Chapter 05 Estimating Project Times and Costs Fill in the Blank

Fill in the Blank Questions 35. When work package estimates are made by individuals most knowledgeable about the work being performed and these estimates are then “rolled up” to find estimated costs for major deliverables and the project itself, ____________ estimating is being used. bottom-up Feedback: The bottom-up approach at the work package level can serve as a check on cost elements in the WBS by rolling up the work packages and associated cost accounts to major deliverables. AACSB: Reflective Thinking Bloom's: Understand Learning Objective: Top-Down versus Bottom-Up Estimating Level: Easy 36. When someone uses experience and/or information from others to determine the project duration and total cost, ____________ estimating is being used. top-down Feedback: Top-down estimates are usually done by senior management. Management will often derive estimates from analogy, group consensus, or mathematical relationships. AACSB: Reflective Thinking Bloom's: Understand Learning Objective: Top-Down versus Bottom-Up Estimating Level: Easy 37. The estimating factor that considers the decreasing accuracy of estimates as one forecasts activities that are further into the future is known as ____________. planning horizon Feedback: The quality of the estimate depends on the planning horizon; estimates of current events are close to 100 percent accurate but are reduced for more distant events. The accuracy of time and cost estimates should improve as you move from the conceptual phase to the point where individual work packages are defined. AACSB: Reflective Thinking Bloom's: Understand Learning Objective: Factors Influencing the Quality of Estimates Level: Medium 38. The estimating factor that considers the skill level of participants doing the estimating is known as the ___________ factor. people Feedback: The people factor can introduce errors in estimating times and cost. For example, accuracy of estimates depends on the skills of the people making the estimates. A close match of people skills to the task will influence productivity and learning time. AACSB: Reflective Learning Bloom's: Understand Learning Objective: Factors Influencing the Quality of Estimates Level: Medium 39. The estimating factor that considers the tendency to overestimate project time and cost in order to improve the likelihood of meeting the estimates is known as the ___________ factor. padding estimates Feedback: In work situations where we are asked for time and cost estimates, most of us are inclined to add a little padding to increase the probability and reduce the risk of being late. If everyone at all levels of the project adds a little padding to reduce risk, the project duration and cost are seriously overstated. AACSB: Reflective Thinking Bloom's: Understand Learning Objective: Factors Influencing the Quality of Estimates Level: Medium 40. The estimating factor that considers the prevailing belief in some firms that detailed estimating takes too much time and is not worth the effort is an example of the ___________ factor. organization culture Feedback: Organizations vary in the importance they attach to estimates. The prevailing belief in some organizations is that detailed estimating takes too much time and is not worth the effort or that it's impossible to predict the future. Other organizations subscribe to the belief that accurate estimates are the bedrock of effective project management. Organization culture shapes every dimension of project management; estimating is not immune to this influence. AACSB: Reflective Thinking Bloom's: Understand Learning Objective: Factors Influencing the Quality of Estimates Level: Medium 41. The preferred method for situations involving strategic decision making, projects with a high degree of uncertainty, and projects with an unstable scope is the ___________ approach to estimating project time and costs. top-down Feedback: Good conditions for top-down estimating are when there is high uncertainty involved in the project, when the project is small and internal, when the scope is unstable and when it involves strategic decision making. AACSB: Reflective Thinking Bloom's: Understand Learning Objective: Top-Down versus Bottom-Up Estimating Level: Medium 42. The preferred method for situations where the cost and time estimates are important, in a fixed contract situation, and when the customer wants a lot of detail is the ___________ approach to estimating project time and costs. bottom-up Feedback: Good conditions for bottom-up estimating are when cost and time are important to the project, when there is a fixed-price contract and when the customer wants details. AACSB: Reflective Thinking Bloom's: Understand Learning Objective: Top-Down versus Bottom-Up Estimating Level: Medium 43. The information necessary to conduct a bottom-up estimate of project time and costs starts with the ___________. work package Feedback: If possible and practical, you want to push the estimating process down to the work package level for bottom-up estimates that establish low-cost, efÏcient methods. This process can take place after the project has been defined in detail. Good sense suggests project estimates should come from the people most knowledgeable about the estimate needed. AACSB: Reflective Thinking Bloom's: Understand Learning Objective: Top-Down versus Bottom-Up Estimating Level: Medium 44. Jose is forecasting project time and cost for constructing a new building by multiplying the total square footage by a given dollar amount. He is using the ___________ method of top-down estimating. ratio Feedback: Top-down methods (sometimes called parametric) usually use ratios, or surrogates, to estimate project times or costs. Top-down approaches are often used in the concept or "need" phase of a project to get an initial duration and cost estimate for the project. For example, contractors frequently use the number of square feet to estimate the cost and time to build a new house. AACSB: Reflective Thinking Bloom's: Understand Learning Objective: Methods for Estimating Project Times and Costs Level: Medium 45. Rose is working on estimates for a project that is very similar to a previous project, in that it has many of the same features and those features have similar costs. Each feature or deliverable will represent the same percentage of the total cost as it did for the previous project. Rose is using the _________ method of top-down estimating. apportion Feedback: This method is an extension to the ratio method. Apportionment is used when projects closely follow past projects in features and costs. Given good historical data, estimates can be made quickly with little effort and reasonable accuracy. This method is very common in projects that are relatively standard but have some small variation or customization. AACSB: