Chapter 13 Progress and Performance Measurement and Evaluation Answer Key Part 2

Chapter 13 - Progress and Performance Measurement and Evaluation 25. The indicator that tells you the amount each remaining dollar must earn in order for the project to stay within budget is the A. PCIC B. VAC C. CPI D. SPI E. TCPI Feedback: The indicator that tells you the amount each remaining dollar must earn in order for the project to stay within budget is the TCPI. A number greater than one means there is more work than there is budget left. A number less than one means there is less work than there is budget left. Answer: E AACSB: Reflective Thinking Bloom's: Understand Learning Objective: Forecasting Final Project Costs Level: Medium 26. A project manager learns that the project is only earning $.90 of planned work for each dollar spent by looking at the A. EV B. BAC C. SV D. SPI E. CPI Feedback: A CPI of .90 would indicate that the project is earning $.90 of planned work for each dollar spent. Answer: E AACSB: Reflective Thinking Bloom's: Understand Learning Objective: Indexes to Monitor Progress Level: Medium 13-13 Chapter 13 - Progress and Performance Measurement and Evaluation 27. A project manager notices that $1,000 worth of work that was scheduled to be completed at this time has not been accomplished. They know this by looking at the A. EV B. TCPI C. SV D. PCIB E. EAC Feedback: A SV of -1000 would indicate that $1,000 worth of work that was scheduled to be completed at this time has not been accomplished. Answer: C AACSB: Reflective Thinking Bloom's: Understand Learning Objective: Development of an Earned Value Cost/Schedule System Level: Medium 28. Sally receives the following information on her project: PV = 100, AC = 75, EV = 100. How well is the project doing in terms of budget? A. Right on budget B. 25 under budget C. 25 over budget D. 50 under budget E. 50 over budget Feedback: To find out how well this project is doing in terms of budget, the CV will need to be calculated by subtracting AC from EV. The result is a positive 25, which indicates that this project has spent $25 less than planned on actual work completed. Answer: B AACSB: Reflective Thinking Bloom's: Apply Learning Objective: Development of an Earned Value Cost/Schedule System Level: Medium 13-14 Chapter 13 - Progress and Performance Measurement and Evaluation 29. Jim receives the following information on his project: PV = 1000, EV = 1200, AC = 800, BAC = 2000, EAC = 1333. How is the project doing in terms of schedule? A. More work has been done than planned B. Less work has been done than planned C. The same amount of work has been done than planned D. The project has cost less than planned E. There is not enough information to draw a conclusion Feedback: To find out how well this project is doing in terms of schedule, the SV will need to be calculated by subtracting PV from EV. The result is a positive 200, which indicates that $200 more worth of work has been completed than planned. Answer: A AACSB: Reflective Thinking Bloom's: Apply Learning Objective: Development of an Earned Value Cost/Schedule System Level: Medium 30. Which of the following is NOT true regarding scope creep? A. It commonly occurs late in projects B. It is frequently unnoticed until time delays or cost overruns are observed C. It wears down team motivation and cohesiveness D. Project suppliers resent frequent changes E. Scope changes can represent significant opportunity Feedback: Scope creep is common early in projects—especially in new-product development projects. Customer requirements for additional features, new technology, poor design assumptions, etc., all manifest pressures for scope changes. Frequently these changes are small and go unnoticed until time delays or cost overruns are observed. Scope creep affects the organization, project team, and project suppliers. Scope changes alter the organization's cash flow requirements in the form of fewer or additional resources, which may also affect other projects. Frequent changes eventually wear down team motivation and cohesiveness. Clear team goals are altered, become less focused, and cease being the focal point for team action. Starting over again is annoying and demoralizing to the project team because it disrupts project rhythm and lowers productivity. Project suppliers resent frequent changes because they represent higher costs and have the same effect on their team as on the project team. Although scope changes are usually viewed negatively, there are situations when they result in positive rewards and can represent significant opportunities. Answer: A AACSB: Reflective Thinking Bloom's: Understand Learning Objective: Other Control Issues Level: Difficult Fill in the Blank Questions 13-15 Chapter 13 - Progress and Performance Measurement and Evaluation 31. ________ holds people accountable, prevents small problems from mushrooming into large problems, and keeps focus. Control Feedback: Control holds people accountable, prevents small problems from mushrooming into large problems, and keeps focus. Except for accounting controls, project control is not performed well in most organizations. AACSB: Reflective Thinking Bloom's: Understand Learning Objective: Structure of a Project Monitoring Information System Level: Medium 32. The first step in creating a project control system for measuring and evaluating project performance is to set a ________. baseline plan Feedback: The project control steps for measuring and evaluating project performance are first to set a baseline plan, then to measure progress and performance, next to compare plan against actual and finally to take action. AACSB: Reflective Thinking Bloom's: Understand Learning Objective: The Project Control Process Level: Easy 33. The value that tells you the planned value of the actual work completed is ___________. earned value Feedback: Earned value is necessary to provide a realistic estimate of performance against a time-phased budget. Earned