COST MANAGEMENT

1) As per PM Study, Payback period do not consider the discount rates

2) Opportunity cost is the cost of passing up the next best option.
So, the opportunity cost of choosing A (over project B, which is the next
best option) = profit given up if Option B is chosen = profit of Option B = $
300,000
3) Life cycle costs are not responsibility of a project as they include costs that are
beyond scope of the project. However they include both direct and indirect costs,
periodic or continuing costs of operation and maintenance. In project selection
criteria, even if a project has lower NPV we can go for it if it has lower Life cycle
costs
4) Parametric modeling is good if it is scalable, parameters are quantifiable,
historical information is more accurate
5) When he is clearly saying to base on NPV, go with it even if PI or other criteria
are more favorable to other project / even when NPV is same and other project is
preferable.
6) Opportunity Cost is NEVER A PROJECT SELECTION CRITERIA
7) Life cycle costing together with Value Engineering helps to reduce cost
and time, improve quality and performance and optimize decision-making.
8) Many projects, especially larger ones may have multiple cost baselines to
measure different aspects of the cost performance
9) Benefit Cost Ratio = Benefits (Or Payback Or Revenues) / Costs
10) Benefits are not Profits, instead, they = Payback or Revenues
11) Positive Schedule Variance means project is ahead of schedule; Negative
Cost Variance means the project is over-budget
12) Budget updates are a special category of revised cost estimates - they are
changes to an approved cost baseline. These numbers are generally
revised only in response to scope changes. If there is a change to the
approved cost baseline, the project manager must issue a Budget
Update
13) Physical Work Actually accomplished is also called EV
14) CPI = EV/AC = BAC / EAC
15) If a problem contains only SUNK and OPPORTUNITY COST informations, just
say you can’t select any project  Both are irrelevant to decision making
16) While Calculating Benefit Cost Ratio, if he gives Profit, Life Cycle Cost, Project
cost and Payback, apply the ratio of Payback / Project Cost  Note that Life Cost
and Profits are not at all concerned. The denominator shall be REVENUE =
PAYBACK = BENEFITS
17) For Opportunity Cost Go with the full cost of the alternative not the difference.
Remember in Economics, Opportunity Cost of Economics Book is Cinema Cost.
18) Actual cost of a previous small project is used for creating estimates for
Analogous Modeling  TRUE (small project term is also okay here!)
19) Analogous estimating is generally less costly than the other techniques,
but it is also generally less accurate. Analogous Estimating is also called
"Top-down" Estimating

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20) Resource Requirements is an output from Resource planning not INPUT
 Look at from this angle also.
21) Cost Estimating: Cost estimating involves developing an approximation
(estimate) of the costs of the resources needed to complete project
activities. In approximating cost, the estimator considers the causes of
variation of the final estimate for purposes of better managing the project
22) Your project is plagued by frequent but minor changes to the project
scope. In this case, you should  Issue a Budget Update
23)

Total Cost Management Questions = 63

QUALITY MANAGEMENT

1) You have been assigned the task of trying to determine the potential
cause for the variations as to why the Circuits are not accurate 
YOU WILL USE CONTROL CHARTS not Ishikawa Dig / Pareto /
Inspection VERSUS… Cause and Effect Diagrams, also called Ishikawa
diagrams or fishbone diagrams illustrate how various factors might be
linked to potential problems or effects (This is for PROBABLE CAUSES
OF PROBLEMS)
2) Modern Quality Management complements Project Management.... This
requires a combination of conformance to requirements (the project must
produce what it said it would produce) and fitness for use (the product or
service produced must satisfy real needs)
3) PMI believes that providing more functionality (gold plating) is not a good
practice - even if it satisfies the customer  Still it is a quality failure if you
give more than what you are supposed to give

