatory dependency

Answer: D Mandatory dependencies are also known as hard logic and are generally inherent in the nature of
the work. Discretionary, soft logic, and preferential are generally associated with best practices.

6-4 You have been asked to reduce the schedule duration of a major project. Your team suggests
overlapping several project activities to reduce the overall duration. This process is known as:

a) Crashing
b) Fast tracking

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c) Leveling
d) Monte Carlo technique

Answer: B Fast tracking involves performing activities in parallel (overlapping) rather than in series (one after
the other). Crashing involves the use of overtime or additional resources. Leveling redistributes work and may
result in an increase in project schedule. Monte Carlo technique is generally associated with risk management
and is used to determine probable project outcomes or results.

6-5 A functional manager for the engineering team has provided you with this information: A work package
for the engineering activities will most likely require 12 weeks to complete. If everything goes well, it could
take 8 weeks, but there have been times when this work has taken 24 weeks to complete. Based on this
information, what is the expected duration of the work package?

a) 13.33
b) 14.27
c) 44
d) 12

Answer: A Use the formula (optimistic + 4 times the most likely + pessimistic) divided by 6
{8 + 4(12) + 24} / 6 = 13.33

6-6 A work package is behind schedule. You decide to add more resources to the activities and use overtime
to correct the schedule slippage. This is an example of the technique known as:

a) Resource leveling
b) Heuristics
c) Crashing
d) CPM

Answer: C Crashing, which is adding resources or using overtime, may reduce the duration of an activity.
Resource leveling is used when a resource has been over allocated. Heuristics is a term associated with
generally accepted information or common knowledge. CPM refers to Critical Path Method.

6-7 The start of an activity must be delayed until 5 days after the finish of its preceding activity. The correct
term for this modification of the logical relationship is:

a) Lead
b) Lag
c) Slack
d) Float

Answer: B Lag introduces delay between predecessor and successor relationships and is usually associated
with a physical requirement. Allowing concrete to cure is a common example of lag. Lead is used to accelerate
a network path. Float and slack or measures of flexibility in a project schedule.

6-8 The most common type of relationship in the precedence diagramming method (PDM) is the:

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a) Start to Finish
b) Finish to Finish
c) Finish to Start
d) Start to Start

Answer: C Refer to page 156 PMBOK Guide, 5th edition.

6-9 Which of the following is not a tool or technique in the Control Schedule process?

a) Schedule compression
b) Performance reviews
c) Resource optimization techniques
d) Change requests

Answer: D Change requests are an output of the control schedule process.

6-10 The technique used to modify the project schedule to account for limited resources or to develop a
resource-limited schedule is known as:

a) Precedence Diagram Method


b) Critical Path Method
c) Critical Chain Method
d) Schedule Network Analysis

Answer: C Critical chain method identifies the weak links in the project schedule and utilizes buffers to
manage the schedule. Refer to page 178 of the PMBOK Guide, 5th edition.

6-11 What kind of dependencies can be shown by the Arrow Diagramming Method (ADM)?

a) Finish to Start
b) Start to Finish
c) Start to Start
d) Finish to Finish

Answer: A ADM can only show Finish to start dependencies.

6-12 You are in the process of calculating the early and late start and finish dates for your project activities.
This form of mathematical analysis is known as:

a) Critical Path Method


b) Monte Carlo simulation
c) Program Evaluation Review Technique
d) Activity duration estimating

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Answer: A CPM Critical Path Method and utilizes the forward and backward pass to determine early start,
early finish, late start and late finish of each activity. Monte Carlo simulation is a quantitative risk analysis
technique. Activity duration estimating precedes the development of the project schedule.

6-13 Your sponsor has informed you that a major project activity must be scheduled with a date to start no
earlier than June 1. This is an example of:

a) A major milestone
b) A lag
c) A constraint
d) An activity duration estimate

Answer: C A constraint is a limitation. Predetermined dates limit options and eliminate alternatives.

6-14 Your project sponsor contacts you and asks you to provide an estimate on the total duration of a newly
approved project. He wants the estimate to be available for a meeting with project stakeholders that has
been scheduled for later in the afternoon. The most appropriate estimating technique to meet this need
would be:

a) A bottom-up estimate
b) A definitive estimate
c) A PERT estimate
d) An analogous estimate

Answer: D An analogous estimate, a top down estimating technique, can generally be developed quickly. It is
not intended to become the final estimate. It range of reliability can be extreme. A bottom up estimate
requires significant time to prepare. A PERT estimate, also known as a weighted average estimate is usually
associated with specific project activities.

6-15 How does Free Float differ from Total Float?

a) Total Float is the accumulated amount of Free Float


b) There is no real difference the two terms are functionally equivalent
c) Activity free float is calculated by subtracting its Total Float from the critical path Total Float
d) Free Float affects only the early start of any immediately following activities

Answer: D Free float is the amount of flexibility between the early finish of an activity and the early start of
its immediate successor activities. Free float allows an activity to slip for a period of time before affecting its
immediate successor.

6-16 You are working on a software development project, and are about to enter the testing phase. The
project requires the installation of specific hardware which is associated with another project that has been
delayed. This is an example of:

a) Mandatory dependency
b) External dependency
c) Internal dependency

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d) Discretionary dependency

Answer: B An external dependency is related to a non-project activity and is considered outside the control
of the project team.

6-17 The tools and techniques of the process Define Activities include all of the following except:

a) Decomposition
b) Rolling wave planning
c) Scope baseline
d) Expert judgment

Answer: C The scope baseline is an input to the define activities process. Page 149 PMBOK Guide, 5th
edition.

6-18 You have been asked to develop a schematic display of the logical relationships of your projects
activities. The result of your efforts is the:

a) Project network diagram


b) Resource breakdown structure
c) Work breakdown structure
d) Schedule network template

Answer: A A project network diagram is produced when the logical relationships of all project activities have
been defined. The work breakdown structure and resource breakdown structure do not display logical
relationships.

Create a network diagram using the following information:

Activity Duration Predecessor


A 2 -
B 3 A
C 1 A
D 4 B,C
E 1 D
F 2 E
G 3 E
H 2 F,G

6-19 What is the duration of this project?

a) 12
b) 13
c) 14

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d) 15

Answer: D

6-20 What is the critical path for this project?

a) ABCDEH
b) ACDEGH
c) ABDEGH
d) ABDEFH

Answer: C

6-21 What is the earliest that activity G can start?

a) 9
b) 10
c) 13
d) 15

Answer: B
Note: The answers to questions 19, 20, 21 require the student to develop a network diagram and then perform
the forward and backward pass.

6-22 Typically, during the project planning process, a detailed project network schedule can be created
after:

a) A scope statement is approved


b) The work breakdown structure is created
c) An escalation process is agreed upon
d) A project control plan is created

Answer: B Generally, after a work breakdown structure has been developed and the work packages fully
defined, the project team will develop a network diagram as predecessor and successor relationships are
established.

6-23 Generally, projects are planned by developing phases that are performed sequentially. In some cases, it
is necessary to accelerate the project life cycle by overlapping project phases. Which of the following best
describes this technique?

a) The technique of overlapping requires the elimination of minor project activities which results in higher
quality
b) Overlapping project phases will compress the schedule but will not generally have an effect on project risk
c) This technique is known as fast tracking and the risk level should be acceptable before it is implemented
d) This technique is known as crashing and can increase the cost of the project but will not affect project risk

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Answer: C Overlapping is referred to as fast tracking and can introduce risk into the project. Generally,
activities are not removed and the scope is not changed. Crashing involves the addition of resources or the use
of overtime and will usually increase project cost.

Lesson 7: Project Cost Management

7-1 All of the following are inputs to the Determine Budget process except:

a) Scope Baseline
b) Project Schedule
c) Activity cost estimates
d) Human Resource Plan

Answer: D Human Resource plan is an input to Estimate Costs.

7-2 Your projects earned value (EV) = 350, its actual cost (AC) = 400 and its planned value (PV) = 325. What
is the cost variance (CV)?

a) +350
b) -75
c) +400
d) -50

Answer: D Cost variance = EV AC = 350 400 = -50

7-3 Measuring the square footage of a building and then multiplying that figure by a set cost factor for
construction is an example of:

a) Analogous estimating
b) Parametric estimating
c) SWAG
d) Bottom up estimating

Answer: B Parametric estimating uses statistical relationships such as cost, duration, and labor rates. Refer to
page 205, PMBOK Guide, 5th edition.

7-4 Your team is in the process of finalizing and producing the cost baseline for the project you are working
on. Your team is involved in which of the following?

a) Cost Estimating
b) Determine Budget
c) Resource leveling
d) Bottom up estimating

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Answer: B The cost baseline is an output of the Determine Budget process. Refer to page 208 PMBOK
Guide, 5th edition.

7-5 You are involved in the process of developing an assessment of the likely quantitative amount of funding
that will be required to complete the project. You are involved in:

a) Pricing/Costing
b) Alternatives analysis
c) Estimate costs
d) Risk assessment

Answer: C Estimate Costs. Pricing/Costing is associated with business decisions related to profit margins.
Alternatives analysis refers to considering other options about how to develop and or produce the projects
deliverables. Risk assessment is included in the process of estimating costs.

7-6 Which of the following is not generally an example of direct cost?

a) Materials
b) Subcontractor expenses
c) Employee benefits
d) Project manager salary

Answer: C Employee benefits, taxes, rent, maintenance are generally considered indirect project costs.

7-7 Your project actual cost has been reported at $200.000. This is equal to the Earned Value. The Budget at
completion for your project is $400.000. It is assumed that all future work will be accomplished at the
budgeted rate. The EAC (Estimate At Completion) is:

a) $200,000
b) $600,000
c) $400,000
d) Cannot be determined with the information provided

Answer: C In this example the EAC = AC + BAC EV = 200,000 + 400,000 200,000 or 400,000

7-8 You are requested to produce the estimated cost of the project, as closely and as accurately as possible.
Which of the following techniques would you use?

a) Bottom-up estimating
b) Order of Magnitude
c) Parametric
d) Analogous

Answer: A A bottom up estimate will produce a definitive estimate. Order of magnitude, parametric and
analogous estimates are considered to be top down and have a wide range of probable outcomes.

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7-9 Doubling the number of resources will not necessarily halve the time taken on a project. This is an
example of:

a) Marginal analysis
b) Pareto rule
c) Parkinson's law
d) Law of diminishing returns

Answer: D The law of diminishing returns states that the incremental return from adding resources will
reduce as we go on adding resources

7-10 Opportunity cost is associated with:

a) Project selection when one project is selected over another


b) Selecting one project and taking it through completion
c) Careful and detailed estimating of project benefits
d) Definitive estimating to realize project profits

Answer: A Generally, opportunity cost is experienced when funding has been assigned to a specific project
and a more desirable project opportunity develops. The greater opportunity is missed due to the commitment
of capital resources to a previously selected project. The best alternative is not chosen.

7-11 You have allocated the project costs over the life cycle of the project. The main output of this process is
a (an):

a) Project schedule
b) Cost control plan
c) Time-phased budget
d) Estimate At Completion

Answer: C The allocation of the aggregated project cost across the project life cycle is referred to as the time
phased budget. Refer to page 209 PMBOK Guide, 5th edition. Estimate at Completion is a forecast of the final
project budget based on current performance. The cost control plan provides a method to manage cost
changes and identify cost variances. The project schedule displays project activity duration over time and
provides an estimate of the total duration of the project life cycle.

7-12 Earned value management is a tool and technique that can be used in:

a) Cost baseline development


b) Controlling costs
c) Parametric estimating
d) Cost budgeting

Answer: B Earned value analysis provides a means to determine cost and schedule variances. Refer to page
215 PMBOK Guide, 5th edition.

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7-13 You are reviewing an earned value report and observe that the CPI is 1.2 and the SPI is 1. You will
report to your sponsor that the project is:

a) Right on plan according to schedule and budget baselines


b) Ahead of schedule and over budget
c) On schedule and under budget
d) Not enough information to determine the project condition

Answer: C A CPI greater than 1 indicates that the project is performing under budget. An SPI that equals 1
indicates that the project is performing at planned levels (on schedule).

7-14 Your earned value analysis report is due. Project information indicates the following: EV = 150,000, PV =
140,000, AC = 160,000. You will report to your project sponsor that the project is:

a) The project is ahead of schedule and under budget


b) The project is ahead of schedule and over budget
c) The project is behind schedule and over budget
d) The project is behind schedule and under budget

Answer: B Earned value greater than planned value indicates the project is ahead of schedule. Actual cost
greater than earned value indicates the project is over budget. Refer to page 218 PMBOK Guide, 5th edition.

7-15 As projects progress through their lifecycles, a graph of project cost expenditures will follow a
characteristic S shape. Typically the information provided in this type of graph indicates that:

a) Projects run in cycles


b) Problems often occur near the beginning and the end of projects
c) Projects inherently are prone to experiencing ups and downs
d) Project costs start at low levels, rapidly increase, plateau and then decline

Answer: D The typical project lifecycle begins with low cost and staffing. As the project progresses, costs
increase. The project will reach a point when maximum resources are applied and then resources will be
systematically released as the project reaches closure. Refer to page 40 PMBOK Guide, 5th edition.

7-16 If the cumulative CPI falls below the baseline plan, all future work must be performed at:

a) The TCPI to achieve the planned BAC


b) Below the TCPI to achieve the planned BAC
c) The planned CPI to achieve the planned BAC
d) The planned ETC to achieve the planned BAC

Answer: A The TCPI is the level of performance that must be achieved if the CPI falls below 1 and the project
BAC must be met. Refer to page 221 PMBOK Guide, 5th edition.

7-17 The average cost of a 6 year project is estimated to be $6 million per year and the estimated total profit
is expected to be $12 million. The annual ROI for this project is:

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a) 33%
b) 0%
c) 50%
d) 25%

Answer: A ROI = Average profit/ average cost x 100


The average profit is 12 million / 6 or 2 million per year. 2million / 6 million = 33%

7-18 Generally, Earned Value Management is a technique used for measuring variance on:

a) Small, short duration projects


b) Large, complex projects
c) Only projects external to an organization
d) Only Government projects

Answer: B Earned value management is generally associated with large, long term projects. Earned value
management provides a means to determine project performance at any point in the project life cycle and also
provides an opportunity to forecast the possible outcome of the project in terms of cost and schedule.

Lesson 8: Project Quality Management


8-1 A product that is produced at a high level of quality but does not include many of the features of similar
products is referred to as:

a) Inaccurate
b) Imprecise
c) Low grade
d) Non-conforming

Answer: C Products that are produced at an acceptable level of quality and meet the desired requirements of
the customer but have limited functionality and features are referred to as low grade. Refer to page 228 of the
PMBOK Guide, 5th edition.

8-2 Quality planning involves documenting how the project will demonstrate compliance in meeting
requirements and should be performed:

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a) In parallel with the other planning processes
b) During the initial phase of the project
c) After the work breakdown structure has been developed
d) By the organization prior to the approval of the project charter

Answer: A Quality management is integrated with many other project planning processes especially cost and
time management. Initiation and work breakdown structure development are included in other planning
processes. Refer to page 231 PMBOK Guide, 5th edition.

8-3 To ensure that a product has been properly prepared for safe use, which of the following should be used
by the inspector operating the product?

a) Check list
b) Quality control plan
c) Cause and effect process
d) Work breakdown structure

Answer: A A quality control plan should be utilized during development of the product. A cause and effect
diagram is used to determine the root cause of a problem. The work breakdown structure is a key element of
the planning process and assist in defining the work of the project. Checklists minimize the omission of
important steps and operating errors.

8-4 Your team is analyzing defects and attempting to isolate the root cause of a problem. Two variables have
been isolated through analysis of the data that is available. There is a concern that one of the two variables
is compounding the problem by causing an effect on the other. Which of the following tools or techniques
will assist in identifying the relationship between variables?

a) Flow chart
b) Pareto diagram
c) Scatter diagram
d) Run chart

Answer: C The scatter diagram is used to determine correlation between two sets of data. Refer to page 238
PMBOK Guide, 5th edition.

8-5 A classification according to technical characteristics for items having the same functional use is:

a) Grade
b) Quality
c) Accuracy
d) Precision

Answer: A Grade is a classification according to technical characteristics.

8-6 All of the following are tools and techniques used in Control Quality except:

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a) Pareto diagram
b) Quality metrics
c) Control charts
d) Scatter diagram

Answer: B Metrics are an output of Plan Quality and an input to Perform Quality Assurance and Perform
Quality Control. Refer to pages 236 and 249, PMBOK Guide, 5th edition.

8-7 You are managing a project and have discovered during a walk through inspection that a large amount of
scrap material has been generated by a team of newly hired workers. The scrap material is an example of:

a) Internal failure
b) External failure
c) Cost of conformance
d) Appraisal costs

Answer: A Internal failure results in defects, repairs, scrap and rework. External failure is associated with
quality issues experience by the customer. Cost of conformance refers to the cost incurred to ensure
compliance. Appraisal costs are included in the cost of conformance.

8-8 You have been asked to identify the primary reasons for the high percentage of product returns your
company is experiencing. Which of the following tools will most effectively assist you in further identifying
the reasons for the failures?

a) Pareto chart
b) Fishbone or Ishikawa diagram
c) Scatter Diagram
d) Attribute sampling

Answer: B The fishbone diagram is also referred to as a root cause analysis tool. Pareto diagrams display the
frequency of occurrence of identified problems. Scatter diagrams indicate a relationship between sets of data.
Attribute sampling identifies deliverables that have failed to meet requirements.

8-9 The total cost of all efforts including prevention, appraisal and defect repair to achieve product or
service quality is known as:

a) The Quality Plan


b) Cost of quality
c) Cost baseline
d) Total Quality Management

Answer: B The quality plan defines the approach to managing quality and may include costs that will include
in the project budget. The cost baseline is the final approved project budget. Total quality management is an
approach to manage quality within an organization. Cost of quality includes all costs associated with
preventing and correcting quality problems. Refer to page 235 PMBOK Guide, 5th edition.

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8-10 A project team is inspecting specific outputs based on defined criteria and rejecting the defective
outputs. Which process group is the team working on?

a) Execution
b) Planning
c) Monitoring and Controlling
d) Closing

Answer: C Inspection is part of quality control, which falls under monitoring and controlling process group.

8-11 You have contracted a team of experts to define the right mix of ingredients that will produce the
desired product, ensuring optimization of the process, while reducing the sensitivity of the product
performance. Which of the following techniques is being used?

a) Statistical sampling
b) Brainstorming
c) Nominal group technique
d) Design of experiments

Answer: D Design of experiments (Taguchi method) utilizes a process to determine the best mix of variables
or ingredients to produce the desired result. Statistical sampling is performed after products have been
produced. Brainstorming and Nominal Group technique are tools and techniques associated with defining
requirements or identifying problems. Refer to Page 239 PMBOK Guide, 5th edition.

8-12 You have developed a graphical display of process results gathered over time and have used the
information to determine that the process is not performing within expected parameters. You have
identified eight consecutive data points that are above the process average. This is an indication of
________________.
a) A trend
b) Process out of control
c) A random cause
d) An alpha risk

Answer: B A run is a set of data points displayed above or below the process average on a control chart.
Generally, seven or more consecutive points above or below the process average but with the upper or lower
control limits indicate process is out of control. A trend is a set of data points moving in a specific positive or
negative direction. A random cause is considered normal and expected when analyzing processes and will
result in some variation from the process average. An alpha risk is the associated with product sampling.

8-13 Inspections are utilized by the project manager to assess the quality of deliverables produced during
the project life cycle. The costs incurred during the inspection process are associated with:

a) Prevention costs
b) Cost of non-conformance
c) Cost benefit analysis
d) Appraisal costs

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Answer: D Appraisal costs are associated with the cost of conformance and include inspections and reviews.

8-14 Monitoring specific project results to determine if they comply with relevant quality standards is:

a) Quality control
b) Quality assurance
c) Quality planning
d) Earned Value Management

Answer: A Quality control is utilized to monitor and record results during execution of quality activities. Refer
to page 248 PMBOK Guide, 5th edition.

8-15 Fitness for use and the legal aspects of quality are key items emphasized by:

a) Crosby
b) Juran
c) Kerzner
d) Heerkens

Answer: B Joseph Juran emphasized continuous improvement, safety, and fitness for use. This means the
product should perform as expected in terms of functionality and should be safe for use by the customer.

8-16 You have gathered information about product defects through analysis and have compiled a list of
defects that have been repeating over a period of time. You notice that some of the defects are appearing
more frequently than others. You want to address the defects that occur most often. Which tool would you
select to display and prioritize the frequency of defects?

a) Pareto diagram
b) Run chart
c) Control chart
d) Scatter diagram

Answer: A A Pareto diagram is used to display errors or problems in the order of frequency of occurrence. A
Run chart is a type of control chart. Scatter diagrams are used to determine if a relationship between exits
between different sets of data.

8-17 "You are performing root cause analysis to figure out the reason behind a problem that was discovered
during testing. Which process are you performing?"

a) Perform Quality Assurance


b) Inspection
c) Process analysis
d) Control Quality

Answer: D Using a fishbone diagram for root cause analysis is a tool or technique within the process of
Control Quality. Perform Quality Assurance is about verifying compliance with quality policies and procedures.

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Process analysis is a tool and technique included within Perform Quality Assurance. Refer to page,243 PMBOK
Guide, 5th edition.

8-18 All of the following are tools and techniques in the Control Quality process except:

a) Cause and effect diagram


b) Histogram
c) Expert Judgment
d) Run chart

Answer: C Expert judgment is not listed as a tool and technique for any of the Quality Management
processes. Refer to page 249 PMBOK Guide, 5th edition.

8-19 As the project manager for the Step-Fast Personal exercise product you contract with a subject matter
expert to determine if the project activities comply with organizational and project policies and procedures.
The SME is specifically interested in identifying gaps and shortcomings in your processes. You have initiated
which of the following?

a) Quality plan review


b) Develop quality control measurements
c) Prevention process
d) Quality audit

Answer: D A quality audit is a review to determine if project activities comply with organizational policies
and procedures. Refer to page 247, PMBOK Guide, 5th edition.

8-20 Comparing actual or planned project practices to those of other projects to generate ideas for
improvement is known as:

a) Benchmarking
b) Benefit/cost analysis
c) Flowcharting
d) Pareto diagram

Answer: A Benchmarking is used to compare planned project practices with established best practices to
generate improvement ideas and as a basis for reviewing performance. Benefit/Cost analysis determines if a
project is worth accepting and implementing. Flow charting displays a process. Pareto diagrams display
problems or errors. Refer to page 239, PMBOK Guide, 5th edition.

Lesson 9: Project Human Resource Management


9-1 A project manager has the least amount of authority in the_________ organizational structure.

a) Matrix
b) Strong Matrix

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c) Projectized
d) Functional

Answer: D In the functional organizational structure, priorities are established by the functional manager.
Projects are considered to be less important than functional work. Refer to page 22, PMBOK Guide, 5th
edition.

9-2 Choose the right sequence of stages during team formation:

a) Forming, Storming, Developing, Performing


b) Forming, Norming, Performing, Storming
c) Forming, Performing, Norming, Storming
d) Forming, Storming, Norming, Performing

Answer: D - The team normally goes through these stages of development. Forming - team gets formed,
Storming - Disagreements start to emerge, Norming - They learn to reconcile and work as a unit, Performing -
They start delivering results

9-3 Project managers must develop skills to ensure that work is completed and deliverables are produced.
This means developing an understanding of formal and informal structures of all organizations involved in
the project, plus an understanding of power and politics. Understanding all of these elements will assist in
improving the project managers:

a) Formal reporting process


b) Upward communication
c) Influencing skills
d) Writing style

Answer: C The understanding of power and politics enables the project manager to develop the appropriate
approaches and techniques to gain trust and influence project stakeholders. Influencing skills will affect the
formal reporting process, upward communication, and writing style.

9-4 A project manager realizes that more IT system administrators are urgently needed to manage the IT
systems on a project. Who is responsible for providing these resources?

a) The head of the IT department


b) The project manager
c) HR department
d) Senior management

Answer: A In the absence of other information, you have to assume that this is a functional or matrix
organization and in such an organization the resources belong to functions.

9-5 In the balanced organization matrix, the project manager generally shares authority with or has
relatively the same authority as the:

a) Sponsor

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b) Customer
c) Functional manager
d) Executive staff

Answer: C In a balanced organization matrix, the authority of the project manager and the authority of the
functional manager are basically equal which may result in some conflict especially when resource assignments
are being delegated. Refer to Page 22, PMBOK Guide, 5th edition.

9-6 A project manager's authority is lowest in:

a) Projectized
b) Strong matrix
c) Weak matrix
d) Balanced matrix

Answer: C Among the given options, the project manager's authority is lowest in a weak matrix organization.

9-7 You have just completed negotiations to acquire additional resources for your project. During the
negotiations there was considerable conflict about which resources would be provided by the functional
group. A solution was reached in which you were able to obtain most of the resources you needed, but you
had to agree to give up some of those resources at an earlier date than you had planned. This conflict was
resolved using which type of conflict handling?

a) Forcing
b) Collaboration
c) Compromise
d) Smoothing

Answer: C Compromise. In this form of conflict management the parties involved agree to give up something
to gain something. This is referred to as a win/lose and lose/win situation. Forcing involves authority and a one
sided decision. Smoothing or accommodating refers to discussions that are focused only on what each side is
in agreement with or in congruence. Collaboration results in a win/win situation for all parties.

9-8 You have just joined an informal group of people who meet to discuss new trends and issues in project
management. The satisfaction that you gain from associating with that group is most closely aligned with:

a) The first level of Maslows hierarchy of needs


b) The 5th level of Maslows hierarchy of needs
c) The 3rd level of Maslows hierarchy of needs
d) Herzbergs Hygiene Theory

Answer: C The third level of Maslows Hierarchy of Needs is the need for social connections or belonging.
Herzberg differentiated between factors that may cause dissatisfaction and conditions or situations that would
motivate people.

9-9 Which tool is used to specify the role played by the team members on various activities of a
project?

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a) A resource pool description
b) A responsibility assignment matrix
c) A work package
d) A cost account code

Answer: B The responsibility assignment matrix specifies who is playing what role for various activities. Work
packages are elements of the work breakdown structure. Cost accounts are associated with work packages.
Resource pools describe resource skills and availability. Refer to page 262 PMBOK Guide, 5th edition.

9-10 The project manager is likely to be most successful in developing a strong and supportive high
performing team in which structure?

a) Projectized
b) Strong matrix
c) Balanced matrix
d) Functional

Answer: A In the projectized structure the project manager has direct control of the project team and the
team is dedicated to the project. The project manager has the ability to establish more effective and
meaningful work relationships with the team members.

9-11 Collective bargaining agreements are an example of a (an) ____________ during organizational
planning.

a) Assumption
b) Constraint
c) Pre-determined project team selection
d) Expected staff assignment

Answer: B Collective bargaining is associated with unions and generally there will be specific conditions and
restricts that may constrain some actions or prevent the use of certain approaches or procedures.

9-12 You have decided that your best approach to keep your team working effectively is to monitor their
performance very closely and to carefully analyze their work output. This style of management is referred to
as:

a) Theory Y
b) Hygienic motivation
c) Theory Z
d) Theory X

Answer: D Theory X (Douglas McGregor) managers believe that people must be closely supervised in ensure
that work is completed. Theory Y managers utilize a participative approach. Theory Z (Ouchi) refers to a
concept that worker collectively support higher level organizational goals. Hygienic motivation is a fabricated
term.

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9-13 All of the following are tools and techniques for team development except:

a) Reward and recognition


b) Collocation
c) Acquisition
d) Training

Answer: C Acquisition is a tool or technique in the process Acquire Project Team

9-14 Referring to the Tuckman Model, the greatest level of conflict in the phases of team building is most
likely to appear in the____________ phase.

a) Forming
b) Adjourning
c) Mourning
d) Storming

Answer: D Storming follows the Forming stage and generally includes a significant amount of conflict as team
members discuss and identify areas or disagreement. Refer to page 276 PMBOK Guide, 5th edition.

9-15 You are reviewing previous work experience, personal interests and personal characteristics of a
potentially available group of people and preparing to negotiate for the resources you need. You are
engaged in the process of:

a) Organizational Planning
b) Acquire Project Team
c) Team development
d) Pre-assignment

Answer: B Acquire Project Team is the process of determining resource requirements, determining
availability of resources and acquiring resources through negotiation or appropriate organizational processes.
Refer to page 267 PMBOK Guide, 5th edition.

9-16 A project manager has the greatest amount of authority in the_________ organizational structure:

a) Strong Matrix
b) Projectized
c) Functional
d) Departmentalized

Answer: B In the projectized structure the project manager is provided with nearly full authority to manage
the project and the project resources.

9-17 The project manager and a functional manager cannot reach agreement about the assignment of
resources for a project. The functional manager insists that the resources are not available due to other
priorities. In this case the conflict will require the assistance of the___________ to reach a solution.

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a) Customer
b) Project Sponsor
c) A new project manager
d) Contractor

Answer: B Generally project conflicts should be resolved at the lowest levels or authority whenever possible.
In some cases conflict requires the involvement of the project sponsor or executive especially when there is an
impasse regarding resource assignments. Customer and contractors would not, in most cases become involved
in internal resource management disputes.

9-18 The motivational theory in which the manager thinks he/she needs to watch the employees every
minute is called:
a) Theory X
b) Theory Y
c) Theory Z
d) Hygiene Theory

Answer: A - Theory X. Mcgregor's Theory X suggests that workers need to be watched every minute as they
will not deliver results on their own.

