Focus Area Test: PMP Diagram Questions Flashcards
- A project team is currently developing the schedule network for a construction project. Following is how the network is looking after completing the forwardpass (all durations in months). There is a risk that the activity G might take 6 more months to complete. If that happens, what will happen to the critical path?
The critical path will remain unchanged.
Explanation: If activity G takes 6 more months, the total activity duration will become 13 months and the early finish will become the 27th month. This will delay the activity K by a month which will then finish by the end of the 29th month. But this will not delay the activity M which is scheduled to start at the start of the 35th month. [PMBOK® Guide, 6th edition, Page 210]
- You are managing a house construction. The following table gives you a high-level status summary of the work packages on the project. What’s the CPI?
0.91
Explanation: The total cost incurred to date is provided; AC = $89,500 (total of Actual Costs column). However, we need to determine the total Earned Value for this project. Individual activity earned values can be calculated by the formula [Activity EV = Activity % Complete x Planned Value]. Calculating EVs for all activities and adding them up we get $81,250. Plugging these in the CPI formula (CPI = EV/AC) we get 0.91. [PMBOK® Guide 6th edition, page 263]
- A project team is currently developing the schedule network for a construction project. Following is how the network is looking after completing the forward pass (all durations in months). There is a risk that the activity G might incur some delays. What is the maximum amount of delay that can be absorbed by the activity without impacting the network’s critical path?
11 months
Explanation:
To determine this, you need to do a backward pass of the network and determine total floats for all activities including the activity G. Activity G has a total float of 11 months and this is the maximum amount of delay that can be absorbed without impacting the project’s critical path. [PMBOK® Guide, 6th edition, Page 210]
- What is the least amount of time required to complete all of the following activities?
15 days
Explanation: The critical path on the diagram is A->C->D. Adding their durations we get 15 days. [PMBOK® Guide 6th edition, page 190]
- A project team is currently assessing whether it is in the best interest of the company to enhance the current model of a product or design a new product from scratch. The following illustration shows the available options and their impact in case of strong and weak market demands. Which diagramming tool is this?
Decision Tree
Explanation: This is an example of a Decision Tree. A decision tree is a decision support tool that uses a tree-like graph or model of decisions and their possible consequences, including chance event outcomes, costs, and benefits. [PMBOK® Guide, 6th edition, Page 435]
- You are currently auditing a project and asked the project coordinator to supply the latest project’s performance report. The following report was shared with you. What do you think about how the project is performing?
The project cost performance is only 89% in terms of the cost baseline.
Explanation: The project cost performance is not on target. The current CPI of 0.89 indicates that the project is only performing at 89% in terms of the cost baseline. The rest of the statements might be correct but we don’t have enough information to conclude any of these are correct. [PMBOK® Guide, 6th edition, Page 261-263]
- Your organization has been awarded a project to lay a segment of railway track. You have recently analyzed the project’s scope and identified the following high-level activities. The given cost estimates include both direct and indirect costs to complete these activities. If you want to include 15% contingency reserves, 20% management reserves, and hope to make a 25% overall profit, what project budget will you offer to the client if you are negotiating a cost-plus contract?
$21.6 million
Since you are negotiating a cost-plus contract, you need to present the true project costs to the client and must not inflate these with the desired profit margin. The total cost estimate for the project is $16 million. However, you need to add the 15% contingency and 20% management reserves ($2,400,000 and $3,200,000 respectively) to complete the project budget. The total comes out to be $21.6 million. [PMBOK® Guide, 6th edition, Pages 252, 472]
- You are developing a software tool for your organization. The following chart gives the summary status of the project. What do you think about the cost performance of this project?
The project is earning 88 cents per dollar spent.
The project CPI = EV / AC = $25,000 / $28,500 = 0.88. This means that the project is earning 88 cents per dollar spent which doesn’t indicate good cost performance. [PMBOK® Guide 6th edition, page 263]
- A project team is currently assessing whether it is in the best interest of the company to enhance the current model of a product or design a new product from scratch. The following illustration shows the available options and their impact in case of strong and weak market demands. Which decision should you take if the management’s risk tolerance is low?