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4) Cost of quality refers to the total cost of all efforts to achieve
product/service quality, and includes all work to ensure conformance to
requirements. There are three types of costs that are incurred: prevention
costs, appraisal costs and failure costs.
5) For the Design of Experiments  Dollars, Pounds, KGs are Measures but not
VARIABLES; Weight is a Variable that can be used.
6) The project management team must have a working knowledge of
statistical quality control, especially sampling and probability, to help it
evaluate quality control outputs.
7) You are the project manager for an automobile company. Because of
change in Government regulations, the emission norms for
automobile vehicles have been made stricter. As a project manager,
you are concerned that your project will not satisfy the required
quality standards. This could be done through  Quality Assurance

 Question: Which of the following statements about Quality Control is

not accurate? 3
1. Prevention refers to keeping errors out of the process, whereas
inspection refers to keeping errors out of hand of the customer.
2. Attribute sampling determines whether the result confirms or not,
and variables sampling determines the degree of conformity.
3. Special Causes are normal process variations, but random causes
refer to unusual events.
4. Tolerance determines if the result falls within acceptable range, but
control limits are used to determine if the process is in control.

8) Product Analysis involves developing a better understanding of the

product of the project. It includes techniques like product breakdown
analysis systems engineering, value engineering, value analysis, function
analysis and quality function deployment.  Quality function
Deployment is a tool used to Develop Better Understanding of the
product of the project
9) Just in time Manufacturing is a process that continuously stresses waste
reduction by optimizing the processes and procedures necessary to
maintain a manufacturing operation. Part of this process is JIT purchasing
or inventory where the materials needed appear just in time for use, thus
eliminating costs associated with material handling, storage, paperwork,
and even inspection. Please note that JIT stresses on having long term
relationships with suppliers, so that the company can depend on the
suppliers to provide materials Just In Time. It will also REDUCE THE
INVENTORY TO ZERO
10) The different factors in the triple constraint may have different priorities
depending on the project  There is nothing like one is most important
than other  Factors are Chpt-5.6.7.8 & Customer Satisfaction (Scope,
Schedule, Cost and Quality)

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11) Information will be gathered for optimistic (low), pessimistic (high) and most
likely scenarios if triangular distributions are used; or on mean and standard
deviation for the normal and log normal distributions (pmstudy notes: How much
a set of data is different from the curve it should make when plotted on a graph.
Or, the square root of the average of the squares of deviations about the mean of a
set of data. Standard deviation is a statistical measure of spread or variability. A
sample Normal Distribution that shows standard deviation (sigma) as
distance of the measurement from the mean value.
12) A quality audit is a structured review of other quality management
activities. The objective of a quality audit is to identify lessons learned that
can improve performance of this project or of other projects within the
performing organization.
13) The cost of quality includes quality planning, quality planning, quality
assurance and rework. Because of the costs associated with quality, it is
not necessary that the cost of the project will decrease because of better
quality. However, better quality provides
• Improved Cost Effectiveness
• Better Customer Satisfaction
• Increase in Productivity
14) 3-Sigma can go upto 99.7%, 2-Signma upto 95%, 1-Sigma upto 68%, - See
below graph

15) Quality Improvement includes taking action to increase the effectiveness

and efficiency of the project to provide added benefits to the project
stakeholders. In most cases, implementing quality improvements will
require preparation of change requests or taking corrective action, and will
be handled according to procedures for integrated change control.
16) Gold plating is a concern not a happy thing!

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17)

This has been attempted wrong!  Economic Security is a Social Need

18) Process adjustments involve immediate corrective or preventive action as
a result of quality control measurements. In some cases, the process
adjustment may need to be handled according to procedures for
integrated change control.
19) Quality Audits: A quality audit is a structured review of other quality
management activities. The objective of a quality audit is to identify
lessons learned that could improve performance of this project or of other
projects within the performing organization.
20) An operation definition describes, in very specific terms, what something
is and how it is measured by the quality control process. For example, it is
not just enough to say that meeting the planned schedule dates is a
measure of management quality; the project management team must also
indicate whether every activity must start on time or only finish on time;
whether individual activities will be measure or only certain deliverables,
and if so which ones. Operational Definitions are also called metrics in
some application areas
21) Flowcharting can be used as a tool for all three processes viz. Quality Planning,
Quality Assurance and Quality Control
22) Description of how a project management team should implement
the overall intentions and direction of an organization with regards
to quality (as expressed by top management) is available in: Quality
Management Plan  Quality Policy is "the overall intentions and direction
of an organization with regard to quality, as formally expressed by top
management"

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23) Cost of quality refers to the total cost of all efforts to achieve
product/service quality, and includes all work to ensure conformance to
requirements, as well as all work resulting from nonconformance to
requirements. There are three types of costs that are incurred: prevention
costs, appraisal costs, and failure costs.