9-19 The project manager of a project that you have been observing appears to remain distant from his
team and often places one of his team members in charge for days at a time. This style of management is
generally considered to be:

a) Motivational
b) Participatory
c) Laissez Fair
d) Conciliatory

Answer: C A manager with a hands-off attitude toward the project work and the team is considered
Laissez Fair.

9-20 A project manager is relying on personal charisma and charm for getting the project work done. What
form of authority is being used?

a) Coercive
b) Referent
c) Formal
d) Penalty

Answer: B Referent authority is the power that comes from personal charm and charisma. It has many
meanings but it is generally referred to as power derived from a perceived connection with people of higher
levels of authority. Coercive power is a form of penalty power. Formal power is associated with position of
rank.

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Lesson 10: Project Communications Management
10-1 The senderreceiver model is designed to assist project managers and team members improve their
communication skills by emphasizing:

a) The need for the project manager to engage in downward communication


b) The importance of horizontal communications during project execution
c) Potential communications barriers and the importance of feedback loops
d) The need to communicate information verbally

Answer: C The communications model emphasizes awareness about developing the appropriate message to
be delivered, the potentials barriers that may be encountered and the importance of a feedback loop to
improve delivery and understanding of a message.

10-2 You have been asked to provide a report about the cost and schedule variances that also indicate
forecast for actuals at the end of the project. Which report will help you to get this information?

a) Progress report
b) Earned Value Analysis report
c) Jeopardy report
d) Status report

Answer: B Earned value analysis report. It provides information about cost and schedule variances and also
includes the forecast for the total budget.

10-3 There are 15 people in a team, an addition of one person was made. How many communication
channels are present in the team now?

a) 16
b) 105
c) 120
d) 56

Answer: C - 16 * 15/2

10-4 As a project manager for a new and highly complex project, when is it important for you to develop
your communications plan?

a) During execution
b) At the earliest stages of the project
c) Upon completion of the project plan
d) Evenly throughout each project phase

Answer: B Communications planning is including in the planning process which is generally completed before
execution. Updates to the project plan, including the communications plan, will occur during the entire project
life cycle. Refer to page 290 PMBOK Guide, 5th edition.

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10-5 Project resources should be expended only on communicating information that:

a) Contributes to project success or where a lack of communication can lead to failure.


b) Originates from the sponsor or the project management office
c) Has been generated internally by the organizations executive team
d) Is developed by the project team

Answer: A Communications requirements analysis determines the information needs of the stakeholders
and identifies information that is most critical to success or failure. Refer to page 291, PMBOK Guide, 5th
edition.

10-6 Which of the following roles of the Project Manager best explains the fact that project managers spend
90% of their time on communication?

a) Servant Leader
b) Integrator
c) Single point of contact
d) Customer management

Answer: B The project manager is an integrator -in the sense that he integrates the output of all the processes
and channels them in the direction of meeting the project's requirements. This is the primary driver for
communications.

10-7 The collecting, storing, analysis and distribution of project information is accomplished most effectively
by using:

a) Information management systems


b) The communications management plan
c) The scope statement
d) The project change control plan

Answer: A Information management systems refers to the facilities, procedures and processes that are used
to collect, store, and distribute information.

10-8 During project execution, the project manager is required to submit several reports that will
communicate information about the project. Describing the project conditions at the present moment in
relationship to schedule and other metrics is found in the:

a) Status report
b) Progress report
c) Project Forecast
d) Quality report

Answer: A The project status report is included in Report Performance outputs. Status reports address the
current condition of a project including risks, and issues. Progress reports refer to work that has been
completed during a reporting period. Forecasts refer to future scheduled work.

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10-9 A project team has 10 members. An eleventh member has just been added. How many communication
channels does the team have?

a) 11
b) 55
c) 45
d) 355

Answer: B - Number of communication channels = n ( n - 1)/2; i.e. 11 * 10/2 = 55

10-10 The cost performance index (CPI) is used to indicate:

a) The sum of individual earned value budgets


b) Cost efficiency
c) The variance between EV and PV
d) The variance between actual cost and budgeted cost

Answer: B CPI is a calculation associated with Earned Value Analysis that indicates the efficiency with which
project monetary resources are expended. Refer to page 219. PMBOK Guide, 5th edition.

10-11 Your project currently has ten people assigned to the project team including yourself. At the end of
the month you will be adding three additional team members to your project. What is the change in the
number of communications channels after you add the new team members?

a) 13
b) 45
c) 33
d) 78

Answer: C Use the formula: # of Channels = N*(N-1) / 2


= 10(10-1)/ 2 = 45
= 13(13-1)/ 2 = 78
78 -45 = 33
(Note, in similar questions you may have to consider that the project manager is not included in the actual
count of team members and may have to be added to the count to determine the number of channels.
Example if you have a team of 10, the project manager would be added making the count 11 for calculating the
number of channels.)

10-12 In the communications model the sender transmits information to the receiver. Communication is
most effective between sender and receiver when the _________ between the sender and receiver overlaps.

a) Area of responsibility
b) Personality screen
c) Region of experience
d) Perception screen

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Answer: C Areas of common interest and experience will contribute to the effectiveness of the
communications process. Areas of responsibility or function may create communications barriers. Personality
and perception screens may distort the message.

10-13 Which of the following is NOT a best practice for project meetings?

a) Send the agenda in advance


b) Note the minutes of the meeting and follow up
c) Summarize the outcome at the end of the meeting
d) Get the widest possible audience

Answer: D-The audience should be tailored by who is interested and capable of contributing to the meeting.
Not necessarily inviting the largest number of people.

10-14 In the communication process, the basic communications model includes all of the following except:

a) Noise
b) Medium
c) Urgency
d) Message

Answer: C Urgency is not included in the basic communications model but should be considered when
determining the method of communications to be used. Refer to page 294, PMBOK Guide, 5th edition.

10-15 Which of the following is NOT an output of the Manage communications process?

a) Communication technology
b) Project communications
c) Project management plan updates
d) Project documents updates

Answer: A - Communications technology is a tool and technique and not the output of the manage
communications process.

10-16 Which of the following does NOT represent "noise"?

a) Distance
b) Cultural differences
c) Body language
d) Accent

Answer: C - Noise is anything that causes disruption in the message being transmitted and affects the
interpretation of the message correctly.

10-17 Which of the following is most tightly linked to the Plan Communications Management process?

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a) Project Performance Reports
b) Reporting systems
c) Interpersonal skills
d) Enterprise environmental factors

Answer: D Enterprise environmental factors are a key input to the plan communications process. Refer to
page 289, PMBOK Guide, 5th edition. Reporting systems is a tool or technique within the Report
Performance process. Interpersonal skills are associated with the Manage Stakeholder Expectations process.
Project performance reports are an output of the Report Performance Process.

Lesson 11: Project Risk Management


11-1 All of the following are inputs to the process of Plan Risk Management except:

a) Project Charter
b) Project Management Plan
c) Organizational Process Assets
d) Risk Register

Answer: D The risk register is an output of the Identify Risks process. Refer to page 313 PMBOK Guide, 5th
edition.

11-2 Outputs from Control Risks include all of the following except:

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a) Change requests
b) Project documents
c) Risk register
d) Organizational process assets updates

Answer: C Risk audits are considered to be a tool or technique in the Monitor and Control Risk process. Refer
to page 349, PMBOK Guide, 5th edition, Risk Management Overview.

11-3 You are managing a project and have a major decision to make about a change in the plan. You decide
to contact several subject matter experts to obtain their opinions before making a decision. Each expert is
unaware of the participation by any of the other experts you have contacted. The process being used is:

a) Nominal group technique


b) Delphi technique
c) Brainstorming
d) SWOT analysis

Answer: B The Delphi technique utilizes input from subject matter experts who remain anonymous to other
experts involved in specific research or problem resolution. Refer to page 324 PMBOK Guide, 5th edition and
to page 108.

11-4 You have just completed an analysis of project risks and have prioritized them using a probability and
impact matrix. The approach you used to prioritize the risks is:

a) Qualitative analysis
b) Quantitative analysis
c) Sensitivity analysis
d) Earned value analysis

Answer: A Qualitative risk analysis utilizes the experience of subject matter experts, functional managers,
best practices, and previous project records. It is a rapid and low cost approach to risk analysis. The
Probability/Impact matrix used the knowledge and familiarity of the project team and subject matter experts
to determine likelihood and impact of a project risk event. Refer to page 327, PMBOK Guide, 5th edition.

11-5 Defining _____________ will provide a structure for systematically identifying risks to a consistent level
of detail during the project planning process. The areas defined in this process should reflect common
sources of risk for the industry or application area.

a) Assumptions
b) Constraints
c) The product description
d) Risk categories

Answer: D Assumptions are information items that should be verified. They are not generally considered to
be based on factual data. Constraints are limitations that should be considered when developing project plans.
The product description provides details about the complexity of the product to be delivered. Risk categories

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assist is detailed risk identification and may be utilized with a Risk Breakdown Structure (RBS). Refer to page
332, PMBOK Guide, 5th edition.

11-6 All of the following are tools and techniques for risk identification except:

a) Monte Carlo simulation


b) Interviewing
c) SWOT analysis
d) Delphi technique

Answer: A Monte Carlo simulation is associated with Quantitative Risk Analysis and uses iterative simulations
to determine project outcomes. Refer to page 319, PMBOK Guide, 5th edition.

11-7 A team implemented planned responses for some of the identified risks, but some risks remained.
What are these risks called?

a) Risk events
b) Risk triggers
c) Primary risks
d) Residual risks

Answer: D The risks that remain after implementing the risk responses are called residual risks.

11-8 The Ishikawa or fishbone diagram is used to display:

a) System flows
b) Predecessors and successor tasks
c) Cause and effects
d) Casual influences and relationships between activities

Answer: C The cause and effect diagram is also known as a fishbone or Ishikawa diagram (after its developer
Kaoru Ishikawa). Refer to page 325 and 236, PMBOK Guide, 5th edition. System flows are associated with
flow charts. Network diagrams display predecessor and successor relationships.

11-9 The enterprise environmental factors that can influence the Identify Risk process include all of the
following except:

a) Assumptions analysis
b) Risk attitudes
c) Industry studies
d) Commercial data bases

Answer: A Assumptions analysis is associated with the tools and techniques of risk identification.

11-10 Your team is using a probability impact matrix. The scales on each axis of the matrix are labeled Very
High, High, Moderate, Low and Very Low. Which process is your team performing?

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a) A cardinal scale
b) An ordinal scale
c) SWOT analysis
d) Quantitative risk analysis

Answer: D Perform quantitative risk analysis. Explanation to the process is: In quantitative risk analysis, the
team tries to quantify the probability and impact to the extent it can.

11-11 The two dimensions of risk used to determine expected value are:

a) Consequence and contingencies


b) Probability and assumptions analysis
c) Probability and consequence
d) Probability and data precision

Answer: C Risk ratings are determined by the product of probability and impact (or consequence) when using
qualitative analysis and to determine expected monetary value when utilizing a decision tree (quantitative
analysis). Refer to page 318, PMBOK Guide, 5th edition.

11-12 Your team is using a model that translates the uncertainties specified at a detailed level into their
potential impact on project objectives at the level of the whole project. The technique being used is:

a) Modeling and Simulation


b) Data precision analysis
c) Decision tree analysis
d) Quantitative trends

Answer: A The use of modeling and simulations such as a Monte Carlo simulation generate information
through iterations. Project information at the activity level is chosen at random during the process and
produces data that illustrates the likelihood of achieving specific cost or schedule targets. Refer to page 336,
PMBOK Guide, 5th edition.

11-13 You believe the projects product design effort would be a major challenge to the teams abilities and
you do not have the tools or material to manage it effectively. You decide to seek a supplier who specializes
in the specific technical area. You sign a fixed-price contract to execute this piece of the project work. This is
an example of:

a) Risk avoidance
b) Risk transfer
c) Risk mitigation
d) Risk acceptance

Answer: B Transferring risk does not eliminate the risk. It shifts the risk to a more qualified entity or to a
third party. Liability for the risk is accepted by the entity or third party at an agreed upon cost. Risk avoidance
refers to risks that should be eliminated by changing strategy. Mitigation is associated with reduction of
probability and or impact. Acceptance indicates that the risk is well with the capabilities of the project team or
key stakeholders.

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11-14 Your team has utilized all of the appropriate tools and techniques for responding to identified project
risks and has discovered that some risks have been reduced in impact but remain a potential threat. These
risks require further monitoring and are referred to as:

a) Secondary risks
b) Primary risks
c) Cumulative risks
d) Residual risks

Answer: D Residual risks are included in the outputs of the Plan Risk Responses process and are expected to
remain as threats. Their probability and impact have been reduced through mitigation. Primary risks are
included in the initial risk identification process are generally most obvious. Secondary risks are those risks that
result from the decisions about how to manage primary risks. Cumulative risk is a combination or collective
expected value of the effect of multiple risks.

11-15 All of the following are tools and techniques for Control Risks except:

a) Reserve Analysis
b) Project risk audits
c) Technical performance measurements
d) Exploitation

Answer: D Exploit is a strategy for opportunities under the tools and techniques of the Plan Risk Responses
process. It is associated with managing opportunity or risks that may have a positive impact on a project. Refer
to page 349. PMBOK Guide, 5th edition.

11-16 Project risk is typically characterized by what three elements:

a) Severity of impact, duration of impact and cost of impact


b) Identification, type of risk category and probability of impact
c) Risk, probability, and impact
d) Occurrence, frequency and cost

Answer: C A risk event is the actual occurrence of the risk. Example equipment failure. Risk probability is
the likelihood that a risk event may occur. Impact refers to the consequence of the occurrence of the risk
event in terms of cost, time, scope, etc.

11-17 Purchasing insurance is considered an example of risk:

a) Mitigation
b) Transfer
c) Acceptance
d) Avoidance

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Answer: B Transfer generally involves the shifting of a risk from one party to another. It does not illuminate
or reduce the risk. Insurance is a common form of transfer of risk. Refer to page 344, PMBOK Guide, 5th
edition.

11-18 You are the project manager assigned to a critical project, which requires that you handle project risk
intentionally and methodically, so you have assembled only the project team. They have identified 32
potential project risks, determined what would trigger the risks, rated and ranked each risk using a risk
rating matrix. You have also reviewed and verified all documented assumptions from the project team and
verified the sources of data used in the process of identifying and rating the risks. You are continuing to
move through the risk management process. What have you forgotten to do?

a) Conduct a Monte Carlo simulation


b) Determine which risks are transferable
c) Determine the overall riskiness of the project
d) Involve other stakeholders

Answer: D The risk management process requires input from all key stakeholders including the project team.
Use of a stakeholder register assists in the proper identification of stakeholders and in obtaining their input.
Refer to page 319, PMBOK Guide, 5th edition.

11-19 A project manager is faced with a product design risk issue. It has been determined that the materials
used to house a critical component of the product are subject to significant corrosion as a result of exposure
to the typical work environment. The project team has decided to modify the design using very expensive
corrosion-resistant materials in this component, which will basically eliminate the risk. The technique used
by the team is:

a) Risk avoidance
b) Risk acceptance
c) Risk transference
d) Risk deflection

Answer: A Risk avoidance is a technique that is used when a change to the plan eliminates a risk or threat
entirely. Risks can be avoided through effective and thorough requirements management and communication
or the use of subject matter experts.

11-20 Using the following information and a normal distribution curve, what is the probability that the
project will be completed in 64 days?

Optimistic time is 48 days. Pessimistic time is 72 days. Most likely time is 60 days
a) 16%
b) 84%
c) 50%
d) 100%

Answer: B To Determine the probability of completing in 64 days, the following steps are required:
1. Determine the weighted average using the formula {Optimistic + 4(Most Likely) + Pessimistic}/6.
2. Determine the standard deviation using the formula (Pessimistic Optimistic) / 6.

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In the normal distribution curve there is a 68% probability that the outcome will be within 1 standard deviation
from the mean. There is a 95% probability that the result will fall within 2 standard deviations from the mean
and a 99.73% probability that the result will fall within 3 standard deviations from the mean. If the mean is at
the 50% point and there is a 68% probability of the result falling within plus or minus one standard deviation of
the mean, then the probability of 1 standard deviation is divided by 2. The result is 34. Adding 34 to 50% =
84%. Subtracting 34 from 50% = 16%. The Standard deviation in this example is 4. The mean is 60. 60 + 4 = 64
or one standard deviation from the mean. 50% + 34 = 84%.

Lesson 12: Project Procurement Management


12-1 When you decide to give up your rights under contract to expedite an activity by circumventing a
process you have decided to:

a) Enter into contract default


b) Terminate the contract
c) Execute a waiver
d) Submit an informal change request

Answer: C A waiver is a voluntary relinquishment of a right or an entitlement.

12-2 The tools and techniques of Control Procurements include all of the following except:

a) Performance reporting
b) Payment systems
c) Inspections and audits
d) Change requests

Answer: D Change requests are generally an output of a process.

12-3 The process that ensures that each party meets their contractual obligations and that their legal rights
are protected is:

a) Control procurements
b) Contract payment systems
c) Claims administration
d) Contract change control

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Answer: A Contract payment systems, claims administration, and contract change control are all included in
the Administer procurements process.

12-4 Ending a contract before all contractual objectives have been reached due to a buyers decision to
change business direction is an example of:

a) Breach of contract
b) Contract close out
c) Termination for convenience
d) Letter of intent

Answer: C Termination for convenience is a contract clause that permits the buyer close a contract at any
time for any reason. Generally there will be specific conditions associated with the execution of this clause.
Breach of contract refers to a failure to deliver a bargained for and agreed upon contractual condition.

12-5 As the buyer during the contract negotiation process, you are interested in a contract that would have
the least amount of risk to your organization. Which of the following contracts would be preferred to meet
your risk-averse needs?

a) Firm Fixed Price


b) Cost Plus Percentage of Cost
c) Cost Plus Incentive Fee
d) Cost Plus Fixed Fee

Answer: A The Firm Fixed Price or Lump Sum contract places the responsibility to deal with the risk of a cost
overrun with the seller. Cost plus contracts shift the cost risks to the buyer.

12-6 The buyer has negotiated a cost plus incentive fee contract with the seller. The contract has a target
cost $300,000, a target fee of $40,000, a sharing ratio of 80/20, a maximum fee of $60,000 and a minimum
fee of $10,000. If the actual cost of the project is $380,000 how much will the buyer pay as a fee to the
seller?

a) $56,000
b) $104,000
c) $30,000
d) $24,000

Answer: D
Target cost = 300,000
Target fee = 40,000
Sharing ratio = 80/20 which means the seller assumes 20% of the cost overrun or 20% of -80,000 = -16,000.
Target fee = 40,000 -16,000 = 24,000
The cost plus incentive fee contract shares the cost savings but could also result in reduced fees to the seller if
a cost savings is not achieved.

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12-7 You are involved in finalizing contract negotiations. The definitive contract has not yet been signed and
may take an additional two weeks but it is critical to start several work packages within the three days work
to avoid schedule problems later. You should utilize a:

a) Verbal agreement to get started


b) Letter of intent or letter contract
c) A project charter
d) A statement of work update

Answer: B A letter of intent is an agreement to begin work and release some funding to avoid potentially
serious schedule delays to meet a negotiated delivery date while final approvals of the definitive contract are
obtained.

12-8 A contract can be described as:

a) An informal agreement between two parties


b) A mutually binding agreement involving an offer and an acceptance
c) A type of project scope statement
d) A document approved by the sponsor defining project manager authority

Answer: B A contract is a negotiated agreement that is considered to be for a legal purpose and includes the
legal obligations of the seller to deliver the agreed upon products or services. Contracts include a consideration
or payment for services.

12-9 Buyers may wish to review the qualifications of potential sellers before they actually meet with them.
This process is known as:

a) Obtaining independent estimates


b) Screening
c) A weighting system
d) Contract negotiation

Answer: B Prior to reviewing detailed proposals a buyer may review the qualifications of sellers who have
indicated an interest to bid. Pre-screening of qualifications will ensure that negotiations are focused on sellers
who can perform the required work. A weighting system is generally utilized to score qualified sellers after
proposals have been submitted.

12-10 As the project manager for a new project you have been given the responsibility to provide all
potential contractors with the information they need to determine if they would like to continue with the
contracting process. To accomplish this you may want to schedule a:

a) Project stakeholder meeting


b) A bidders conference
c) A make or buy analysis conference
d) A project kickoff meeting

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Answer: B The Bidders conference provides an opportunity for the buyer to provide all potential sellers with
information to allow them to determine if they should continue with the proposal process.

12-11 All of the following are examples of procurement documents except:

a) Request for Information


b) Request for Proposal
c) Project Scope Statement
d) Request for Quote

Answer: C The project scope statement is generally developed after the Statement of work and Contract has
been reviewed and approved.

12-12 A cost reimbursable contract introduces greater risk to the:

a) Buyer
b) Seller
c) Project team
d) Functional managers

Answer: A In a cost reimbursable contract the buyer generally does not have finalized requirements. The
buyer has higher cost risk, since the seller has their costs covered.

12-13 The seller is protected from liabilities and penalties when a project is impacted by a natural disaster
through the:

a) Liquidated damages clause


b) Penalty clause
c) Force Majeure clause
d) Statement of work

Answer: C The Force Majeure clause is intended to protect the seller from any liabilities resulting in natural
disasters. Example of a force majeure clause in a contract: No Party shall be liable for any failure to perform
its obligations where such failure is as a result of Acts of Nature (including fire, flood, earthquake, storm,
hurricane or other natural disaster). Penalty clauses and Liquidated damages are associated with a failure to
meet a contractual obligation.

12-14 A high level description of the scope issued by the buyer, specifying the work expected to be
completed by the seller is called:

a) Statements of work
b) Acceptance criteria
c) Considerations
d) Teaming agreements

Answer: A Statements of work (SoW) is a high level description of work that the buyer issues to enable the
seller develop an understanding of the scope.

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12-15 The legal contractual relationship that exists between a buyer and a seller after the contract is signed
is known as:

a) Privity
b) Obligation
c) Bilateral agreement
d) Legally bonded relationship

Answer: A Privity of contract is a relationship that exists only between the parties to the contract, most
commonly a contract that provides goods or services (a contract of sale). A bilateral agreement is a binding
contract between the two parties that have agreed to mutually acceptable terms.

12-16 In a cost reimbursable contract, the risk of cost escalation is borne by the:

a) Buyer
b) Seller
c) Project manager
d) Shared between seller & buyer

Answer: A In a cost reimbursable contract, the seller is guaranteed to be reimbursed for every item of cost,
so the risk of cost escalation primarily lies with the buyer.

12-17 A cost-plus-incentive-fee (CPIF) contract has an estimated cost of $150,000 with a predetermined fee
of $15,000 and a share ratio of 80/20. The actual cost of the project is $130,000. What is the total fee that
will be awarded to the seller?

a) $31,000
b) $19,000
c) $15,000
d) None of the above

Answer: B
Target cost = 150,000
Actual cost = 130,000
Savings = 20,000
Share to the seller 20% of 20,000 = 4000
15,000 + 4000 = 19,000
Total project cost for the buyer = 130,000 + 19,000 = 149,000

12-18 Under which type of contract does the seller accept all liability for poor workmanship, engineering
errors and consequential damages?

a) Incentive fee
b) Fixed price
c) Cost plus
d) Cost plus fixed fee

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Answer: B Fixed price. The Fixed price or lump-sum contract places the risk on the seller. The seller will
generally include a contingency in the contract to assist in minimizing the risk of reduced profits.

12-19 Contractual language does not preclude the possibility of misunderstandings and situations that could
adversely affect project progress. Therefore, it is considered a best practice to have a ______ committee
established as a means of removing the obstacles and managing conflicts.

a) Top management
b) Disputes resolution
c) Steering
d) Engagement

Answer: B Generally the process for resolving contractual disputes is described in the contract itself and
usually includes designated representatives from each party involved who are authorized to resolve contract
issues. Refer to page 384, PMBOK Guide, 5th edition Claims administration.

12-20 Which of the following contract types does not encourage the seller to control costs and, as a result,
places the greatest risk on the buyer?

a) Cost exclusive
b) Cost Plus Fixed Fee
c) Cost Plus Incentive Fee
d) Cost Plus Percentage of Cost

Answer: D The cost-plus-percentage-of-cost or CPPC contract transfers all cost to the buyer and any increase
in costs will result in an increase in the fee to the seller. It also incentivizes the seller to be inefficient. This
places significant risk with the buyer and requires close cost management.

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Lesson 13: Project Stakeholder Management
13-1 Project information has been distributed according to the communications plan. Some project
deliverables have been changed and were made according to the change control plan. One stakeholder
expressed surprise to the project manager upon being informed of a previously published change to a
project deliverable. All other stakeholders received notification of the change. What should the project
manager do?

a) Inform the stakeholder of the date when the change was approved
b) Review the communications plan with the stakeholder and explain his responsibility
c) Review the communications plan and make revisions, if necessary
d) Address the situation in the next steering committee meeting so others do not miss publish changes

Answer: C In this case the communications plan and the communications requirements analysis may not
have included all Key stakeholders. Informing the stakeholder of the date of the change does not
resolve the situation and it may occur again. The existing communications plan may not be complete and
explaining stakeholder responsibility without ensuring the process has been agreed upon could result in
conflict. Addressing a communications issue during steering committee meeting may assist will not resolve a
problem until the communications plan is reviewed and updated as needed.

13-2 During stakeholder analysis the project manager and team may use many different models to classify
stakeholders. The model that helps to analyze a stakeholders ability to impose his or her will or power and
influence the need for immediate attention from the project team along with the legitimacy of the
stakeholders involvement is the:

a) Power / interest grid


b) RAM
c) Salience model
d) Stakeholder registers

Answer: C The salience model addresses stakeholder power, urgency and legitimate involvement in a
project. The Power and interest grid assists in determining the level of influence and interest a stakeholder
may have on the planning and outcome of the project. The RAM, Responsibility Assignment Matrix, connects
project stakeholders with work breakdown structure components. The stakeholder register is an output of
stakeholder analysis. Refer to page 262, PMBOK Guide, 5th edition.

13-3 Which of the following may NOT be a stakeholder to a project?

a) Project Manager
b) Project Team
c) Everybody in the customers organization
d) Suppliers to the project

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Answer : C - Each and every person in the customer organization may not necessarily be a stakeholder. There
may be members of the organization who are not connected with the project at all.

13-4 Stakeholder management involves all of the following EXCEPT:

a) Identifying the stakeholders


b) Keeping all stakeholders happy
c) Analyzing stakeholder expectations
d) Managing stakeholder engagement

Answer: B - Stakeholder management involves processes required to identify stakeholders, analyze their
expectations and to develop appropriate strategies to engage them. It does not necessarily mean keeping
everybody happy (which may not even be possible).

13-5 Which of the following should you be most concerned about, during stakeholder analysis?

a) Their interest in the project


b) Their influence on the project
c) Both A and B
d) Neither A nor B

Answer: C - The stakeholder can be interested in a project or be in a position to influence the project. As such,
both are important for the project to understand.

13-6 What is the best way to manage stakeholders which are low on power and interest?

a) Monitor them
b) No need to worry about them
c) Treat all stakeholders equal
d) Keep them informed

Answer: A - The strategy for stakeholders who are low on the power-interest grid is Monitor.

13-7 Which of the following is a tool to assess the current and desired state of engagement of a stakeholder
on the project?

a) Stakeholder registers
b) Stakeholder management plan
c) Stakeholder engagement assessment matrix
d) Stakeholder issue log

Answer: C - Stakeholder engagement assessment matrix, which is a tool and technique of the Plan stakeholder
management process, is a tool to assess the engagement levels of the stakeholders on a project.

13-8 Which of the following is an input to the plan stakeholder management process?
a) Stakeholder registers
b) Stakeholder management plan
c) Stakeholder engagement assessment matrix

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d) Impact/Power grid

Answer: A - Stakeholder register is an input to the plan stakeholder management process.

13-9 Which conflict resolution technique is most likely to result in a permanent resolution?

a) Compromise
b) Negotiation
c) Confrontation
d) Smoothing

Answer: C - Confrontation is most likely to result in a permanent resolution. All the others involve both parties
giving something up.

13-10 All of the following is true about critical path activities EXCEPT:

a) They have zero float


b) Any delay in these will delay the project
c) It is the shortest possible path from start to finish
d) There may be more than one critical path on a project

Answer: C - Critical path is the longest path from start to finish.

13-11 An important stakeholder in a project is at an unaware state at present, i.e. he does not know what
is going on in a project. You reckon that his support could be very important. Which of the following is the
BEST way to get him to a supportive state?

a) Send him regular reports about the project and its benefits
b) Assign some work or review activity to him
c) Send him tickets to his favorite opera show
d) Give topmost priority to the issues that he has raised

Answer: B - Involving the stakeholders in the project work is a good way to get them to support the project.
Simply sending them reports seems a passive way of engaging.

13-12 Which of the following is a tool and technique used in manage stakeholder engagements process?

a) Communication management plan


b) Change log
c) Issue log
d) Inter-personal skills

Answer: D - Inter-personal skills is an important technique used in the manage stakeholder engagements
process.

13-13 A project manager is reviewing the stakeholder management plan and communications management
plan and sending appropriate information to the stakeholders. She sets up meetings with the stakeholders

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and ensures that their expectations are being realized. She makes sure that any issues that get raised are
addressed promptly as far as possible. Which process in stakeholder management is being worked on here?

a) Plan stakeholder management


b) Manage stakeholder engagements
c) Control stakeholder engagements
d) Close stakeholder engagements

Answer: B - These are all activities typical of managing stakeholder engagements.

