Project Management Chapter 13

Student name:__________ TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false. 1) In some cases, conditions or scope can change, which, in turn, will require a change in the baseline plan to recognize new information. ⊚ true ⊚ false 2) The PCIC index measures the project percent complete in relation to the actual resources used so far on the project. ⊚ true ⊚ false 3) 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 4) Schedule variance measures progress in time units. ⊚ true 5) Earned value is defined as the budgeted cost of the actual work performed. ⊚ true ⊚ ⊚ ⊚ false false false 6) The baseline is derived from merging information from the work packages with the project network. ⊚ true Version 1 ⊚ false 1 7) Because of their easy-to-understand visual format, tracking Gantt charts are the most favored, used, and understandable option for reporting project status. ⊚ true 8) The PV, AC and CV are all required to assess the current status of the project. ⊚ true ⊚ ⊚ false false 9) 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 ⊚ false 10) 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. ⊚ true ⊚ false 11) Most changes will not result in serious scope changes and should be absorbed as positive or negative variances. ⊚ true ⊚ false 12) A "rubber baseline" occurs when, in an effort to disguise poor performance, the baseline changes to constantly match results. Version 1 2 ⊚ true 13) Baseline costs typically include labor, equipment, materials and direct overhead cost. ⊚ true ⊚ ⊚ false false 14) 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. ⊚ true ⊚ false 15) Two major reasons for creating a baseline are to monitor and report progress and to estimate cash flow. ⊚ true ⊚ false 16) In calculating schedule variance and cost variance, a negative variance indicates a desirable condition, and a positive variance suggests problems. ⊚ true ⊚ false 17) An undesirable schedule variance always indicates that the project is running behind schedule. ⊚ true 18) Progress and performance can be measured quantitatively as well as qualitatively. Version 1 ⊚ false 3 ⊚ true 19) A CPI index of 1.11 indicates that the project has spent less money than earned. ⊚ true ⊚ ⊚ false false 20) A project manager notices that the current EV for his project is lower than both the PV and the AC. He has reason to be concerned about the underperforming project. ⊚ true 21) All scope changes that result in increased costs should be avoided. ⊚ true ⊚ ⊚ false false 22) Although it is very difficult to measure, measuring technical performance is as important as measuring schedule and cost performance. ⊚ true ⊚ false 23) Deciding what data to collect, collecting the data and analyzing it, and reporting this data are all parts of structuring a project monitoring information system. ⊚ true 24) A project manager would be glad to see a TCPI of 1.2. ⊚ true Version 1 ⊚ ⊚ false false 4 25) A positive VAC indicates that the project will be completed under budget. ⊚ true 26) A Control Chart can be used to estimate schedule trends. ⊚ true ⊚ ⊚ false false 27) For a more complex project, statistical analysis can be applied to a control chart to identify potential causes of schedule deviation. ⊚ true ⊚ false 28) If the cost of labor and materials has not been separated there is additional analysis required to determine the cause of the calculated variance. ⊚ true ⊚ false 29) The schedule variance is the best way to get an accurate assessment of schedule performance. ⊚ true ⊚ false 30) A common project practice is to ignore straight labor hours when calculating earned value. ⊚ true Version 1 ⊚ false 5 31) A scope change is always viewed negatively as it changes the delivery date of the project. ⊚ true ⊚ false MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question. 32) A project monitoring system involves all of the following EXCEPT A) determining what data to collect. B) determining how, when, and who will collect the data. C) adjusting the data. D) analysis of the data. E) reporting current progress. 33) A team leader tells the project manager that as of right now, $1.20 worth of work has been accomplished for each $1 worth of scheduled work. The team leader got this information from viewing the A) SV. B) TCPI. C) CPI. D) SPI. E) PCIB. 34) A project manager just received the following information on her project: PV = 300, EV = 300, AC = 200. In terms of cost at completion, Version 1 6 A) the project will currently finish under budget, assuming the project continues to perform in this way. B) the project will currently finish over budget, assuming the project continues to perform in this way. C) the project will currently finish on budget, assuming the project continues to perform in this way. D) the project will currently finish behind schedule, assuming the project continues to perform in this way. E) there is insufficient information to draw conclusions. 35) The first step in the project control process for measuring and evaluating project performance is to A) set a baseline plan. B) determine the project objectives. C) determine the project deliverables. D) analyze the project budget. E) review the project priority matrix. 