Reflective Thinking Bloom's: Understand Learning Objective: Methods for Estimating Project Times and Costs Level: Medium 46. The top-down method for estimating project time and cost that uses weighted variables based on major parameters and is frequently used in the development of software is known as the ____________ method. function point Feedback: In the software industry, software development projects are frequently estimated using weighted macro variables called "function points" or major parameters such as number of inputs, number of outputs, number of inquiries, number of data files, and number of interfaces. AACSB: Reflective Thinking Bloom's: Understand Learning Objective: Methods for Estimating Project Times and Costs Level: Medium 47. The top-down method of estimating project time and costs that is useful for projects requiring the same task, group of tasks, or product repeated several times, especially if it is labor intensive, is the ______________. learning curve Feedback: This is a phenomenon of tasks that are labor intensive. In these circumstances the pattern of improvement phenomenon can be used to predict the reduction in time to perform the task. From empirical evidence across all industries, the pattern of this improvement has been quantified in the learning curve (also known as improvement curve, experience curve, and industrial progress curve). AACSB: Reflective Thinking Bloom's: Understand Learning Objective: Methods for Estimating Project Times and Costs Level: Medium 48. The bottom-up method of estimating where work package time and costs for past projects are used as a starting point for a new project and adjustments are made based on differences in the new project is known as the ___________ method. template Feedback: If the project is similar to past projects, the costs from past projects can be used as a starting point for the new project. Differences in the new project can be noted and past times and costs adjusted to reflect these differences. AACSB: Reflective Thinking Bloom's: Understand Learning Objective: Methods for Estimating Project Times and Costs Level: Medium 49. The top-down method of estimating when the pooled experience of senior and/or middle managers are used to estimate the total project duration and cost is the _________ method. consensus Feedback: The consensus method simply uses the pooled experience of senior and/or middle managers to estimate the total project duration and cost. This typically involves a meeting where experts discuss, argue, and ultimately reach a decision as to their best guess or estimate. AACSB: Reflective Thinking Bloom's: Understand Learning Objective: Methods for Estimating Project Times and Costs Level: Medium 50. The approach to estimating project time and cost that begins with an overall estimate for the project and then refines estimates for various stages of the project as it is implemented is known as ____________. phase estimating Feedback: This approach begins with a top-down estimate for the project and then refines estimates for phases of the project as it is implemented. Some projects by their nature cannot be rigorously defined because of the uncertainty of design or the final product. Phase estimating is used when an unusual amount of uncertainty surrounds a project and it is impractical to estimate times and costs for the entire project. AACSB: Reflective Thinking Bloom's: Understand Learning Objective: Methods for Estimating Project Times and Costs Level: Medium 51. The estimating approach that is best to use on projects where there is an unusual amount of uncertainty surrounding the project and when it is impractical to estimate times and costs for the entire project is known as ___________. phase estimating Feedback: Some projects by their nature cannot be rigorously defined because of the uncertainty of design or the final product. Phase estimating is used when an unusual amount of uncertainty surrounds a project and it is impractical to estimate times and costs for the entire project. AACSB: Reflective Thinking Bloom's: Understand Learning Objective: Methods for Estimating Project Times and Costs Level: Medium 52. A way to improve estimates on future projects is to collect and archive data on past project estimates and actuals. Creating a ___________ for estimating is a way to achieve this goal. database Feedback: The best way to improve estimates is to collect and archive data on past project estimates and actuals. Saving historical data provides a knowledge base for improving project time and cost estimating. AACSB: Reflective Thinking Bloom's: Understand Learning Objective: Creating a Database for Estimating Level: Easy 53. Project costs such as labor and materials are typically classified as ___________ costs. direct Feedback: Direct project costs can be clearly chargeable to specific work packages. They include labor costs, equipment costs and material costs. AACSB: Reflective Thinking Bloom's: Understand Learning Objective: Types of Costs Level: Easy 54. The salary of the project manager and temporary rental space for the project team would be classified as __________ costs. direct overhead Feedback: Direct overhead rates more closely pinpoint which resources of the organization are being used in the project. Direct project overhead costs can be tied to project deliverables or work packages. Examples include the salary of the project manager and temporary rental space for the project team. AACSB: Reflective Thinking Bloom's: Understand Learning Objective: Types of Costs Level: Medium 55. Estimates should be made based on ___________ conditions, efÏcient methods, and a normal level of resources. normal Feedback: Estimates should be based on normal conditions, efÏcient methods, and a normal level of resources. AACSB: Reflective Thinking Bloom's: Understand Learning Objective: Estimating Guidelines for Times; Costs; and Resources Level: Easy 56. Costs that are associated with time devoted to the coordination in meetings and briefings as well as time necessary to resolve disconnects between tasks are known as ____________ costs. interaction Feedback: Time, and therefore cost, devoted to managing interactions rises exponentially as the number of people and different disciplines involved increases on a project. AACSB: Reflective Thinking Bloom's: Understand Learning Objective: Refining Estimates Level: Medium 57. Costs that are not directly related to a specific project, such as advertising, accounting, and senior management salary, are classified as _____________ costs. general and administrative overhead Feedback: General and administrative costs represent organization costs that are not directly linked to a specific project. These costs are carried for the duration of the project. AACSB: Reflective Thinking Bloom's: Understand Learning Objective: Types of Costs Level: Medium