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Project management > L4 > Flashcards

L4 Flashcards

1
Q

What are the steps in project management?

A
  1. Obtain project scope (goal, objective…)
  2. Leads to an activity list (+precedence relations, durations…)
  3. Leads to work breakdown structure (responsibilities, resources, cost, quantities…)
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2
Q

How to come up with activity time and cost estimates?

A
  • use analogies - similar projects/activities.
  • experience - hire a consultant, Delphi technique
  • parametric estimation
  • three points estimation
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3
Q

What’s the Delphi technique?

A

Get a group of experts and ask them for the major activities and they give you estimates for time/cost.

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4
Q

What is parametric estimation?

A

Analogy + maths!

Look at past projects and why some cost more than others.

Use regression to make estimates

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5
Q

When can we not use parametric estimation?

A

When it’s a first-timer project! No prior knowledge or data available.

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6
Q

Downsides of parametric estimation?

A

The environment might have changed, eg Brexit has changed estimates.

The nature doesn’t have to be linear, there might be economies of scale to be found.

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7
Q

What is three points estimation?
AKA PERT

A

Program Evolution and Review Technique

  • come up with optimistic/pessimistic/most likely estimates
  • combine these numbers into an average estimate
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8
Q

Average time equation for PERT?

A

(To + 4Tm + Tp) / 6

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9
Q

Variance equation for PERT?

A

( (Tp - To) / 6 ) ^2

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10
Q

Standard deviation equation for PERT?

A

(Tp - To) / 6

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11
Q

Features of the analogous estimation method?

A
  • fastest
  • least accurate
  • use when we have limited information
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12
Q

Features of parametric estimation method?

A
  • more accurate than analogous
  • uses statistics
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13
Q

Features of three-point estimation method? AKA PERT

A
  • reduces bias, risk, uncertainty
  • possibly more accurate than the others
  • Monte Carlo simulation
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14
Q

What time estimate should you tell the customer/client?

A

Go half way between the average and worst estimates, and you’ll be 90% safe.

If it’s really crucial not to be late, go with the worst case.

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15
Q

What is needed to estimate activity durations?

A

Resource calendars:
- resource = human vs non-human
- calendar = availability dates

Organisational asset evaluation:
- quality, skill level, work ethics

Enterprise/project environmental factors:
- where? Season? PESTEL/MODeST

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16
Q

How to estimate activity cost?

A
  • analogous estimating
  • rules of thumb (parametric estimating)
  • three point estimates
17
Q

What are the 3 costs?

A

Direct
Indirect
Below the line

18
Q

What are direct costs?

A

Directly related to the project:
- salaries
- materials, machinery
- third-party services, consultants, lawyers
- others, travel

19
Q

What are indirect costs?

A
  • overhead costs, general management, office space
  • often percentage of direct costs
20
Q

What are below the line costs and what are they a percentage of?

A
  • contingency
  • profit mark-up
  • percentage of total
21
Q

What is a common mistake in estimating project costs?

A

Not including indirect costs and profit margin.

22
Q

How can we improve estimating costs?

A
  • get inputs from many areas
  • hire professional cost estimators
  • primarily estimate direct costs
23
Q

What are the types of budgeting?

A

Top down
Bottom up
Negotiated

24
Q

What happens in reality when making a budget?

A
  • iterative negotiation
  • combination of top-down, bottom-up
  • both are prepared, differences negotiated
25
Q

What happens with top-down budgeting?

A
  • managers estimate/decide
  • trickle down through company
  • viewed as zero-sum game
26
Q

Pros of top-down budgeting?

A
  • set/controlled very accurately
  • management have lots of control
  • no need to identify small tasks
27
Q

Cons of top-down budgeting?

A
  • low buy-in from lower managers
  • low level competition for the budget
  • managers might miss out a key activity then it’s totally inaccurate
28
Q

What happens in bottom-up budgeting?

A
  • low level managers come up with estimates from work packages
  • then add overhead and profits
29
Q

Advantages of bottom-up budgeting?

A
  • greater buy in from lower managers
  • catch unusual expenses
30
Q

Disadvantages of bottom-up?

A
  • people might overestimate to give themselves more time
  • management might cut the budget
  • accountability shifts
31
Q

Which budget method is best if you want it quick?

A

Top down

32
Q

Which budget method is best when you want it accurate?

A

Bottom up

33
Q

When to use top down budgeting?

A

Use for small projects
strategic projects
high uncertainty (first timer)
fixed price contracts
flexible scope projects
Unstable project scopes

34
Q

What budgeting method do we use if the customer wants details?

A

Bottom up

35
Q

Are IT or brick and mortar projects more uncertain in terms of time/cost estimates?

A

IT = more uncertain

Less data to estimate from
Changing tech environment

Project management (10 decks)

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