36) The second step in the project control process for measuring and evaluating project performance is to A) review the baseline plan with top management. B) analyze inputs to control system. C) compare plan against actual. D) measure progress and performance. E) review spending with team members. 37) The third step in the project control process for measuring and evaluating project performance is to Version 1 7 A) review the baseline plan with top management. B) analyze inputs to the control system. C) compare the plan against actual performance. D) measure both progress and performance. E) review spending with team members. 38) The final step in the project control process for measuring and evaluating project performance is to A) take appropriate action. B) prepare a report to top management. C) follow up on corrective action. D) measure progress and performance. E) review spending with team members. 39) In monitoring project time (schedule) performance, actual performance should be compared to A) budgets for the current year. B) top management's targets. C) project network schedule derived from the WBS/OBS. D) progress on similar past projects. E) previous status reports. 40) A ___________ Gantt chart is a simple and effective way to depict progress on a project. A) baseline B) control C) variance D) tracking Version 1 8 E) simple 41) A tool used to monitor past project schedule performance and current performance, and to estimate future schedule trends is a simple line chart known as a A) Gantt chart. B) network diagram. C) PERT chart. D) milestone chart. E) project control chart. 42) The earned value system starts with the time-phased costs that provide the project baseline, which is called the A) planned budgeted value of work scheduled. B) planned budgeted value of work completed. C) earned value of work scheduled. D) scheduled value of work scheduled. E) scheduled value of work completed. 43) The earned value of a project is the A) project cost to date adjusted for project scope changes. B) total project cost to date. C) cost incurred minus the planned cost. D) percent of the original budget that has been earned by work that is completed. E) the planned time-phased baseline of the value of work scheduled. 44) The cost variance for a project is calculated by Version 1 9 A) EV − AC. B) AC − SV. C) PV − EV. D) CV − EV. E) EV − PV. 45) The schedule variance for a project is calculated by: A) EV − AC B) AC − SV C) PV − EV D) CV − EV E) EV − PV 46) Baseline project budgets are derived from A) the organization's overall budget. B) time-phasing the work packages. C) top management directions. D) the total direct, direct project overhead and G&A overhead costs. E) the earned value system. 47) Of the following costs, which are NOT included in baseline? A) Suppliers B) Equipment C) Labor D) Budget reserves E) Contractors Version 1 10 48) 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 A) 0/100 percent rule. B) task complete rule. C) degree complete rule. D) work complete rule. E) percent complete rule. 49) Which performance index is the most potentially misleading? A) CPI B) EV C) CV D) SV E) EAC 50) Which of the following are required to assess the current status of a project using the earned-value cost/schedule system? A) BAC, EAC, and ETC B) VAC, EAC, and BAC C) CV, SV, and BAC D) PV, EV, and AC E) TCPI, EV, and PV 51) Which of the following methods of variance analysis is the best indicator of how far off the budget a project will be at completion? Version 1 11 A) BAC B) EAC C) ETC D) VAC E) TCPI 52) Which of the following methods will measure the cost efficiency of the work accomplished to date? A) SV/CV B) EV/PV C) EV/AC D) AC/SV E) AC/CV 53) Which of the following methods will measure the scheduling efficiency of the work accomplished to date? A) SV/CV B) EV/PV C) EV/AC D) AC/SV E) AC/CV 54) A CPI or SPI value less than one indicates that the project is currently A) under cost or behind schedule. B) over cost or ahead of schedule. C) under cost or ahead of schedule. D) over cost or behind schedule. Version 1 12 E) 55) on cost or on schedule. The value that tells you the planned value of work that has actually been completed is the A) SV. B) PV. C) EV. D) AC. E) CV. 56) The indicator that tells you the amount each remaining dollar must earn for the project to stay within budget is the A) PCIC. B) VAC. C) CPI. D) SPI. E) TCPI. 57) A program financial accountant learns that a project is currently earning $1.15 for each dollar actually spent. The accountant is able to determine this by looking at the A) EV. B) BAC. C) SV. D) SPI. E) CPI. 58) A project manager notices that $5,560 worth of work that was scheduled to be completed at this time has not been accomplished. She knows this by looking at the Version 1 13 A) EV. B) TCPI. C) SV. D) PCIB. E) EAC. 59) A project manager receives the following information on his project: PV = 4,500, AC =4,000, EV = 5,000. How well is the project doing in terms of budget? A) Right on budget B) 1,000 under budget C) 1,000 over budget D) 500 under budget E) 500 over budget 60) The chief financial officer receives the following information on a project: PV = 10,000, EV = 12,000, AC = 8,000, BAC = 20,000, EAC = 13,333. 