13-14 One of the important inputs to the Control stakeholder engagements is:

a) Change request
b) Issue log
c) Information management system
d) Work performance information

Answer: B - Issue log is an input to the control stakeholder engagements process.

13-15 During the execution of a construction project, excavation activities unearth some artifacts that seem
to have some archaeological importance. What should the project manager do?

a) Ignore the findings and continue work as scheduled


b) Inform senior management and continue work as scheduled
c) Stop excavation work and call up the archaeological department to quickly research the findings
d) Raise a change request

Answer: C - A project manager needs to take cognizance of the significance of the findings and must consult
the experts before proceeding further. Activities other than excavation may continue.

PMP & PMBOK are registered trademarks of Project Management Institute, Inc.

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Simplilearn Practice Test Paper

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PMP - PMBOK 5th Edition Test Paper
1. During the initiating, which of the following elements will be identified to meet the project goals?
a) Key deliverables
b) Stakeholders
c) Quality
d) Vendors

2. A car manufacturing company conceptualized a new car which would be more fuel efficient, better
ergonomically designed, and satisfies the latest safety compliance. This car was recently launched and
has now moved into full fledged production. This is an example of:
a) Operation, as the company is into car manufacturing which is an ongoing process
b) Project, as this car was conceptualized, designed, and now launched
c) Project, as it has clear scope and requirements in terms of safety compliance, fuel efficiency etc.
d) Operation, as this activity didn't create a unique product

3. When is cost highest in the project life cycle?


a) At initiation
b) During planning
c) Midway during the project
d) During closure

4. As a part of Stakeholder Management, all of the following are acceptable management practice to be
followed by a Project Manager EXCEPT:
a) Identify all the stakeholders and capture them in project team directory
b) Ensure stakeholders' expectations are aligned and gain support for the project
c) Give preference to stakeholders over customer in case of difference of interest
d) Communicate to the stakeholders all relevant information about the project

5. After a high level management meeting the manager chairing the meeting asks the Project Manager to
document and communicate the action items to all the stakeholders. The Project Manager is part of
which kind of organization structure?
a) Balanced Matrix
b) Weak Matrix
c) Strong Matrix
d) Tight Matrix

6. Which of the following activities is part of initiating?


a) Develop stakeholder management plan
b) Conduct benefit analysis with stakeholders to validate project alignment with organizational strategy
and expected business value.
c) Validate Scope
d) Conduct kick off meeting

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7. A Project Manager is just assigned to a project. He is involved in creating a document that would
formally authorize the project and capture initial requirements of the stakeholders. What is the output
of this process?
a) Project Management Plan
b) Project Statement of work
c) Project Charter
d) Business case

8. Which of the following statements DOES NOT describe the essence of Integration Management in the
context of Project Management?
a) Balancing of competing objectives and the exploration of alternative actions
b) The processes and activities needed to identify, define, combine, unify, and coordinate process and
project management activities within the Project Management Process Group
c) Integrating different components from the development cycle to create the final deliverable
d) Managing interdependencies among Project Management knowledge areas

9. A Project Manager is going through the Project Statement of Work provided by the project sponsor.
Which of the following will NOT be a part of this document?
a) Business Need
b) Product Scope Description
c) Strategic Plan
d) Performance Baseline

10. You have just been assigned as a Project Manager of a project for which a prototype was recently
delivered. The sponsor of the project calls you and gives you an overall estimate of the project. This
form of estimate is known as ____.
a) Analogous Estimate
b) Parametric Estimate
c) Heuristic Estimate
d) Three Point Estimate

11. A Project Manager who has just been assigned to a new project has been asked by his sponsor to come
up with an initial cost estimate called a Rough Order of Magnitude (ROM). This would typically fall
under which range?
a) -50% to +100%
b) -25% to +75%
c) -10% to +15%
d) -100% to +50%

12. In a meeting, the Sponsor has discussed three projects with you: Project A with Net Present Value of
$55,000 and a payback period of 5 years; Project B with Net Present Value of $95,000; and Project C
with payback period of 10 years. He provides you with more information about the projects and
intends to assign you as the Project Manager for the selected project. What is expected from you as a
Project Manager, EXCEPT?

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a) Conduct project selection methods to select one of the three projects discussed with you by the
sponsor to evaluate feasibility of new products and services
b) Proceed to select the project with higher NPV
c) You have no role and tasks to be performed as a Project Manager
d) Participate in the project selection method

13. There are three projects A, B, and C. NPV for project A is $50,000 and for project B is $ 80,000 and for
project C is $ 40,000. In a meeting, the management unanimously has chosen projects A and C. What is
the opportunity cost of the project?
a) 80000
b) 130000
c) 90000
d) 0

14. A project is in the initiation stage and the Project Manager is identifying project communication
constraints. Which of the following could be a valid constraint?
a) The project could face high attrition rate
b) Management and customer expect detailed formal status reports on the project
c) Project team members would require to work from geographically different locations
d) Many stakeholders of the project would not be able to attend planned project kick off meeting

15. A Project Manager is responding to a business proposal in an overseas company. Which of the
following should he refer to as a guide to understand the business practice(s) that are allowed and
discouraged?
a) Procurement documents including contract statement of work
b) His Organization policies and procedures
c) Project Charter
d) PMI code of Professional Conduct

16. Which of the following is NOT a project?


a) Campaigning for an election
b) Family Weekend drives to sea coast
c) Writing an autobiography about project management experience
d) Preparing for PMP examinations

17. You have been assigned a large construction project and you are in the Initiation process group. You
have identified the project stakeholders using stakeholder analysis tool and defined the high level
scope of the project. During these activities you have identified a key project limitation regarding the
project location. What is the BEST option for you, in this situation?
a) Document the project limitation as a project constraint
b) Discuss the project constraint with the project sponsor and the customer
c) Document the project limitation as a project constraint and propose an implementation approach with
the sponsor and customer, if required
d) Ignore the project constraint and work towards getting approval for the project charter

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18. The Project Manager is participating in development of project charter by gathering and analyzing the
stakeholders' requirements and ensuring that the project scope, milestones, and deliverables are
documented correctly. Of the following, which is NOT achieved by the sponsor's approval of the
project charter?
a) Formalize the authority assigned to the Project Manager
b) Gain commitment by the stakeholders
c) Gain acceptance for the project by the stakeholders
d) Ensure formal acceptance of the deliverables by the customer

19. Which of the following is NOT an input to the Plan Stakeholder Management Process?
a) Project Management Plan
b) Stakeholder Register
c) Stakeholder Management Plan
d) Enterprise Environmental Factors

20. John has been assigned a project recently and he is in the process of documenting the project charter
with the project sponsor. Which of the following MUST he include in the Project Charter?
a) Project purpose or justification
b) Positive risks
c) Budget estimates
d) Risk analysis

21. As a Project Manager of a large project with hundreds of stakeholders, which of the following is the
BEST course of action?
a) Incorporate needs of only important stakeholders
b) Incorporate needs of all stakeholders
c) Ask your manager to manage the stakeholders
d) Eliminate some of them

22. As part of Stakeholder Analysis, it is important to prioritize the key stakeholders to ensure the efficient
use of effort to communicate and manage their expectations. All of the following are the classification
models available EXCEPT:
a) Power/Influence grid
b) Power/Impact grid
c) Power/Interest grid
d) Influence/Impact grid

23. You are the Project Manager of a software telecom development project. You and your team are
working together to create a billing software. Which quadrant of the Power/Influence Grid will the
person(s) responsible for sign-off of the deliverables fall in?
a) Keep Informed
b) Monitor
c) Manage Closely
d) Keep Satisfied

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24. You are the Project Manager of a project in which team members have dual reporting structure. In
addition to reporting to you, they also report to their functional manager. Also the team members are
expected to do the project work, along with their department work. You are working in which form of
organization?
a) Functional
b) Projectized
c) Tight Matrix
d) Matrix

25. You are a Project Manager of an ambitious project in the organization. Although you have successfully
managed many critical projects before, this is a new organization and you are working on this
technology for the first time. However you hear that the company has proven expertise on the
technology and have also done a similar project in the past. In this situation, what is the BEST option
available to you?
a) Approach the Project Manager from the earlier project and take his inputs
b) Obtain historical records and guidance from the Project Management Office (PMO)
c) Involve Stakeholders, take their opinion and expertise on the project
d) Continue to manage project by your instincts until there is a major issue

26. You are managing a large and complex project which is in the planning stage. After assessing the
detailed project requirements with the stakeholders, you ask the team to create a Work Breakdown
Structure (WBS). However, since most of the team is new, you decide to brief them on some rules of
creating a WBS. Which of the following statements is INCORRECT about a Work Breakdown Structure?
a) WBS is a list of specific activities used to accomplish the deliverables
b) WBS includes only work needed to create deliverables hence work not in WBS is not part of the project
c) Lower level WBS components are a decomposed result of the upper level WBS components
d) WBS allows better estimation of cost, risk, and time

27. You are a Project Manager for an infrastructure development project and the project is to build a
multi-story building. You have submitted your project estimates for cost and duration to the client. You
also inform the buyer that the estimates would be true provided there is already an 8ft foundation
built on the site. This statement describes a/an ----------- in your project.
a) Risk
b) Constraint
c) Assumption
d) Mandatory Dependency

28. You are the Project Manager of a large and complex project. Your project team has finished creating a
Work Breakdown Structure for the project. However, some of the team members are still not sure of
what work is included in each of their work packages. Which of the following documents would you
suggest they go through?
a) Project scope statement
b) Project Management Plan

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c) Work Break Structure (WBS) Dictionary
d) The Product Scope document

29. You are a Project Manager, in the process of sequencing activities for your project, you create a
schedule network diagram that uses boxes called nodes to represent activities and connects them with
arrows to represent logical relationship between them. What is this popular scheduling diagram
known as?
a) Precedence Diagramming Method (PDM)
b) Arrow Diagramming Method (ADM)
c) Program Evaluation and Review technique (PERT)
d) Graphical Evaluation and Review Technique (GERT)

30. As a Project Manager, you are in the process of identifying and documenting relationship among
project activities and you are using the Precedence Diagramming Method (PDM). Which of the
following relationships are you MOST UNLIKELY to use for this purpose?
a) Finish to start (FS)
b) Finish to finish (FF)
c) Start to Start (SS)
d) Start to finish (SF)

31. As a Project Manager, you are estimating the duration of your project activities using PERT technique
(Program Evaluation and Review technique). For a particular project activity your Optimistic estimate is
14 days, Pessimistic estimate is 47 days, and Most Likely estimate is 27 days. What should be the
expected duration of this activity?
a) 28.17
b) 31
c) 43
d) 36

32. Sub network or fragment network templates are most useful when the project has MANY:
a) Mandatory Dependency
b) Discretionary Dependency
c) Undefined Variables
d) Identical or nearly identical deliverables

33. As a Project Manager you have created a Resource Breakdown Structure (RBS) for your project. Which
of the following statements is NOT TRUE about Resource Breakdown Structure (RBS)?
a) It is a hierarchical structure of resources
b) It is used for estimating Resource Utilization
c) It is used for organizing and reporting project schedule
d) It has resources grouped by category and type

34. A Project Manager is managing a project which has constraints on the availability of required resources
throughout the project. As such he needs to rearrange resources in such a way that a constant number

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of resources are used each month. Which of the following techniques will the Project Manager use to
achieve this?
a) Fast Tracking
b) Crashing
c) Leveling
d) Lagging

35. A project team is in the process of estimating the types and quantities of resources required to
perform each activity. Which of the following activities will NOT be done by the team during this
process?
a) Estimate the type and quantity of resource required to perform each activity
b) Go through the past data and Lessons Learned from previous project
c) Study the organization policies and procedures regarding staffing
d) Identify and show network dependency in the project activities

36. Which estimate technique does the Program Evaluation and Review Technique (PERT) use to define
the approximate range of activity costs?
a) Earned Value Technique
b) Parametric Estimation Technique
c) Three Point Estimate Technique
d) Historical Information

37. Your project team is involved in estimating the cost of the project as a part of project cost
management. Which of the following tools and techniques will NOT be applicable for this purpose?
a) Cost Benefit Analysis
b) Reserve Analysis
c) Cost of Quality
d) Vendor Bid Analysis

38. The common term for an authorized time phase budget at completion (BAC) used to measure cost
performance and displayed in the form of an S curve is:
a) Earned Value
b) Cost Performance Index
c) Cost Baseline
d) Project Budget

39. A project team is in the process of identifying quality requirements and standards for the project and
documenting how the project will demonstrate compliance. They have referred to organizational
process assets and are using tools like statistical sampling and control charts. Which process of Quality
Management is the project team performing?
a) Plan Quality Management
b) Perform Quality Assurance
c) Perform Quality Control
d) Manage Project Team

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40. Which of the following is true with respect to planning?
a) Develop the high level budget
b) Develop the cost management plan
c) Develop the budget plan
d) Develop both budget plan and cost management plan

41. Which of the following is an example of external failure cost?


a) Cost of testing
b) Cost of training
c) Cost of documentation
d) Warranty cost

42. A project team is ahead of their schedule and their SPI is currently 1.4 and CPI is 1.2 respectively. The
Project Manager and the team is brainstorming on the scope of next milestone delivery. They have
found that including an additional feature would enhance the usability of the product and can be
compressed in the current schedule. What should the project team do next?
a) Add this feature in next release as long as it doesn't affect the delivery date
b) Go through the change management and analyze the impact of this additional feature
c) Discuss it with the project sponsor
d) Drop this feature as it is gold plating and customer does not need it

43. You are a Project Manager managing a large team at diversified locations. There are many groups
within a project like architects, human resources, legal, quality engineers, etc. with their own hierarchy
and reporting structure. In order to ensure that each team member has clarity on their own and other
members' reporting structure, you decide to capture all of this information graphically. Which of the
following documents will you be using for this purpose?
a) Project Organization Chart
b) Resource Breakdown Structure
c) Organization Breakdown Structure
d) Resource Assignment Matrix

44. A Project Manager wants to capture information related to staff acquisition and release, training
needs, resource calendar, recognition, and rewards. Which of the following documents would be most
appropriate?
a) Project Management Plan
b) Staffing Management Plan
c) Project Staff Assignments
d) Issue Log

45. You are a Project Manager in a functional structure organization, hence it is important that you
negotiate suitable resources for your project from the functional manager. Which of the following
tools could be a valuable asset to prove your project resource requirements to the functional
manager?

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a) Staffing Management Plan
b) Network Diagram and Project Schedule
c) Resource Assignment Matrix
d) Project organization chart

46. In a project kick off meeting there is utter chaos with all the attendees talking simultaneously. The
Project Manager is not able to present his report in this noise and the stakeholders feel that their
expectations are not being met properly. Also, many of the invited attendees are not attending the
meeting. What must the Project Manager have done to avoid this situation?
a) Communicate the agenda of the meeting clearly to all the Stakeholders
b) Postpone the meeting to ensure availability of all the Stakeholders
c) Conduct a brainstorming session to reach a consensus with Stakeholders
d) Establish ground rules for the meeting and communicate the same to all the attendees

47. You have been assigned as a Project Manager of a newly initiated project and have 5 team members.
There is a project sponsor (Mr. Smith) and a technical architect who will be involved only during the
planning stage. This project is for an external customer. How many communication channels are
possible in your project?
a) 36
b) 72
c) 28
d) Cannot be determined since project is in the initiation stage

48. Risk Breakdown Structure is an example of:


a) Text oriented format
b) Functional chart
c) Hierarchical representation of risks according to risk categories
d) Matrix based organization chart

49. A Project Manager is managing a short duration pilot project and has started with a risk management
planning process. He has identified new risks and arranged them based on probability and the impact
matrix. The Project Manager now proceeds to plan responses for the risks without analyzing the risks
numerically. According to you, this decision of Project Manager is:
a) Incorrect, It is important to numerically analyze each risk so that they can be responded properly
b) Correct, Quantitative Risk Analysis is waste of time and not required if risks are already assessed
qualitatively
c) Incorrect, Quantitative risk analysis is important. We need to calculate EMV for each risk and later
move to risk response planning
d) Correct, This is a short duration project and Project Manager might skip Quantitative Risk analysis if he
feels it is not assisting in the Risk Management process

50. Which of the following elements are to be considered while developing the project schedule? Pick the
best answer.
a) Based on project deliverables

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b) Based on project timeline
c) Based on Quality
d) Based on cost

51. As part of Quantitative Risk Analysis, a Project Manager has derived four packages with the following
probability and impact. Using EMV (Expected Monetary Value) which one should he use in the project?
a) Work package I: Probability 15% and Impact $20,000
b) Work package II: Probability 7 % and Impact $10,000
c) Work package III: Probability 7 % and Impact $15,000
d) Work package IV: Probability 15% and Impact $10,000

52. A Project Manager is in the planning stage and is evaluating risks in the project. He wants to improve
the project's chances of success by evaluating all possible risks. As a part of risk management planning
and identification he has used a standard questionnaire to identify risks and has identified about 20
risks in the project. What would you advise him to do before moving to the next process, 'qualitative
risk analysis?'
a) Prioritize risk by determining each of their probability and impact
b) Update project management plan and other project documents based on inputs from these risks
c) Communicate the status of identified risks to stakeholders
d) Continue to identify more risks using other tools and techniques

53. A project team in a software project started with risk management planning and identified new risks.
Then they conducted qualitative risk analysis using a probability and impact matrix and thereafter
completed the 'plan risk response' process. What is an important step they need to complete before
moving to risk monitoring and control?
a) Evaluate risks quantitatively using any of the tools of Quantitative Risk Analysis
b) Identify Risk owners among stakeholder and project team
c) Evaluate the amount of contingency time and cost reserve needed
d) Communicate the status of identified risks and response strategy to stakeholders

54. A project team is working on a risk response strategy by evaluating every risk and coming up with
suitable response strategies. However, one particular risk with a negative impact cannot be avoided or
mitigated. Furthermore, there is no way to transfer risk by outsourcing or buying insurance. What is
the best they can do about the risk?
a) Treat it as a secondary risk and update it in Risk Register
b) Share the risk by allocating ownership to a third party
c) Accept the risk and put it in the watch list
d) Re-visit the Risk Response Strategy

55. You are a Project Manager in a construction company and urgently require some expert welders for a
short duration. You checked their availability internally with the functional manager, but he is not able
to match the skill set required by you. You decide to acquire these resources on contract. Which of the
following is the BEST type of contract for your requirements?
a) Cost Reimbursable

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b) Fixed Price
c) Time and Material
d) Cost Plus Incentive Fee

56. A contract type where the seller is reimbursed for all allowable costs for performing the contract work
and receives a predetermined incentives fee based on achieving certain performance incentive is:
a) Cost Plus Fixed Fee Contract
b) Cost Plus Incentive Fee Contract
c) Cost Plus Award Fee Contract
d) Fixed Price Incentive Fee Contract

57. A Project Manager is in the process of preparing a plan that documents how the procurement process
will be managed from developing procurement documents to contract closure. He is also going
through project requirements and scope documents with the team and discussing different contract
types to decide the one most suitable for the project. According to you, which process of procurement
management is the Project Manager in?
a) Plan Procurement Management
b) Conduct Procurements
c) Control Procurements
d) Close Procurements

58. A Project Manager has used a popular cost estimating model to come up with cost estimates for his
upcoming project. However, the sponsor asks him to add 15% to the total cost estimate as the
customer always negotiates and asks the prices to be reduced by 10% to 15%. What should be the
BEST option for the Project Manager?
a) Do as the Sponsor says after all he is your senior and project sponsor
b) Recalculate the cost estimates using a more suitable technique and check the difference between the
estimates
c) Provide the Sponsor with details on cost estimation and suggest him to share the same with customer
d) Refuse to make any changes or increase the estimated cost
59. A large project with a team of 150 people is in the planning stage. It spans over a duration of 3 years
and is under strict budget. A Project Manager is assessing the detailed project requirements in
consultation with the stakeholders based on the project charter to establish the key project
deliverables. He sets his project quality objective per the organization capability baseline set by the
quality policy. However, one of the stakeholders refuses to accept this and asks him to reduce the
quality objective as it will help cut down cost of quality of the project. He also refuses to approve the
project till the Project Manager agrees to his suggestion. What should the Project Manager do?
a) Explain to the stakeholder that Cost of Quality is less than cost of project
b) Explain to the stakeholder that if Quality objectives are set lower than expected they will be
highlighted during Quality Audit
c) Explain to the stakeholder that the quality policy universally guides the projects within the
organization to set quality objectives and they need to abide by it
d) Agree to the stakeholder's suggestion and reduce the metric as he will not approve the project
otherwise

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60. After a project management plan is prepared and approved a week ago, a project stakeholder asks the
Project Manager to correct some syntax and grammatical errors in the project document as it could be
misleading. What should the Project Manager do?
a) Refuse as these are trivial changes and can be ignored
b) Refuse as the project management plan is already discussed and approved
c) Refuse and ask the stakeholder to meet the project sponsor
d) Refuse and ask stakeholder to raise a change request that can be considered by change control board

61. Being a Project Manager, your project sponsor has asked you to come up with the total funding
requirements of the project. What will be the total funding requirements for your project?
a) The total of the approved budget by time period
b) The total of project budget plus anticipated liabilities
c) The total funds including the cost baseline plus any management reserves
d) The total of individual cost estimates

62. A project has a Project Manager, a sponsor, a human resource, a quality analyst, and 7 team members.
What are the number of communication channels possible in the project?
a) 50
b) 110
c) 55
d) 115

63. You are a Project Manager who has sent a formal document that describes the procurement item in
sufficient detail to allow prospective sellers to determine if they are capable of providing the product
and details methodology and results that will be provided to the buyer. This is called:
a) Invitation for Bid
b) Request for Proposal
c) Request for Quotation
d) Contract Statement of work

64. Which of the following are NOT achieved by the human resource plan, created by the Project Manager
during the planning process group?
a) Defines the roles and responsibilities of the project team members
b) Includes an effective project organization structure
c) Provides guidance about how resources will be utilized and managed
d) Defines the work breakdown structure

65. You are the Project Manager for a big size project and quality is top priority for this project. You have
devoted so much of the project time for creating the quality management plan. What is the advantage
of the quality management plan?
a) Prevents the defects from reaching the customers
b) Guarantees improvement in project quality
c) Provides a systematic approach for meeting the project's quality goals

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d) Conformance to customer's testing methodology

66. A Project Manager is trying hard to successfully complete a project, but his role in the organization is
limited and he has no control over project budget. Although he has some power to authorize
decisions, he needs to seek approval on most of the major decisions. Also his team members work only
part-time on the project. The Project Manager is mostly in which kind of organization?
a) Functional
b) Projectized
c) Composite
d) Strong Matrix

67. How is the role of project expeditor different from project coordinator?
a) Project coordinator has some power to make decisions
b) Project coordinator acts primarily as Staff assistant
c) Project coordinator role is that of communication coordinator
d) Project coordinator can control project budget

68. You are working on a critical project for a large enterprise. The project has a major milestone delivery
next week and is in final testing phase. The project team is working on two critical showstopper bugs,
which are parts of the deliverable as the project faces many serious issues. One of the senior members
of the project has put up his resignation and the outsourced component which was scheduled for
delivery next week may be delayed. Additionally, the current performance indices are CPI 1.09 and SPI
is 1.90. What is the MOST critical issue faced by the project?
a) Cost and Schedule
b) Delay in third party component
c) Resource Movement
d) Testing defects

69. All of the following are enterprise and environmental factors that can influence direct and manage
project work EXCEPT:
a) Stakeholder risk tolerance
b) Organizational culture and structure
c) Project Management Information System (PMIS)
d) Standardized guidelines and work instructions

70. A work authorization system is a:


a) Part of change control system in a project
b) It is a privately created software tool helped to submit and track changes, monitor and control project
activities from project initiation to closure
c) Tool used to notify team or contractors that they may begin work on a project or work package
d) Helps team create Work Breakdown Structure

71. Which of the following processes does not have defect repair as one of the outputs?
a) Perform Integrated Change Control Process

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b) Control Procurements
c) Monitor and Control
d) Control Schedule

72. You are a Project Manager of a software project which is in a critical phase of testing and bug fixing. An
enthusiastic test engineer working in the project tells you that he found a major bug the previous night
during testing. He assures that there is nothing to worry as he has 'patched' the code and it is working
fine now. What should be your main concern from this incident?
a) Nothing, it shows proactive approach of the team member and should be appreciated
b) It can be a case of scope creep and all prior documents need to be changed
c) It shows disrespect to the project management authority as the team member didn't ask his opinion
d) The patch or bug fix may not work correctly in all scenarios

73. You are a Project Manager in an oil company and have joined a project midway during execution. You
want to understand how requirements activities, configuration management activities such as changes
to the product requirement will be initiated, impacts analyzed, tracked and reported as well as the
authorization levels required to approve these changes. Which of the following documents will provide
you this information?
a) Requirements Management Plan
b) Integrated Change Control
c) Project Charter
d) Project Scope Statement

74. To acquire and manage the project team, which of the following plan or documents should be
referred?
a) Human Resource management plan
b) Procurement management plan
c) Project charter
d) Human Resource management plan and Procurement management plan

75. An Instrument measuring thickness of a screw of 15 mm diameter gives the following readings 16.001
mm, 16.00015 mm, 16.0003 mm, and 15.900 mm. Assuming the instrument is capable of measuring
up to the third place decimal, what BEST can be concluded on performance of the instrument?
a) The instrument is accurate and precise
b) The instrument is not accurate but precise
c) The instrument is accurate but not precise
d) The instrument is neither accurate nor precise

76. You are a Project Manager in a leading manufacturing company and managing a critical project for the
company. Your project is facing severe cost constraints and you cannot delay the delivery date of the
product. After consulting stakeholders and the customer, you decide to lower both the quality and
grade of the product. The decision to lower the quality and grade of the product is?
a) Wrong; as a grade and quality should never be compromised in a product.
b) Wrong; as grade can be compromised but not quality

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c) Wrong; as quality can be compromised but not grade
d) Correct; as both grade and quality can be compromised as per project need

77. A project is in the execution stage when the customer comes back with an additional feature to be
added in the forthcoming milestone delivery. The project team has assessed the impact of the change
by performing Integrated Change Control. The Project Manager should:
a) Hold a meeting with customer explaining why it is not good option to incorporate change requests
during project execution
b) Create a change Request and proceed for review by Change Control Board
c) Review Quality Management Plan and evaluate the effect of the additional feature on Quality
d) Notify stakeholders affected by change

78. According to Maslow's hierarchy of needs, what comes at the BOTTOM of the pyramid?
a) Safety
b) Social
c) Esteem
d) Self Actualization

79. A project is in the final testing stage and is approaching a critical deadline. Two senior members of the
team who have already had disagreements throughout project execution are caught up in a deadlock.
The Project Manager has earlier tried his best to sort out their differences but it hasn't worked. What
is the BEST the Project Manager can do in this situation?
a) Talk to the project sponsor since they are senior members of the project
b) Give them a final warning making it clear that such behavior is not encouraged
c) Talk face to face with each of them individually to sort out their differences
d) Use an Autocratic approach and make a decision which is best for the project

80. Of the following reasons which one is the MOST COMMON reason for conflict?
a) Schedules
b) Personalities
c) Technical Beliefs
d) Administrative policies and procedures

81. In order to achieve the project deliverables, the project manager has to manage task execution based
on project management plan. In doing so, which of the following elements should be considered?
a) Budget and schedule
b) Leading and developing the project team
c) Quality and cost
d) Acquiring the team

82. You are managing a large diversified project team. In the initial days of the project, the team members
behaved like independent individuals and seemed reserved, learning about their roles and
responsibilities. Then as the team began to work on the project and participate in technical decisions,

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their trust level grew. The team now supports each others needs and works together. According to
you, they are in which stage of team development?
a) Norming
b) Performing
c) Forming
d) Adjourning

83. Which of the following is NOT a tool and technique used in 'develop project team' process?
a) Training
b) Interpersonal Skills
c) Co-Location
d) Observation and Conversation

84. You have delivered many complex and technically challenging projects in the past and have won
respect and appreciation for your work from the customer and senior managers in the organization
alike. Which form of power are you using?
a) Formal (Legitimate)
b) Reward
c) Expert
d) Referent
85. A new Project Manager takes over a project during the execution phase. One of the main issues faced
by the project is that the customer complains of poor visibility on the project. What should be his first
step towards resolving the issue?
a) Have a discussion with the customer to understand why he feels the project lacks visibility
b) Hold a discussion with the team members who have been in this project since beginning to understand
customer specific communication needs
c) Go through the communication management plan to understand customer communication
requirement and whether it is being addressed properly
d) Project Manager should first understand the project and go through project management plan to
understand the project properly

86. You are managing a large project which has many stakeholders across various departments in the
organization. During the planning stage, you created a communication management plan based on the
project organization structure and external stakeholder requirements in order to manage the flow of
project information. Now while executing the project, one of the stakeholders contacts you and
informs you that his expectations are not accounted for in the project. What should be your BEST
response to the situation?
a) Understand his expectations and update project documents accordingly starting with stakeholder
register
b) Since the stakeholder analysis is already completed and all the other stakeholders have been present
and addressed work towards fulfilling their expectations, the same cannot be repeated for this
particular stakeholder
c) Go through the stakeholder analysis with the team as there might be more unidentified stakeholders
in the project

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d) Inform this stakeholder that he will be included in all project communications and he can raise his
concerns whenever he feels his requirements are not being addressed

87. A software project run in an IT company has 14 stakeholders and is in the final testing stage when the
technical architect leaves the project and two new test engineers join in. What is the change in the
potential communication channels of the project?
a) Communication channel would remain unaffected by change in team members.
b) Number of communication channels will increase by 13.
c) Number of communication channels will increase by 26.
d) Number of communication channels will increase by 14.