Enhance the current model
Explanation:
The EMV of designing a new model = 60% * (120 - 80) + 40% * (70 - 80) = $20 million; The EMV of enhancing the current model = 60% * (80 – 40) + 40% * (50 - 40) = $28 million. The management should decide to enhance the current model instead of designing a new model as the EMV of enhancing the current model is higher. Further, there is no loss situation when deciding to enhance the current model regardless of the market condition; hence this option should be selected if the risk tolerance is low. [PMBOK® Guide, 6th edition, Page 435]
- The following is an extract of the project schedule you are currently working on. This is a major project for your organization with a total budget of $21.6 million dollars. You are currently developing a cost performance report for this project. What is the current CPI?
0.89
Explanation:
In order to determine the current CPI, you need to first determine the total project EV to date. The EV of a project activity can be computed by multiplying the activity’s PV with its percentage complete. Calculating individual activity EVs and adding them together you get the total project EV of $4,000,000. The total actual cost is $4,500,000. CPI = EV/AC = 0.89. [PMBOK® Guide, 6th edition, Pages 261-263]
- You are managing a house construction. The following table gives you a high-level status summary of the work packages on the project. You are a bit concerned regarding the final total costs of the project if the cost performance continues at the current rate. What will the project EAC be if the cost overruns continue at the current rate?
$170,330
Explanation: ince you expect the current cost performance to continue, you need to calculate the project’s EAC based on current CPI by the formula EAC = BAC / CPI. The total budget of the project is the sum of individual project activity planned values; BAC = $155,000. The total cost incurred to date is provided; AC = $89,500 (total of Actual Costs column). However, we need to determine the total Earned Value for this project. Individual activity earned values can be calculated by the formula [Activity EV = Activity % Complete x Planned Value]. Calculating EVs for all activities and adding them up we get the total project EV = $81,250. Plugging these in the CPI formula (CPI = EV/AC) we get CPI = 0.91. Plugging these values in the EAC formula we get $155,000 / 0.91 = $170,330. [PMBOK® Guide 6th edition, page 265]
- The following is an extract of the project schedule you are currently working on. This is a major project for your organization with a total budget of $21.6 million dollars. You are currently developing a cost performance report for this project. What is the project’s total EV?
$4,000,000
Explanation:
The EV of a project activity can be computed by multiplying the activity’s PV with its percentage complete. Calculating individual activity EVs and adding them together you get the total project EV of $4,000,000. [PMBOK® Guide, 6th edition, Pages 261-263]
- You are leading a construction project that requires building ten nearly identical buildings. Although you can start the construction of all the buildings at the same time, some constraints such as site access, geographical terrain and construction feasibility, limit you to construct these in a specific order. The schedule of construction is shown below (all durations are in weeks). If due to some reason the completion of building C gets delayed by 10 weeks, how would this impact building H and the project?
The float for building H will reduce to 4 weeks and there will be no delay on the project.
Explanation: Building H is the successor of building C with a total float of 14 weeks. If the completion of building C is delayed by 10 weeks, it will reduce the total float of building H by 10 weeks and it will get reduced to 4 weeks. Since none of the building on the critical path has been impacted, the project completion time will not be impacted. [PMBOK® Guide 6th edition, page 210]
- A project team is currently assessing whether it is in the best interest of the company to enhance the current model of a product or design a new product from scratch. The following illustration shows the available options and their impact in case of strong and weak market demands. According to the given decision tree, what is the EMV of the designing a new model?
$20 million
Explanation: The EMV of designing a new model = 60% * (120 - 80) + 40% * (70 - 80) = $20 million. [PMBOK® Guide, 6th edition, Page 435]
- You are managing a construction project. The following network shows the involved activities and their durations (in months). If the shown dependencies cannot be changed and none of the activities can be completed any earlier, how many months do you need to complete this project?
