Project Management

The Midterm Exam 200 Marks

MGT.354 Winter 2013
The Business School
Student Name: ______________________________
Student ID No.: _____________________________
Duration: 120 Minutes
Information and Instructions:
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Write your name and Humber ID exam booklet as well as the Scantron form.
o True or False Questions are to be marked as A or B on the form.
o You are required to answer your questions on the exam booklet.
o You will be given Enough Time to copy your answers of questions 2 and 3 to the
Scantron form.
Question No.

Marks

Q.1 [40 Marks ]

Q.2 [40 Marks ]

Q.3 [40 Marks ]

Q.4 [ 20 Marks ]

Q.5 [ 20 Marks ]

Q.6 [ 20 Marks ]

Q.7 [ 20 Marks ]

Total Mark:

Project Management MGT-354

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The Business School

Q.1

Define each of the following Terms ......... 40 Marks

1. Project::___________________________________________________________
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2. Net Present Value::_____________________________________________________
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3. Payback Method::________________________________________________________
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4. Implementation Gap::___________________________________________________
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5. Project Portfolio::_______________________________________________________
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6. Balanced Matrix::_______________________________________________________
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7. :Project Office:__________________________________________________________
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8. :Slack:___________________________________________________________
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9. Project Charter::_________________________________________________________
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10. :Scope Statement:________________________________________________________

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11. Work Package::_________________________________________________________

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12. Work Breakdown Structure::_____________________________________________

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13. :Priority Matrix:_______________________________________________________

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14. Activity:__________________________________________________________
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15. Delphi Method::________________________________________________________

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16. Learning Curves::_______________________________________________________
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17. Padding Estimates:_______________________________________________________

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18. Critical Path::________________________________________________________
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19. :Risk:_______________________________________________
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20. Transferring Risk:____________________________________________
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Q.2 Mark each of the following statement as ( ) if it is true or ( X ) if it is false:40 Marks

[.On the form, mark your answers as either A or B]
1

The problem in many organizations is not with formulating strategies but with
implementing the strategies.

10
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. If a proposed project does not meet one of the designated "must" objectives it is
immediately removed from consideration.
Many organizations find they have three different kinds of projects in their
portfolio, compliance, operational, and marketing.
The first step in the Strategic Management Process is to review and define the
organizational mission.
Project estimates should be broken down into as much detail than and with as
much accuracy as possible.
Reviewing and revising the organization's mission is best achieve through the use
of a SWOT analysis
The ideal approach to estimating project time and costs is to use both the topdown and the bottom-up approach.
The NPV financial model measures the time it will take to recover the project
investment
Since a construction company builds many buildings the projects after the first
building do not fit the definition of a project.
The apportion method is a top-down approach that uses the pooled experience of
senior and/or middle managers to estimate the total project duration and cost.
An activity includes only one work package.

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The first stage in the Project Life Cycle is the Concept stage.

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The two approaches used to develop project networks are AOA and AON

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Lags can be used to constrain the start and finish of an activity

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A common rule of thumb in the world of high-tech product development is that a

six-month project delay can result in a 33 percent loss in product revenue share.
Generally, people working on several projects at the same time are more efficient
than having several people working part-time on the same projects
One of the defining characteristics of project management is that the projects are
not confined to a single department but involve several departments and
professionals
Because of its flexibility, project management is equally useful in ongoing,
routine work as well as unique, one-time projects.
Statements of project scope are sometimes referred to as Work Breakdown
Structure (WBS).
In general, work packages should not exceed 10 work days.

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Q.3 Select a, b, c, or d for each correct answer..40 Marks

21. The highest element in the hierarchical breakdown of the WBS is
A. A work package
B. Sub deliverables
C. A cost account
D. Major deliverables
E. The project
22. The highest element in the hierarchical breakdown of the WBS is
A. A work package
B. Sub deliverables
C. A cost account
D. Major deliverables
E. The project
23. Statements of project scope are sometimes referred to as Statements of Work or Project
Charters. Which of the following represents an activity on an AOA project network?
A. An arrow
B. A line
C. A node
D. Both A and B are correct
E. A, B, and C are all correct
24. The laying pipe example in the text illustrates the concept of
A. Laddering
B. Hammock activities
C. Critical path
D. Concurrent engineering
E. Forward pass
25. The forward pass in project network calculations determines the
A. Earliest time's activities can begin
B. Earliest time's activities can be finished
C. Duration of the project
D. Both A and B are correct
E. A, B, and C are all correct

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26. ________ activities must be completed immediately before a particular activity.