Total Number of Questions in Quality Management = 48

SCOPE MANAGEMENET

1. Project charter includes or references the business need and product

description - Project Charter provides authority to the project manager -
Project charter formally authorizes a project. The project charter should be
issued by a manager external to the project, and at a level appropriate to
the needs of the project
2. Work Component descriptions are often collected in the WBS Dictionary.
A WBS Dictionary will typically include work package descriptions, as well
as other planning information such as schedule dates, cost budgets, and
staff assignments
3. Product Analysis involves developing a better understanding of the
product of the project. It includes techniques such as product breakdown
analysis systems engineering, value engineering, value analysis, function
analysis and quality function deployment.
4. Management by Objectives is a systems approach for aligning project
goals with organizational goals, project goals with the goals of other
subunits of the organization, and project goals with individual goals
5. As a project manager, you must formalize acceptance of the project
scope and keep the project focused on the business need that it was
undertaken to address. This should be done After each phase of the
project
6. Once the project is completed, maintenance of the product Will not be
part of the project life cycle
7. WBS enables Shared Ownership
8. If it is in the scope, it is not gold plating
9. Benefit measurement methods include comparative approaches, scoring
models, benefit contribution or economic models
10. A scope change control is any modification to the agreed upon project
scope as defined by the approved WBS. Scope changes often require
changes to the cost, time, quality or other project objectives. Project scope
changes are fed back through the planning process, technical and
planning documents are updated as needed, and stakeholders are notified
as appropriate

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11. pmstudy notes: As the project becomes more complicated, there are
several parameters in the project which can impact the scope - so the
uncertainty of the scope increases
12. Inspection(which is a Tool for Scope Verification) includes activities such
as measuring, examining and testing undertaken to determine whether
results confirm to requirements. Inspections are variously called reviews,
product reviews, audits and walk-throughs
13. A value adding change (e.g. an environmental remediation project is able
to reduce the costs by taking advantage of technology that was not
available when the scope was originally defined).
14. If the project is terminated early, the scope verification process should
establish and document the level and extent of completion.
15. For a project to be successful, what is the primary requirement? 
Customer Satisfaction
16. If there is a major change to the project, the Project Manager should try to
influence the change to minimize the impact the project. Usually the
project manager is advised to do the following:
1. Evaluate the impact of the change within the team
2. Let the customer(or person requesting the change) know about the
impacts of the change
3. If changes is required, then open a change control and get it approved
- definitely inform the management and the change control board about
the impact of the changes
4. If changes are approved by the change control board, then make the
appropriate changes in the project plan

17. Product documentation refers to the documents produced to describe the

projects products - it includes plans, drawings and specifications.
18. A Change request could be because of an error or omission in defining the
scope of the project (e.g. using a BOM instead of a WBS)
19. Decision Models include generalized techniques (Decision Trees, Forced
Choice, and others) as well as specialized ones (Analytic Hierarchy
process, Logical Framework Analysis and others).
20. Economic Models are part of Benefit Measurement methods