41 months
Explanation:
In order to solve this network, you need to complete the forward pass. You will find out that the critical path of the network is A -> E -> I -> L -> M and the duration of this critical path is 41 months. [PMBOK® Guide, 6th edition, Page 210]
- You are managing a house construction. The following table gives you a high-level status summary of the work packages on the project. What’s the project’s TCPI based on BAC?
1.13
Explanation:
The TCPI based on BAC is calculated by the formula: TCPI = (BAC - EV) / (BAC - AC). The total budget of the project is the sum of individual project activity planned values; BAC = $155,000. The total cost incurred to date is provided; AC = $89,500 (total of Actual Costs column). We need to calculate the total Earned Value for the project. Individual activity earned values can be calculated by the formula [Activity EV = Activity % Complete x Planned Value]. Calculating EVs for all activities and adding them up we get Project EV = $81,250. Plugging these values in the TCPI formula we get Project TCPI = 1.13.
- You are leading a construction project that requires building ten nearly identical buildings. Although you can start the construction of all the buildings at the same time, some constraints such as site access, geographical terrain and construction feasibility, limit you to construct these in a specific order. The schedule of construction is shown below (all durations are in weeks). If everything goes by the plan, what will be the maximum number of buildings that will be constructed at any given point it time.
4
Explanation: Note that the network diagram is not developed on a chronological scale. If everything goes by the plan, construction on each building should start at its early start date. It can be seen that between weeks 10 and 11, four buildings (B, C, F and G) will be progressing at the same time. [PMBOK® Guide 6th edition, page 210]
- The following chart gives you the schedule of activities on a system design project. For each project activity, the management has approved a 5% and 3% contingency and management reserves respectively. What is the total budget for this project?
$47,520
Explanation: The cost baseline is the approved version of the project budget that includes contingency reserves, but excludes management reserves. However, the management reserves are part of the total project budget. The sum of individual activity cost estimates comes up to be $44,000 (sum of all planned values). Adding another 8% for contingency and management reserves we get a total budget of $47,520. [PMBOK® Guide 6th edition, page 252]
- The following chart gives you the schedule of activities on a system design project. What is the project’s CPI?
0.94
Explanation: The total cost incurred to date is provided; AC = $34,500 (total of Actual Costs column). However, we need to determine the total Earned Value for this project. Individual activity earned values can be calculated by the formula [Activity EV = Activity % Complete x Planned Value]. Calculating EVs for all activities and adding them up we get $32,400. Plugging these into the CPI formula (CPI = EV/AC) we get 0.94. [PMBOK® Guide 6th edition, page 263]
- According to the following schedule network, what is the Late Finish for activities C.1 and B.2?
29 for both
Explanation:
Both activities B.2 and C.1 are successor activities of D.1. Since the Late Start of D.1 is 30, Late Starts for both B.2 and C.1 are 29. [PMBOK® Guide 6th edition, page 210]
- Your organization has been awarded a project to lay a segment of railway track. You have recently analyzed the project’s scope and identified the following high-level activities. The given cost estimates include both direct and indirect costs to complete these activities. If you want to include 15% contingency reserves, 20% management reserves, and a 25% overall profit, what contract price will you offer to the client if you are negotiating a fixed price contract?
$27.0 million
Explanation: The total of all estimated costs is $16 million. You now need to add 15% contingency reserves ($2,400,000) and 20% management reserves ($3,200,000) to the total, which becomes $21.6 million. Since this is a fixed price contract, you need to add another 25% of profit margin to it. The final contract price becomes $27 million. [PMBOK® Guide, 6th edition, Pages 252, 471]
- The following chart gives you the schedule of activities on a system design project. What is the project’s CPI?
0.94
Explanation: The total cost incurred to date is provided; AC = $34,500 (total of Actual Costs column). However, we need to determine the total Earned Value for this project. Individual activity earned values can be calculated by the formula [Activity EV = Activity % Complete x Planned Value]. Calculating EVs for all activities and adding them up we get $32,400. Plugging these into the CPI formula (CPI = EV/AC) we get 0.94. [PMBOK® Guide 6th edition, page 263]
- You are developing a software tool for your organization. The following chart gives the summary status of the project. For the ETC work, what cost performance do you need to achieve in order to hit the budget target?
