Chapter 13 Progress and Performance Measurement and Evaluation Answer Key Part 3

Chapter 13 - Progress and Performance Measurement and Evaluation 58. Because of their easy-to-understand visual format, tracking Gantt charts are the most favored, used, and understandable option for reporting project status. TRUE Feedback: The Gantt chart is the most favored, used, and understandable. This kind of chart is commonly referred to as a tracking Gantt chart. 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: Medium 59. The PV, AC and CV are all required to assess the current status of the project. FALSE Feedback: PV, EV and AC are all required to assess the current status of the project. From these values project variances and efficiency ratios can be calculated. AACSB: Reflective Thinking Bloom's: Understand Learning Objective: Development of an Earned Value Cost/Schedule System Level: Medium 60. When revising the estimated cost at completion, there are two approaches. The EACre is determined by experts in the field and the EACf is a mathematical approach which assumes the CPI as the basis for forecasting cost at completion. TRUE Feedback: The EACre and the EACf both determine the estimated cost at completion. They are simply different approaches. The EACre is determined by experts in the field and the EACf is a mathematical approach which assumes the CPI as the basis for forecasting cost at completion. AACSB: Reflective Thinking Bloom's: Understand Learning Objective: Forecasting Final Project Cost Level: Difficult 13-25 Chapter 13 - Progress and Performance Measurement and Evaluation 61. The best method for assigning costs to the baseline under the 50/50 rule is to establish frequent checkpoints over the duration of the work package and assign completion percentages in dollar terms. FALSE Feedback: The best method for assigning costs to the baseline under the percent complete 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 Aan Earned Value Cost/Schedule System Level: Medium 62. Most changes will not result in serious scope changes and should be absorbed as positive or negative variances. TRUE Feedback: Project managers should only allow scope changes only if it is clear that the project will fail without the change, the project will be improved significantly with the change, or the customer wants it and will pay for it. Most changes will not result in serious scope changes and should be absorbed as positive or negative variances. AACSB: Reflective Thinking Bloom's: Understand Learning Objective: Other Control Issues Level: Difficult 63. A “rubber baseline” occurs when, in an effort to disguise poor performance, the baseline changes to constantly match results. TRUE Feedback: Care should be taken not to use baseline changes to disguise poor performance on past or current work. A common signal of this type of baseline change is a constantly revised baseline that seems to match results. Practitioners call this a “rubber baseline” because it stretches to match results. AACSB: Reflective Thinking Bloom's: Understand Learning Objective: Other Control Issues Level: Medium 13-26 Chapter 13 - Progress and Performance Measurement and Evaluation 64. Baseline costs typically include labor, equipment, materials and direct overhead cost. FALSE Feedback: The baseline (PV) is the sum of the cost accounts, and each cost account is the sum of the work packages in the cost account. Three direct costs are typically included in baselines —labor, equipment, and materials. AACSB: Reflective Thinking Bloom's: Understand Learning Objective: Development of an Earned Value Cost/Schedule System Level: Medium 65. A project control system allows for comparing actual performance against plan to identify deviations; however, the system doesn’t impact the quality of communication between stakeholders. FALSE Feedback: A project control system allows for accurate information regarding the current status of a project to be communicated to stakeholders. AACSB: Reflective Thinking Bloom's: Understand Learning Objective: Structure of a Project Monitoring Information System Level: Easy 66. Two major reasons for creating a baseline are to monitor and report progress and to estimate cash flow. TRUE Feedback: The major reasons for creating a baseline are to monitor and report progress and to estimate cash flow. Therefore, it is crucial to integrate the baseline with the performance measurement system. AACSB: Reflective Thinking Bloom's: Understand Learning Objective: Development of aAn Earned Value Cost/Schedule System Level: Medium 13-27 Chapter 13 - Progress and Performance Measurement and Evaluation 67. In calculating schedule variance and cost variance, a negative variance indicates a desirable condition, and a positive variance suggests problems. FALSE Feedback: A positive variance indicates a desirable condition, while a negative variance suggests problems or changes that have taken place. AACSB: Reflective Thinking Bloom's: Understand Learning Objective: Development of an Earned Value Cost/Schedule System Level: Medium 68. An undesirable schedule variance always indicates that the project is running behind schedule. FALSE Feedback: A negative schedule variance suggests problems or changes that have taken place. 