Question: All the following are examples of Constrained Optimization

except:  1

1. Economic Models
2. Multi Objective Programming
3. Decision Trees
4. Logical Framework Analysis

21. Benefit/cost Analysis involves estimating tangible and intangible costs

(outlays) and benefits (returns) of various project and product alternatives,

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 and then using financial measures such as return on investment or
payback period to assess relative desirability of the identified alternatives.
22. A WBS is a deliverable-oriented grouping of project components that
organizes and defines the total scope of the project; work not in the WBS
is outside the scope of the project. As with the scope statement, the WBS
is often used to confirm a common understanding of the project scope
23. The items at the lowest level of the WBS may be referred to as work
packages, especially in organizations that follow Earned Value
Management practices. These work packages may in turn be
decomposed in a subproject work break-down structure. Generally this
type of approach is used when the project manager is assigning a scope
of work to another organization, and this other organization must plan and
manage the scope of work at a more detailed level than the project
manager in the main project.
24) Project charter should include, either directly or by reference to other
document:
• Business Need that the project was undertaken to address.
• The product description
25) Question: A well-constructed Scope Statement can provide all the
following benefits EXCEPT:  4
1. Provide a documented basis for making future project decisions
2. Develop common understanding of project scope among stakeholders
3. Provide knowledge of project justification, deliverables and objectives
4. Provide a basis for time and cost estimates

26) You are the project manager for an initiative aimed at releasing a new
product in the market. But because of Government Regulation, you will have
to make some changes to the project scope. Any modifications to the contents
of the scope statement should be done through Scope Statement updates
27) Your project is very critical for the company and must be completed
within 6 months. The project charter has been signed, but Scope
Statement is not yet prepared. Management asks you to go ahead
with the project without the scope statement being approved. What
should you do? (SELECT BEST ANSWER)  Meet the Management
and mention the problems you will face without a Scope Statement
28) Please note that it is Very Important to ensure that Customer does
formal Scope Verification after each project phase or major project
deliverable. Otherwise, there is a very good possibility that the project will
not meet the customer requirements.
29) A project charter is a document that formally authorizes a project.
30) Change requests: Changes may require expanding the scope or may
allow shrinking it. Most changes are the result of:...

An error or omission in defining the scope of the product (e.g., failure to

include a required feature in the design of a telecommunications system).

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 31) Question: In your project, you use configuration management to
record and report the change and its implementation status. In this
context, you are using change control as a technique for:  2
1. Performance Measurement
2. Overall change control
3. Change Control System
4. Scope Definition

TOTAL NUMBER OF SCOPE QUESTIONS = 71

HUMAN RESOUCE MANAGEMENT

01) The five interpersonal influences are:

• Legitimate Power: The ability to gain support because project personnel

perceive the project manager as being officially empowered to issue
orders.

• Reward Power: The ability to gain support because project personnel

perceive the project manager as capable of directly or indirectly
dispensing valued organizational rewards (i.e. salary, promotion, bonus,
future work assignments

• Penalty Power: The ability to gain support because the project personnel
perceive the project manager as capable of directly or indirectly
dispensing penalties that they wish to avoid. Penalty power usually
derives from the same source as reward power, with one being a
necessary condition for the other

• Expert Power:The ability to gain support because personnel perceive the

project manager as possessing special knowledge or expertise. (that
functional personnel perceive as consider as important)
• Referent power:The ability to gain support because project personnel feel
personally attracted to the project manager or project

Referent power can be because of referring to someone higher up in the

organization hierarchy

Expert power is based on knowledge and expertise of the project manager,

not on his position in the organization AND hence max the Project
Management position might derive Legitimate, Penalty, Reward Powers

02) Reward and Recognition system  They promote or reinforce desired

behavior; Reward and recognition systems must consider cultural differences;
To be effective, they should make the link between project performance and
reward clear, explicit and achievable; Projects must often have their own

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 reward and recognition systems since the systems of the performing
organizations may not be appropriate

03) < P>

04) As a project nears completion, you notice that the functional managers are more
interested in trying to find a new position, rather than concentrating on their project work.
Their motivation is  SAFETY

05) Douglas McGregor advocated that most workers can be categorized

according to two theories:

• Theory X: This assumes that the workers are inherently lazy and require
supervision

• Theory Y: The average worker finds that physical and mental effort on the
job satisfying, and likes his work.