88. Which of the following types of organizations would have the most complex communication
management?
a) Functional Organization
b) Projectized Organization
c) Matrix Organization
d) Ad hoc Organization

89. You are Project Manager of a software project that has finished the design stage and is moving to the
implementation stage. At the end of design phase, you got the document reviewed; tracked and closed
the defect logs. Also as part of the design stage review and kick-off for the implementation phase, you
checked current SPI and CPI and revisited the risks. What did you forget to do?
a) Identify new risks for the next stage and update risk register
b) Take corrective and preventive actions from design review so that defects can be minimized
c) Conduct an impact analysis of the defects found during the design review
d) Communicate project stage review findings to all the stakeholders

90. In which of the following types of contracts does the buyer have the MAXIMUM cost risk?
a) Cost Reimbursable
b) Fixed Price
c) Time and Material
d) Cost Plus Fixed Fee

91. A cost reimbursable contract has an estimated cost of $20,000. If the seller beats the cost, they will
share the savings. 80% will go to the buyer and 20% will go to the seller. If the actual costs come in at
$18,000, what is the final price?
a) 18000
b) 18200
c) 18400
d) 18600

92. A project team is in the process of obtaining seller responses, selecting a seller, and awarding a
contract. For this purpose they are using some predefined selection criteria to evaluate the bids and

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select the most appropriate seller. Which process of project management is the project team working
on?
a) Plan Procurement Management
b) Conduct Procurements
c) Control Procurements
d) Proposal Evaluation

93. A Project Manager is involved in a procurement management process in a centralized contracting


environment. He is assigned a full-time contract manager who reports to him for the project. Under
this scenario which would usually NOT be the role of Project Manager?
a) Provide increased expertise in contracting and also guide the team on standardized company practices
b) Make sure the contract contains all project management requirements
c) Identify risks and incorporate mitigation and allocation of risks into contracts
d) Help tailor the contract to the unique need of the project

94. A Project Manager is forced to give a contract to a preferred supplier as he has a strict deadline to
meet. What could be the BIGGEST risk in this situation for the Project Manager?
a) The seller has not proven that he has required expertise and resources to take this assignment
b) The Project Manager didn't get chance to evaluate other vendors who could be better
c) The seller may not fulfill the evaluation criteria to bid for the project
d) The seller may not meet acceptance criteria in the contract and Project Manager might have to accept
what he gets

95. Your company is bidding for a major project from Company X. You have a friend in Company X and he
requests your help in evaluating the proposals. What action should you take?
a) Accept the friend's request and work impartially while helping on the proposal evaluation
b) Accept friend's request and take care of your company's interest while helping on the proposal
evaluation
c) Reject friend's request
d) Ask your Manager's opinion

96. As a Project Manager of a complex and relatively new technology you have asked for an expensive
training for yourself and the team from the project sponsor. Although the sponsor has agreed to your
request, he asks you to start the project in the meantime. Which of the following is NOT an option for
you?
a) Since you have already asked your sponsor for training, you can do nothing to enhance your skills till
that time
b) Visit PMO and Organization project database to go through lessons learned from previous projects
c) Talk to fellow Project Managers who have executed similar projects in the organization
d) Join Organization or library to gain access to journals featuring the technology

97. A Project Manager has worked on many challenging projects and managed teams across the globe in
last 20 years of his career. Now, he intends to share his best practices and lessons learned throughout
his professional career. The Project Manager's act can be BEST defined as:

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a) Enhancing his professional skills by evaluating his experience and strengths
b) Project Manager is contributing to the project management knowledge base
c) Capturing his professional stint in an autobiography
d) Informing others about project management principles and helping the profession grow

98. You work in a pharmaceutical company and as a part of the project, your client has shared some
confidential information with you. A medical university contacts you to share some information
including that from the client for their research purpose. What should you do?
a) Share the information as it will be used purely for academic purposes
b) Share the information but hide all the references which could expose the client
c) Never share any information from the client as you are bound by Non Disclosure Agreement
d) Contact your client and seek permission to disclose the information

99. Which of the following is an example of smoothing as part of promoting interaction among
stakeholders?
a) Project Manager keeps himself aloof and uninvolved from team conflicts and lets the team handle it
themselves
b) Project Manager calls the troublemakers and tries to resolve their problems through discussion
c) Project Manager downplays the difference of opinion saying the difference lies only in perception
d) Project Manager takes side of the more experienced resource as he is more valuable to the project

100. A Project Manager defines a personal plan for his career and professional development every
year. As a part of this plan, he goes through his project experiences, lessons learned, and decides on
the training needs to help him excel as a Project Manager and contribute to his organization. In this
scenario the Project Manager is:
a) Contributing to the Project Management knowledge base
b) Enhancing his Personal Professional Competence
c) Helping his organization through his project success
d) Putting project's need before his own and taking decisions in the best interest of the project

101. Team development would be MOST difficult in which form of the organization structure?
a) Weak Matrix Organization
b) Projectized Organization
c) Tight Matrix
d) Balance Matrix Organization

102. An organization has recently started outsourcing work to a low cost, high value, engineering
center located in a different country. According to you, which is the BIGGEST value addition a Project
Manager can provide to the team?
a) An introduction to the applicable laws in the country
b) An exposure to cultural differences
c) Communication management Plan
d) Competency in speaking foreign language

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103. One of the high-performing team members from a support group of the project team wants to
move onto the technical team as he finds that work more challenging. As a Project Manager you know
that he is a valuable resource and moving him out of the support group can affect group performance.
You decide to give him a hike in salary. However, the employee is still unhappy and dissatisfied. This is
an example of which theory?
a) Maslow's Theory
b) Herzberg's theory
c) McGregor's theory
d) Expectancy theory

104. A Project Manager is preparing for the next milestone release when he realizes that he has
missed an important feature in the project requirements plan. If implemented, this feature would take
at least one person a week of effort. What should be his next step to address this?
a) Discuss the change with Customer and seek his approval
b) Evaluate the impact of change on triple constraint
c) Look for the alternatives to reduce the impact of change
d) Raise a change request to address the change through change control process

105. In negotiations, what is a fait accompli tactic?


a) Making personal attacks which could be downright insulting
b) Playing role of Good guy and Bad guy in a team
c) Claiming an issue has already been decided and therefore cannot be changed
d) Hiding or partially disclosing the complete information

106. What does the kaizen theory state?


a) Evaluate project performance on regular basis
b) Reduce the inventory cost to zero by making inputs available just when required
c) Use a process of Plan -Do-Check-Act to improve quality
d) Apply continuous small improvements to reduce costs and ensure consistency

107. Your customer asks for a small change in the project, which was not budgeted in the project. It
is a small effort as compared to the total project and you need the goodwill of the customer to be
successful in this multimillion dollar gas project. What will you do?
a) Implement approved changes according to the change management plan to meet the project
requirements
b) Since you need to maintain goodwill, you agree to incorporate the change
c) Speak to the sponsor for his consent
d) Tell the customer to keep it as a secret and not inform the sponsor about this change to be
implemented

108. During the project, you and your team discovered that a key project component was stolen. As
this was not planned for, the team decided to launch the product without the stolen component. This
is an example of:
a) Work around

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b) Risk Transfer
c) Risk Mitigation
d) Acceptance

109. During the project execution, the status report shows that an activity on the critical path is
delayed. As a Project Manager, what should you do?
a) Deliver incomplete activity
b) Compress the schedule
c) Reduce the scope
d) Stop the project execution

110. As a Project Manager, you are assigned to a project that has been outsourced. The next step is
to organize a formal bidding process and select the vendor for the project. You own stock in one of the
vendor companies who participated in the bidding process. What is the BEST course of action for you?
a) Get the vendor company selected for the project
b) Keep the information to yourself
c) Tell your manager and remove yourself from the vendor selection committee
d) Ask other members of the selection committee to select your vendor company

111. Which of the following is NOT a tool and technique for the 'conduct procurements' process?
a) Bidders Conference
b) Independent estimates
c) Procurement Negotiation
d) Contract Types

112. The Project Manager has discovered that two team members have a disagreement over the
procurement of the project component. The Project Manager suggests that the team members
compromise. The team members are also willing to resolve the conflict. Who should decide the best
course of action?
a) Sponsor
b) Customer
c) Project Manager
d) Team members

113. The primary communication skill the Project Manager will use in working with the functional
manager is:
a) Problem Solving
b) Negotiation
c) Team Building
d) Public Relations

114. Performance improvements include all BUT:


a) Improvements in amount of overtime worked
b) Improvements in individual skills

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c) Improvements in team behavior
d) Improvements in team capabilities

115. Herzberg divided motivation factors into two classes: satisfiers and dissatisfiers. Examples of
satisfiers are:
a) Vacation time
b) Work satisfaction, fringe benefit
c) Plush offices space, performance based salary raise
d) Sense of personal achievement, work satisfaction

116. A Project Manager is concerned about team building on her project. One of the mandatory
things that she must have to have good team building is:
a) Commitment from top level management
b) Co-location of team members
c) Establishment of clear negotiated goals
d) Open discussion of poor individual performance

117. A Project Manager is managing a project where there will be a number of persons working
together. She wants to enhance the ability of the team to work together and perform as a team. One
of the things she can do to enable this is:
a) Cohabitation
b) Co-location
c) Staffing plan
d) WBS

118. Tom always delivers his projects on time and within budget. He believes that his success can
be explained by the fact that he makes all of the project decisions himself and then enforces those
decisions with an iron hand. His management style is best described by:
a) Force Field Theory
b) Expectation Theory
c) Gregor's Theory X
d) Gregor's Theory Y

119. Which of the following is NOT a purpose of the configuration management system?
a) Ensure all the project team members have the latest version of the project document
b) Ensure all the relevant changes are communicated to the stakeholders
c) Maintain consistency of product's performance and its functional attributes
d) It includes Configuration identification, Configuration status accounting, and Configuration verification
and audit

120. A project is in the final stages of testing when it receives a major change request from the
customer which would delay the final delivery of the project by 2 weeks. What should the Project
Manager do NEXT?
a) Create a change request and go through the change management process

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b) Evaluate the impact of the change
c) Communicate the implication of the change to the customer
d) Adjust the project management plan and baseline

121. You are a Project Manager and your team recently encountered a major change in the project.
This change was evaluated for its impact on the triple constraints and went for approval to the Change
Control Board (CCB). The CCB is comprised of important stakeholders of the project who approved the
change. The project documents were updated through the configuration management system. What
should the project team do NEXT?
a) Explore options to reduce the effect of change
b) Adjust the project management plan and baselines
c) Notify the stakeholders affected by the change
d) Prevent the root cause of change
122. A Project Manager working on a critical deliverable encounters a major change that affects the
schedule baseline, along with the next milestone deliverable. This change cannot be accommodated
within current project management plan. What is the BEST option for the Project Manager?
a) Avoid the change as it gravely affects the project deadline
b) Explore options to reduce the effect of change
c) Communicate the implication of this change request to the customer
d) Seek an approval from change control board or project sponsor

123. Measure project performance using appropriate tools and techniques in order to identify and
quantify any variances and corrective actions task is which part of the process group?
a) Planning
b) Executing
c) Monitoring and controlling
d) Closing

124. A Project Manager is in the process of comparing actual performance to the scope statement
to determine variances, evaluate possible alternatives, and take the appropriate action. Which of the
following will NOT be an output to the process?
a) Work Performance Information
b) Updates in Organizational Process assets
c) Change Requests
d) Change Control Meetings

125. During the project lifecycle, a Project Manager can change the schedule baseline ONLY
through:
a) Customer defined change in the schedule
b) Formally approved change through the change control process
c) Corrective action based on Performance Report
d) In rare event of project showing high deviation from the baseline

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126. For a project Earned value = 600, Actual Cost = 400, Estimate to Completion= 700. What is the
estimate at completion?
a) 1200
b) 1100
c) 1300
d) 300

127. Your project is expected to be delayed by 6 days from the scheduled final delivery date. Your
current CPI is 1.5 and the project risks are low. You also have many discretionary dependencies on the
project. You don't have access to any more resources for the project. Which of the following would be
the BEST alternative to bring the project back on schedule?
a) Reduce number of resources from an activity
b) Complete activities that involve external dependencies first
c) Remove few activities from the project
d) Complete some activities concurrently

128. A Project Manager has to discuss project progress and track status with the project team.
Which should be the MOST relevant format for this purpose?
a) Milestone Chart
b) Bar Chart
c) WBS
d) Schedule Baseline

129. A project is severely delayed and Project Manager is trying his best to bring it back on
schedule. To expedite the work, he has added more resources and working overtime to complete the
project earlier. All of the following could be a possible outcome of project crashing EXCEPT:
a) Increase in Project Cost
b) Increase in Project Risk
c) Decrease in morale of team members
d) Increase in rewards and recognition

130. Which is the most important parameter against which project schedule should be measured to
recommend corrective and preventive actions?
a) Schedule Baseline
b) Work Performance Measurement
c) Earned Value Technique
d) Variance Analysis

131. What is the Estimate at Completion (EAC) assuming the current variances are atypical of the
future. A project has initial budgeted cost also called Budget at Completion (BAC) as $100,000. As the
project progresses, these are the current figures: Planned Value (PV) $20,000. Actual Cost (AC)
$25,000. Earned Value (EV) $15,000.
a) $110,000
b) 90000

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c) 100000
d) 115000

132. You are a Project Manager of a large and complex project which is partly outsourced to third
party. Under these circumstances your planned expenditure sometimes overshoots the funding limits
set for the project. As a Project Manager how do you best handle the situation?
a) Relook and adjust the scheduling of work to smoothen out or regulate those expenditures
b) Discuss this situation with your project sponsor or customer to work out a solution
c) Use Management Reserve allocated for the project
d) Delay the payments of vendor for that phase
133. You are working on a highly visible project for which it is critical to have accurate cost
estimates. While reviewing cost estimates for the project you notice that one of the WBS (Work
Breakdown Structure) work packages is estimated almost 25% higher than two other similar WBS work
packages. What should you do in this case?
a) Reduce the estimate but add an additional budget in management reserve
b) Reduce the estimate but add an additional budget in contingency reserve
c) Trust your team to come up with accurate estimates as they already had many team discussions
d) Call the WBS owner to discuss the basis for estimating the work package

134. Your project has current CPI of 1.2 and SPI of 0.86. What does the figure indicate about the
project performance?
a) The project has cost under run and is delayed
b) The project has cost overrun and is delayed
c) The project has cost under run and is ahead of schedule
d) The project has cost overrun and is ahead of schedule

135. A project with a CPI Index of 0.96 indicates:


a) The project has cost overrun and would not complete within budget
b) The project has cost under run of performance to date
c) The project has cost overrun for work completed so far
d) The schedule has overrun

136. A project has faced some unforeseen circumstances that affected its performance with respect
to cost and schedule. However they are not bound to continue in future. What should be the value of
Estimate at Completion (EAC)? Here BAC is Budget at completion, AC is Actual Cost, CPI is Cost
Performance Index, and EV is earned Value.
a) BAC/CPI
b) AC+ ETC
c) AC + (BAC-EV)/CPI
d) AC+ (BAC-EV)

137. A Project Manager is working on a highly visible project in an organization and is most
concerned about project performance and progress. His cost variance is currently $150 and schedule

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variance percentage is -15%. Which of the following statements about the cost and schedule
performance of the project is INCORRECT?
a) The project spent more money on work accomplished than planned
b) The project has overestimated the amount of time needed for the activity
c) The Project has faced some unplanned or planned setbacks which has affected the schedule
d) The project is doing favorably cost-wise but is lagging in schedule

138. In a control chart, what does upper specification and lower specification limit (USL, LSL) signify:
a) These are based on requirements of the contract and reflect the maximum and minimum values
allowed
b) They are set by PM and stakeholders to reflect points for corrective action in case they are crossed
c) These are usually +/- 3? limits based on normal distribution
d) These are used to monitor cost and schedule variances

139. You are heading a software development project team which has many new members working
for the first time. You ensure that the team diligently gets their work products reviewed by an external
reviewer and close the defects before moving to the next stage. However, the last few review reports
have captured high numbers of defects including many careless mistakes. According to you, what is
the root cause of the problem?
a) Since most of the team is new and inexperienced high defects are expected
b) The team has in all probability not understood the scope of the work properly
c) The review is not efficient as most of the defects are not valid
d) Team is not doing proper self-review before submitting their work

140. A popular tool used to monitor project performance including cost and schedule variances and
ensure process operate within acceptable limit is called
a) Control Charts
b) Run Charts
c) Pareto Chart
d) Flowchart

141. A project team is analyzing a major, critical defect to determine the root cause. In order to do
this, they considered various factors linked to the defect and grouped them into Machine, Method,
Material, Manpower etc. Which of the following tool of quality is the team using?
a) Histogram
b) Cause and Effect Diagram
c) Control charts
d) Flowchart

142. Which of the following can NOT be considered as an indicator of a team's effectiveness?
a) Improvements in skills that allow team to perform assignments more effectively
b) Improvement in competency that helps the team perform better
c) Increased staff turnover rate
d) Increase in team cohesiveness and trust

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143. During the testing phase in the project, a senior manager who is also an important stakeholder
in the project tells you that he no longer wishes to receive weekly status reports. Instead, he can be
sent periodical project performance report. What should be your response to his request?
a) Make the manager understand that since he is a major stakeholder and project is in critical stage,
status reports will be important to know project progress
b) Continue to send him status report to keep your project visibility high
c) Follow communication management plan and send reports as earlier decided
d) Follow his instructions and update project documents including communication management plan
accordingly

144. As a part of 'Manage Communications' in Communication Management, which of the following


analysis or information would be most relevant to a sponsor or senior management of the project?
a) Work Performance Index
b) Earned Value Management
c) Estimate to Complete
d) Exception Report

145. In addition to Performance Information, which of the following is an output of the process
'Control Communications' in Communication Management?
a) Budget Forecast
b) Change Request
c) Work Performance Measurements
d) Communication management plan

146. During an informal gathering with stakeholders of the project, the Project Manager overhears
one stakeholder expressing dissatisfaction over the project's progress reporting and communication.
What should be the Project Manager's best response?
a) Ignore the incident; anyways the stakeholder was not directly and formally addressing the Project
Manager
b) Call a meeting of all the Stakeholders to address their concerns on the project
c) Meet face to face with the complaining stakeholder to understand his concern and update it in the
issue log
d) Confront the stakeholder demanding why he never approached you if he was dissatisfied with project
reporting

147. A senior technology manager in the organization wants to know the project status with
respect to major deliverables and key external interfaces. According to you, the Project Manager
should use which of the formats in his performance report to capture this graphically?
a) Project Schedule Network Diagram
b) Milestone Charts
c) Bar Charts
d) S curve

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148. As part of the audit findings, you realize that many of the risks were not identified during the
planning stage, so you decide to reassess project risks. Which process are you in?
a) Identify Risks
b) Plan Risk Management
c) Perform Quantitative Risk Analysis
d) Control Risks
149. As a Project Manager you have instructed your project team to update the organizational
process assets including the lessons learned database and risk management template of future project
based on project audit findings. You are in which process of project management?
a) Control Procurements
b) Close Contracts
c) Control Risks
d) Perform Quality Assurance

150. A project is delivered per the contract by the project team; however, the customer is not
happy. The customer feels that the deliverable is far below his expectation in terms of quality and
functionality and has some serious defects. What should the Project Manager do in this situation?
a) Talk to the project sponsor to discuss the issue
b) Proceed to project closure activity
c) Discuss the issues with customer and find ways to resolve the same
d) Brainstorm with technical experts, stakeholders, and team members to understand issues in the
project

151. A Project Manager who has contracted a project, notices that the seller has discontinued
sending the weekly status report, which is part of their contract. The Project Manager understands the
seller is under tremendous pressure to meet the next milestone deliverable and has been otherwise
communicating the project status periodically. What should the Project Manager do in this scenario?
a) Ignore the incident as the seller is anyway updating him with project status periodically
b) Give the seller time till next milestone delivery and then bring up the issue informally
c) Send a formal, written communication regarding the issue of irregular status reports
d) Terminate the project contract

152. A Project Manager has signed a contract with the buyer and project is moving towards
completion. At this stage, the Project Manager realizes that he has missed an important functionality
in the product and the contract needs to be changed to accommodate that. How should the Project
Manager proceed to resolve this?
a) Since the Project Manager has already signed the contract and the project is nearing completion, this
change need not be updated in the project
b) Project Manager shall communicate the change request and its implication to the seller in a meeting
c) Project Manager can bring out this deviation during Procurement Performance Review
d) Project Manager should raise a formal change order, signed by both the parties to incorporate the
change

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153. A Project Manager has taken up a project midway and is going through project schedules and
status reports. He realizes that the previous Project Manager has inaccurately calculated the project
status and per the current situation the project would definitely miss the next milestone. What should
the Project Manager do in this case?
a) Call the previous Project Manager and ask him for explanation
b) Inform the customer and stakeholder about the impeding delay
c) Relook the project schedule to find alternatives to meet the schedule
d) Wait for the next milestone date to arrive to report the delay

154. A Project Manager wants to qualify for the PMP examination. However while going through
the eligibility criteria he finds that he is falling short of the required experience by a small margin. He
discusses this with a certified PMP professional and mentions that he is planning to make up the gap in
experience as it is a very small margin. His friend however is not convinced and warns him that he
should not provide false information at any point during the PMI Certification Program, as it can result
in:
a) Revocation of your PMI membership
b) Revocation of your PMP certification
c) Both of the above are true
d) There will be no impact

155. You are a Project Manager of a dynamic project team. Recently, there have been some
changes in the team structure and you don't know if they would positively or negatively affect the
project? What should be the BEST approach to address this?
a) Conduct a risk benefit analysis
b) Conduct a gap analysis
c) Increase project budget
d) Revise project plan

156. A Project Manager wants to present project performance reports for his project. Which of the
following formats should he use?
a) Pareto Chart
b) Responsibility Assignment Matrix
c) Bar Chart
d) Control chart

157. While monitoring and controlling the projects, why is it required to manage changes to the
project by following the change management plan?
a) To satisfy customer
b) To align business needs
c) For Project requirements
d) To satisfy sponsor

158. Trend analysis is often performed using:


a) Fishbone diagram

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b) Design of Experiments
c) Run charts
d) Pareto Charts

159. An assembly line in a car manufacturing plant produces 250 components in one shift. QA
randomly picks 10 of them for quality checking. This is an example of:
a) Quality Audit
b) Inspection
c) Process Control
d) Process Analysis

160. As a part of the Monitoring and Controlling process group, you and your project team have
listed and are assessing the corrective actions in the issue register. What is the NEXT step that you will
perform?
a) Determine steps for unresolved issues by using appropriate tools to minimize the impact on project
cost, schedule, and resources
b) You have already listed the corrective actions and now it is the customer's responsibility to decide the
resolutions
c) Follow the Change control method
d) Communicate the corrective actions to the stakeholders

161. What is key purpose of the Monitoring and Controlling process group?
a) Measure project performance in order to identify and quantify any variances and perform approved
corrective actions
b) Perform preventive actions so that no variances ever occur in the project lifecycle
c) To conduct daily status meetings
d) None of the above

162. A project is terminated unexpectedly by the sponsor midway during the execution phase.
What should the Project Manager do FIRST?
a) Update process and templates based on lessons learned
b) Create and Distribute final report of project performance
c) Analyze and document success and effectiveness of the project
d) Perform scope verification to verify level of completion

163. A Project Manager has just finished a Gantt (bar) chart representing the project schedule. As a
result, all of the following documents get updated EXCEPT:
a) Activity Resource Requirement
b) Risk Register
c) Resource Leveling
d) Calendar

164. Documentation of lessons learned is important in any project and forms the main input to
organizational process assets. In fact, continuous improvement of the project management process

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cannot occur without lessons learned. This process is completed by the project team and is BEST done
at:
a) The end of project completion stage before contract closure
b) Whenever the project implements any corrective action as part of Audit closure
c) As a part of corrective and prevention action on recommendation of QA
d) Throughout the project, finalized during project phase closing or project closing

165. A Project Manager is in the 'Control Procurements' process when his sponsor asks him to
terminate the contract. What should the Project Manager do NEXT?
a) Revisit the Proposal Evaluation technique to understand issues with seller
b) Update Records Management System
c) Proceed with Procurement Audit
d) Arrange Vendor conferences to invite new proposals to the contract

166. All of the following could be a justifiable reason to terminate a project EXCEPT:
a) Project doesn't fulfill organizations' objective any longer
b) Project funding is in serious trouble due to financial meltdown in the company
c) There is serious personal conflict between two senior project members affecting the work
d) The project is no longer commercially viable

167. As part of the project closure, a project team wants to collate the lessons learned to update
the organization's knowledge base. These records should be updated in:
a) Storage Room
b) Database
c) Project Performance Reports
d) Project Archives

168. The Project Manager has obtained final acceptance of the project deliverables by the
customer. Which of the following is NOT an activity of project closing process?
a) Collate lessons learned and update the organization's knowledge base
b) Distribute the final project report to all the stakeholders
c) Transfer ownership of deliverables to assigned stakeholders
d) Assess old risks and update risk register

169. Of the following, which is NOT an exit criterion?


a) Lessons learnt
b) Customer sign-off
c) Stakeholder analysis
d) Regulatory Inspections

170. Procurement documentation is an input to the contract closure procedure. It includes all of
the following EXCEPT:
a) Technical documentation
b) Warranties

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c) Payment record
d) Contract closure procedure
171. Which of the following statements are true?
a) Contract closure and administrative closure both involve quality assurance activities
b) Contract closure and administrative closure both involve product verification
c) Contract closure and administrative closure both involve benefit cost analysis
d) Contract closure and administrative closure both involve project selection

172. Customer satisfaction should be measured at the end of the project to maintain long-term
relationships. Which of the following is NOT always an aspect of customer satisfaction?
a) The product meets its stated and unstated requirements
b) The project is profitable
c) The product is high quality
d) The customers needs are met

173. At the close of your project, you measure the customer satisfaction and find that some
customer needs were not fully met. Your supervisor asks you what steps you took on your project to
improve customer satisfaction. Which subsidiary plan would you consult to determine this
information?
a) Quality management plan
b) Communications management plan
c) Staffing management plan
d) Risk management plan

174. Your client has terminated your project before it is complete. Which of the following is true?
a) You must stop all work and release the team immediately
b) You must work with the team to document the lessons learned
c) You must keep the team working on the project to give your senior management time to talk to the
client
d) You must update the project management plan to reflect this change

175. Your project team has completed the project work. All of the following must be done before
the project can be closed EXCEPT:
a) Ensure that the schedule baseline has been updated
b) Get formal acceptance of the deliverables from the customer
c) Make sure the scope of the project was completed
d) Verify that the product acceptance criteria have been met

176. Which of the following Quality Theorists advocated the 80/20 principle?
a) W Edwards Deming
b) Philips Crosby
c) Joseph Juran
d) Walter A Shewhart

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177. Ongoing project planning is also known as ____.
a) Rolling wave planning
b) Resource Planning
c) Contingency planning
d) Continual Improvement

178. A step-by-step instruction guide on how to complete work or procedure is called:


a) Work breakdown Structure
b) Work Instruction
c) Baseline
d) Control account identifier

179. The aim of quality is to ensure:


a) Fitness to use and conformance to requirements
b) Meet customer requirements
c) Fulfill quality objectives
d) Lower cost of Quality

180. A network diagram drawing method that allows loops between activities is:
a) Precedence Diagramming Method (PDM)
b) Arrow Diagramming Method (ADM)
c) Program Evaluation and Review technique (PERT)
d) Graphical Evaluation and Review Technique (GERT)

181. An organization has created a special project team to handle a critical project. The team
members of this project are full-time dedicated to the project and are pulled from different functional
departments. They also have their own set of operating procedures. This organization structure is
MOSTLY:
a) Projectized
b) Functional
c) Composite
d) Matrix

182. What is the 100% rule in the Work Breakdown Structure creation?
a) The total of work at lowest level adds up to the higher levels, so no work is left out and no extra work
is completed
b) 80% of the problems can be attributed to 20% of the causes
c) WBS must be detailed enough to cover 100% of the work since beginning of the project
d) WBS must contain 100% deliverables both internal and external

183. Which of the following is NOT an example of a facilitated workshop?


a) Joint Application Development (JAD)
b) Just in Time (JIT)
c) Quality Function Deployment (QFD)

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d) Voice of the Customer (VOC)
184. What is the meaning of the term 'management by objective' in project management?
a) A management philosophy that advocates establishing unambiguous and realistic objectives and
conduct periodic review to ensure they are being met
b) Management of projects by a central office which determines objectives to be met for each project
c) It is PMI's organizational maturity model for project management
d) A project gets better managed over length of project as objectives become clearer

185. What is the name of PMI's organization maturity model for project management?
a) CMMi
b) Six Sigma
c) OPM3
d) Just in Time (JIT)

186. A Project Manager working in a weak matrix organization will NOT have which of the following
challenges?
a) Communications will be more complex
b) The team members may not always have a home
c) The team members may get directions from multiple people
d) Team members may not report to the Project Manager

187. An activity which does NOT require work or take time and is inserted simply to show
dependency between activities is called:
a) Milestone Activity
b) Critical Activity
c) Hammock Activity
d) Dummy Activity

188. Which of the following factors is MOST critical to achieving customer satisfaction?
a) Ensure that the project satisfies all the Quality related metrics
b) Ensure that the project completes in the scheduled timelines
c) Ensure that the project is completed within allotted budget
d) Ensure that the project satisfies all the requirements given by the customer

189. Which of the following is NOT an example of contributing to the project management
knowledge base?
a) Writing an article of project management best practices
b) Writing a book on your experiences as a Project Manager and lessons learned
c) Giving a session on Risk Management methodologies to fellow Project Managers
d) Briefing a friend and aspiring Project Manager about PMP exam merits and PMI organization

190. A heuristic is called a ____.


a) Scheduling method
b) Controlling Tool

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c) Planning Tool
d) Rule of Thumb

191. 'Halo Effect' is ____.


a) based on the assumption that because the person is good at a technology, he will be good as a Project
Manager.
b) based on hiring the best
c) to recruit the best in management
d) to promote from within

192. Voice mail and e-mail are examples of:


a) Interactive communication
b) Pull communication
c) Push communication
d) Push Pull communication

193. 3 sigma is equal to:


a) 99.73%
b) 99.99%
c) 95.46%
d) 68.26%

194. In which of the following areas are the following skills considered - Performance appraisal,
recruitment, retention, regulatory issues, and labor relations?
a) Administrative
b) Project Management
c) Accounting
d) General Management

195. During the closing, final acceptance of the deliverables is one of the important activities. Who
is supposed to accept? Choose the best answer.
a) Customer
b) Sponsor
c) Relevant stakeholders
d) Operation team

196. Which of the following statements describes the relationship between project phases and the
project life cycle?
a) The project lifecycle contains the iterative incremental elements inside a project phase
b) Collectively, the project phases are known as the project life cycle
c) The project lifecycle is regarded as a sequence of project activities while phases are defined to control
the overlapping of activities
d) The project lifecycle contains the repetitive elements inside a project phase

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197. Which is NOT true with regards to ROI (Return on Investment)?
a) It defines the cumulated net income from an investment at a given point in time or during a defined
period.
b) It includes investment, direct and indirect costs and may include allowances for capital cost,
depreciation, risk of loss, and/or inflation
c) It is generally stated in currency units, as a percentage or as an index figure.
d) It is the time when cumulated net income is equal to the investment.

