Chapter 7

Question 1

Name the two discretionary funding allocations a project may receive.

Answer 1

Contingency Reserve and Management Reserve

Question 2

Name the negative risk responses

Answer 2

Accept, Avoid, Transfer, Mitigate

Question 3

Name the positive risk responses

Answer 3

Exploit, Share, Enhance, Accept

Question 4

Choosing to accept the consequences of the risk

Answer 4

Accept

Question 5

Actual cost of completing the work component in a given time period

Answer 5

Actual Costs AC

Question 6

Avoiding the risk altogether or eliminating the cause of the risk event.

Answer 6

Avoid

Question 7

the most precise cost estimating technique. It assigns a cost to each work package on the project. It is also the costliest.

Answer 7

Bottom-Up Estimating

Question 8

the process of aggregating all the cost estimates and establishing a cost baseline.

Answer 8

Budgeting

Question 9

How fast you’re going through the money

Answer 9

Burn Rate

Question 10

Certain amount of money set aside to cover costs resulting from possible adverse events or unexpected issues on the project. PM usually controls

Answer 10

Contingency Reserve

Question 11

the total expected cost for the project.

Answer 11

Cost Baseline

Question 12

Measures the value of work completed at the measurement date against the actual cost.

Answer 12

Cost Performance Index CPI

Question 13

Measures actual performance to date against what’s been spent.

Answer 13

Cost Variance CV

Question 14

Performance measurement technique that compares what your project has produced to what you’ve spent by monitoring the planned value, earned value, and actual costs expended to produce the work of the project.

Answer 14

Earned Value Measurement EVM

Question 15

Value of the worked completed to date as it compares to budgeted amount (PV) for that period. Example: Budgeted amount is $1k. 30 percent of work completed. This is $300

Answer 15

Earned Value EV

Question 16

Monitoring the probability or impact of the risk event to assure benefits are realized.

Answer 16

Enhance

Question 17

The expected cost to finish all the remaining project work

Answer 17

Estimate to Completion ETC

Question 18

Includes measuring the project spending to date, determining the burn rate, and tracking expenditures to the cost baseline so that stakeholders can see what was planned versus what actually spent on the project.

Answer 18

Expenditure Tracking

Question 19

Mechanism used to report on the current state of the project budget

Answer 19

Expenditure Reporting

Question 20

Looking for opportunities to take advantage of positive impacts.

Answer 20

Exploit

Question 21

Consequence or opportunity the risk poses to the project if it occurs. Can be defined as:

• High: 1.0
• Medium: 0.5
• Low: 0.1

Answer 21

Risk Impact

Question 22

Amount set aside by upper management to cover future situations that can’t be predicted. Contingency spending authority is under the discretion of the project manager or upper management.

Answer 22

Management Reserve

Question 23

Reducing the impact or the probability of the risk.

Answer 23

Mitigate

Question 24

A cost-estimating technique that uses the actual cost of a previous, similar project as the basis for estimating the cost of the current project; also called analogous estimates. They are the least accurate and least expensive.

Answer 24

Top Down Estimating / Order-of-Magnitude Estimating

Question 25

The cost of the work that has been authorized and budgeted for a specific schedule activity or WBS component during a given time period or phase

Answer 25

Planned Value PV

Question 26

the likelihood that a risk event will occur, expressed as a number from 0.0 to 1.0 with 1 being absolute certainty.

Answer 26

Probability

Question 27

a tool for the project team to aid in prioritizing risks.

Answer 27

Probability and Impact Matrix

Question 28

Potential future event that can have either negative or positive impacts on the project.

Answer 28

Risk

Question 29

Process of identifying those risks that have the greatest possibility of occurring and the greatest impact to the project if they do occur.

Answer 29

Risk Analysis

Question 30

The process of determining and documenting the potential risks that could occur on your project.

Answer 30

Risk Identification

Question 31

Deals with how you manage the areas of uncertainty in your project. Identify, analyze, and develop a response.

Answer 31

Risk Planning

Question 32

List of risks that you can record in a simple spreadsheet that includes an identification number, risk name, description, risk owner, and response plan.

Answer 32

Risk Register

Question 33

the process of developing options, and determining actions to enhance opportunities and reduce threats to the project’s objectives

Answer 33

Risk Response Plan

Question 34

Sign or a precursor signaling that a risk event is about to occur.

Answer 34

Risk Triggers

Question 35

Measures the progress to date against the progress that was planned.
• Formula: SPI = EV/PV
• Results: <1: Behind schedule >1: Ahead of schedule

Answer 35

Schedule Performance Index SPI

Question 36

Compares an activity’s actual progress to date to the estimated progress and is represented in terms of cost.

Answer 36

Schedule Variance

Question 37

Assigning the risk to a third party who is best able to bring about the opportunity.

Answer 37

Share

Question 38

SWOT

Answer 38

Strengths, Weaknesses, Opportunities, and Threats.

Question 39

Involves analyzing the project from each perspective: strengths, weaknesses, opportunities, and threats.

Answer 39

SWOT Analysis

Question 40

Average of the most likely estimate, the optimistic estimate, and the pessimistic estimate. Subject matter experts should give the estimates.
• Formula: Estimate + Optimistic + Pessimistic/3

Answer 40

Three-Points Estimate

Question 41

Moving the liability for the risk to a third party by purchasing insurance, performance bonds, and so on.

Answer 41

Transfer

Question 42

The total time it takes for a person to complete the task if they do nothing else from the time they start until the task is completed. Need to know actual hours spent performing task. Example resource is spending 5 hours a day over 4 days. Work effort is 20 hours.

Answer 42

Work Effort