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 more than planned E) There is not enough information to draw a conclusion 61) Which of the following is NOT true regarding scope creep? Version 1 14 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. 62) A reason that the duration on a task may differ from an original duration on a tracking Gantt chart could be A) an expected delay. B) new information on the task. C) the task has been cancelled. D) a new budget cycle. E) an unexpected delay. 63) The start of a task may be moved on a tracking Gantt due to A) increase in earned value. B) lack of an updated control chart. C) a predecessor task starting late. D) Both an increase in earned value and a lack of an updated control chart. E) All of these alternatives are correct. 64) When reviewing the cost variance on a project, you compare Earned Value with A) actual cost. B) realized risks. C) planned value. D) Both actual cost and planned value. E) All of these alternatives are correct. Version 1 15 65) A Cost/Schedule graph can be interpreted using ___________ for its vertical axis and _______ for its horizontal axis. A) Earned Value; Schedule. B) Dates; Actual Cost. C) Baseline; Deadline. D) Dollar Amounts; Time. E) None of these alternatives is correct. 66) A project can have a negative schedule variance and still be ahead of schedule when A) all budget targets have been achieved. B) earned value exceeds planned value. C) progress on the critical path is faster than non-critical path tasks. D) actual cost exceeds earned value. E) None of these alternatives is correct. 67) A negative cost variance combined with a negative schedule variance is an indicator of A) actual cost exceeding earned value. B) planned value exceeding earned value. C) budget over-runs. D) behind schedule. E) All of these alternatives are correct. 68) Causes for scope creep can include Version 1 16 A) newly identified features. B) incorrect design assumptions. C) new technology. D) users want more functionality. E) All of these alternatives are correct. 69) Which of the following is not one of the four steps for measuring and evaluating project performance? A) Setting a baseline plan. B) Setting a baseline budget. C) Taking action. D) Measuring progress and performance. E) Comparing plan against actual. 70) Taking action in the four steps for measuring and evaluating project performance can only happen after _________. A) setting a baseline plan. B) setting a baseline budget. C) measuring progress and performance. D) comparing plan against actual. E) writing a progress and performance report. 71) The value that tells you how much work has been completed in dollars of value is ___________. A) earned value B) planned value C) actual cost D) budgeted cost of work scheduled Version 1 17 E) baseline plan 72) 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. A) estimated completion B) estimated cost C) percent complete D) estimation E) estimation method 73) Because of their easy-to-understand visual format, ________ charts are the most favored, used, and understandable tool used to report project schedule status. A) Network B) Work breakdown structure C) Gantt D) Burndown E) Cost/schedule 74) The indicator that tells you the planned time-phased value of the work that is scheduled is the _______________. A) planned value (PV) B) earned value (EV) C) schedule variance (SV) D) cost variance (CV) E) None of these alternatives is correct. Version 1 18 75) Baseline project budgets are derived from time-phasing the work ________. A) products B) milestones C) packages D) modules E) resources 76) The ________ variance is the difference between the earned value and the actual costs for the work completed to date. A) schedule B) cost C) budget D) time E) performance 77) The ________ variance is the difference between the earned value to date and the baseline schedule. A) schedule B) cost C) budget D) time E) performance 78) ________ is simply the percent complete times the original budget. Version 1 19 A) Actual cost B) Earned value C) Cost Performance Index D) Schedule Performance Index E) Budget at Completion 79) Conditions or scope can change during execution, which, in turn, will require a change to the __________ plan to recognize the new information. A) project B) budget C) schedule D) overall E) baseline 80) The project network schedule is derived from the _______ and it serves as the baseline to compare against actual performance. A) Risk Breakdown Structure B) Work Breakdown Structure C) Gantt Chart D) Organization Breakdown Structure E) Risk Register 81) A negative CV indicates the project is currently ________ budget. A) over B) under C) on track with D) ahead of Version 1 20 E) behind 82) 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. A) one-to-ten B) one-to-one C) 50/100 D) 0/100 E) 50/50 83) The ratio that