198. In making an investment in a project, investors require compensation for which of the
following?
a) The risk-free rate of return plus a risk premium plus a premium for inflation
b) Sacrifice of immediate use of cash for consumption or other investments, possibility of inflation and
risk
c) Payback period in years x investment x (1 + discount rate)periods
d) Inflation and depreciation

199. A summary activity in a network logic diagram is often referred to as a ____.


a) Hammock Activity
b) Dangler
c) Milestone
d) Subtask

200. When a project phase is finished, this is also known as a ____.


a) Gold Plating
b) Kill Point
c) Scope Creep
d) Metrics

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Simplilearn Practice Test PaperSolutions

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1. During the initiating, which of the following elements will be identified to meet the project goals?
e) Key deliverables
f) Stakeholders
g) Quality
h) Vendors

Answer: (a) Key deliverables. Even though the identification of stakeholders and potential sellers happens
as part of initiating through identify stakeholders process this will not help to meet the project goals. Key
deliverables help in meeting the project goals. This is the new task added in the examination content
outline. Quality identification happens during planning.

2. A car manufacturing company conceptualized a new car which would be more fuel efficient, better
ergonomically designed, and satisfies the latest safety compliance. This car was recently launched and
has now moved into full fledged production. This is an example of:
e) Operation, as the company is into car manufacturing which is an ongoing process
f) Project, as this car was conceptualized, designed, and now launched
g) Project, as it has clear scope and requirements in terms of safety compliance, fuel efficiency etc.
h) Operation, as this activity didn't create a unique product

Answer: (b) Project, as this car was conceptualized, designed, and now launched. This is a typical scenario
where project is intersecting with operation during product lifecycle, notice the word launched. All the
activities before launch of the vehicle are part of a project which is temporary activity with a well-defined
unique output. Once the car moves to production line, it becomes an ongoing operation for the company.
Refer PMBOK 5th edition Introduction PN 3.

3. When is cost highest in the project life cycle?


e) At initiation
f) During planning
g) Midway during the project
h) During closure

Answer: (c) Project cost peaks in the middle of the project as maximum resources are utilized during this
phase. Project cost is low at the beginning, peaks midway, and drops rapidly as project draws to the end.
Initiating, planning, and closing are not part of project life cycle and are process groups. Refer to diagram
2-8 and section 3-2 from PMBOK.

4. As a part of Stakeholder Management, all of the following are acceptable management practice to be
followed by a Project Manager EXCEPT:
e) Identify all the stakeholders and capture them in project team directory
f) Ensure stakeholders' expectations are aligned and gain support for the project
g) Give preference to stakeholders over customer in case of difference of interest
h) Communicate to the stakeholders all relevant information about the project

Answer: (c) Give preference to stakeholders over customer in case of difference of interest. In case of
differences, it should be generally resolved in favor of the customer or organization who would use the
project's product or service.

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5. After a high level management meeting the manager chairing the meeting asks the Project Manager to
document and communicate the action items to all the stakeholders. The Project Manager is part of
which kind of organization structure?
e) Balanced Matrix
f) Weak Matrix
g) Strong Matrix
h) Tight Matrix

Answer: (b) Weak Matrix. The Project Manager is part of weak matrix organization and is playing the role
of project expeditor. The project expeditor acts primary as staff assistant and communication coordinator.
The expeditor personally cannot make or enforce decisions.

6. Which of the following activities is part of initiating?


e) Develop stakeholder management plan
f) Conduct benefit analysis with stakeholders to validate project alignment with organizational strategy
and expected business value.
g) Validate Scope
h) Conduct kick off meeting

Answer: (b) Conduct benefit analysis with stakeholders to validate project alignment with organizational
strategy and expected business value. This task is added new in the examination content outline. Options
(a) and (d) are part of planning. Option (c) is part of Monitoring and Controlling.

7. A Project Manager is just assigned to a project. He is involved in creating a document that would
formally authorize the project and capture initial requirements of the stakeholders. What is the output
of this process?
e) Project Management Plan
f) Project Statement of work
g) Project Charter
h) Business case

Answer: (c) Project Charter. The document is called a Project Charter, which formally authorizes the
project and provides Project Manager with the authority to apply resources to project activities. Although
the project sponsor may create the project charter, it is recommended that the Project Manager
participate in development of the project charter. Options (b) and (d) are inputs to the process of
developing project charter. Please refer PMBOK 5th edition Project Integration Management PN 71.

8. Which of the following statements DOES NOT describe the essence of Integration Management in the
context of Project Management?
e) Balancing of competing objectives and the exploration of alternative actions
f) The processes and activities needed to identify, define, combine, unify, and coordinate process and
project management activities within the Project Management Process Group
g) Integrating different components from the development cycle to create the final deliverable
h) Managing interdependencies among Project Management knowledge areas

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Answer: (c) Integrate different components of development cycle to create the final deliverable.
Integrating different components from a development cycle to create a final deliverable is an example of
Software integration management used in software development projects. During this software
integration phase, components from different development module is integrated into one product and
tested. Whereas, integration management involves making choices about resource allocation, trade-offs
among competing objectives, and managing interdependencies among project management knowledge
areas i.e. options (a),(b) and(d).Please refer PMBOK 5th edition Project Integration Management PN 65.

9. A Project Manager is going through the Project Statement of Work provided by the project sponsor.
Which of the following will NOT be a part of this document?
e) Business Need
f) Product Scope Description
g) Strategic Plan
h) Performance Baseline

Answer: (d) Performance Baseline. Performance Baseline is a part of the project management plan. Refer
PMBOK 5th edition Project Integration Management PN 76.

10. You have just been assigned as a Project Manager of a project for which a prototype was recently
delivered. The sponsor of the project calls you and gives you an overall estimate of the project. This
form of estimate is known as ____.
e) Analogous Estimate
f) Parametric Estimate
g) Heuristic Estimate
h) Three Point Estimate

Answer: (a) Analogous Estimate. Analogous Estimate (also called Top down approach) is a form of Expert
Judgment. It uses estimations from previous similar activities to estimate future durations. The accuracy of
estimates derived using this method depends on the correctness of historical information, similarity of the
historical projects (here a prototype project), and expert judgment.

11. A Project Manager who has just been assigned to a new project has been asked by his sponsor to come
up with an initial cost estimate called a Rough Order of Magnitude (ROM). This would typically fall
under which range?
e) -50% to +100%
f) -25% to +75%
g) -10% to +15%
h) -100% to +50%

Answer: (b) -25% to +75%. The Rough Order of Magnitude estimate (ROM) is usually done in the initial
stages of the project when limited information is available. Budgeted estimate will be in the range of -10%
to +25% and definitive estimate will be -5% to +10%.

12. In a meeting, the Sponsor has discussed three projects with you: Project A with Net Present Value of
$55,000 and a payback period of 5 years; Project B with Net Present Value of $95,000; and Project C
with payback period of 10 years. He provides you with more information about the projects and

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intends to assign you as the Project Manager for the selected project. What is expected from you as a
Project Manager, EXCEPT?
e) Conduct project selection methods to select one of the three projects discussed with you by the
sponsor to evaluate feasibility of new products and services
f) Proceed to select the project with higher NPV
g) You have no role and tasks to be performed as a Project Manager
h) Participate in the project selection method

Answer: (c) You have no role and tasks to be performed as a Project Manager. As per the new examination
content outline, the project manager participates in development of project charter.

13. There are three projects A, B, and C. NPV for project A is $50,000 and for project B is $ 80,000 and for
project C is $ 40,000. In a meeting, the management unanimously has chosen projects A and C. What is
the opportunity cost of the project?
e) 80000
f) 130000
g) 90000
h) 0

Answer: (a) $80,000. Opportunity cost is the cost of giving up the opportunity by selecting a project(s) over
another, here Project B is selected.

14. A project is in the initiation stage and the Project Manager is identifying project communication
constraints. Which of the following could be a valid constraint?
e) The project could face high attrition rate
f) Management and customer expect detailed formal status reports on the project
g) Project team members would require to work from geographically different locations
h) Many stakeholders of the project would not be able to attend planned project kick off meeting

Answer: (c) Project team members would require to work from geographically different locations.
Constraints always limit project team options. Option (a) is a known risk, and (b) and (d) can be addressed
under stakeholder management by drawing consensus on the report format and rescheduling the meeting
date.

15. A Project Manager is responding to a business proposal in an overseas company. Which of the
following should he refer to as a guide to understand the business practice(s) that are allowed and
discouraged?
e) Procurement documents including contract statement of work
f) His Organization policies and procedures
g) Project Charter
h) PMI code of Professional Conduct

Answer: (b) His Organization policies and procedures. Organization policies and procedures should guide
and help a Project Manager regarding decisions he makes in a foreign country. PMI's PMBOK is a valuable
reference, but it is more generic. So option (b) is better.

16. Which of the following is NOT a project?

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e) Campaigning for an election
f) Family Weekend drives to sea coast
g) Writing an autobiography about project management experience
h) Preparing for PMP examinations

Answer: (b) Family weekend drives to sea coast. Remember, a project is a temporary endeavor undertaken
to create a unique product, service, or result. Option (c) Family weekend drives is ongoing activity and
hence it is not a project.

17. You have been assigned a large construction project and you are in the Initiation process group. You
have identified the project stakeholders using stakeholder analysis tool and defined the high level
scope of the project. During these activities you have identified a key project limitation regarding the
project location. What is the BEST option for you, in this situation?
e) Document the project limitation as a project constraint
f) Discuss the project constraint with the project sponsor and the customer
g) Document the project limitation as a project constraint and propose an implementation approach with
the sponsor and customer, if required
h) Ignore the project constraint and work towards getting approval for the project charter

Answer: (c) Document the project limitation as a project constraint and propose an implementation
approach with the sponsor and customer, if required. Once the Project Manager has identified the
stakeholders, his next activity in the Initiation process group is to identify and document project high level
risks, assumptions, constraints based on the current environment, and historical records and propose an
implementation approach for the same. Later the Project Manager will further progressively elaborate the
project charter with inputs from the stakeholders and get a formal approval from the sponsor and the
customer, if required.

18. The Project Manager is participating in development of project charter by gathering and analyzing the
stakeholders' requirements and ensuring that the project scope, milestones, and deliverables are
documented correctly. Of the following, which is NOT achieved by the sponsor's approval of the
project charter?
e) Formalize the authority assigned to the Project Manager
f) Gain commitment by the stakeholders
g) Gain acceptance for the project by the stakeholders
h) Ensure formal acceptance of the deliverables by the customer

Answer: (d) Ensure formal acceptance of the deliverables by the customer. The Project Charter is approved
by the sponsor and the customer (if required). It formalizes the authority assigned to the Project Manager,
and helps the Project Manager gain commitment and acceptance for the project. Option (d) is correct in
this scenario as formal acceptance of the project deliverables is part of the 'Validate Scope' process and
performed during the Monitoring and Controlling process group.

19. Which of the following is NOT an input to the Plan Stakeholder Management Process?
e) Project Management Plan
f) Stakeholder Register
g) Stakeholder Management Plan

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h) Enterprise Environmental Factors

Answer: (c) Stakeholder Management Plan. Stakeholder management plan is an OUTPUT not an input to
the process.

20. John has been assigned a project recently and he is in the process of documenting the project charter
with the project sponsor. Which of the following MUST he include in the Project Charter?
e) Project purpose or justification
f) Positive risks
g) Budget estimates
h) Risk analysis

Answer: (a) Project purpose or justification. As per PMBOK, project description must be included in the
project charter. Options C and D, budget estimates and risk analysis, may be included in some project
charters, per the requirement.

21. As a Project Manager of a large project with hundreds of stakeholders, which of the following is the
BEST course of action?
e) Incorporate needs of only important stakeholders
f) Incorporate needs of all stakeholders
g) Ask your manager to manage the stakeholders
h) Eliminate some of them

Answer: (b) Incorporate needs of all stakeholders. The Project Manager is required to identify all the
stakeholders and incorporate the requirements of every stakeholder.

22. As part of Stakeholder Analysis, it is important to prioritize the key stakeholders to ensure the efficient
use of effort to communicate and manage their expectations. All of the following are the classification
models available EXCEPT:
e) Power/Influence grid
f) Power/Impact grid
g) Power/Interest grid
h) Influence/Impact grid

Answer: (b) Power/Impact grid. All of the other options are models available for classification used to
prioritize the stakeholders except Power/Impact Grid. Refer PMBOK 5th Edition Page 397 for more
information on the multiple classification models.

23. You are the Project Manager of a software telecom development project. You and your team are
working together to create a billing software. Which quadrant of the Power/Influence Grid will the
person(s) responsible for sign-off of the deliverables fall in?
e) Keep Informed
f) Monitor
g) Manage Closely
h) Keep Satisfied

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Answer: (c) Manage Closely. Since the person responsible for sign-off will have high power and his interest
in the project will be high, he will fall in the 'Manage Closely' quadrant, that is, High Power High Interest
grid. Refer PMBOK 5th Edition Page 397 for more information on the Power/Influence Grid.

24. You are the Project Manager of a project in which team members have dual reporting structure. In
addition to reporting to you, they also report to their functional manager. Also the team members are
expected to do the project work, along with their department work. You are working in which form of
organization?
e) Functional
f) Projectized
g) Tight Matrix
h) Matrix

Answer: (d) Matrix. These are the characteristics of a matrix organization where team members have dual
reporting structure and the team works in their respective functional areas while performing project work.
Option (c) Tight matrix has nothing to do with organization structure. It simply denotes keeping the project
team in the vicinity. Please refer to PMBOK 5th Edition Project Life Cycle and Organization PN 22.

25. You are a Project Manager of an ambitious project in the organization. Although you have successfully
managed many critical projects before, this is a new organization and you are working on this
technology for the first time. However you hear that the company has proven expertise on the
technology and have also done a similar project in the past. In this situation, what is the BEST option
available to you?
e) Approach the Project Manager from the earlier project and take his inputs
f) Obtain historical records and guidance from the Project Management Office (PMO)
g) Involve Stakeholders, take their opinion and expertise on the project
h) Continue to manage project by your instincts until there is a major issue

Answer: (b) Obtain historical records and guidance from the PMO. Though all the options except (d) reflect
proactive nature of the Project Manager and is appropriate, the best option is to go through historical
records from the PMO. It will help you to get an objective and systematic assessment of past projects in
the organization. Remember, a project management office plays a critical role by providing centralized
management of the projects and access to policies, templates, lessons learned, and historical records to
projects.

26. You are managing a large and complex project which is in the planning stage. After assessing the
detailed project requirements with the stakeholders, you ask the team to create a Work Breakdown
Structure (WBS). However, since most of the team is new, you decide to brief them on some rules of
creating a WBS. Which of the following statements is INCORRECT about a Work Breakdown Structure?
e) WBS is a list of specific activities used to accomplish the deliverables
f) WBS includes only work needed to create deliverables hence work not in WBS is not part of the project
g) Lower level WBS components are a decomposed result of the upper level WBS components
h) WBS allows better estimation of cost, risk, and time

Answer: (a) WBS is a list of specific activities used to accomplish the deliverables. Work Breakdown
Structure (WBS) is a deliverable-oriented hierarchical decomposition of the work to be executed by the

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project team to accomplish the project objectives and create the required deliverables. It organizes and
defines the total scope. Hence, it is NOT a list of specific activities used to accomplish the deliverables.
How the work is completed (activities) can vary and change throughout the project, but deliverables
cannot change without a change request. For more information on Work Breakdown Structure (WBS),
please refer to PMBOK 5th Edition Project Scope Management PN 132.

27. You are a Project Manager for an infrastructure development project and the project is to build a
multi-story building. You have submitted your project estimates for cost and duration to the client. You
also inform the buyer that the estimates would be true provided there is already an 8ft foundation
built on the site. This statement describes a/an ----------- in your project.
e) Risk
f) Constraint
g) Assumption
h) Mandatory Dependency

Answer: (c) Assumption. This is an assumption you have made about usability of existing foundation to
derive the project estimates. An assumption, by definition, is a statement that is assumed to be true and
from which a conclusion can be drawn. There may be external circumstances or events that must occur for
the project to be successful, which are categorized under project assumptions. This is not a risk as there is
no element of uncertainty involved. (Option a ) Risk, by definition, is an event which may or may not occur
in the future and if it occurs it can positively or negatively affect the project. There is also no justification to
believe that this is a project constraint. (Option b) as constraints usually limit project options and are
outside the control of the project team. Pre-existence of a foundation for building a multi-story is also not
an example of Mandatory Dependency (Option d).

28. You are the Project Manager of a large and complex project. Your project team has finished creating a
Work Breakdown Structure for the project. However, some of the team members are still not sure of
what work is included in each of their work packages. Which of the following documents would you
suggest they go through?
e) Project scope statement
f) Project Management Plan
g) Work Break Structure (WBS) Dictionary
h) The Product Scope document

Answer: (c) Work Break Structure (WBS) Dictionary. A Work Break Structure (WBS) Dictionary accompanies
a Work Breakdown Structure and provides a description of the work to be done for each WBS package. It
provides more detailed descriptions of the WBS components such as work description, schedule
milestones, schedule activities, resources required, cost estimates, quality requirements, acceptance
criteria, etc. The project scope statement--option (a)--contains details about the scope of the project, but it
is at a much higher level and will not be helpful in this situation.

29. You are a Project Manager, in the process of sequencing activities for your project, you create a
schedule network diagram that uses boxes called nodes to represent activities and connects them with
arrows to represent logical relationship between them. What is this popular scheduling diagram
known as?

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e) Precedence Diagramming Method (PDM)
f) Arrow Diagramming Method (ADM)
g) Program Evaluation and Review technique (PERT)
h) Graphical Evaluation and Review Technique (GERT)

Answer: (a) Precedence Diagramming Method (PDM). The Precedence Diagram Method, also known as
Activity-On-Node, is a tool for scheduling activities in a project plan and constructing a project schedule
network diagram that uses boxes, referred to as nodes, to represent activities and connects them with
arrows that show the dependencies.

30. As a Project Manager, you are in the process of identifying and documenting relationship among
project activities and you are using the Precedence Diagramming Method (PDM). Which of the
following relationships are you MOST UNLIKELY to use for this purpose?
e) Finish to start (FS)
f) Finish to finish (FF)
g) Start to Start (SS)
h) Start to finish (SF)

Answer: (d) Start to finish (SF). The Project Manager is in the process of documenting Sequence Activities,
which defines four kinds of dependencies or logical relationships between project activities. Start to finish
(SF) relationship, which denotes completion of successor activity, depends on initiation of predecessor
activity. For example, activity A has a start to finish relationship with activity B that implies B doesn't finish
before A starts. This relationship is rarely used and uncommonly found in real life situations. An example
could be a call center environment where the previous shift doesn't finish until the next one starts.

31. As a Project Manager, you are estimating the duration of your project activities using PERT technique
(Program Evaluation and Review technique). For a particular project activity your Optimistic estimate is
14 days, Pessimistic estimate is 47 days, and Most Likely estimate is 27 days. What should be the
expected duration of this activity?
e) 28.17
f) 31
g) 43
h) 36

Answer: (a) 28.17. PERT allows the estimator to include three estimates: optimistic, pessimistic, and most
likely, given by the equation: Expected Duration = [P + 4(ML) + O]/6 where P is the pessimistic estimate,
ML is the most likely estimate, and O is the optimistic estimate. Using this method the correct answers
comes out to be 28.167 days or 28.17 days.

32. Sub network or fragment network templates are most useful when the project has MANY:
e) Mandatory Dependency
f) Discretionary Dependency
g) Undefined Variables
h) Identical or nearly identical deliverables

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Answer: (d) Identical or nearly identical deliverables. Sub network or fragment network templates are part
of project schedule network template. It can be used to expedite the preparation of networks of project
activities, especially when a project includes several identical deliverables.

33. As a Project Manager you have created a Resource Breakdown Structure (RBS) for your project. Which
of the following statements is NOT TRUE about Resource Breakdown Structure (RBS)?
e) It is a hierarchical structure of resources
f) It is used for estimating Resource Utilization
g) It is used for organizing and reporting project schedule
h) It has resources grouped by category and type

Answer: (b) It is used for estimating Resource Utilization. Resource Calendars and not RBS are used for
Resource Utilization. Resource Breakdown Structure (RBS) is focused on creating a hierarchical list of the
resources, both significant and seemingly redundant, that are involved in the project. Every hierarchical
level lists a number of resources that are needed for carrying out various kinds of project related activities.
Every kind of resource is further divided into a number of categories or resource-types to help classify
them.

34. A Project Manager is managing a project which has constraints on the availability of required resources
throughout the project. As such he needs to rearrange resources in such a way that a constant number
of resources are used each month. Which of the following techniques will the Project Manager use to
achieve this?
e) Fast Tracking
f) Crashing
g) Leveling
h) Lagging

Answer: (c) Leveling. Resource leveling would be the only technique from the available options which can
help provide a constant number of resources used in a time frame. It is a project management process
used to examine a project for an unbalanced use of resources (usually people) over time, and for resolving
over-allocations or conflicts. Resource Leveling is quite important in a maintenance project in software
industry.

35. A project team is in the process of estimating the types and quantities of resources required to
perform each activity. Which of the following activities will NOT be done by the team during this
process?
e) Estimate the type and quantity of resource required to perform each activity
f) Go through the past data and Lessons Learned from previous project
g) Study the organization policies and procedures regarding staffing
h) Identify and show network dependency in the project activities

Answer: (d) Identify and show network dependency in the project activities. The project team is in the
process of Estimate Activity Resources and the activities provided as option (a),(b) and (c) are done as part
of this process. Option (d) which involves creating schedule network diagram to display project schedule
activities and logical relationship between them is part of Sequence Activities process.

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36. Which estimate technique does the Program Evaluation and Review Technique (PERT) use to define
the approximate range of activity costs?
e) Earned Value Technique
f) Parametric Estimation Technique
g) Three Point Estimate Technique
h) Historical Information

Answer: (c) Three Point Estimate Technique. Program Evaluation and Review Technique (PERT) calculates
an expected activity cost using the weighted average of the three estimates, that is (Most Likely+
Optimistic+ Pessimistic)/3 where *Most likely is the approximate realistic scenario, that is, the cost of the
activity given the resources likely to be assigned, their productivity, realistic expectations of availability. *
Optimistic is the best-case scenario, that is the activity duration is based on a best-case scenario of what is
described in the most likely estimate.* Pessimistic is the worst-case scenario, that is, the activity duration
is based on a worst-case scenario of what is described in the most likely estimate.

37. Your project team is involved in estimating the cost of the project as a part of project cost
management. Which of the following tools and techniques will NOT be applicable for this purpose?
e) Cost Benefit Analysis
f) Reserve Analysis
g) Cost of Quality
h) Vendor Bid Analysis

Answer: (a) Cost Benefit Analysis. Reserve Analysis, option (b), is an analytical technique to determine a
reserve for budget, estimated costs and funds for the project. It is an important technique in the process of
estimating costs. Option (c) Cost of Quality is the sum of all costs a company invests into the release of a
quality product and can be used to prepare cost estimates. Option (d) Vendor Bid Analysis can also be used
as a technique to evaluate the project cost based on responsive bids from qualified vendors. However, (a)
Cost Benefit Analysis is a technique that compares positive factors or benefits with negative ones to
determine the net result of doing the action. It is a popular technique for selecting projects, but will not be
useful during cost estimation at the activity level. Please refer to PMBOK 5th edition Project Cost
Management PN 171 for more details.

38. The common term for an authorized time phase budget at completion (BAC) used to measure cost
performance and displayed in the form of an S curve is:
e) Earned Value
f) Cost Performance Index
g) Cost Baseline
h) Project Budget

Answer: (c) Cost Baseline. It provides a yardstick against which you can measure cost performance. Please
refer PMBOK 5th edition PN 212 for definition of cost baseline.

39. A project team is in the process of identifying quality requirements and standards for the project and
documenting how the project will demonstrate compliance. They have referred to organizational

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process assets and are using tools like statistical sampling and control charts. Which process of Quality
Management is the project team performing?
e) Plan Quality Management
f) Perform Quality Assurance
g) Perform Quality Control
h) Manage Project Team

Answer: (a) Plan Quality Management. Notice the words 'identifying quality requirements and standards',
which are part of quality planning. So the project is in Plan Quality process in the planning phase. Please
refer to PMBOK 5th Edition Project Quality Management PN 231.

40. Which of the following is true with respect to planning?


e) Develop the high level budget
f) Develop the cost management plan
g) Develop the budget plan
h) Develop both budget plan and cost management plan

Answer: (b). As per the latest examination content outline, budget plan is replaced with cost management
plan. Option (a) is part of Initiating and option (c) and (d) are not true.

41. Which of the following is an example of external failure cost?


e) Cost of testing
f) Cost of training
g) Cost of documentation
h) Warranty cost

Answer: (d) Warranty cost is the only cost which belongs to the category of external failure cost. Training
and documentation are prevention costs. Testing is appraisal cost. Please refer to PMBOK 5th edition
Project Quality Management, Cost of Quality PN 235.

42. A project team is ahead of their schedule and their SPI is currently 1.4 and CPI is 1.2 respectively. The
Project Manager and the team is brainstorming on the scope of next milestone delivery. They have
found that including an additional feature would enhance the usability of the product and can be
compressed in the current schedule. What should the project team do next?
e) Add this feature in next release as long as it doesn't affect the delivery date
f) Go through the change management and analyze the impact of this additional feature
g) Discuss it with the project sponsor
h) Drop this feature as it is gold plating and customer does not need it

Answer: (d) Drop this feature as it is gold plating and customer does not need it. PMI does not recommend
gold plating and this additional feature is definitely not part of the requirement in the contract. Though it
does not affect delivery, it may involve costs or additional risk, so option (a) is not justified. The best option
would be to first evaluate the impact of this additional feature and then discuss it with the customer. Since
that is not a choice, (d) is the best answer.

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43. You are a Project Manager managing a large team at diversified locations. There are many groups
within a project like architects, human resources, legal, quality engineers, etc. with their own hierarchy
and reporting structure. In order to ensure that each team member has clarity on their own and other
members' reporting structure, you decide to capture all of this information graphically. Which of the
following documents will you be using for this purpose?
e) Project Organization Chart
f) Resource Breakdown Structure
g) Organization Breakdown Structure
h) Resource Assignment Matrix

Answer: (a) Project Organization Chart. A project organization chart is part of the human resource plan
and displays project team members and their reporting structure. Depending on the project requirements,
team size and their reporting hierarchy, this chart could be highly detailed or broadly framed. Please refer
PMBOK 5th edition PN 261.

44. A Project Manager wants to capture information related to staff acquisition and release, training
needs, resource calendar, recognition, and rewards. Which of the following documents would be most
appropriate?
e) Project Management Plan
f) Staffing Management Plan
g) Project Staff Assignments
h) Issue Log

Answer: (b) Staffing management plan. A staffing management plan which is part of the human resource
plan describes when and how human resource requirements will be met. Option (a) project management
plan may or may not contain a staffing management plan; hence (b) is a better option. Option (c) Project
staff assignments is an output of the 'acquire project team' process and can include project team
directories, memos to team members, etc. Option (d) issue log is used for capturing project issues and is
not the correct answer. Please refer to PMBOK 5th edition PN 261.