06) Expertise of the project manager is the most important factor in getting
support from the project personnel; least important factor is ability to penalize

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07)

08) As a project manager, you advocate active participation of your team

members - this is because you believe in  Theory Y (McGregor Model) [Not
Referent power]

09) All the following roles can exist in a Roles and Responsibility Matrix 
PARIS – Participant, Accountable, Review Required, Input Required, Sign
Off Required

10) An Organizational breakdown structure(OBS) is a specific type of

organization chart that shows which organizational units are responsible for
which work packages.

11) You have been given a high priority task that needs to be completed
within a short time frame. Since you know what has to be done, you
instruct you assign tasks to the different team members and tell them when
and how the tasks should e done. The management style that you are
following is  Directing

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< P>

12)

13) Direct and indirect costs for training are generally paid by the performing orga

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14)

15) You are the blue eyed boy of your Vice Chairman, who appreciates the
way in which you handle projects. This helps you in managing
interpersonal relationships with your team-members because you have the
following power  LEGITIMATE

16)

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17) You are the project manager for a complicated construction project
which involves building highways in the whole state of North Carolina. You
have several groups working with you in the project. To plan resources for
this project, you should use  Responsibility Assignment Matrix

18) The most preferred Conflict Resolution Techniques by project managers(in

descending order of importance) are as follows:

1. Confrontation
2. Compromise
3. Smoothing
4. Forcing
5. Withdrawal

19) As a project manager, you are involved in launching a new software

product across several markets around the world and interacting with
different units in your company. This requires a thorough knowledge of 
Organizational Interfaces

20) Question: Organizational Planning involves identifying, documenting,

and assigning project roles, responsibilities and reporting relationships.
Roles, responsibilities and reporting relationships may be assigned to
individuals or groups. All the following can assist in determining the
impacts related to Organizational Planning EXCEPT:

1. Formal and Informal reporting relationships among different organizational

units.
2. Kinds of competencies required for different individuals and groups
3. Literature about how organizations can and should be structured
4. Meetings held to assess project status and/or progress

Justification:

• Option 1 refers to Project Interfaces (Organizational interfaces) - this is an

input to Organizational Planning
• Option 2 refers to Staffing requirements - this is an input to Organizational
Planning
• Option 3 refers to Organizational Theory - this is a Tool and Technique for
Organizational Planning
• Option 4 refers to Performance Reviews - this is a tool for Performance
Reporting; and does not help in Organizational Planning

TOTAL NUMBER OF HRM QUESTIONS = 47

COMMUNICATIONS MANAGEMENT

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1.

2. To get summary information about the project, you should use 

Progress Reporting - Progress Reporting - describing what the project
team has accomplished - for example, percent complete to schedule, or
what is completed versus what is in process - Progress Reporting are
summary reports about % complete and provide a quick overview of the
project
3. Project Reports: Formal project reports on project status and/or issues
4. Win-Win Situation of Conflict Resolution is by COLLABORATING

5.
6. If too much dis-order at meeting  prepare agenda  You can’t influence
all communication channels as there would be n(n-1)/2 channels.

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7. The sender is responsible for making the information clear, unambiguous,
and complete, so that the receiver can receive it correctly, and for
confirming that it is properly understood. The receiver is responsible for
making sure that the information is received in its entirety and understood
correctly.
8. Question: All the following are inputs for Information Distribution
EXCEPT  4

Work Results

Communication Management Plan

Project Plan

Performance Measurement Documentation

9.

10. Non-verbal communication is more than 50% of the total communication

and is extremely important to look out for while negotiations are being
conducted.
11. Common formats for Performance Reports include bar charts (also called
Gantt Charts), S-curves, histograms and tables
12. Communication Skills is the most important trait in a project manager 
Look for this when you are interviewing for this position
13. Project closure - Confirmation that the project has met all customer
requirements for the product of the project (the customer has formally
accepted the project results and deliverables and the requirements of the

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 delivering organization)

