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MGMT 6056 > M7-M8 > Flashcards

M7-M8 Flashcards

1
Q

a tool and technique for Estimate Costs and Determine Budget used to determine the amount of reserves for the project, or
used to estimate the amount of money that should be set aside to cover unexpected costs

A

Reserve Analysis

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2
Q

the process of developing an approximation of the costs of the resources needed to complete the project work

A

Estimate Costs

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3
Q

what do we look mainly at in the Estimate Costs process

A

contingency reserves

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4
Q

the process of aggregating the estimated costs of individual activities or work packages to establish an authorized cost baseline

A

Determine Budget

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5
Q

what do we look mainly at in Determine Budget process

A

management reserves

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6
Q

the allocation of extra funds to cover the uncertainties and improve the chance of finishing on time

A

Budget Reserves

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7
Q

what does Murphy’s Law state

A

If anything can go wrong, it will.

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8
Q

why are contingencies needed?

A
  • Project scope may change
  • Murphy’s Law is present
  • Cost estimation must anticipate interaction costs
  • Normal conditions are rarely encountered
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9
Q

In the project budget component diagram, what is the area that the Project Manager focuses on and is responsible for?

A

Cost Baseline

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10
Q

the Cost Baseline indicates (1)what and (2)what not?

A

(1)Budget at Completion and (2)Project Budget

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11
Q

3 reserve areas in the project budget component diagram

A

management reserve
contingency reserve
activity contingency reserve

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12
Q

used to provide extra funds for specific activity issues rather than broader known unknown risks in the project

A

Activity Contingency Reserve

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13
Q

To create a quote to the customer, what component is added to the Project Budget

A

Profit or Margin

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14
Q

Activity Contingency Reserve + Activity Cost estimates

A

Work Package Cost Estimate

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15
Q

Work Package Cost Estimate + Contingency Reserve

A

Control Accounts

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16
Q

Control Accounts is also equivalent to what

A

Cost Baseline

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17
Q

Cost baseline + management reserve

A

project budget

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18
Q

these reserves are for the known unknowns

A

Contingency Reserves

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19
Q

these reserves are for the unknown unknowns

A

Management Reserves

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20
Q

Contingency reserves are frequently accessed via what?

A

Change Request (CR)

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21
Q

True or False
Project managers may be given the authority to use a contingency reserve at their discretion for very small projects

A

True

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22
Q

True or False
Contingency reserve do not require a form of approval before it can be used

A

false

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23
Q

Used to approve changes to one or more of the project baselines

A

Change Request

24
Q

True or False
Management reserves are part of the project baseline and overall project budget

A

False
They are NOT part of the project baseline but part of the overall project budget

25
Q

How much is usually allocated for management reserve

A

similar to past projects 1-10%
unique and high technology projects 20-60%

26
Q

True or False
Management Reserves need approval to use based on the organization’s policies

A

true

27
Q

a portion of something (in PM it is a portion of the money)

A

tranche

28
Q

BAC

A

Budget at Completion

29
Q

It is over and above the original budget baseline/BAC and is in the management reserve zone

A

special tranche

30
Q

Cost Baseline indicates what?

A

BAC (not the project budget)

31
Q

generic control points where management measures and compares project performance to the baseline

A

control accounts

31
Q

tranches can be/have:

A

*phases or gates
*connections connected to them

32
Q

the contingency reserves or management reserves could become extra profit if project is what?

A

firm-fixed price

33
Q

unused reserves would not be charged to the customer as they weren’t actual expenditures if the project is:

A

Cost plus

34
Q

5 estimation tips

A
  1. a goal is not an estimate
  2. the estimate you produce should be unrelated to what you think the requester wants to hear
  3. the correct answer to an estimate is “Let me get back to you on that”
  4. avoid giving single-point estimates
  5. incorporate contingency buffers into estimates
35
Q

2 forms of support or in some cases constraints the organization and the wider community provide to assist project teams manage and deliver their projects

A

EEF - Enterprise Environmental Factors
OPA - Organizational Process Assets

36
Q

conditions not under the immediate control of the team, that influence, constrain, or direct project, program, or portfolio

A

Enterprise Environmental Factor

37
Q

plans, processes, policies, procedures, and knowledge bases that are specific to and used by the performing organization

A

Organizational Process Assets

38
Q

____ impact the project and ____ are used in the project

A

factors and assets

39
Q

Important part of a PM’s role

A

determine and document the project baseline; control and track project performance against the baseline

40
Q

describes the procedures that need to be performed before changes are made to deliverables or project documentation

A

control change process

41
Q

a formal approval that is used to approve or reject a change

A

control change process

42
Q

could include sponsor, key stakeholders, and senior management

A

Change Control Board (CCB)

43
Q

a negative term where there is an uncontrolled addition of project requirements that make a project run over schedule or budget

A

Scope Creep

44
Q

adding excessive features that the overall value of the project is no longer increasing, it’s decreasing

A

Feature Creep

45
Q

statements about Change Requests

A

*approved based on analysis and assumptions at a specific point in time during the project
*delays could change the costs of the CR as well as the planned benefits or even success of the CR
*could have its own scope, resource, allocations, costs, schedule, and risks
*can introduce new risks that impact the rest of the project, and delayed the CR even more so
*managing execution of the CR is like managing a micro project

46
Q

can provide guidelines to help identify the most significant variances

A

variance threshold

47
Q

the real cause of something, factor that has caused the problem, core issue

A

root cause

48
Q

what PMs are supposed to do with variances

A

control, track and prevent

49
Q

MCQ
Which statement best describes the meaning of the term cost baseline?
a.) A cost baseline is always created by translating time-phased cost information into cost data on activity or work-package level.
b.) A cost baseline is an approved time-phased budget that will be used to measure and monitor cost performance on the project.
c.) Data to draw a cost baseline can be easily generated and updated as necessary from information related to actual project cost.
d.) A cost baseline is usually displayed in the form of an inverse S-curve drawn from the beginning of the project until the last date for which data is available.

A

b.

50
Q

MCQ
An estimation has been made that the construction of a residential home will cost a certain amount per square foot of living area. This is an example of what type of estimating?
a. Analogous estimating
b. Bottom-up estimating
c. Top-down estimating
d. Parametric estimating

A

d.

51
Q

MCQ
During execution of a project, an identified risk event occurs that results in additional cost and time. The project had provisions for contingency and management reserves. How should these be accounted for?
a. Contingency reserves
b. Residual risks
c. Management reserves
d. Secondary risks

A

a.

52
Q

MCQ
Management reserves are used to handle which type of risk?
a. Unknown unknowns
b. Known unknowns
c. business risks
d. pure risks

A

a.

53
Q

MCQ
Which of the following are examples of indirect costs?
a. Salaries of corporate executives
b. Salaries of staff working full-time on the project
c. Overhead costs
d. a and b
e. a and c

A

e.

54
Q

MCQ
Which of the following contract types places the greatest risk on the seller?
a. Cost-plus-fixed-fee contract
b. Cost plus-incentive-fee contract
c. Fixed-price-incentive contract
d. Firm-fixed-price contract

A

d.

55
Q

MCQ
A project manager has increased project costs by US $75,000, but completed the project six weeks earlier than planned. What tool is best described here?
a. Resource leveling
b. Duration compression
c. Crashing
d. Fast tracking

A

c.

56
Q

MCQ
Preliminary Cost estimates are developed during the______ phase of the project:
a. Conceptual
b. Planning
c. Implementation
d. Execution

A

c.

MGMT 6056 (5 decks)

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