45. You are a Project Manager in a functional structure organization, hence it is important that you
negotiate suitable resources for your project from the functional manager. Which of the following
tools could be a valuable asset to prove your project resource requirements to the functional
manager?
e) Staffing Management Plan
f) Network Diagram and Project Schedule
g) Resource Assignment Matrix
h) Project organization chart

Answer: (b) Network Diagram and Project Schedule. Project schedule along with network diagram (that
graphically represents the project schedule) provides the most convincing visual proof of the resource
requirements in the project and shall be used during resource negotiation by Project Manager. Remember
a project schedule is derived from a WBS, an effort estimate for each task, and a resource list with
availability for each resource, so it is granular and most accurate. Option (a) staffing management plan
provides guidelines on how human resources should be defined, staffed, managed, and controlled. Option

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(c) and (d) capture the reporting structure and roles and responsibilities of the team members, therefore
they are not the best choices.

46. In a project kick off meeting there is utter chaos with all the attendees talking simultaneously. The
Project Manager is not able to present his report in this noise and the stakeholders feel that their
expectations are not being met properly. Also, many of the invited attendees are not attending the
meeting. What must the Project Manager have done to avoid this situation?
e) Communicate the agenda of the meeting clearly to all the Stakeholders
f) Postpone the meeting to ensure availability of all the Stakeholders
g) Conduct a brainstorming session to reach a consensus with Stakeholders
h) Establish ground rules for the meeting and communicate the same to all the attendees

Answer: (d) Establish ground rules for the meeting and communicate the same to all the attendees. This is
a question where you need to concentrate on the root cause of the situation. There is no evidence to
believe option (a) was not done. Option (b) may not always be feasible. Also option (c) may not be
required once Project Manager is able to present his point of view and order is restored. The most
important thing in this situation is to establish clear expectations regarding acceptable behavior by project
team members. Discussing ground rules also allows team members to discover values that are important
to one another and improve productivity.

47. You have been assigned as a Project Manager of a newly initiated project and have 5 team members.
There is a project sponsor (Mr. Smith) and a technical architect who will be involved only during the
planning stage. This project is for an external customer. How many communication channels are
possible in your project?
e) 36
f) 72
g) 28
h) Cannot be determined since project is in the initiation stage

Answer: (a) 36. This is directly based on the formula n*(n-1)/2. If n is the number of stakeholders in the
project, the total possible communication channels = n*(n-1)/2. So the project has five team members, a
sponsor, a technical architect, an external customer, and the Project Manager himself. Thus, there are 9
people and 36 possible communication channels. Please Refer to PMBOK 5th edition page 292 Plan
Communications: Tools and Techniques.

48. Risk Breakdown Structure is an example of:


e) Text oriented format
f) Functional chart
g) Hierarchical representation of risks according to risk categories
h) Matrix based organization chart

Answer: (c) Hierarchical representation of risks according to risk categories. As part of risk breakdown
structure, all risks are placed in a hierarchical structure as they are identified, which makes your risk
planning more efficient.

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49. A Project Manager is managing a short duration pilot project and has started with a risk management
planning process. He has identified new risks and arranged them based on probability and the impact
matrix. The Project Manager now proceeds to plan responses for the risks without analyzing the risks
numerically. According to you, this decision of Project Manager is:
e) Incorrect, It is important to numerically analyze each risk so that they can be responded properly
f) Correct, Quantitative Risk Analysis is waste of time and not required if risks are already assessed
qualitatively
g) Incorrect, Quantitative risk analysis is important. We need to calculate EMV for each risk and later
move to risk response planning
h) Correct, This is a short duration project and Project Manager might skip Quantitative Risk analysis if he
feels it is not assisting in the Risk Management process

Answer: (d) Correct, this is a short duration project and a Project Manager might skip quantitative risk
analysis if he feels it is not required in the risk management process. It is not mandatory for you to do
quantitative risk analysis and you can directly move on to risk response planning, especially for a low
priority or short term project.

50. Which of the following elements are to be considered while developing the project schedule? Pick the
best answer.
e) Based on project deliverables
f) Based on project timeline
g) Based on Quality
h) Based on cost

Answer: (a). As per the new examination content outline, project schedule is developed based on project
deliverables rather than project timeline.

51. As part of Quantitative Risk Analysis, a Project Manager has derived four packages with the following
probability and impact. Using EMV (Expected Monetary Value) which one should he use in the project?
e) Work package I: Probability 15% and Impact $20,000
f) Work package II: Probability 7 % and Impact $10,000
g) Work package III: Probability 7 % and Impact $15,000
h) Work package IV: Probability 15% and Impact $10,000

Answer: (a) Work package I: Probability 15% & Impact $ 20,000. EMV = Probability * Impact. If the impact
is positive, then it is opportunity and if the impact is negative then it is threat. From the given options, all
are opportunities and the one which is highest should be the right option.

52. A Project Manager is in the planning stage and is evaluating risks in the project. He wants to improve
the project's chances of success by evaluating all possible risks. As a part of risk management planning
and identification he has used a standard questionnaire to identify risks and has identified about 20
risks in the project. What would you advise him to do before moving to the next process, 'qualitative
risk analysis?'
e) Prioritize risk by determining each of their probability and impact
f) Update project management plan and other project documents based on inputs from these risks
g) Communicate the status of identified risks to stakeholders

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h) Continue to identify more risks using other tools and techniques

Answer: (d) Continue to identify more risks using other tools and techniques. As you noticed, the project
has only identified 20 risks which are rather low. Furthermore, they are only identified using a standard
questionnaire. It is also not clear whether all stakeholders were involved in the risk Identification process.
Also, risks need to be identified using various tools and techniques in 'identify risks' process. Option (b) and
(c) are not valid as risk identification process is not yet completed and option (a) is part of 'perform
quantitative risk analysis' process.

53. A project team in a software project started with risk management planning and identified new risks.
Then they conducted qualitative risk analysis using a probability and impact matrix and thereafter
completed the 'plan risk response' process. What is an important step they need to complete before
moving to risk monitoring and control?
e) Evaluate risks quantitatively using any of the tools of Quantitative Risk Analysis
f) Identify Risk owners among stakeholder and project team
g) Evaluate the amount of contingency time and cost reserve needed
h) Communicate the status of identified risks and response strategy to stakeholders

Answer: (d) Communicate the status of identified risks and response strategy to stakeholders. It is
important to communicate risks and strategies to stakeholders before moving to the next stage of the
project. Option (b) and (c) are part of plan risk response and is already completed. Option (a) quantitative
risk analysis comes before risk response planning and would have been either addressed or skipped
depending on project requirements.

54. A project team is working on a risk response strategy by evaluating every risk and coming up with
suitable response strategies. However, one particular risk with a negative impact cannot be avoided or
mitigated. Furthermore, there is no way to transfer risk by outsourcing or buying insurance. What is
the best they can do about the risk?
e) Treat it as a secondary risk and update it in Risk Register
f) Share the risk by allocating ownership to a third party
g) Accept the risk and put it in the watch list
h) Re-visit the Risk Response Strategy

Answer: (c) Accept the risk and put it in the watch list. The question suggests the team has already
explored all the alternatives, so option (d) would not provide any further solution. In this case, the best
strategy is to accept the risk and if possible plan for a contingency to be implemented if risk occurs. Option
(b) is a strategy for positive risks or opportunities. Option (a) is not true as secondary risk is an outcome of
implementing risk response strategy.

55. You are a Project Manager in a construction company and urgently require some expert welders for a
short duration. You checked their availability internally with the functional manager, but he is not able
to match the skill set required by you. You decide to acquire these resources on contract. Which of the
following is the BEST type of contract for your requirements?
e) Cost Reimbursable
f) Fixed Price
g) Time and Material

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h) Cost Plus Incentive Fee

Answer: (c) Time and Material. Since the requirement is short term and the Project Manager wants to
have a brief and quick contract, a time and material contract is the best option. Time and material
contracts are most suitable for staff augmentation, acquisition of experts etc. Please refer to PMBOK 5th
edition Project Procurement Management PN 362.

56. A contract type where the seller is reimbursed for all allowable costs for performing the contract work
and receives a predetermined incentives fee based on achieving certain performance incentive is:
e) Cost Plus Fixed Fee Contract
f) Cost Plus Incentive Fee Contract
g) Cost Plus Award Fee Contract
h) Fixed Price Incentive Fee Contract

Answer: (b) Cost Plus Incentive Fee Contract. A contract type where the seller is reimbursed for all
allowable costs for performing the contract work and receives predetermined incentives fee based on
achieving certain performance incentive is cost plus incentive fee contract. It helps protect buyer interests
as seller has good incentive to keep costs down. Please refer to PMBOK 5th edition Project Procurement
Management PN 362.

57. A Project Manager is in the process of preparing a plan that documents how the procurement process
will be managed from developing procurement documents to contract closure. He is also going
through project requirements and scope documents with the team and discussing different contract
types to decide the one most suitable for the project. According to you, which process of procurement
management is the Project Manager in?
e) Plan Procurement Management
f) Conduct Procurements
g) Control Procurements
h) Close Procurements

Answer: (a) Plan Procurement Management. The Project Manager is in the 'plan procurement
management' process and he is preparing the procurement management plan with his team. Contract
types are also important tools of this process, which is carried at the planning stage of the project. Please
refer to PMBOK 5th edition Project Procurement Management PN 358.

58. A Project Manager has used a popular cost estimating model to come up with cost estimates for his
upcoming project. However, the sponsor asks him to add 15% to the total cost estimate as the
customer always negotiates and asks the prices to be reduced by 10% to 15%. What should be the
BEST option for the Project Manager?
e) Do as the Sponsor says after all he is your senior and project sponsor
f) Recalculate the cost estimates using a more suitable technique and check the difference between the
estimates
g) Provide the Sponsor with details on cost estimation and suggest him to share the same with customer
h) Refuse to make any changes or increase the estimated cost

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Answer: (c) Provide the Sponsor with details on cost estimation and suggest him to share the same with
customer. Both option (a) and (d) are wrong because they are evasive responses to the situation and do
not help to improve it. Option (b) may not solve the problem as there is no reason to believe that Project
Manager's current estimates are flawed. The fact that customer asks to reduce cost by 10 % indicates he
does not trust the seller to quote a fair price. Option (c) provides the customer with the details on
estimating the model and cost breakup to help build trust with the customer and negotiate a fair price.

59. A large project with a team of 150 people is in the planning stage. It spans over a duration of 3 years
and is under strict budget. A Project Manager is assessing the detailed project requirements in
consultation with the stakeholders based on the project charter to establish the key project
deliverables. He sets his project quality objective per the organization capability baseline set by the
quality policy. However, one of the stakeholders refuses to accept this and asks him to reduce the
quality objective as it will help cut down cost of quality of the project. He also refuses to approve the
project till the Project Manager agrees to his suggestion. What should the Project Manager do?
e) Explain to the stakeholder that Cost of Quality is less than cost of project
f) Explain to the stakeholder that if Quality objectives are set lower than expected they will be
highlighted during Quality Audit
g) Explain to the stakeholder that the quality policy universally guides the projects within the
organization to set quality objectives and they need to abide by it
h) Agree to the stakeholder's suggestion and reduce the metric as he will not approve the project
otherwise

Answer: (c) Explain to the stakeholder that the quality policy guides the projects within the organization to
set quality objectives and they need to abide by it. This is a typical question, which can overwhelm you
with information! Option (c) is correct because quality policy is set by the management in the organization
and not by the Project Manager, but he needs to abide by it. Option (b) though correct, is wrong in
essence. The project should follow the right process by choice and not by fear of being caught in audits.

60. After a project management plan is prepared and approved a week ago, a project stakeholder asks the
Project Manager to correct some syntax and grammatical errors in the project document as it could be
misleading. What should the Project Manager do?
e) Refuse as these are trivial changes and can be ignored
f) Refuse as the project management plan is already discussed and approved
g) Refuse and ask the stakeholder to meet the project sponsor
h) Refuse and ask stakeholder to raise a change request that can be considered by change control board

Answer: (d) Refuse and ask stakeholder to raise a change request that can be considered by change
control board. All changes in the project should be documented as a change request and should go
through proper change management process. Option (a) is wrong because though these are grammatical
errors, question says it could be misleading and hence they are not trivial.

61. Being a Project Manager, your project sponsor has asked you to come up with the total funding
requirements of the project. What will be the total funding requirements for your project?
e) The total of the approved budget by time period
f) The total of project budget plus anticipated liabilities

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g) The total funds including the cost baseline plus any management reserves
h) The total of individual cost estimates

Answer: (c) The total funds include cost baseline plus management reserves if any. The total funds
required for the project are those included in cost baseline plus management reserves. Cost baseline
includes contingency reserves for the risk remaining after risk response planning. A management reserve is
an extra amount of funds to be set aside to cover unforeseen risks or changes in the project, and total fund
requirement for the project would include management reserves. Option (a) and option (b) describe cost
baseline and option (d) is the definition for cost budgeting.

62. A project has a Project Manager, a sponsor, a human resource, a quality analyst, and 7 team members.
What are the number of communication channels possible in the project?
e) 50
f) 110
g) 55
h) 115

Answer: (c) 55. Possible number of communication channels are n*(n-1)/2. In this case, it is equal to
(11*10)/2 = 55.

63. You are a Project Manager who has sent a formal document that describes the procurement item in
sufficient detail to allow prospective sellers to determine if they are capable of providing the product
and details methodology and results that will be provided to the buyer. This is called:
e) Invitation for Bid
f) Request for Proposal
g) Request for Quotation
h) Contract Statement of work

Answer: (b) Request for Proposal. A request for proposal (referred to as an RFP) is an invitation for
suppliers, often through a bidding process, to submit a proposal on a specific commodity or service. An
RFP requests a price but also a detailed proposal on how the work will be accomplished, who will do it,
company experiences etc. Option (a) 'Invitation for bid' requests for total price to do the work and option
(c) 'Requests for quotation' requests a price quote per item or hour.

64. Which of the following are NOT achieved by the human resource plan, created by the Project Manager
during the planning process group?
e) Defines the roles and responsibilities of the project team members
f) Includes an effective project organization structure
g) Provides guidance about how resources will be utilized and managed
h) Defines the work breakdown structure

Answer: (d) Defines the work breakdown structure. The human resource plan defines the roles and
responsibilities of the project team members to create an effective project organization structure and
provide guidance regarding how resources will be utilized and managed. A work breakdown structure is
created by deconstructing the scope and not by the human resource plan.

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65. You are the Project Manager for a big size project and quality is top priority for this project. You have
devoted so much of the project time for creating the quality management plan. What is the advantage
of the quality management plan?
e) Prevents the defects from reaching the customers
f) Guarantees improvement in project quality
g) Provides a systematic approach for meeting the project's quality goals
h) Conformance to customer's testing methodology

Answer: (c) The purpose of quality management plan is to provide an approach for meeting the project's
quality goals. Preventing defects from reaching customers is in Quality control. Plan does not guarantee
project quality. Conformance to customer's testing methodology may not be incorporated in the project
quality plan. Refer PN 241 in the PMBOK guide.

66. A Project Manager is trying hard to successfully complete a project, but his role in the organization is
limited and he has no control over project budget. Although he has some power to authorize
decisions, he needs to seek approval on most of the major decisions. Also his team members work only
part-time on the project. The Project Manager is mostly in which kind of organization?
e) Functional
f) Projectized
g) Composite
h) Strong Matrix

Answer: (a) Functional. The Project Manager has limited authority and no control on project budget. Also,
his team members are not allocated full time on project work. The Project Manager is hence working in a
functional organization structure.

67. How is the role of project expeditor different from project coordinator?
e) Project coordinator has some power to make decisions
f) Project coordinator acts primarily as Staff assistant
g) Project coordinator role is that of communication coordinator
h) Project coordinator can control project budget

Answer: (a) Project coordinator has some power to make decisions. The only difference between the role
of coordinator and expeditor is that the former has some power to make decisions and may report to high
level management, while the latter acts as a communication coordinator, that is, monitors and reports the
status of the project to the senior management. Option (b) and (c) are true for both the roles of
coordinator and project expeditor, whereas option (d) is false statement.

68. You are working on a critical project for a large enterprise. The project has a major milestone delivery
next week and is in final testing phase. The project team is working on two critical showstopper bugs,
which are parts of the deliverable as the project faces many serious issues. One of the senior members
of the project has put up his resignation and the outsourced component which was scheduled for
delivery next week may be delayed. Additionally, the current performance indices are CPI 1.09 and SPI
is 1.90. What is the MOST critical issue faced by the project?
e) Cost and Schedule
f) Delay in third party component

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g) Resource Movement
h) Testing defects

Answer: (d) Testing defects. This question exemplifies a typical scenario when a Project Manager needs to
integrate information and make a decision from many choices. Since both CPI and SPI are more than one,
cost and schedule are in control. Delay in third party components is a risk which may or may not occur.
Furthermore, there is no information to suggest it will delay the milestone release. The Project Manager
can plan for proper knowledge transfer to minimize the effect of senior members' resignation. The show
stopper bugs need to be resolved before delivery and that is the most critical issue faced by the project.

69. All of the following are enterprise and environmental factors that can influence direct and manage
project work EXCEPT:
e) Stakeholder risk tolerance
f) Organizational culture and structure
g) Project Management Information System (PMIS)
h) Standardized guidelines and work instructions

Answer: (d) 'Standardized guidelines and work instructions' is a part of Organizational Process Assets.
Refer to PMBOK 5th edition Project Integration Management PN 27.

70. A work authorization system is a:


e) Part of change control system in a project
f) It is a privately created software tool helped to submit and track changes, monitor and control project
activities from project initiation to closure
g) Tool used to notify team or contractors that they may begin work on a project or work package
h) Helps team create Work Breakdown Structure

Answer: (c) Tool used to notify team or contractors that they may begin work on a project or work
package. Work authorization system is a subsystem of the overall project management system. It is a
collection of formal documented procedures that defines how project work will be authorized to ensure
that the work is done by the identified organization, at the right time, and in the proper sequence. It
includes the steps, documents, tracking system, and defined approval levels needed to issue work
authorizations. Option (b) is a description for another important tool that helps project management
known as Project Management Information System (PMIS).

71. Which of the following processes does not have defect repair as one of the outputs?
e) Perform Integrated Change Control Process
f) Control Procurements
g) Monitor and Control
h) Control Schedule

Answer: (a) Perform integrated change control process. Defect repair is due to change request. Change
request is the input for perform integrated change control process and can be the output for the
remaining options.

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72. You are a Project Manager of a software project which is in a critical phase of testing and bug fixing. An
enthusiastic test engineer working in the project tells you that he found a major bug the previous night
during testing. He assures that there is nothing to worry as he has 'patched' the code and it is working
fine now. What should be your main concern from this incident?
e) Nothing, it shows proactive approach of the team member and should be appreciated
f) It can be a case of scope creep and all prior documents need to be changed
g) It shows disrespect to the project management authority as the team member didn't ask his opinion
h) The patch or bug fix may not work correctly in all scenarios

Answer: (b) It can be a case of scope creep and all prior documents need to be changed. Scope creep is
essentially uncontrolled changes in the defined scope which have not gone through Perform Integrated
Change Control Process. It is important that any change in functionality or even a bug fix should be
informed to Project Manager and its impact considered on other project constraints including schedule,
cost, and quality. Option (d) is not supported by enough evidence. Option (a) and (c) are incorrect.

73. You are a Project Manager in an oil company and have joined a project midway during execution. You
want to understand how requirements activities, configuration management activities such as changes
to the product requirement will be initiated, impacts analyzed, tracked and reported as well as the
authorization levels required to approve these changes. Which of the following documents will provide
you this information?
e) Requirements Management Plan
f) Integrated Change Control
g) Project Charter
h) Project Scope Statement

Answer: (a) Requirements Management Plan. Requirements management plan documents how
requirements will be analyzed, documented, and measured in the project. It also includes configuration
management activities such as how changes to the product requirement will be initiated, impacts
analyzed, tracked and reported as well as the authorization levels required to approve these changes.
Option (b) Integrated Change Control is a process required for effective and efficient change management.
Refer to PMBOK 5th Edition Project Scope Management PN 110.

74. To acquire and manage the project team, which of the following plan or documents should be
referred?
e) Human Resource management plan
f) Procurement management plan
g) Project charter
h) Human Resource management plan and Procurement management plan

Answer: (d) As per the new examination content outline, not only the procurement management plan, but
human resource management plan should also be considered.

75. An Instrument measuring thickness of a screw of 15 mm diameter gives the following readings 16.001
mm, 16.00015 mm, 16.0003 mm, and 15.900 mm. Assuming the instrument is capable of measuring
up to the third place decimal, what BEST can be concluded on performance of the instrument?
e) The instrument is accurate and precise

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f) The instrument is not accurate but precise
g) The instrument is accurate but not precise
h) The instrument is neither accurate nor precise

Answer: (b) The instrument is not accurate but precise. Precision means the values of repeated
measurements are clustered and have little scatter. As the name suggest, accuracy means how close the
measured values are to the actual value. The measurements though precise are not accurate, that is,
option (b).

76. You are a Project Manager in a leading manufacturing company and managing a critical project for the
company. Your project is facing severe cost constraints and you cannot delay the delivery date of the
product. After consulting stakeholders and the customer, you decide to lower both the quality and
grade of the product. The decision to lower the quality and grade of the product is?
e) Wrong; as a grade and quality should never be compromised in a product.
f) Wrong; as grade can be compromised but not quality
g) Wrong; as quality can be compromised but not grade
h) Correct; as both grade and quality can be compromised as per project need

Answer: (d) Correct; as both grade and quality can be compromised as per project need. Remember triple
constraints and real life project constraints. Though it is not advised to compromise on quality and grade,
the Project Manager and team are responsible for managing the tradeoff in quality and grade of the
delivered product in specific scenarios. But it should be approved and agreed by the customer and
stakeholders. Refer to Project Quality Management PMBOK 5th edition PN 228.

77. A project is in the execution stage when the customer comes back with an additional feature to be
added in the forthcoming milestone delivery. The project team has assessed the impact of the change
by performing Integrated Change Control. The Project Manager should:
e) Hold a meeting with customer explaining why it is not good option to incorporate change requests
during project execution
f) Create a change Request and proceed for review by Change Control Board
g) Review Quality Management Plan and evaluate the effect of the additional feature on Quality
h) Notify stakeholders affected by change

Answer: (c) Review Quality Management Plan and evaluate the effect of the additional feature on quality.
Quality needs to be considered whenever there is a change in a triple constraint. If you choose option (d)
you are quite close. The stakeholders should then be informed as part of change management. Option (b)
is already completed by the project team as a part of Integrated Change Control.

78. According to Maslow's hierarchy of needs, what comes at the BOTTOM of the pyramid?
e) Safety
f) Social
g) Esteem
h) Self Actualization

Answer (a) Safety. Maslow and other theorists might be referenced on the PMP exam and it is important
to get familiar with them. Maslow's hierarchy of needs is displayed as a pyramid and displays the five

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levels of human need from bottom to top. These are: Physiological, Safety, Social, Esteem and Self
Actualization.

79. A project is in the final testing stage and is approaching a critical deadline. Two senior members of the
team who have already had disagreements throughout project execution are caught up in a deadlock.
The Project Manager has earlier tried his best to sort out their differences but it hasn't worked. What
is the BEST the Project Manager can do in this situation?
e) Talk to the project sponsor since they are senior members of the project
f) Give them a final warning making it clear that such behavior is not encouraged
g) Talk face to face with each of them individually to sort out their differences
h) Use an Autocratic approach and make a decision which is best for the project

Answer: (d) Use an Autocratic approach and make a decision which is best for the project. The Project
Manager is responsible for the project's success. This project is approaching a critical deadline and these
two members have always been a problem. Option (a) troubling your sponsor for this issue is definitely not
an option as a Project Manager should be able to handle conflicts within the team. Option (b) and (c) may
not work as Project Manager has tried earlier to resolve their difference amicably. The only option is to use
the power to make a decision, which is in the best interest of the project including expulsion of one
resource if required.

80. Of the following reasons which one is the MOST COMMON reason for conflict?
e) Schedules
f) Personalities
g) Technical Beliefs
h) Administrative policies and procedures

Answer: (a) Schedules. The most widely accepted common reasons for conflict in a team are: Schedules,
Priorities, Resources, Technical beliefs, Administrative policies and procedures, project costs and
Personalities (they are in order of most common to least common).

81. In order to achieve the project deliverables, the project manager has to manage task execution based
on project management plan. In doing so, which of the following elements should be considered?
e) Budget and schedule
f) Leading and developing the project team
g) Quality and cost
h) Acquiring the team

Answer: (b). As per the new examination content outline, it is by leading and developing the project team.
Earlier it was based on budget and schedule.

82. You are managing a large diversified project team. In the initial days of the project, the team members
behaved like independent individuals and seemed reserved, learning about their roles and
responsibilities. Then as the team began to work on the project and participate in technical decisions,
their trust level grew. The team now supports each others needs and works together. According to
you, they are in which stage of team development?
e) Norming

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f) Performing
g) Forming
h) Adjourning

Answer: (a) Norming. The stage at which team members begin to work together and adjust work habits
and behavior that support the team and develop trust is the Norming stage. There are five stages of team
development starting from Forming, Storming, Norming, Performing, and Adjourning. Please refer to
PMBOK 5th edition Project Human Resource PN 276.

83. Which of the following is NOT a tool and technique used in 'develop project team' process?
e) Training
f) Interpersonal Skills
g) Co-Location
h) Observation and Conversation

Answer: (d) Observation and Conversation. All the other options like (a) training to enhance team
member's skill, (b) Interpersonal Skills or soft skills to improve understanding and increase cooperation
and (c) Co-Location placing team members physically close to each other, help in developing the team.
However, 'Observation and Conversation' are techniques used in 'manage project team' process. Please
refer to PMBOK 5th edition Project Human Resource PN 282.

84. You have delivered many complex and technically challenging projects in the past and have won
respect and appreciation for your work from the customer and senior managers in the organization
alike. Which form of power are you using?
e) Formal (Legitimate)
f) Reward
g) Expert
h) Referent

Answer: (d) Referent. This an example of Referent form of power derived from respect and appreciation.
There are several types of power a leader uses namely: Formal authority (legitimate power): ability to
influence through the authority to direct, based upon position in the hierarchy of the organizational
structure or the perception of official empowerment to issue orders. Reward power: ability to influence
based upon direct or indirect control over positive consequences one desires to gain, such as raises in
compensation, bonuses, promotions, choice assignments, or other perks. Penalty (coercive) power: ability
to influence based upon direct or indirect control over negative consequences one desires to avoid, such
as the lack of raises in compensation, bonuses, promotions, choice assignments, or other perks. Expert
power: ability to influence based upon expertise or special knowledge considered important to the work at
hand. Referent power: ability to influence based upon respect, loyalty, admiration, affection, or a desire to
gain approval.

85. A new Project Manager takes over a project during the execution phase. One of the main issues faced
by the project is that the customer complains of poor visibility on the project. What should be his first
step towards resolving the issue?
e) Have a discussion with the customer to understand why he feels the project lacks visibility

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f) Hold a discussion with the team members who have been in this project since beginning to understand
customer specific communication needs
g) Go through the communication management plan to understand customer communication
requirement and whether it is being addressed properly
h) Project Manager should first understand the project and go through project management plan to
understand the project properly

Answer: (c) Go through the communication management plan to understand customer communication
requirement and whether it is being addressed properly. Since the communication management plan
details the communication requirements of all the stakeholders, he should first ensure that the plan is
being properly followed. Option (a) and (c) can follow later. Option (d) though true is not relevant to the
situation. Refer to PMBOK 5th Edition Chapter Project Communication Management PN 287.

86. You are managing a large project which has many stakeholders across various departments in the
organization. During the planning stage, you created a communication management plan based on the
project organization structure and external stakeholder requirements in order to manage the flow of
project information. Now while executing the project, one of the stakeholders contacts you and
informs you that his expectations are not accounted for in the project. What should be your BEST
response to the situation?
e) Understand his expectations and update project documents accordingly starting with stakeholder
register
f) Since the stakeholder analysis is already completed and all the other stakeholders have been present
and addressed work towards fulfilling their expectations, the same cannot be repeated for this
particular stakeholder
g) Go through the stakeholder analysis with the team as there might be more unidentified stakeholders
in the project
h) Inform this stakeholder that he will be included in all project communications and he can raise his
concerns whenever he feels his requirements are not being addressed

Answer: (a) Understand his expectations and update project documents accordingly starting with
stakeholder register. Managing stakeholder expectations and establishing an effective communication
with them is one of the most critical activities for project success. The Project Manager should update the
project documents according to the requirements of the stakeholders. Option (b) is incorrect as all the
stakeholders in the project need to be identified and their expectations managed throughout the project.
Option (c) is incorrect as there is no reference in the question to suggest that more stakeholders might
have been missed in the project. Option (d) is incorrect approach. The Project Manager should proactively
manage stakeholder expectation in the project.

87. A software project run in an IT company has 14 stakeholders and is in the final testing stage when the
technical architect leaves the project and two new test engineers join in. What is the change in the
potential communication channels of the project?
e) Communication channel would remain unaffected by change in team members.
f) Number of communication channels will increase by 13.
g) Number of communication channels will increase by 26.
h) Number of communication channels will increase by 14.