measures the amount of value each remaining dollar in the budget must earn to stay within the budget is the _________. A) CPI B) SPI C) TCPI D) EAC E) PCIB 84) The _________ index measures the project percent complete in relation to the resources that were budgeted. A) CPI B) SPI C) TCPI D) EAC E) PCIB Version 1 21 85) Given that the AC = 500, PV = 400 and EV = 300, this project is currently _________ budget and ______ schedule. A) under, ahead of B) under, behind C) over, behind D) over, ahead of E) on, on 86) Given an EAC of $10,000 and a BAC of $15,000, the project is expected to be completed _________. A) over budget B) under budget C) over budget but ahead of schedule D) under budget but behind schedule E) on budget 87) A CPI index of 1.18 indicates that the project is currently ________ schedule. A) ahead of B) behind C) over D) under E) cannot be determined. 88) Although it is very difficult to measure, measuring ________ performance is as important as measuring schedule and cost performance. Version 1 22 A) procurement B) technical C) stakeholder D) human resources E) risk 89) Which of the following is not a benefit of Earned Value Management? A) Measures accomplishments against plan and deliverables. B) Provides a method for tracking directly to a problem work package and organization unit responsible. C) Enables the project manager to ascertain problem paths within the project network and when the critical path is underperforming. D) Alerts all stakeholders to early identification of problems and allows for quick, proactive corrective action. E) Provides for accountability over individual portions of the overall budget for each organization unit. SHORT ANSWER. Write the word or phrase that best completes each statement or answers the question. 90) Identify the steps in creating a control process that measures and evaluates project performance. 91) What is the difference between a baseline Gantt chart and a tracking Gantt chart? Version 1 23 92) A project manager learns that his project has an EV of 1,500, AC of 1,100 and PV of 1,400. What can the project manager report regarding this project? 93) Conducting an earned value analysis requires three data elements. Identify the acronyms for each and describe what they are. 94) In reviewing the budget report of a project, you notice that spending on the project is running about 10 percent over plan. Is the project in trouble? Support your answer. 95) Schedule variance (SV) is in dollars and does not directly represent time. Why is it still useful? 96) All projects need some form of formal control. Agree or disagree? Support you answer. Version 1 24 97) Identify and describe two methods for tracking and trending schedule performance. 98) 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. 99) What is scope creep and how does it impact project control? 100) What is a "rubber baseline" and how does it undermine project control? Version 1 25 101) What is the percent complete rule and what role does it play when developing an earned value cost/schedule system? Version 1 26 Answer Key Test name: Chapter 13 Test Bank 1) TRUE 2) TRUE 3) TRUE 4) FALSE 5) TRUE 6) TRUE 7) TRUE 8) FALSE 9) TRUE 10) FALSE 11) TRUE 12) TRUE 13) FALSE 14) FALSE 15) TRUE 16) FALSE 17) FALSE Version 1 27 18) TRUE 19) TRUE 20) TRUE 21) FALSE 22) TRUE 23) TRUE 24) FALSE 25) TRUE 26) TRUE 27) TRUE 28) TRUE 29) FALSE 30) FALSE 31) FALSE 32) C 33) D 34) A 35) A 36) D 37) C 38) A Version 1 28 39) C 40) D 41) E 42) A 43) D 44) A 45) E 46) B 47) D 48) E 49) D 50) D 51) D 52) C 53) B 54) D 55) C 56) E 57) E 58) C 59) B Version 1 29 60) A 61) A 62) B 63) C 64) A 65) D 66) C 67) E 68) E 69) B 70) D 71) A 72) C 73) C 74) A 75) C 76) B 77) A 78) B 79) E 80) B Version 1 30 81) A 82) D 83) C 84) E 85) C 86) B 87) E 88) B 89) C 90) (1) Set the baseline plan; (2) Measure the progress and performance; (3) Compare plan against actual; (4) Take corrective action as indicated by the results. 91) The baseline chart is created during the project planning phase and lays out the logic and timing for major activities. The tracking Gantt chart shows progress against that plan by using various graphical techniques to display progress. 92) The project has a positive CV of $400. This indicates that $400 less was spent on actual work performed than what was earned. The project has a positive SV of $100. This indicates that $100 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 = 1.36 and the SPI is 1.07 93) (1) PV-budgeted cost of work scheduled; (2) EV-budgeted cost of the work performed; (3) AC-actual cost of the work performed. Version 1 31 94) 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. 95) 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. 96) 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. 97) 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. 98) 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. 99) 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. Version 1 32 100) 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. 101) 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. Version 1 33