Project Environment Quiz Flashcards
- A business is considering more than a dozen infrastructure upgrade projects. These projects, once delivered, will add to the organization’s overall performance but will not contribute to any of the revenue streams. Prior to initiating any such project, the value of the project to the organization must be determined. Which of the following is the most important factor to consider in such a scenario?
Alignment with the strategic goals
Explanation:
Projects help in achieving organizational goals whey they are aligned with the organization’s strategy. If the projects are misaligned with the organizational strategic goals, they are most likely to produce undesirable results either in the short-term or the long-term. NPV and IRR calculations are great measures, however, these are not applicable since these projects will not contribute to any of the revenue streams. Investment requirement is important but is useless on the projects that are not aligned with the strategic goals of the organization. [PMBOK® Guide 6th edition, Pages 34, 35]
- Kelly is part of a project management office (PMO). Her office is responsible for the centralized and coordinated management of 18 projects. Each project has its own project manager. Which of the following will not typically be a responsibility of her PMO?
Development of a detailed description of each project and the product it produces
Explanation: The primary function of a PMO is to support project managers in a variety of ways. This may include developing and managing project policies, coaching, mentoring, training, and oversight. This may also include management of resources that are shared across the projects. However, development of a detailed description of each project would be a responsibility of the project manager handling the project, not of the PMO. [PMBOK® Guide 6th edition, Page 48]
- Nancy is carrying out cost-benefit analysis for a project. If undertaken, the project will start in January next year and end by December. The project will incur a constant cost of $10,000 each month (payable by the end of each month) giving a total cost of $120,000 for the project. The revenue from the project is collected on a quarterly basis. The total revenue for the project by the end of December will be $200,000. The opportunity cost of the project is 12 percent which is the bank interest rate Nancy can get if she does not invest in this project. The total present value of all cash outflows is $112,551, while the total present value of all cash inflow is $185,721. What is the benefit-to-cost ratio for the project?
1.65
Explanation:
Benefit-to-cost ratio (BCR) = PV of inflows / PV of outflows = 1.65 The gross BCR can also be calculated as Total Revenue / Total Cost. However, since the total present value of both the inflow and outflow is given, this must be used for a more accurate calculation. [PMBOK® Guide 6th edition, Page 34]
- Laurence is the PMO manager at ANZ Company. The CEO of the company asked Laurence to review the business requirements and develop the current year’s capital management plan. The capital management plan will outline the key business deliverables (capital projects) and will go to the board for final approval. Which of the following organizational artifacts should Laurence review to analyze the business requirements for the current fiscal year?
Organizational Strategy
Explanation:
Capital planning is the process of budgeting resources for the future of an organization’s long term plans. Capital planning for a business would include budgeting for new and replacement machinery, research and development and the production of new products, new plants and other major capital projects. Capital projects can only achieve the organizational goals when they are aligned with the organization’s strategy. [PMBOK® Guide 6th edition, Page 12]
- You are setting up a PMO in your organization. The PMO will not only be required to provide templates and necessary training to projects, it will ensure all projects comply with the organizational project management policies and procedures. However, the PMO will not directly manage the organizational projects. Which type of PMO you are setting up?
Controlling PMO
Explanation:
This is an example of a controlling PMO. A controlling PMO performs all the tasks of a supportive PMO plus ensures compliance. This is not a directive PMO since it will not directly manage the projects. “Super PMO” is a made-up term. [PMBOK® Guide, 6th edition, Page 48]
- Project managers play a critical role in the leadership of their project teams. The project managers’ engagement and involvement with projects vary from organization to organization and from project to project. Which of the following gives the maximum level of engagement in a project?
From project evaluation through realizing business benefits.
Explanation: The role of the project manager may vary from organization to organization. In some organizations, a project manager may be involved in evaluation and analysis activities prior to project initiation. In some organizations a project manager may also be involved in follow-on activities related to realizing business benefits from the project. [PMBOK® Guide, 6th edition, Page 51]
- Linda is currently drafting her project stakeholder management plan. Since she is a new hire, she is not aware of the company’s policies and procedures. If she wants to know more about the company’s general issues management procedures, where must she look?
Organizational process assets
Explanation: Linda is looking for company’s policies and procedures. These are part of the organizational process assets. [PMBOK® Guide 6th edition, Page 39]
- A first-time project manager was assigned to a project that had a duration of three months. In order to get a head start on the project, the manager took an older, completed the project and incorporated all the tools, techniques, and checklists in their entirety from that project into the current one. The older project was completed in 14 months’ time and was remarkably similar in nature. The most appropriate comment on this would be:
This may be unnecessary. The project management team needs to decide what is appropriate for the project.
Explanation: The correct response is that this may be unnecessary. The project management team needs to decide what is appropriate for the project. Since the prior project had a duration of 14 months and the current one is of 3 months’ duration, it is unlikely that the current project will have exactly the same processes applied. Some amount of tailoring will be required. The other responses are not valid. It cannot be said with certainty that the project manager will not be violating copyright and intellectual property rights of prior customers. Most organizations have clear guidelines on what information can go into their organizational assets’ database. [PMBOK® Guide 6th edition, Page 28]
- Your company requires that before you purchase any routers or switches for the data center you are building, you need to solicit quotes from three separate suppliers prior to submitting the purchase request to the finance department. This policy belongs to:
Organizational Process Assets
Explanation:
Any type of corporate policy or formal procurement procedure is an organizational process asset. [PMBOK® Guide 6th edition, Page 39]
- During the execution of a project, a large number of defects were discovered. The project manager ensured that the issues, defect resolution, and action item results were logged into a defects database. What would the defect database be considered a part of?
Organizational Process Assets
Explanation:
Issue and defect management databases are considered part of the organizational process assets. These databases typically contain historical issue and defect status, control information, issue and defect resolution, and action item results. [PMBOK® Guide 6th edition, Page 39]