A. Merge
B. Burst
C. Predecessor
D. Successor
E. Critical
27. Which of the following is not one of the basic rules to follow when developing project
networks?
A. An activity cannot begin until all preceding activities have been completed
B. Each activity must have a unique identification number
C. Conditional statements are allowed but looping statements are not allowed
D. An activity identification number must be larger that that of any preceding activities
E. Networks flow from left to right
28. A/an _________ activity has more than one dependency arrow flowing from it.
A. Parallel
B. Critical path
C. Burst
D. Merge
E. Independent
29. An activity that has more than one dependency arrow flowing into it is termed a(n)
A. Parallel activity
B. Critical path
C. Burst activity
D. Merge activity
E. Independent activity
30. Information to develop a project network is collected from the
A. Organization breakdown structure
B. Work breakdown structure
C. Budget
D. Project proposal
E. Responsibility matrix

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31. Which of the following would be the best method for projects where the final product is
not known and the uncertainty is very large?
A. Function point
B. Template
C. Learning curve
D. Phase estimating
E. Apportion
32. Learning curves are more likely to apply in situations where most of the costs are
A. Materials
B. Labor
C. Overhead
D. Evenly spread over materials, labor, and overhead
E. All of these are equally likely situations for learning curves
33. Laura is forecasting the time and cost of developing an intranet for a new customer. Her
department has completed six such intranets for customers during the last two years.
Although the proposed system is about the same size as the others she estimates that it
will take about 10 percent less time and money. Which of the following methods is she
using?
A. Ratio
B. Template
C. Apportion
D. Function point
E. Learning curve
34. Jose is forecasting project time and cost for constructing a new building by multiplying
the total square footage by a given dollar amount. Which of the following methods is he
using?
A. Ratio
B. Template
C. Apportion
D. Function point
E. Learning curve

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35. Which of the following methods is not considered a top-down approach to estimating
project time and cost?
A. Ratio
B. Template
C. Apportion
D. Function point
E. Learning curve
36. ______ estimates are most likely to use low cost, efficient methods.
A. Apportion
B. Ratio
C. Top-down
D. Bottom-up
E. All of these are equally likely
37. Which of the following is a good condition for top-down estimating?
A. Cost and time important
B. Fixed price contract
C. Customer wants details
D. Internal, small project
E. All of these are good conditions for top-down estimating
38. Which of the following is a good condition for top-down estimating?
A. Cost and time important
B. Fixed price contract
C. Customer wants details
D. Internal, small project
E. All of these are good conditions for top-down estimating
39. Janet is forecasting how much money her department needs to support a new project. She
estimates that two people and $25,000 in expenses will cover her needs. Because
management typically insists on reducing forecasts by 20 percent, she increases her
estimates to allow for that reduction. Which of the following factors is illustrated in this
situation?
A. Padding estimates
B. Planning horizon
C. Project structure
D. People
E. Organization culture

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40. In which of the following stages is it determined what the project will entail, when it will
be scheduled, whom it will benefit, and what the budget will be?
A. Conceptualizing
B. Defining
C. Planning
D. Executing
E. Delivering

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Q.4 Payback Period

20 Marks

XYZ Company want to determine which of two project alternatives is the more attractive
investment opportunity by using a payback period approach. XYZ have calculated the initial
investment cost of the two projects and the expected revenues they should generate for them is
shown below. Which project should they invest in?

Year 0
Year 1
Year 2
Year 3
Year 4
Year 5

Initial Outlay and Projected Revenues for the two projects

Project A
Project B
Revenues
Outlays
Revenues
500,000
50,000
75,000
150,000
100,000
350,000
150,000
600,000
150,000
500,000
900,0000

Outlays
500,000

- Bonus (4 marks): what is the Rate of Return of both projects?

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Q.5 Learning Curve

20 Marks

In an IT project, there is a database tuning activity by a DBA. According to the schedule, this
activity needs to be repeated five times during the project period. The activity is estimated to be
performed for the first time in 150 hours by the DBA. The learning rate is estimated to be 80%.
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What is the estimated performance times for the 2nd, 3rd, 4th, and 5th times?
Using the Learning Curve Cumulative Values, what is the cumulative hours required to
repeat the task 5 times.

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Q.6a For the sequence of activities listed below of Project-XYZ, create a complete project
network diagram and determine critical path:
15 Marks
Activity
A
B
C
D
E
F
G
H

Description
Scope Documentation
Project Planning
Buy Materials
Prototype Design
Prototype Analysis
Prototype Implementation
Testing of Prototype
Presenting Prototype to Customer

Preceding Activity
A
B
C
C
D, E
F
G

Q.6b What is the difference between free slack and total slack?

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Duration (Weeks)
2
3
8
3
6
5
4
2

5 Marks

The Business School

Q.7a What are the major differences between managing negative risks versus positive risks
(opportunities)?
(10 Marks)

Q.7b Explain the difference between budget reserves and management reserves. (10 Marks)

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