value (EV) is defined as the budgeted cost of the work performed. AACSB: Reflective Thinking Bloom's: Understand Learning Objective: The Project Control Process Level: Medium 13-16 Chapter 13 - Progress and Performance Measurement and Evaluation 34. When someone familiar with each task estimates what percent of the task has been completed or how much of the task remains, they are creating a method for assigning costs to the baseline called the ____________ rule. percent complete Feedback: The percent complete rule is the heart of any earned value system. The best method for assigning costs to the baseline under this rule is to establish frequent checkpoints over the duration of the work package and assign completion percentages in dollar terms. AACSB: Reflective Thinking Bloom's: Understand Learning Objective: Development of an Earned Value Cost/Schedule System Level: Medium 35. Because of their easy-to-understand visual format, ________ charts are the most favored, used, and understandable tool used to report project schedule status. Gantt Feedback: Gantt and control charts serve well as a means for tracking and trending schedule performance. Their easy-to-understand visual formats make them favorite tools for communicating project schedule status—especially to top management, who do not usually have time for details. AACSB: Reflective Thinking Bloom's: Understand Learning Objective: Monitoring Time Performance Level: Easy 36. The indicator that tells you the planned time-phased value of the work that is scheduled is the _______________. planned value (PV) Feedback: The planned value is the budgeted cost of the work scheduled. AACSB: Reflective Thinking Bloom's: Understand Learning Objective: The Project Control Process Level: Easy 13-17 Chapter 13 - Progress and Performance Measurement and Evaluation 37. Baseline project budgets are derived from time-phasing the work ________. packages Feedback: The earned value system starts with the time-phased costs (found in the work packages) that provide the project budget baseline, which is called the planned budgeted value of the work scheduled (PV). Given this time-phased baseline, comparisons are made with actual and planned schedule and costs using earned value. The earned value approach provides the missing links not found in conventional cost-budget systems. AACSB: Reflective Thinking Bloom's: Understand Learning Objective: The Project Control Process Level: Medium 38. The ________ variance is the difference between the earned value and the actual costs for the work completed to date. cost Feedback: Cost variance is the difference between the earned value and the actual costs for the work completed to date where CV = EV - AC. AACSB: Reflective Thinking Bloom's: Understand Learning Objective: Development of an Earned Value Cost/Schedule System Level: Medium 39. The ________ variance is the difference between the earned value to date and the baseline schedule. schedule Feedback: Schedule variance is the difference between the earned value and the baseline line to date where SV = EV - PV. AACSB: Reflective Thinking Bloom's: Understand Learning Objective: Development of an Earned Value Cost/Schedule System Level: Medium 13-18 Chapter 13 - Progress and Performance Measurement and Evaluation 40. ________ is simply the percent complete times the original budget. Earned value Feedback: The earned value for a task is simply the percent complete times its original budget. AACSB: Reflective Thinking Bloom's: Understand Learning Objective: Development of aAn Earned Value Cost/Schedule System Level: Medium 41. Conditions or scope can change, which, in turn, will require a change to the __________ plan to recognize the new information. baseline Feedback: If deviations from plans are found and are significant, corrective action will be needed to bring the project back in line with the original revised plan. In some cases, conditions or scope can change, which, in turn, will require a change to the baseline plan to recognize the new information. AACSB: Reflective Thinking Bloom's: Understand Learning Objective: The Project Control Process Level: Medium 42. The project network schedule is derived from the _______ and it serves as the baseline to compare against actual performance. WBS Feedback: Monitoring schedule performance is relatively easy. The project network schedule is derived from the WBS and it serves as the baseline to compare against actual performance. AACSB: Reflective Thinking Bloom's: Understand Learning Objective: Monitoring Time Performance Level: Medium 13-19 Chapter 13 - Progress and Performance Measurement and Evaluation 43. A negative CV indicates the project is ________ budget. over Feedback: A negative cost variance indicates that more money has been spent on actual work completed than was planned. AACSB: Reflective Thinking Bloom's: Understand Learning Objective: Development of an Earned Value Cost/Schedule System Level: Easy 44. The ________ rule assumes credit is earned for having performed the work once it is completed. This rule is usually used for work packages having very short durations. 