PMP Glossary D

Question 1

Reserve Analysis - Key Features 01:

Answer 1

Contingency Reserves: These are funds or time added to the project baseline to cover identified risks. They are typically used for known risks that can be anticipated.

Question 2

Reserve Analysis - Key Features 02:

Answer 2

Management Reserves: These are additional funds or time set aside for unforeseen risks that may arise during the project. These are not included in the baseline but can be accessed if necessary.

Question 3

Reserve Analysis - Key Features 03:

Answer 3

Risk Assessment: Reserve analysis requires a thorough risk assessment process to identify potential risks and their impacts, enabling project managers to determine the appropriate amount of reserve needed.

Question 4

Reserve Analysis Example:

Answer 4

In a construction project, after assessing risks like weather delays, material shortages, and labor issues, the project manager might decide to set aside:

Contingency Reserve: $50,000 to cover expected delays and costs.
Management Reserve: $20,000 for unexpected issues that may arise.
By having these reserves in place, the project manager can better navigate uncertainties without jeopardizing the project’s overall success.

Question 5

Reserve Analysis Application

Answer 5

Reserve analysis helps ensure that projects remain on track and within budget, even when unexpected challenges occur, making it a vital part of risk management in project planning.

Question 6

Basis of Estimate (BOE)

Answer 6

is a detailed document or explanation that provides the rationale, assumptions, and methods used to develop project cost or time estimates.

It explains how the estimates were created,

what data was used, and any assumptions made.

This helps ensure transparency and allows for future revisions if assumptions change.

Question 7

Basis of Estimate (BOE) Key Features 01:

Answer 7

Assumptions: It outlines the assumptions made during the estimating process, such as resource availability, costs of materials, or labor rates.

Question 8

Basis of Estimate (BOE) Key Features 02:

Answer 8

Methodology: It explains the method used to calculate estimates, such as analogous estimating, parametric estimating, or bottom-up estimating.

Question 9

Basis of Estimate (BOE) Key Features 03:

Answer 9

Data Sources: It includes details on where the data came from, such as historical project data, expert judgment, or market rates.

Question 10

Basis of Estimate (BOE) Key Features 04:

Answer 10

Range of Accuracy: It indicates the possible range of accuracy for the estimates, for example, ±10%, depending on the level of project detail.

Question 11

Basis of Estimate (BOE) Key Features 05:

Answer 11

Risks and Uncertainties: The BOE also mentions any risks or uncertainties that might affect the estimate.

Question 12

Example:

Answer 12

For a software development project, a Basis of Estimate might include:

Assumptions: Developers will work 40 hours per week, and the hourly rate is $50.
Methodology: A bottom-up estimate was used to calculate the cost for each phase (research, design, development, testing).
Data Source: The estimate is based on past project data for similar software projects and current market labor rates.
Range of Accuracy: The estimate is accurate within ±15% based on available information.
Risks: Risks include potential changes in technology requirements or additional testing cycles.

Question 13

Importance:

Answer 13

The BOE ensures that stakeholders understand how and why estimates were made, increasing confidence in the project plan and helping in future discussions about changes or variances. It serves as the foundation for cost and time management throughout the project.

Question 14

Formulas for Three-Point Estimate:
Triangular Distribution:

Answer 14

(O+P+M)/3

o=optimistic
p=pessimistic
m=most likely

Question 15

Formulas for Three-Point Estimate:
Beta (PERT) Distribution:

Answer 15

(O+P+4M)/6

o=optimistic
p=pessimistic
m=most likely
4M= 4xby most likely

Question 16

Crashing (Adding Resources to a project activity)

Answer 16

refers to a schedule compression technique where additional resources are added to critical path tasks in order to complete the project faster, without changing the project scope. It’s typically used when the project is running behind schedule or when there’s a need to meet a strict deadline.

Question 17

Example of Crashing:

Answer 17

Critical Task: Filming the scenes is on the critical path.
Crashing Solution: You hire an additional camera team to work in parallel, reducing the filming time by two days.
Cost Tradeoff: Hiring extra people increases costs, but the schedule is shortened.

Question 18

Fast Tracking (Activates Performed in Parallal)

Answer 18

Fast tracking is a schedule compression technique used in project management to shorten the project timeline without changing its scope.

Question 19

Fast Tracking (Activates Performed in Parallal) B

Answer 19

fast tracking involves performing tasks that were originally planned to be done sequentially in parallel or overlapping to save time. It’s often used when a project is running behind schedule or when there’s a need to meet a strict deadline.

Question 20

Example of Fast Tracking:
Scenario: You’re managing the production of a 30-second TV commercial, and the client requests an earlier launch date.

Answer 20

Original Plan: The script is written and approved first, then the video is filmed, edited, and sound is added sequentially.
Fast Tracking Solution: You begin filming before the script is 100% finalized and start editing while the filming is still ongoing. Sound design also starts before the final edit is complete.
Risks: If the script changes during filming, you may need to re-shoot, or re-edit certain parts, leading to rework.

Question 21

Difference Between Fast Tracking and Crashing: A

Answer 21

Fast Tracking overlaps tasks that were originally planned to be done sequentially. It doesn’t necessarily increase costs but may increase risk and rework.

Question 22

Difference Between Fast Tracking and Crashing: B

Answer 22

Crashing adds more resources to speed up tasks on the critical path. It directly increases costs but may be less risky than fast tracking in some cases.

Question 23

Resource leveling

Answer 23

is a project management technique used to balance the demand for resources with the available supply, ensuring that resources (like people, equipment, or budget) are not over-allocated.

Question 24

Goal of Resource leveling

Answer 24

The primary goal of resource leveling is to ensure that no resources are overburdened or double-booked, even if it means adjusting the project schedule. This technique often results in extending the project timeline to match the availability of resources.

Question 25

Resource smoothing

Answer 25

The goal of resource smoothing is to ensure that resource usage is balanced and does not exceed a predetermined limit without altering the critical path or extending the project timeline.

Question 26

Resource Leveling

Answer 26

is used to manage over-allocated resources, often leading to extended project timelines.

Question 27

Resource Smoothing

Answer 27

seeks to balance resource workloads while keeping the original project schedule intact.