1.08
Explanation: The TCPI of the project based on BAC = (BAC - EV) / (BAC - AC) = ($73,000 - $25,000) / ($73,000 - $28,500) = 1.08. [PMBOK® Guide 6th edition, page 266]
- You are developing a software tool for your organization. The following chart gives the summary status of the project. How much will the ETC work cost you if you could perform at the budget rate from this point onwards?
$48,000
Explanation:
EAC (Work Performed at the budgeted rate) = AC + (BAC - EV) = $28,500 + ($73,000 – $25,000) = $76,500. Since ETC = EAC – AC = $76,500 - $28,500 = $48,000. [PMBOK® Guide 6th edition, pages 264, 265]
- You are currently auditing a project and asked the project coordinator to supply latest project’s performance data. The following report was shared with you. The project team is seeking a revised project budget of $24.3 million and assuring that the future cost performance will be inline with the budgeted costs, what’s your opinion?
The project team is misleading the management.
Explanation:
If the future cost performance can be inline with the budgeted costs, the team should not have calculated the EAC based on CPI. The EAC should be $22.1 million and not $24.3 million. [PMBOK® Guide, 6th edition, Page3 264, 265]
- A risk analyst has produced the following chart for your project. Which risk management tool is this?
Tornado diagram
Explanation:
This is an example of a tornado diagram which is a typical display of sensitivity analysis. The tornado diagram presents the calculated correlation coefficients for each element of the quantitative risk analysis model that can influence the project outcome ordered by descending strength of correlation. [PMBOK® Guide 6th edition, page 434]
- You are leading a construction project that requires building ten nearly identical buildings. Although you can start the construction of all the buildings at the same time, some constraints such as site access, geographical terrain and construction feasibility, limit you to construct these in a specific order. The schedule of construction is shown below (all durations are in weeks). Your construction crew can only work at one building at a time; hence you need to outsource the construction of some buildings. Outsourcing would increase project risk as the subcontractors cannot be directly controlled and construction delays can occur. Which of the following buildings would you outsource to minimize this risk?
B, C, E, F and H
Explanation: Any delay on activities on the critical path directly delays the entire project. Hence you should outsource the construction of the buildings that are not on the critical path. Further, since there is no float on the critical path and your construction crew can only work a building at a time, you would have to outsource all of the buildings that are not on the critical path. [PMBOK® Guide 6th edition, page 210]
- A risk analyst has produced the following chart for your project. Which risk management tool is this?
Tornado diagram
Explanation: This is an example of a tornado diagram which is a typical display of sensitivity analysis. The tornado diagram presents the calculated correlation coefficients for each element of the quantitative risk analysis model that can influence the project outcome ordered by descending strength of correlation. [PMBOK® Guide 6th edition, page 434]
- The following chart gives you the schedule of activities on a system design project. For each project activity, the management has approved a 5% and 3% contingency and management reserves respectively. What is the cost baseline for this project?
$46,200
Explanation: The cost baseline is the approved version of the project budget that includes contingency reserves, but excludes management reserves. The sum of individual activity cost estimates comes up to be $44,000 (sum of all planned values). Adding a 5% contingency reserve we get a cost baseline of $46,200. [PMBOK® Guide 6th edition, page 248]
- Your organization has been awarded a project to lay a segment of railway track. You have recently analyzed the project’s scope and identified the following high-level activities. The given cost estimates include both direct and indirect costs to complete these activities. You must include 15% contingency reserves, 20% management reserves, and a 25% overall profit to your price offer. What is your cost performance baseline for this project?
$18.4 million
Explanation: The cost performance baseline includes the contingency reserves but excludes the management reserves. The total cost estimate is $16 million. Adding a 15% contingency reserve to this you get your cost performance baseline of $18.4 million. [PMBOK® Guide, 6th edition, Page 252]