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Answer: (d) Number of communication channels will increase by 14. The question is asking the change and
not the total potential communication channels in the project. The total possible communication channels
= n*(n-1)/2 where n is the number of stakeholders in the projects. When the technical architect was part
of the project team, there were 14 stakeholders, which made a total of [(14*13)/2] = 91 channels. When
the technical architect left the project team and two new test engineers were added, there were 15
stakeholders, which made a total of [(15*14)/2] =105 channels. Hence the change in the potential
communication channels is 105-91=14. Refer to PMBOK 5th edition page no 292 Plan Communications:
Tools and techniques.

88. Which of the following types of organizations would have the most complex communication
management?
e) Functional Organization
f) Projectized Organization
g) Matrix Organization
h) Ad hoc Organization

Answer: (c) Matrix organization has combination of both functional and projectile characteristics as project
members are from across the organization. This makes the communication more complex and challenging
as team members not only need to communicate within their project team but across different horizontal
departments and vertical domains. Note: There is no word for ad hoc organization in the PMBOK.

89. You are Project Manager of a software project that has finished the design stage and is moving to the
implementation stage. At the end of design phase, you got the document reviewed; tracked and closed
the defect logs. Also as part of the design stage review and kick-off for the implementation phase, you
checked current SPI and CPI and revisited the risks. What did you forget to do?
e) Identify new risks for the next stage and update risk register
f) Take corrective and preventive actions from design review so that defects can be minimized
g) Conduct an impact analysis of the defects found during the design review
h) Communicate project stage review findings to all the stakeholders

Answer: (d) Communicate project stage review findings to all the stakeholders. Remember the Project
Manager needs to communicate project progress to stakeholders at all the major milestones. Option (a)
would have been addressed during revisiting the risk as part of kick off meeting, whereas Option (b) and
(c) are not mandatory activities and may not be required in every project.

90. In which of the following types of contracts does the buyer have the MAXIMUM cost risk?
e) Cost Reimbursable
f) Fixed Price
g) Time and Material
h) Cost Plus Fixed Fee

Answer: (a) Cost Reimbursable. In a cost reimbursable type of contract, the buyer has the maximum risk
because the total cost of the project remains unknown. This is usually used when the buyer is not able to
come up with complete contract statement of work and has limited understanding. Similarly in a Fixed

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Price Contract Option (b) the buyer has least cost risk, because any additional cost over and above the
negotiated price has to be borne by the seller.

91. A cost reimbursable contract has an estimated cost of $20,000. If the seller beats the cost, they will
share the savings. 80% will go to the buyer and 20% will go to the seller. If the actual costs come in at
$18,000, what is the final price?
e) 18000
f) 18200
g) 18400
h) 18600

Answer: (c) $18,400. For this question, Target price = $ 20,000; Actual cost = $ 18,000; Sharing ratio =
80/20; Actual cost to buyer = $18000 + ($20,0000-$18,000)*20% = $18,400

92. A project team is in the process of obtaining seller responses, selecting a seller, and awarding a
contract. For this purpose they are using some predefined selection criteria to evaluate the bids and
select the most appropriate seller. Which process of project management is the project team working
on?
e) Plan Procurement Management
f) Conduct Procurements
g) Control Procurements
h) Proposal Evaluation

Answer: (b) Conduct Procurements. The activities are part of the 'conduct procurement' process, which
includes obtaining seller responses, selecting a seller, and awarding a contract based on selection criteria
for selecting qualified sellers. Although they are working on proposal evaluation, Option (d) is not a
process, but a tool.

93. A Project Manager is involved in a procurement management process in a centralized contracting


environment. He is assigned a full-time contract manager who reports to him for the project. Under
this scenario which would usually NOT be the role of Project Manager?
e) Provide increased expertise in contracting and also guide the team on standardized company practices
f) Make sure the contract contains all project management requirements
g) Identify risks and incorporate mitigation and allocation of risks into contracts
h) Help tailor the contract to the unique need of the project

Answer: (a) Provide increased expertise in contracting and also guide the team on standardized company
practices. The Project Manager is working in an organization with a centralized contracting group. He has
also been assigned an experienced full-time contract manager who would be a specialist in contracting
procedure. In these circumstances, it is not expected for a Project Manager to provide guidance on
organization contracting policies.

94. A Project Manager is forced to give a contract to a preferred supplier as he has a strict deadline to
meet. What could be the BIGGEST risk in this situation for the Project Manager?
e) The seller has not proven that he has required expertise and resources to take this assignment
f) The Project Manager didn't get chance to evaluate other vendors who could be better

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g) The seller may not fulfill the evaluation criteria to bid for the project
h) The seller may not meet acceptance criteria in the contract and Project Manager might have to accept
what he gets

Answer: (a) The seller has not proven that he has required expertise and resources to take this
assignment. Since this contract is given to the seller without evaluating, his competency for this project is a
major risk on the project. Option (b) and (c) are issues and not risks because they are known facts. Option
(d) is incorrect because the contract is legally binding and the seller is bound to oblige the contract.

95. Your company is bidding for a major project from Company X. You have a friend in Company X and he
requests your help in evaluating the proposals. What action should you take?
e) Accept the friend's request and work impartially while helping on the proposal evaluation
f) Accept friend's request and take care of your company's interest while helping on the proposal
evaluation
g) Reject friend's request
h) Ask your Manager's opinion

Answer: (c) Reject friend's request. This is a clear situation of conflict of interests and the Project Manager
should reject the request.

96. As a Project Manager of a complex and relatively new technology you have asked for an expensive
training for yourself and the team from the project sponsor. Although the sponsor has agreed to your
request, he asks you to start the project in the meantime. Which of the following is NOT an option for
you?
e) Since you have already asked your sponsor for training, you can do nothing to enhance your skills till
that time
f) Visit PMO and Organization project database to go through lessons learned from previous projects
g) Talk to fellow Project Managers who have executed similar projects in the organization
h) Join Organization or library to gain access to journals featuring the technology

Answer: (a) Since you have already asked your sponsor for training, you can do nothing to enhance your
skills till that time. Doing nothing is the worst option because there is always something that can be done
to enhance your skills and knowledge.

97. A Project Manager has worked on many challenging projects and managed teams across the globe in
last 20 years of his career. Now, he intends to share his best practices and lessons learned throughout
his professional career. The Project Manager's act can be BEST defined as:
e) Enhancing his professional skills by evaluating his experience and strengths
f) Project Manager is contributing to the project management knowledge base
g) Capturing his professional stint in an autobiography
h) Informing others about project management principles and helping the profession grow

Answer: (b) Project Manager is contributing to the project management knowledge base. The Project
Manager is sharing the lessons learned and best practices and contributing to the project management
knowledge base.

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98. You work in a pharmaceutical company and as a part of the project, your client has shared some
confidential information with you. A medical university contacts you to share some information
including that from the client for their research purpose. What should you do?
e) Share the information as it will be used purely for academic purposes
f) Share the information but hide all the references which could expose the client
g) Never share any information from the client as you are bound by Non Disclosure Agreement
h) Contact your client and seek permission to disclose the information

Answer: (d) Contact your client and seek permission to disclose the information. The best option is to
consult the client on these matters. Option (a) seems to be in good faith, but you need to remember that
the owner of the data is the client, so you can't share the information without seeking their approval.

99. Which of the following is an example of smoothing as part of promoting interaction among
stakeholders?
e) Project Manager keeps himself aloof and uninvolved from team conflicts and lets the team handle it
themselves
f) Project Manager calls the troublemakers and tries to resolve their problems through discussion
g) Project Manager downplays the difference of opinion saying the difference lies only in perception
h) Project Manager takes side of the more experienced resource as he is more valuable to the project

Answer: (c) Project Manager downplays the difference of opinion saying the difference lies only in
perception. Smoothing is a technique in which Project Manager emphasizes agreement rather than
difference of opinion and option (c) is the correct choice.

100. A Project Manager defines a personal plan for his career and professional development every
year. As a part of this plan, he goes through his project experiences, lessons learned, and decides on
the training needs to help him excel as a Project Manager and contribute to his organization. In this
scenario the Project Manager is:
e) Contributing to the Project Management knowledge base
f) Enhancing his Personal Professional Competence
g) Helping his organization through his project success
h) Putting project's need before his own and taking decisions in the best interest of the project

Answer: (b) Enhancing his Personal Professional Competence. This is an example of Project Manager
working on enhancing his skill(s) that indirectly helps his organization, the correct choice is definitely
option (b).

101. Team development would be MOST difficult in which form of the organization structure?
e) Weak Matrix Organization
f) Projectized Organization
g) Tight Matrix
h) Balance Matrix Organization

Answer: (a) Weak Matrix Organization. Team development is most difficult in a weak matrix organization
because the power to manage resources lies with the functional manager and the Project Manager has
limited authority. Please refer to table 2-1 Organizational Influences on Projects PMBOK 5th edition PN 22.

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102. An organization has recently started outsourcing work to a low cost, high value, engineering
center located in a different country. According to you, which is the BIGGEST value addition a Project
Manager can provide to the team?
e) An introduction to the applicable laws in the country
f) An exposure to cultural differences
g) Communication management Plan
h) Competency in speaking foreign language

Answer: (b) An exposure to cultural differences. Today's project team operates in a global environment
and work on projects is characterized by cultural diversity. Only those Project Managers who realize that
cultural differences are a resource to be fully utilized can survive in the international project business.
Although other options are beneficial, exposure to cultural differences is critical and the biggest value-add
to a project's success.

103. One of the high-performing team members from a support group of the project team wants to
move onto the technical team as he finds that work more challenging. As a Project Manager you know
that he is a valuable resource and moving him out of the support group can affect group performance.
You decide to give him a hike in salary. However, the employee is still unhappy and dissatisfied. This is
an example of which theory?
e) Maslow's Theory
f) Herzberg's theory
g) McGregor's theory
h) Expectancy theory

Answer: (b) Herzberg's theory. Herzberg's motivation-hygiene theory was developed by Frederick
Herzberg, a psychologist who found that job satisfaction and job dissatisfaction acted independently of
each other. This two Factor Theory states that there are certain factors in the workplace that cause job
satisfaction, while a separate set of factors cause dissatisfaction. Two-factor theory distinguishes between:
Motivators (e.g. challenging work, recognition, responsibility) which give positive satisfaction, arising from
intrinsic conditions of the job itself, such as recognition, achievement, or personal growth, and Hygiene
factors (e.g. status, job security, salary, and fringe benefits) which do not give positive satisfaction,
although dissatisfaction results from their absence. These are extrinsic to the work itself, and include
aspects such as company policies, supervisory practices, or wages/salary. Essentially, hygiene factors are
needed to ensure that an employee is satisfied. Motivation factors are needed to motivate an employee to
higher performance. In this question, the Project Manager has only changed the hygiene factors without
any change in the motivation factors and hence the employee remains unhappy and dissatisfied.

104. A Project Manager is preparing for the next milestone release when he realizes that he has
missed an important feature in the project requirements plan. If implemented, this feature would take
at least one person a week of effort. What should be his next step to address this?
e) Discuss the change with Customer and seek his approval
f) Evaluate the impact of change on triple constraint
g) Look for the alternatives to reduce the impact of change
h) Raise a change request to address the change through change control process

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Answer: (c) Look for the alternatives to reduce the impact of change. For any change in the project the
first thing a Project Manager should do is to evaluate impact of the change on the project. Since the
question states that this change will require an effort of one person for a week, this analysis is already
done. The next step is to create options including crashing, fast tracking, etc. to reduce the impact of the
change i.e. option (c).

105. In negotiations, what is a fait accompli tactic?


e) Making personal attacks which could be downright insulting
f) Playing role of Good guy and Bad guy in a team
g) Claiming an issue has already been decided and therefore cannot be changed
h) Hiding or partially disclosing the complete information

Answer: (c) Claiming an issue has already been decided and therefore cannot be changed. Fait accompli
literally means an accomplished fact; an action which is completed before those affected by it are in a
position to query or reverse it and it is a technique used during negotiation.

106. What does the kaizen theory state?


e) Evaluate project performance on regular basis
f) Reduce the inventory cost to zero by making inputs available just when required
g) Use a process of Plan -Do-Check-Act to improve quality
h) Apply continuous small improvements to reduce costs and ensure consistency

Answer: (d) Apply continuous small improvements to reduce costs and ensure consistency. Kaizen theory
looks for uninterrupted, ongoing incremental change and it states that there is always room for
improvement.

107. Your customer asks for a small change in the project, which was not budgeted in the project. It
is a small effort as compared to the total project and you need the goodwill of the customer to be
successful in this multimillion dollar gas project. What will you do?
e) Implement approved changes according to the change management plan to meet the project
requirements
f) Since you need to maintain goodwill, you agree to incorporate the change
g) Speak to the sponsor for his consent
h) Tell the customer to keep it as a secret and not inform the sponsor about this change to be
implemented

Answer: (a) Implement approved changes according to the change management plan to meet the project
requirements.

108. During the project, you and your team discovered that a key project component was stolen. As
this was not planned for, the team decided to launch the product without the stolen component. This
is an example of:
e) Work around
f) Risk Transfer
g) Risk Mitigation
h) Acceptance

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Answer: (a) Work around. Since this was not planned for and the solution was arrived at during the project
execution, this is referred to as work around. The other options are risk response strategies that are
worked on during the planning process group.

109. During the project execution, the status report shows that an activity on the critical path is
delayed. As a Project Manager, what should you do?
e) Deliver incomplete activity
f) Compress the schedule
g) Reduce the scope
h) Stop the project execution

Answer: (b) Compress the schedule. Of the options listed, compressing the schedule is the best option.

110. As a Project Manager, you are assigned to a project that has been outsourced. The next step is
to organize a formal bidding process and select the vendor for the project. You own stock in one of the
vendor companies who participated in the bidding process. What is the BEST course of action for you?
e) Get the vendor company selected for the project
f) Keep the information to yourself
g) Tell your manager and remove yourself from the vendor selection committee
h) Ask other members of the selection committee to select your vendor company

Answer: (c) Tell your manager and remove yourself from the vendor selection committee.

111. Which of the following is NOT a tool and technique for the 'conduct procurements' process?
e) Bidders Conference
f) Independent estimates
g) Procurement Negotiation
h) Contract Types

Answer: (d) Contract types. All the stated options are tools and techniques for the 'conduct procurements'
process except contract types, which is a tool and technique for the 'plan procurements' process.

112. The Project Manager has discovered that two team members have a disagreement over the
procurement of the project component. The Project Manager suggests that the team members
compromise. The team members are also willing to resolve the conflict. Who should decide the best
course of action?
e) Sponsor
f) Customer
g) Project Manager
h) Team members

Answer: (d) Team members. The team members should resolve the issue on their own.

113. The primary communication skill the Project Manager will use in working with the functional
manager is:
e) Problem Solving
f) Negotiation

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g) Team Building
h) Public Relations

Answer: (b). To work with the functional manager, the best communication skill that the Project Manager
should exercise is negotiation. The Project Manager may have to negotiate with the functional manager
for human resources, schedules, and deadlines.

114. Performance improvements include all BUT:


e) Improvements in amount of overtime worked
f) Improvements in individual skills
g) Improvements in team behavior
h) Improvements in team capabilities

Answer: (a). Working overtime is an indication of plan variance and not performance improvement.
Options B, C, and D are examples of improvements that are expected as a result of good project execution.

115. Herzberg divided motivation factors into two classes: satisfiers and dissatisfiers. Examples of
satisfiers are:
e) Vacation time
f) Work satisfaction, fringe benefit
g) Plush offices space, performance based salary raise
h) Sense of personal achievement, work satisfaction

Answer: (d) Herzberg's satisfiers are sense of personal achievement, work satisfaction, and others.

116. A Project Manager is concerned about team building on her project. One of the mandatory
things that she must have to have good team building is:
e) Commitment from top level management
f) Co-location of team members
g) Establishment of clear negotiated goals
h) Open discussion of poor individual performance

Answer: (a) Commitment from top level management. For team building, it is essential that there is
support from the top level management.

117. A Project Manager is managing a project where there will be a number of persons working
together. She wants to enhance the ability of the team to work together and perform as a team. One
of the things she can do to enable this is:
e) Cohabitation
f) Co-location
g) Staffing plan
h) WBS

Answer: (b) Co-location. Co-location involves placing many or all of the most active project team members
in the same physical location to enhance their ability to perform as a team.

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118. Tom always delivers his projects on time and within budget. He believes that his success can
be explained by the fact that he makes all of the project decisions himself and then enforces those
decisions with an iron hand. His management style is best described by:
e) Force Field Theory
f) Expectation Theory
g) Gregor's Theory X
h) Gregor's Theory Y

Answer: (c) Gregor's Theory X. McGregors Theory X asserts that the average person dislikes work
inherently and that effective management lies in threats, intimidation, and minimal involvement of the
individual in work decisions.

119. Which of the following is NOT a purpose of the configuration management system?
e) Ensure all the project team members have the latest version of the project document
f) Ensure all the relevant changes are communicated to the stakeholders
g) Maintain consistency of product's performance and its functional attributes
h) It includes Configuration identification, Configuration status accounting, and Configuration verification
and audit

Answer: (b) Ensure all the relevant changes are communicated to the stakeholders. This is a part of
communication management. All the other options (a) (c) and (d) are completed as part of the
configuration management system. Refer to PMBOK 5th edition Project Integration Management PN 287.

120. A project is in the final stages of testing when it receives a major change request from the
customer which would delay the final delivery of the project by 2 weeks. What should the Project
Manager do NEXT?
e) Create a change request and go through the change management process
f) Evaluate the impact of the change
g) Communicate the implication of the change to the customer
h) Adjust the project management plan and baseline

Answer: (c) Communicate the implication of the change to the customer. The next step is to communicate
the impact on the final delivery to the customer and get his approval, especially because it affects the final
delivery date of the project. Option (a) and (b) are already completed by the team as they have already
assessed the impact of the delay on schedule. Option (d) will come after customer approval.

121. You are a Project Manager and your team recently encountered a major change in the project.
This change was evaluated for its impact on the triple constraints and went for approval to the Change
Control Board (CCB). The CCB is comprised of important stakeholders of the project who approved the
change. The project documents were updated through the configuration management system. What
should the project team do NEXT?
e) Explore options to reduce the effect of change
f) Adjust the project management plan and baselines
g) Notify the stakeholders affected by the change
h) Prevent the root cause of change

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Answer: (c) Notify the stakeholders affected by the change. It will help to know the process of making
changes stepwise to answer this type of questions correctly. Since change is already updated through
configuration management Options (a), (b) and (d) are already addressed. Option (d) would have been
explored as soon as the change was found. Option (a) would have been done as a part of evaluating impact
of the change on triple constraints and option (b) would have been done as a part of updating documents
through configuration management system. However, it is also important to notify stakeholders affected
by the change, which is the only thing remaining.

122. A Project Manager working on a critical deliverable encounters a major change that affects the
schedule baseline, along with the next milestone deliverable. This change cannot be accommodated
within current project management plan. What is the BEST option for the Project Manager?
e) Avoid the change as it gravely affects the project deadline
f) Explore options to reduce the effect of change
g) Communicate the implication of this change request to the customer
h) Seek an approval from change control board or project sponsor

Answer: (d) Seek an approval from change control board or project sponsor. Changes that affect the
project management plan and performance baseline are generally not in the purview of the Project
Manager and needs approval from the change control board or project sponsor. Option (a) is not a wise
move, and the fact that the change cannot be accommodated within the current management plan proves
that option (b) was completed. There is no data to support that this change request originated from the
customer, so option (c) is not the best option as the change could have an internal origin. It is best to first
seek approval from the project sponsor.

123. Measure project performance using appropriate tools and techniques in order to identify and
quantify any variances and corrective actions task is which part of the process group?
e) Planning
f) Executing
g) Monitoring and controlling
h) Closing

Answer: (c). This is part of M&C. This task is slightly changed from the previous examination content
outline. Earlier, in addition to the task mentioned it was supposed to be informed to the stakeholders as
well. Now, inform stakeholders has been taken out as this is part of executing.

124. A Project Manager is in the process of comparing actual performance to the scope statement
to determine variances, evaluate possible alternatives, and take the appropriate action. Which of the
following will NOT be an output to the process?
e) Work Performance Information
f) Updates in Organizational Process assets
g) Change Requests
h) Change Control Meetings

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Answer: (d) Change Control Meetings. The project team is in the 'control scope' process. Change control
meetings is a tool from the 'perform integrated change control' process. Option (b),(c) and (d) are the
outputs of the 'control scope' process. Refer to PMBOK 5th Edition Project Scope Management PN 136.

125. During the project lifecycle, a Project Manager can change the schedule baseline ONLY
through:
e) Customer defined change in the schedule
f) Formally approved change through the change control process
g) Corrective action based on Performance Report
h) In rare event of project showing high deviation from the baseline

Answer: (b) Formally approved change through the change control process. The schedule baseline can only
be changed after it is formally approved by the stakeholders and executed through the change control
process.

126. For a project Earned value = 600, Actual Cost = 400, Estimate to Completion= 700. What is the
estimate at completion?
e) 1200
f) 1100
g) 1300
h) 300

Answer: (b) 1100. The formula for Estimate to Complete (ETC) = Estimate at Completion (EAC) - Actual Cost
(AC). Estimate at completion = Estimate to complete + Actual cost, that is, 700 + 400 =1100.

127. Your project is expected to be delayed by 6 days from the scheduled final delivery date. Your
current CPI is 1.5 and the project risks are low. You also have many discretionary dependencies on the
project. You don't have access to any more resources for the project. Which of the following would be
the BEST alternative to bring the project back on schedule?
e) Reduce number of resources from an activity
f) Complete activities that involve external dependencies first
g) Remove few activities from the project
h) Complete some activities concurrently

Answer: (d) Complete some activities concurrently. Since the project has low risk and there are many
discretionary dependencies, it is best to plan to do more activities concurrently. Option (a) wouldn't help in
bringing project back on schedule. Option (c) is not suggested as removing activities may affect the project
negatively. Option (b) is not the best option as there is no rationale to believe that activities with external
dependencies are in the critical path, and finishing them first would reduce project duration. Also external
activities by definition describe activities that are not in control of Project Manager and it may not be at
discretion of Project Manager to finish them first.

128. A Project Manager has to discuss project progress and track status with the project team.
Which should be the MOST relevant format for this purpose?
e) Milestone Chart
f) Bar Chart

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g) WBS
h) Schedule Baseline

Answer: (b) Bar Chart. A Gantt chart is a bar chart that shows the activities of a project, when each must
take place and how long each will take. As the project progresses, bars are shaded to show the activities
that have been completed. Also, people assigned to each task can be represented. Thus, Project Managers
can efficiently use the bar charts to track project progress and track status with project team. Option (b)
Milestone charts are similar to bar charts, but only identify the scheduled start or completion of major
deliverables and key external interfaces and is used for senior management reporting. (c) Network diagram
is a graphical representation of the logical relationships among the project schedule activities. (d) Control
Chart indicates if the measurements taken over a period of time are within the limits or not.

129. A project is severely delayed and Project Manager is trying his best to bring it back on
schedule. To expedite the work, he has added more resources and working overtime to complete the
project earlier. All of the following could be a possible outcome of project crashing EXCEPT:
e) Increase in Project Cost
f) Increase in Project Risk
g) Decrease in morale of team members
h) Increase in rewards and recognition

Answer: (d) Increase in rewards and recognition. PMI doesn't advocate rewarding team members if they
need to work overtime due to poor planning. It is important to reward only desirable behavior. However,
crashing a project could result in higher project cost and/or risks and/or lower team morale.

130. Which is the most important parameter against which project schedule should be measured to
recommend corrective and preventive actions?
e) Schedule Baseline
f) Work Performance Measurement
g) Earned Value Technique
h) Variance Analysis

Answer: (a) Schedule Baseline. Schedule baseline is an important and effective yardstick that acts as a
benchmark to determine project status. Meeting schedule baseline is one of the measures of project
success.

131. What is the Estimate at Completion (EAC) assuming the current variances are atypical of the
future. A project has initial budgeted cost also called Budget at Completion (BAC) as $100,000. As the
project progresses, these are the current figures: Planned Value (PV) $20,000. Actual Cost (AC)
$25,000. Earned Value (EV) $15,000.
e) $110,000
f) 90000
g) 100000
h) 115000

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Answer: (a) $110,000. Recall that BAC is Budget at Completion, which is the initial budgeted cost. In this
case, it is 100,000 USD. Note that EAC = AC + (BAC - EV) when current variances are thought to be atypical
of future. Hence, EAC = $25,000 + ($100,000 - $15,000) = $110,000.

132. You are a Project Manager of a large and complex project which is partly outsourced to third
party. Under these circumstances your planned expenditure sometimes overshoots the funding limits
set for the project. As a Project Manager how do you best handle the situation?
e) Relook and adjust the scheduling of work to smoothen out or regulate those expenditures
f) Discuss this situation with your project sponsor or customer to work out a solution
g) Use Management Reserve allocated for the project
h) Delay the payments of vendor for that phase

Answer: (a) Relook and adjust the scheduling of work to smoothen out or regulate those expenditures.
Customer will set limits on disbursement of funds for the project. Hence Project Manager sometimes
needs to reschedule activities or impose date constraints on work packages in such a way that the
expenses are within funding limits set for the project. Option (b) is not advisable as Project Manager is
expected to address this within his purview. Option (c) is wrong as management reserve is budget reserved
for unplanned changes to cost and scope. Option (d) is ethically wrong.

133. You are working on a highly visible project for which it is critical to have accurate cost
estimates. While reviewing cost estimates for the project you notice that one of the WBS (Work
Breakdown Structure) work packages is estimated almost 25% higher than two other similar WBS work
packages. What should you do in this case?
e) Reduce the estimate but add an additional budget in management reserve
f) Reduce the estimate but add an additional budget in contingency reserve
g) Trust your team to come up with accurate estimates as they already had many team discussions
h) Call the WBS owner to discuss the basis for estimating the work package

Answer: (d) Call the WBS owner to discuss the basis for estimating the work package. It is always
important for you as Project Manager to first understand the reason for deviation before taking an action.

134. Your project has current CPI of 1.2 and SPI of 0.86. What does the figure indicate about the
project performance?
e) The project has cost under run and is delayed
f) The project has cost overrun and is delayed
g) The project has cost under run and is ahead of schedule
h) The project has cost overrun and is ahead of schedule

Answer: (a) The project has cost under run and is delayed. CPI > 1 indicates cost of completing the work is
less than planned, but SPI < 1 indicates they are behind the schedule.

135. A project with a CPI Index of 0.96 indicates:


e) The project has cost overrun and would not complete within budget
f) The project has cost under run of performance to date
g) The project has cost overrun for work completed so far
h) The schedule has overrun

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Answer: (c) The project has cost overrun for work completed. CPI and SPI are always indicative of current
status of performance. We can't confidently state that project wouldn't finish within budget (Option a) if
current CPI is less than 1.

136. A project has faced some unforeseen circumstances that affected its performance with respect
to cost and schedule. However they are not bound to continue in future. What should be the value of
Estimate at Completion (EAC)? Here BAC is Budget at completion, AC is Actual Cost, CPI is Cost
Performance Index, and EV is earned Value.
e) BAC/CPI
f) AC+ ETC
g) AC + (BAC-EV)/CPI
h) AC+ (BAC-EV)

Answer: (d) EAC = AC+ (BAC-EV) Actual to date plus remaining budget is used when the current variance
are thought to be atypical of the future.

137. A Project Manager is working on a highly visible project in an organization and is most
concerned about project performance and progress. His cost variance is currently $150 and schedule
variance percentage is -15%. Which of the following statements about the cost and schedule
performance of the project is INCORRECT?
e) The project spent more money on work accomplished than planned
f) The project has overestimated the amount of time needed for the activity
g) The Project has faced some unplanned or planned setbacks which has affected the schedule
h) The project is doing favorably cost-wise but is lagging in schedule

Answer: (a) The project spent more money on work accomplished than planned. Since cost variance for
the project is positive, it means its Earned Value > Planned value and hence the project has achieved more
than planned in terms of cost. However, the negative value of the schedule variance % denotes that the
project is lagging in terms of planned schedule objectives. [Schedule Variance % is defined as = [(Earned
Value - Planned value)/Planned Value]. This could be due to overestimation (option b) or unplanned
activity affecting the schedule (option c). Similarly option (d) is also a correct statement as discussed
above.

138. In a control chart, what does upper specification and lower specification limit (USL, LSL) signify:
e) These are based on requirements of the contract and reflect the maximum and minimum values
allowed
f) They are set by PM and stakeholders to reflect points for corrective action in case they are crossed
g) These are usually +/- 3? limits based on normal distribution
h) These are used to monitor cost and schedule variances

Answer: (a) These are based on requirements of the contract and reflect the maximum and minimum
values allowed. This is a typical question where all the options are correct about control charts. However,
specification limits are usually specified by the customer and are part of the contractual requirements. To
avoid confusion between specification and control limits, always remember specification limits specify the
imposed limits beyond which a product may not be accepted. To have a stable and predictable process, it

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should operate within control limits. Stable and predictable process control limits should lie within the
specification limits. Please Refer PMBOK 5th edition Project Quality Management PN 238.