0/100 Feedback: The 0/100 rule assumes credit is earned for having performed the work once it is completed. Hence, 100 percent of the budget is earned when the work package is completed. AACSB: Reflective Thinking Bloom's: Understand Learning Objective: Indexes to Monitor Progress Level: Easy 45. The ratio that measures the amount of value each remaining dollar in the budget must earn to stay within the budget is the _________. TCPI Feedback: The ratio that measures the amount of value each remaining dollar in the budget must earn to stay within the budget is the TCPI. A number greater than 1 means there is more work than there is budget left. AACSB: Reflective Thinking Bloom's: Understand Learning Objective: Forecasting Final Project Cost Level: Medium 13-20 Chapter 13 - Progress and Performance Measurement and Evaluation 46. The _________ index measures the project percent complete in relation to the resources that were budgeted. PCIB Feedback: The PCIB indicates what percentage of work has been completed to date based on planned budget. It is a good indicator of how much of the project has been completed. AACSB: Reflective Thinking Bloom's: Understand Learning Objective: Indexes to Monitor Progress Level: Medium 47. Given that the AC = 300, PV = 400 and EV = 500, this project is _________ budget. under Feedback: The cost variance is determined by subtracting the AC from the EV. This results in a positive $200. At this point $200 less has been spent on work completed than what was planned. AACSB: Reflective Thinking Bloom's: Apply Learning Objective: Development of an Earned Value Cost/Schedule System Level: Medium 48. Given a BAC of 5,500 and an EAC of 6,000, the project is expected to be completed _________ budget. over Feedback: The BAC indicates the budgeted project cost at completion. The EAC indicates the new estimated cost at completion. The difference (BAC - EAC) gives the variance at completion (VAC). In this example the VAC = -$500. The project is estimated to be completed $500 over budget. AACSB: Reflective Thinking Bloom's: Apply Learning Objective: Forecasting Final Project Cost Level: Medium 13-21 Chapter 13 - Progress and Performance Measurement and Evaluation 49. An SPI index of 1.22 indicates that the project is ________ schedule. ahead of Feedback: An SPI of 1.22 means that $1.22 worth of work has been accomplished for each $1 worth of work scheduled. AACSB: Reflective Thinking Bloom's: Understand Learning Objective: Indexes to Monitor Progress Level: Medium 50. Although it is very difficult to measure, measuring ________ performance is as important as measuring schedule and cost performance. technical Feedback: It is very difficult to specify how to measure technical performance because it depends on the nature of the project. Suffice it to say, measuring technical performance must be done. Technical performance is frequently where quality control processes are needed and used. Project managers must be creative in finding ways to control this very important area. AACSB: Reflective Thinking Bloom's: Understand Learning Objective: Indexes to Monitor Progress Level: Medium 51. The final step in the project control process for measuring and evaluating project performance is to take appropriate ________. action Feedback: The final step in the project control process for measuring and evaluating project performance is to take appropriate action. If deviations from plans are significant, corrective action will be needed to bring the project back in line with the original or revised plan. AACSB: Reflective Thinking Bloom's: Understand Learning Objective: The Project Control Process Level: Medium True / False Questions 13-22 Chapter 13 - Progress and Performance Measurement and Evaluation 52. In some cases, conditions or scope can change, which, in turn, will require a change in the baseline plan to recognize new information. TRUE Feedback: If deviations from plans are found and are significant, corrective action will be needed to bring the project back in line with the original revised plan. In some cases, conditions or scope can change, which, in turn, will require a change to the baseline plan to recognize the new information. AACSB: Reflective Thinking Bloom's: Understand Learning Objective: The Project Control Process Level: Medium 53. The PCIC index measures the project percent complete in relation to the resources that have actually been used so far on the project. TRUE Feedback: The PCIC index assumes the actual costs-to-date and expected cost at completion are the most reliable for measuring project percent complete. These indexes compare the todate progress to the end of the project. The PCIC index views percent complete in terms of actual dollars spent to accomplish the work to date and the actual expected dollars for the completed project (EAC). AACSB: Reflective Thinking Bloom's: Understand Learning Objective: Indexes to Monitor Progress Level: Medium 54. The only accurate method for determining the true time progress of the project is to compare the project network schedule against the actual network schedule to measure if the project is on time. TRUE Feedback: Schedule variance measures progress in dollars rather than time units. Therefore, it is unlikely that any translation of dollars to time will yield accurate information telling if any milestone or critical path is early, on-time, or late. AACSB: Reflective Thinking Bloom's: Understand Learning Objective: Development of an Earned Value Cost/Schedule System Level: Medium 13-23 Chapter 13 - Progress and Performance Measurement and Evaluation 55. Schedule variance measures progress in time units. FALSE Feedback: Schedule variance measures progress in dollars rather than time units. Therefore, it is unlikely that any translation of dollars to time will yield accurate information telling if any milestone or critical path is early, on-time, or late. AACSB: Reflective Thinking Bloom's: Understand Learning Objective: Development of an Earned Value Cost/Schedule System Level: Medium 56. Earned value is defined as the budgeted cost of the actual work performed. TRUE Feedback: Earned value (EV) is defined as the budgeted cost of the work performed. Earned value is the percentage complete times the budgeted cost of an activity or activities. AACSB: Reflective Thinking Bloom's: Understand Learning Objective: The Project Control Process Level: Medium 57. The baseline is derived from merging information from the work packages with the project network. TRUE Feedback: The baseline is derived from the cost and duration information found in the work breakdown structure (WBS) database and time-sequence data from the network and resource scheduling decisions. AACSB: Reflective Thinking Bloom's: Understand Learning Objective: The Project Control Process Level: Medium 13-24