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 aAn Earned Value Cost/Schedule System Level: Difficult 69. Progress and performance can be measured quantitatively as well as qualitatively. TRUE Feedback: Time and budgets are quantitative measures of performance that readily fit into the integrated information system. Qualitative measures such as meeting customer technical specifications and product function are most frequently determined by on-site inspection or actual use. AACSB: Reflective Thinking Bloom's: Understand Learning Objective: The Project Control Process Level: Medium 13-28 Chapter 13 - Progress and Performance Measurement and Evaluation 70. A CPI index of 0.97 indicates that the project has spent less money than budgeted. FALSE Feedback: A CPI index of 0.97 indicates that you are only earning $.97 of planned work for each dollar spent. AACSB: Reflective Thinking Bloom's: Understand Learning Objective: Indexes to Monitor Progress Level: Medium 71. Rachel notices that the current EV for her project is higher than both the PV and the AC. Rachel has reason to be concerned. FALSE Feedback: When the EV is higher than the PV and the AC, this results in positive cost and schedule variances. This indicates that the project is progressing well in terms of cost. Rachel should check heryou tracking Gantt chart to make sure critical activities are progressing well. AACSB: Reflective Thinking Bloom's: Apply Learning Objective: Development of an Earned Value Cost/Schedule System Level: Medium 72. All scope changes that result in increased costs should be avoided. FALSE Feedback: Although scope changes are usually viewed negatively, there are situations when scope changes result in positive rewards. Scope changes can represent significant opportunities. In product development environments, adding a small feature to a product can result in a huge competitive advantage. A small change in the production process may get the product to market one month early or reduce product cost. AACSB: Reflective Thinking Bloom's: Understand Learning Objective: Other Control Issues Level: Medium 13-29 Chapter 13 - Progress and Performance Measurement and Evaluation 73. Although it is very difficult to measure, measuring technical performance is as important as measuring schedule and cost performance. TRUE 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 74. Deciding what data to collect, actually collecting the data and analyzing it, and reporting this data are all parts of structuring a project monitoring information system. TRUE Feedback: The project monitoring system involves determining what data to collect; how, when, and who will collect the data; analysis of the data and reporting current progress. AACSB: Reflective Thinking Bloom's: Understand Learning Objective: Structure of a Project Monitoring Information System Level: Easy 75. A project manager would be glad to see a TCPI of 1.07. FALSE Feedback: A TCPI of 1.07 would indicate that each remaining $1 in the budget must earn $1.07 for the project to stay within budget. There is more work than there is budget left. AACSB: Reflective Thinking Bloom's: Apply Learning Objective: Indexes to Monitor Progress Level: Medium 13-30 Chapter 13 - Progress and Performance Measurement and Evaluation 76. A negative VAC indicates that the project will be completed over budget. TRUE Feedback: A positive VAC indicates that the project will be completed under budget and a negative VAC indicates that the project will be completed over budget. It is calculated by subtracting the EAC from the BAC. AACSB: Reflective Thinking Bloom's: Understand Learning Objective: Development of an Earned Value Cost/Schedule System Level: Easy Short Answer Questions 77. Identify the steps in creating a control process that measures and evaluates project performance. Feedback: 1. Set the baseline plan; 2. Measure the progress and performance; 3. Compare plan against actual; 4. Take action as indicated by the results. AACSB: Reflective Thinking Bloom's: Remember Learning Objective: The Project Control Process Level: Medium 78. What is the difference between a baseline Gantt chart and a tTracking Gantt chart? Feedback: The baseline chart is created during the project planning phase and lays out the logic and timing for major activities. The tracking chart shows progress against that plan by using various graphical techniques to display progress. AACSB: Analytic Bloom's: Analyze Learning Objective: Monitoring Time Performance Level: Medium 13-31 Chapter 13 - Progress and Performance Measurement and Evaluation 79. A project manager learns that hetheir project has an EV of 1200, AC of 1100 and a PV of 1000. What can the project manager report regarding this project? Feedback: The project has a position CV of $100. This indicatesd that $100 less was spent on actual work performed than what was planned. The project has a positive SV of $200. This indicates that $200 worth of work has been completed that wasn’t planned at this time. In order to be sure that this work includes critical activities, the project manager must look at the tracking Gantt chart. Efficiency indexes can also be reported and interpreted. CPI = 1.09 and the SPI is 1.2. AACSB: Analytic Bloom's: Apply Learning Objective: Development of an Earned Value Cost/Schedule System Level: Medium 80. Conducting an earned value analysis requires three data elements. Identify the acronyms for each and describe what they are. Feedback: 1. PV; budgeted cost of work scheduled. 