139. You are heading a software development project team which has many new members working
for the first time. You ensure that the team diligently gets their work products reviewed by an external
reviewer and close the defects before moving to the next stage. However, the last few review reports
have captured high numbers of defects including many careless mistakes. According to you, what is
the root cause of the problem?
e) Since most of the team is new and inexperienced high defects are expected
f) The team has in all probability not understood the scope of the work properly
g) The review is not efficient as most of the defects are not valid
h) Team is not doing proper self-review before submitting their work

Answer: (d) Team is not doing proper self-review before submitting their work. The word to look for is
'careless' mistakes which show proper self-review is not done by the team before submitting their work for
external review. Other options (a), (b) and (c) are possible, but there is not enough data to support them.

140. A popular tool used to monitor project performance including cost and schedule variances and
ensure process operate within acceptable limit is called
e) Control Charts
f) Run Charts
g) Pareto Chart
h) Flowchart

Answer: (a) Control Charts. Control charts, also known as Shewhart charts or process-behavior charts is a
popular tool used to monitor project performance including cost and schedule variances and ensure the
process operates within acceptable limits. Don't confuse them with option (b) run charts that are often
used to show trends over a finite period of time relative to an average. Please refer to PMBOK 5th edition
Project Quality Management PN 238 for more details.

141. A project team is analyzing a major, critical defect to determine the root cause. In order to do
this, they considered various factors linked to the defect and grouped them into Machine, Method,
Material, Manpower etc. Which of the following tool of quality is the team using?
e) Histogram
f) Cause and Effect Diagram
g) Control charts
h) Flowchart

Answer: (b) Cause and Effect diagram. Cause and effect diagram, also called Ishikawa diagrams or fishbone
diagrams, are used to determine the root cause of a problem by identifying and grouping its potential
causes. Please refer to PMBOK 5th edition Project Quality Management PN 237 for more details.

142. Which of the following can NOT be considered as an indicator of a team's effectiveness?
e) Improvements in skills that allow team to perform assignments more effectively
f) Improvement in competency that helps the team perform better
g) Increased staff turnover rate

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h) Increase in team cohesiveness and trust

Answer: (c) Increased staff turnover rate. All the other options except (c) indicate improvement in team
effectiveness. However, an effective team should definitely have lower attrition or staff turnover rates. As
team members would feel more fulfilled with their role in the project they would like to continue in the
project longer.

143. During the testing phase in the project, a senior manager who is also an important stakeholder
in the project tells you that he no longer wishes to receive weekly status reports. Instead, he can be
sent periodical project performance report. What should be your response to his request?
e) Make the manager understand that since he is a major stakeholder and project is in critical stage,
status reports will be important to know project progress
f) Continue to send him status report to keep your project visibility high
g) Follow communication management plan and send reports as earlier decided
h) Follow his instructions and update project documents including communication management plan
accordingly

Answer: (d) Follow his instructions and update the project documents including communication
management plan accordingly. This is part of the effective and efficient communication strategy i.e.
providing only information that is needed. Senior management may not be interested in every status
report of the project. Refer PMBOK 5th Edition Chapter Project Communication Management PN 297.

144. As a part of 'Manage Communications' in Communication Management, which of the following


analysis or information would be most relevant to a sponsor or senior management of the project?
e) Work Performance Index
f) Earned Value Management
g) Estimate to Complete
h) Exception Report

Answer: (b) Earned Value management methodology integrates scope, schedule, and resources for
objectively measuring project performance and progress and would be most useful information for
sponsors and seniors management. Option (a) Work Performance Index compares planned versus actual
and Option (c) only talks about schedule which would not be as informative as Earned Value management.
Option (d) is a document that includes only major variations from the plan and is not relevant to the case.

145. In addition to Performance Information, which of the following is an output of the process
'Control Communications' in Communication Management?
e) Budget Forecast
f) Change Request
g) Work Performance Measurements
h) Communication management plan

Answer: (b) Change Request. Change request is an output of 'Control Communications' process in addition
to performance information. These change requests are processed through Integrated Change Control
process as recommended corrective actions. The corrective measures help bring the expected future
performance of the project in line with the project management plan and/or preventive actions. This

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reduces the probability of incurring a negative project performance in the future. Please Refer PMBOK 5th
edition page no 303 Control Communications: Outputs.

146. During an informal gathering with stakeholders of the project, the Project Manager overhears
one stakeholder expressing dissatisfaction over the project's progress reporting and communication.
What should be the Project Manager's best response?
e) Ignore the incident; anyways the stakeholder was not directly and formally addressing the Project
Manager
f) Call a meeting of all the Stakeholders to address their concerns on the project
g) Meet face to face with the complaining stakeholder to understand his concern and update it in the
issue log
h) Confront the stakeholder demanding why he never approached you if he was dissatisfied with project
reporting

Answer: (c) Meet face to face with the complaining stakeholder to understand his concern and update it in
the issue log. This is the best approach to resolve the problem proactively. Even if the Project Manager is
not able to immediately solve the issue, tracking it through the issue log would show his commitment and
build trust. Option (a) is not advisable as Project Manager is expected to proactively look for and avoid any
issues in the project. Option (b) There is no indication that many stakeholders have similar concern and
hence this may not be applicable. Option (d) will do nothing to resolve problem at hand.

147. A senior technology manager in the organization wants to know the project status with
respect to major deliverables and key external interfaces. According to you, the Project Manager
should use which of the formats in his performance report to capture this graphically?
e) Project Schedule Network Diagram
f) Milestone Charts
g) Bar Charts
h) S curve

Answer: (b) Milestone charts are most suitable as they capture project status with respect to important
milestone deliveries. Option (a) can also be applicable but it is more detailed and not the best choice.

148. As part of the audit findings, you realize that many of the risks were not identified during the
planning stage, so you decide to reassess project risks. Which process are you in?
e) Identify Risks
f) Plan Risk Management
g) Perform Quantitative Risk Analysis
h) Control Risks

Answer: (d) Control Risks. You can identify new risks during both risk identification and risk monitoring and
control processes. Since these new risks are an outcome of risk assessments, risk audits and periodic risk
reviews, it is part of risk monitoring and control. Refer PMBOK 5th edition Project Risk Management PN
348.

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149. As a Project Manager you have instructed your project team to update the organizational
process assets including the lessons learned database and risk management template of future project
based on project audit findings. You are in which process of project management?
e) Control Procurements
f) Close Contracts
g) Control Risks
h) Perform Quality Assurance

Answer: (c) Control Risks. Since the lessons learned are based on audit findings you are definitely in risk
monitoring and control. Also remember that lessons learned could be a continuous activity done
throughout the project execution and not necessarily at the end of the project. Refer PMBOK 5th edition
Project Risk Management PN 348.

150. A project is delivered per the contract by the project team; however, the customer is not
happy. The customer feels that the deliverable is far below his expectation in terms of quality and
functionality and has some serious defects. What should the Project Manager do in this situation?
e) Talk to the project sponsor to discuss the issue
f) Proceed to project closure activity
g) Discuss the issues with customer and find ways to resolve the same
h) Brainstorm with technical experts, stakeholders, and team members to understand issues in the
project

Answer: (b) Proceed to project closure activity. Since the project is delivered per the contract, the Project
Manager has already fulfilled his obligation and he can move to project closure activity. A contract is a
legal document and once signed it represents a mutually binding agreement that obligates the seller to
provide a specified product and the buyer to provide monetary compensation. In this case, the deliverable
was as per the contract and there is no objective evidence to believe otherwise.

151. A Project Manager who has contracted a project, notices that the seller has discontinued
sending the weekly status report, which is part of their contract. The Project Manager understands the
seller is under tremendous pressure to meet the next milestone deliverable and has been otherwise
communicating the project status periodically. What should the Project Manager do in this scenario?
e) Ignore the incident as the seller is anyway updating him with project status periodically
f) Give the seller time till next milestone delivery and then bring up the issue informally
g) Send a formal, written communication regarding the issue of irregular status reports
h) Terminate the project contract

Answer: (c) Send a formal, written communication regarding the issue of irregular status reports. Any
deviation from the contract is a breach and the response to a breach must be by issuing a letter, formally
notifying the breach. If the Project Manager doesn't send an official notice of breach, his company could
lose their right to claim breach later. Option (d) termination is too harsh a reaction and not called for in
this situation.

152. A Project Manager has signed a contract with the buyer and project is moving towards
completion. At this stage, the Project Manager realizes that he has missed an important functionality

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in the product and the contract needs to be changed to accommodate that. How should the Project
Manager proceed to resolve this?
e) Since the Project Manager has already signed the contract and the project is nearing completion, this
change need not be updated in the project
f) Project Manager shall communicate the change request and its implication to the seller in a meeting
g) Project Manager can bring out this deviation during Procurement Performance Review
h) Project Manager should raise a formal change order, signed by both the parties to incorporate the
change

Answer: (d) Project Manager should raise a formal change order, signed by both the parties to incorporate
the change. A contract is a legal document which is binding to both the parties and any changes in the
contract can only be done through a change order signed by both parties. Option (a) has some truth since
the project is nearing completion, the change could be incorporated in the next phase, but there is not
enough information to validate that. Option (b), since this change requires change in the contract it needs
to go through formal change order rather than a usual discussion in the meeting. Option (c), procurement
performance review is done at the completion of a contract to identify success and failures to help and
improve the procurement process.

153. A Project Manager has taken up a project midway and is going through project schedules and
status reports. He realizes that the previous Project Manager has inaccurately calculated the project
status and per the current situation the project would definitely miss the next milestone. What should
the Project Manager do in this case?
e) Call the previous Project Manager and ask him for explanation
f) Inform the customer and stakeholder about the impeding delay
g) Relook the project schedule to find alternatives to meet the schedule
h) Wait for the next milestone date to arrive to report the delay

Answer: (c) Relook the project schedule to find alternatives to meet the schedule is a positive and
proactive approach, which helps to minimize the impact of the problem.

154. A Project Manager wants to qualify for the PMP examination. However while going through
the eligibility criteria he finds that he is falling short of the required experience by a small margin. He
discusses this with a certified PMP professional and mentions that he is planning to make up the gap in
experience as it is a very small margin. His friend however is not convinced and warns him that he
should not provide false information at any point during the PMI Certification Program, as it can result
in:
e) Revocation of your PMI membership
f) Revocation of your PMP certification
g) Both of the above are true
h) There will be no impact

Answer: (c) Both of the above are true. Falsification of any information directly or indirectly related to all
aspects of the PMI Certification Program can result in both revocation of PMI Membership and PMP
Certification of a candidate.

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155. You are a Project Manager of a dynamic project team. Recently, there have been some
changes in the team structure and you don't know if they would positively or negatively affect the
project? What should be the BEST approach to address this?
e) Conduct a risk benefit analysis
f) Conduct a gap analysis
g) Increase project budget
h) Revise project plan

Answer: (a) Conduct a risk benefit analysis. Risks re-assessment should be done whenever new risks or
uncertain events (which could positively or negatively affect the project) are found.

156. A Project Manager wants to present project performance reports for his project. Which of the
following formats should he use?
e) Pareto Chart
f) Responsibility Assignment Matrix
g) Bar Chart
h) Control chart

Answer: (c) Bar Chart. A bar chart also known as a Gantt chart is a chart that depicts progress in relation to
time, often used in planning and tracking a project. Though they are weak planning tools and do not help
organize the project as effectively as a Work Breakdown Structure or network diagram, a bar chart is an
effective tool for project progress reporting and control.

157. While monitoring and controlling the projects, why is it required to manage changes to the
project by following the change management plan?
e) To satisfy customer
f) To align business needs
g) For Project requirements
h) To satisfy sponsor

Answer: (b). As per the new examination content outline, it is to ensure project goals remain aligned with
business needs.

158. Trend analysis is often performed using:


e) Fishbone diagram
f) Design of Experiments
g) Run charts
h) Pareto Charts

Answer: (c) Run charts. Run charts (often known as line graphs) display process performance over time. It
helps to spot and analyze upward and downward trends, cycles, and large aberrations in the project
performance over time.

159. An assembly line in a car manufacturing plant produces 250 components in one shift. QA
randomly picks 10 of them for quality checking. This is an example of:
e) Quality Audit
f) Inspection

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g) Process Control
h) Process Analysis

Answer: (b) Inspection. An inspection is, most generally, an organized examination or formal evaluation
exercise. It involves measuring and testing certain characteristics of an activity. The results are usually
compared to specified requirements and standards to determine whether the activity meets the targets.

160. As a part of the Monitoring and Controlling process group, you and your project team have
listed and are assessing the corrective actions in the issue register. What is the NEXT step that you will
perform?
e) Determine steps for unresolved issues by using appropriate tools to minimize the impact on project
cost, schedule, and resources
f) You have already listed the corrective actions and now it is the customer's responsibility to decide the
resolutions
g) Follow the Change control method
h) Communicate the corrective actions to the stakeholders

Answer: (a) Determine steps for unresolved issues by using appropriate tools to minimize the impact on
project cost, schedule, and resources. Even if you have listed the corrective actions, the next task is to get
them implemented and initiate the resolution of the unresolved issues.

161. What is key purpose of the Monitoring and Controlling process group?
e) Measure project performance in order to identify and quantify any variances and perform approved
corrective actions
f) Perform preventive actions so that no variances ever occur in the project lifecycle
g) To conduct daily status meetings
h) None of the above

Answer: (a) Measure project performance in order to identify and quantify any variances and perform
approved corrective actions. Option (b), preventive actions should be identified and implemented during
this process group but they will not ensure no variances will take place throughout the project lifecycle.
Option (c), conducting only daily status meetings will not assist in monitoring and controlling the project.

162. A project is terminated unexpectedly by the sponsor midway during the execution phase.
What should the Project Manager do FIRST?
e) Update process and templates based on lessons learned
f) Create and Distribute final report of project performance
g) Analyze and document success and effectiveness of the project
h) Perform scope verification to verify level of completion

Answer: (d) Perform scope verification to verify level of completion. A Project Manager should first
perform the project scope verification process to establish and document the level and extent of project
completion. Option (a), (b), (c) would follow later.

163. A Project Manager has just finished a Gantt (bar) chart representing the project schedule. As a
result, all of the following documents get updated EXCEPT:

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e) Activity Resource Requirement
f) Risk Register
g) Resource Leveling
h) Calendar

Answer: (c) Resource Leveling. Resource leveling is a tool and has no relationship with developing project
schedule activity. Resource leveling can also be used to balance the workload of primary resources over
the course of the project, usually at the expense of one of the traditional triple constraints (time, cost,
scope).

164. Documentation of lessons learned is important in any project and forms the main input to
organizational process assets. In fact, continuous improvement of the project management process
cannot occur without lessons learned. This process is completed by the project team and is BEST done
at:
e) The end of project completion stage before contract closure
f) Whenever the project implements any corrective action as part of Audit closure
g) As a part of corrective and prevention action on recommendation of QA
h) Throughout the project, finalized during project phase closing or project closing

Answer: (d) Throughout the project, finalized during project phase closing or project closing. Lessons
learned should be documented all through the project execution and not at the end of the project. This
would make the activity more efficient. Also other projects can use inputs from lessons learned sooner.

165. A Project Manager is in the 'Control Procurements' process when his sponsor asks him to
terminate the contract. What should the Project Manager do NEXT?
e) Revisit the Proposal Evaluation technique to understand issues with seller
f) Update Records Management System
g) Proceed with Procurement Audit
h) Arrange Vendor conferences to invite new proposals to the contract

Answer: (c) Proceed with Procurement Audit. All contracts must go through formal closure no matter
whether they finished successfully or terminated. As a part of the closure procedure, a procurement audit
should be done to review procurement processes from plan purchases to contract administration and
identify success and failure.

166. All of the following could be a justifiable reason to terminate a project EXCEPT:
e) Project doesn't fulfill organizations' objective any longer
f) Project funding is in serious trouble due to financial meltdown in the company
g) There is serious personal conflict between two senior project members affecting the work
h) The project is no longer commercially viable

Answer: (c) There is serious personal conflict between two senior project members affecting the work. A
project is created with definite set of objectives and it should be terminated only in extreme situations.
Option (a), (b) and (d) are all plausible reasons of project termination. But option (c) is a conflict situation
which is inevitable in a project environment and not a justifiable reason for project termination. A Project

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Manager is expected to resolve conflicts in a project using techniques like establishing team ground rules
and using solid management practices like communication planning.

167. As part of the project closure, a project team wants to collate the lessons learned to update
the organization's knowledge base. These records should be updated in:
e) Storage Room
f) Database
g) Project Performance Reports
h) Project Archives

Answer: (d) Project Archives. Project archives could be a part of the centralized organization knowledge
base, which includes the collated lessons learned from the earlier projects. Option (a) and (b) are generic
terms and can also be used by IT, Administration, or Human Resource departments of the organization.
Option (c), that is, project performance reports are collected on live, undergoing projects.

168. The Project Manager has obtained final acceptance of the project deliverables by the
customer. Which of the following is NOT an activity of project closing process?
e) Collate lessons learned and update the organization's knowledge base
f) Distribute the final project report to all the stakeholders
g) Transfer ownership of deliverables to assigned stakeholders
h) Assess old risks and update risk register

Answer: (d) Assess old risks and update risk register. This activity is executed as part of the monitoring and
controlling process group. All the other options (a), (b) and (c) are activities performed as part of the
project closing process group.

169. Of the following, which is NOT an exit criterion?


e) Lessons learnt
f) Customer sign-off
g) Stakeholder analysis
h) Regulatory Inspections

Answer: (c) Stakeholder analysis. Of the stated options, all are criteria for exit, while stakeholder analysis is
an activity in the initiation process group.

170. Procurement documentation is an input to the contract closure procedure. It includes all of
the following EXCEPT:
e) Technical documentation
f) Warranties
g) Payment record
h) Contract closure procedure

Answer: (d) Contract closure procedure.

171. Which of the following statements are true?


e) Contract closure and administrative closure both involve quality assurance activities
f) Contract closure and administrative closure both involve product verification

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g) Contract closure and administrative closure both involve benefit cost analysis
h) Contract closure and administrative closure both involve project selection

Answer: (b) Contract closure and administrative closure both involve product verification.

172. Customer satisfaction should be measured at the end of the project to maintain long-term
relationships. Which of the following is NOT always an aspect of customer satisfaction?
e) The product meets its stated and unstated requirements
f) The project is profitable
g) The product is high quality
h) The customers needs are met

Answer: (b) The project is profitable. Customers can be satisfied even when the project is not profitable.
Customer satisfaction is not always about money. It could be about making sure that the people who are
paying for the end product are happy with what they get.

173. At the close of your project, you measure the customer satisfaction and find that some
customer needs were not fully met. Your supervisor asks you what steps you took on your project to
improve customer satisfaction. Which subsidiary plan would you consult to determine this
information?
e) Quality management plan
f) Communications management plan
g) Staffing management plan
h) Risk management plan

Answer: (a) Quality management plan. Customer satisfaction is about making sure that the people who are
paying for the end product are happy with it. Customer satisfaction is an important part of modern quality
management.

174. Your client has terminated your project before it is complete. Which of the following is true?
e) You must stop all work and release the team immediately
f) You must work with the team to document the lessons learned
g) You must keep the team working on the project to give your senior management time to talk to the
client
h) You must update the project management plan to reflect this change

Answer: (b) You must work with the team to document the lessons learned. Even if a project is shut down
before the work is completed, you still need to document the lessons learned and add them to the
organizational process assets.

175. Your project team has completed the project work. All of the following must be done before
the project can be closed EXCEPT:
e) Ensure that the schedule baseline has been updated
f) Get formal acceptance of the deliverables from the customer
g) Make sure the scope of the project was completed
h) Verify that the product acceptance criteria have been met

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Answer: (a) Ensure that the schedule baseline has been updated.

176. Which of the following Quality Theorists advocated the 80/20 principle?
e) W Edwards Deming
f) Philips Crosby
g) Joseph Juran
h) Walter A Shewhart

Answer: (c) Joseph Juran. The principle was suggested by Joseph Juran, but named after Pareto. It is better
to be aware of the popular quality theorists and their main principles.

177. Ongoing project planning is also known as ____.


e) Rolling wave planning
f) Resource Planning
g) Contingency planning
h) Continual Improvement

Answer: (a) Rolling Wave Planning. As a project progresses, more project information is gathered and
hence additional planning may be required. This progressive detailing of the project management plan is
referred to as 'rolling wave planning' indicating that planning and documentation are iterative and an
ongoing process. Please refer to PMBOK 5th edition Project Management Process for a Project PN 152.

178. A step-by-step instruction guide on how to complete work or procedure is called:


e) Work breakdown Structure
f) Work Instruction
g) Baseline
h) Control account identifier

Answer: (b) Work Instruction. Work instructions are step-by-step instructions for the accomplishment of a
task by one person and are retained in the department or unit where the work is performed. Work
instructions are often referred to as desk procedures, task outlines, or standard operating procedure
(SOPs).

179. The aim of quality is to ensure:


e) Fitness to use and conformance to requirements
f) Meet customer requirements
g) Fulfill quality objectives
h) Lower cost of Quality

Answer: (a) Fitness to use and conformance to requirements. The most acceptable definition of quality is
fitness for purpose given by J M Duran and conformance to requirements given by P B Crosby. Quality aims
at providing customers, both internal and external, with products and services that fully satisfy their
negotiated requirements.

180. A network diagram drawing method that allows loops between activities is:
e) Precedence Diagramming Method (PDM)
f) Arrow Diagramming Method (ADM)

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g) Program Evaluation and Review technique (PERT)
h) Graphical Evaluation and Review Technique (GERT)

Answer: (d) Graphical Evaluation and Review Technique (GERT).Graphical Evaluation and Review
Technique (GERT) are network analysis techniques that allow for conditional and probabilistic treatment of
logical relationships (that is, some activities may not be performed). The drawing method allows loops
between activities; for example - design is followed by testing, which might require some re-design.

181. An organization has created a special project team to handle a critical project. The team
members of this project are full-time dedicated to the project and are pulled from different functional
departments. They also have their own set of operating procedures. This organization structure is
MOSTLY:
e) Projectized
f) Functional
g) Composite
h) Matrix

Answer: (c) Composite. This is example of a composite form of organizational structure. Some
organizations fall somewhere between the fully functional and pure matrix and even a fully functional
organization can create a special project team to handle critical project. The team members of this project
are full-time dedicated to the project and are pulled from different functional departments. They also have
their own set of operating procedures and may operate outside standard reporting structure.

182. What is the 100% rule in the Work Breakdown Structure creation?
e) The total of work at lowest level adds up to the higher levels, so no work is left out and no extra work
is completed
f) 80% of the problems can be attributed to 20% of the causes
g) WBS must be detailed enough to cover 100% of the work since beginning of the project
h) WBS must contain 100% deliverables both internal and external

Answer: (a) The total of work at lowest level adds up to the higher levels so no work is left out and no
extra work is completed. WBS should be both exhaustive and complete to capture only the work required
to be completed and nothing more. Refer PMBOK 5th Edition Project Scope Management PN 132.

183. Which of the following is NOT an example of a facilitated workshop?


e) Joint Application Development (JAD)
f) Just in Time (JIT)
g) Quality Function Deployment (QFD)
h) Voice of the Customer (VOC)

Answer: (b) Just in Time is an approach to improve process overheads by reducing in-process inventory
and associated carrying costs. All the other options are examples of facilitated workshops or requirements
workshops. These are focused sessions to bring together key stakeholders in the project to define product
requirements. Refer PMBOK 5th edition Project Scope Management PN 114.

184. What is the meaning of the term 'management by objective' in project management?

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e) A management philosophy that advocates establishing unambiguous and realistic objectives and
conduct periodic review to ensure they are being met
f) Management of projects by a central office which determines objectives to be met for each project
g) It is PMI's organizational maturity model for project management
h) A project gets better managed over length of project as objectives become clearer

Answer: (a) A management philosophy that advocates establishing unambiguous and realistic objectives
and conduct periodic review to ensure they are being met. Management by objective advocates
establishing unambiguous and realistic objectives and review to ensure they are being met and take
corrective action whenever necessary. For the Project Manager it implies that the project might lose its
resources and support from management if it doesn't support the corporate objectives.

185. What is the name of PMI's organization maturity model for project management?
e) CMMi
f) Six Sigma
g) OPM3
h) Just in Time (JIT)

Answer: (c) OPM3. OPM3 was published by the Project Management Institute Incorporated (PMI). It
provides a method for organizations to understand their organizational project management processes
and measure their capabilities in preparation for improvement.

186. A Project Manager working in a weak matrix organization will NOT have which of the following
challenges?
e) Communications will be more complex
f) The team members may not always have a home
g) The team members may get directions from multiple people
h) Team members may not report to the Project Manager

Answer: (b) In a matrix organization, communications will be more complex, the team members will likely
get directions from within their functions as well as from the Project Manager and the team members may
not report into the Project Manager. The team members not having a home is a challenge on projectile
organization matrix.

187. An activity which does NOT require work or take time and is inserted simply to show
dependency between activities is called:
e) Milestone Activity
f) Critical Activity
g) Hammock Activity
h) Dummy Activity

Answer: (d) Dummy Activity. A dummy activity is usually used in the Arrow Diagramming Method (ADM)
and is inserted simply to show dependency between activities and does not require work or take time.
Option (c) Hammock Activity is a schedule (project management) or project planning term for a grouping
of subtasks that 'hangs' between two end dates it is tied to. For example, subtasks which are not related in

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the hierarchical sense of a Work Breakdown Structure or subtasks which are not related in a logical sense
of a dependency where one subtask must wait for another.

188. Which of the following factors is MOST critical to achieving customer satisfaction?
e) Ensure that the project satisfies all the Quality related metrics
f) Ensure that the project completes in the scheduled timelines
g) Ensure that the project is completed within allotted budget
h) Ensure that the project satisfies all the requirements given by the customer

Answer: (d) Ensure that the project satisfies all the requirements given by the customer. While all the
options (a), (b) and (c) are desirable in fulfilling all the customer requirements for the project, option (d) is
most critical.

189. Which of the following is NOT an example of contributing to the project management
knowledge base?
e) Writing an article of project management best practices
f) Writing a book on your experiences as a Project Manager and lessons learned
g) Giving a session on Risk Management methodologies to fellow Project Managers
h) Briefing a friend and aspiring Project Manager about PMP exam merits and PMI organization

Answer: (d) Briefing a friend and aspiring Project Manager about PMP exam merits and PMI organization.
Option (d) is helpful but does not contribute to project management knowledge base like all the other
activities.

190. A heuristic is called a ____.


e) Scheduling method
f) Controlling Tool
g) Planning Tool
h) Rule of Thumb

Answer: (d) Heuristic is also referred to as a Rule of Thumb.

191. 'Halo Effect' is ____.


e) based on the assumption that because the person is good at a technology, he will be good as a Project
Manager.
f) based on hiring the best
g) to recruit the best in management
h) to promote from within

Answer: (a) based on the assumption that because the person is good at a technology, he will be good as a
Project Manager.

192. Voice mail and e-mail are examples of:


e) Interactive communication
f) Pull communication
g) Push communication
h) Push Pull communication

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Answer: (c) Push Communication. Letter, memos, faxes, e-mails, and voice mails are examples of Push
communication.

193. 3 sigma is equal to:


e) 99.73%
f) 99.99%
g) 95.46%
h) 68.26%

Answer: (a) 99.73%.

194. In which of the following areas are the following skills considered - Performance appraisal,
recruitment, retention, regulatory issues, and labor relations?
e) Administrative
f) Project Management
g) Accounting
h) General Management

Answer: (a) Administrative. Skills such as performance appraisal, recruitment, retention, regulatory issues,
and labor relations are considered as administrative rather than management.

195. During the closing, final acceptance of the deliverables is one of the important activities. Who
is supposed to accept? Choose the best answer.
e) Customer
f) Sponsor
g) Relevant stakeholders
h) Operation team

Answer: (c). As per the new examination content outline, it is relevant stakeholders who give final
acceptance. Earlier it was sponsor and or customer.

196. Which of the following statements describes the relationship between project phases and the
project life cycle?
e) The project lifecycle contains the iterative incremental elements inside a project phase
f) Collectively, the project phases are known as the project life cycle
g) The project lifecycle is regarded as a sequence of project activities while phases are defined to control
the overlapping of activities
h) The project lifecycle contains the repetitive elements inside a project phase

Answer: (b) Collectively, the project phases are known as the project life cycle.

197. Which is NOT true with regards to ROI (Return on Investment)?


e) It defines the cumulated net income from an investment at a given point in time or during a defined
period.
f) It includes investment, direct and indirect costs and may include allowances for capital cost,
depreciation, risk of loss, and/or inflation
g) It is generally stated in currency units, as a percentage or as an index figure.

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h) It is the time when cumulated net income is equal to the investment.

Answer: (d) It is the time when cumulated net income is equal to the investment.

198. In making an investment in a project, investors require compensation for which of the
following?
e) The risk-free rate of return plus a risk premium plus a premium for inflation
f) Sacrifice of immediate use of cash for consumption or other investments, possibility of inflation and
risk
g) Payback period in years x investment x (1 + discount rate)periods
h) Inflation and depreciation

Answer: (b) Sacrifice of immediate use of cash for consumption or other investments, possibility of
inflation and risk.

199. A summary activity in a network logic diagram is often referred to as a ____.


e) Hammock Activity
f) Dangler
g) Milestone
h) Subtask

Answer: (a) A summary activity in a network logic diagram is often referred to as a Hammock activity.

200. When a project phase is finished, this is also known as a ____.


e) Gold Plating
f) Kill Point
g) Scope Creep
h) Metrics

Answer: (b) Completion of project phase is also referred as kill point.

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