2. EV; budgeted cost of the work performed. 3. AC; actual cost of the work performed. AACSB: Analytic Bloom's: Knowledge Learning Objective: Development of An Earned Value Cost/Schedule System Level: Medium 81. In reviewing the budget report of a project, you notice that spending on the project is running about 10ten percent over plan. Is the project in trouble? Why or why not? Feedback: You don't know for sure. The project may be in trouble, however the cost overrun could be due to the project being ahead of schedule. You would need to have an earned value analysis run before you could tell. AACSB: Analytic Bloom's: Analyze Learning Objective: Development of An Earned Value Cost/Schedule System Level: Medium 13-32 Chapter 13 - Progress and Performance Measurement and Evaluation 82. Schedule variance (SV) is in dollars and does not directly represent time. Why is it still useful? Feedback: Schedule variance presents an overall assessment of all work packages in the project scheduled to date. Although it doesn’t directly represent time, it is still very useful in assessing the direction all the work in the project is taking after 20 %percent of the project has been completed. AACSB: Analytic Bloom's: Analyze Learning Objective: Development of an Earned Value Cost/Schedule System Level: Difficult 83. All projects need some form of formal control. Agree or dDisagree? Support you answer. Feedback: Control by “wandering around” and/or “involvement” can overcome most problems in small projects. But large projects need some form of formal control. Control holds people accountable, prevents small problems from mushrooming into large problems, and keeps focus. AACSB: Analytic Bloom's: Analyze Learning Objective: The Project Control Process Level: Medium 84. Identify and describe two methods for tracking and trending schedule performance. Feedback: 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. Tracking Gantt charts and control charts are two ways to do this. AACSB: Reflective Thinking Bloom's: Understand Learning Objective: The Project Control Process Level: Medium 13-33 Chapter 13 - Progress and Performance Measurement and Evaluation 85. Two project complete indexes are used, depending on your judgment of which one is most representative of your project. Identify both indexes and explain when it is most appropriate to use each. Feedback: The PCIB assumes the original budget of work complete is the most reliable information to measure project percent complete. The PCIC assumes the actual costs-to-date and expected cost at completion are the most reliable for measuring project percent complete. AACSB: Reflective Thinking Bloom's: Understand Learning Objective: Indexes to Monitor Progress Level: Medium 86. What is scope creep and how does it impact project control? Scope creep is small refinements that eventually build into a major change in the scope of the project. A project manager should be concerned in that the project was put together and the resources assembled to achieve specific objectives and while the motives can be well intended the result is that sacrifices may be required to the other two key areas of schedule and/or costs. AACSB: Analytic Bloom's: Analyze Learning Objective: Other Control Issues Level: Medium 87. What is a “rubber baseline” and how does it undermine project control? Feedback: A rubber baseline is when the baseline is constantly revised to match results in attempt to disguise poor performance. This undermines project control by not having accurate performance measures to control variances. Problems will continue to mushroom, no one is accountable, and there is no way to use these measures to help plan and implement future projects. AACSB: Analytic Bloom's: Analyze Learning Objective: Other Control Issues Level: Medium 13-34 Chapter 13 - Progress and Performance Measurement and Evaluation 88. What is the percent complete rule and what role does it play when developing an earned value cost/schedule system? Feedback: The percent complete rule is used when someone familiar with each task estimates what percent of the task has been completed or how much of the task remains. 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. Once percent complete has been established, earned value can be determined. AACSB: Analytic Bloom's: Analyze Learning Objective: Development of an Earned Value Cost/Schedule System Level: Difficult 13-35