Please note that although Administrative Closure is the process in which

you formalize acceptance of the product of the project, the specific output
from the process is "Project Closure"
14. Contract Closeout is similar to administrative closure in that it involves
both product verification (Was all work completed correctly and
satisfactorily?) and administrative closeout (updating of records to reflect
final results and archiving of such information for future use).
15. Number of Communication Channels increases exponentially when
number of people increase
16. Communications management plan is a document that provides:
• A collection and filing structure that details what methods will be used
to gather and store various types of information. Procedures should
also cover collecting and disseminating updates and corrections to
previously distributed material
• A Distribution structure that details to whom information will flow, and
what methods will be used to distribute various types of information.
• A description of the information to be distributed, including format,
content, level of detail, and conventions/definitions to be used
• Production schedules showing wven each type of communication will
be produced.
• Methods of accessing information between scheduled
communications.
• A method for updating and refining the communications management
plan as the project progresses and develops.
17. After one week, there will be 9 people in your team (this includes 8 team
members and you, the project manager). So, the number of
communication channels = 9 * (9 - 1) / 2 = 9*8/2 = 36
18. Email and notes are examples are which type of communication 
Written Informal
19. A conflict resolution technique that results in a win-lose situation i.e.
one party wins at the expense of another is  FORCING
20. Question: Communication planning involves determining the
information and communications needs of the stakeholders: who
needs what information, when they will need it, and how it will be
given. For this, you will need all the following inputs EXCEPT:  4
1. Sum of information requirements of the project stakeholders
2. Factors that will limit the project management team`s options
3. Methods used to transfer information back and forth among project
stakeholders
4. Methods for distributing information between stakeholders

Justification: Option 4 refers to Information Distribution Methods which is a

tool and technique for Information Distribution.

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All the remaining options are inputs to Communication Planning:

• Option 1 refers to Communication Requirements

• Option 2 refers to Communications Technology
• Option 3 refers to Constraints
21. Administrative closure consists of documenting project results to formalize
acceptance of the product of the project by the sponsor, or customer.
22. Change Requests: Analysis of project performance often generates a
request for a change to some aspect of the project. These change
requests are often handled as described in various change control
processes (e.g. scope change management, schedule control etc.)

TOTAL NUMBER OF QUESTIONS IN COMMUNICATIONS MANAGEMENT

= 47

PROFESSIONAL RESPONSIBILITY

1. If standard deviation is slightly more than 0.002 then  do not accept or reject it
but Document the lower quality level, ask the contractor for explanation and try to
find a solution - Any decrease in quality level should be documented and
discussed with the contractor. If there is a small decrease from the
required quality, rejecting the product outright(Choice 3) is extremely
harsh. Similarly, allowing for lower quality (Choice 1 and Choice 4) is not
advisable.
2. Requirements for PMP Code of Professional Conduct 

a) Satisfying scope and obj of professional services

b) refrain from offering or accepting inappropriate gifts or other forms
of personal compensation Unless in conformity with the laws or
customs of the country where project management services are
offered.
c) Maintaining confidentiality of sensitive information
d) Reporting Violations to PMP code of professional conduct
e) bribe should not be paid because it is unethical by PMI standards
3. A project manager has the Responsibility to refrain from offering or
accepting inappropriate payments, gifts, or other forms of compensation
for personal gain, unless in conformity with applicable laws or customs of
the country where the project management services are being provided
(Going to Asian Country to study business proposition of a contractor
qualifies for this).
4. You recently took over the responsibilities of Project Manager from
another person. While reviewing the costs for the project, you realize
there is a $ 100,000 payment, which should not have taken place.
Your project CPI is 1.2. In this case  Inform your manager BUT DO
NOT DENY THE PAYMNET

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5. Your project is close to completion, when you are informed by the
customer that they would like to see an additional feature in the
project. You realize that the feature was discussed with the project
sponsor in an earlier meeting, and he categorically mentioned that
he did not want this feature. What is the BEST course of action 
Deny the customer request, and ask him to open a change request
6. For Professional Responsibility questions, please note that the Project
Manager should always try to solve the problem
7. You have scheduled a contractor conference after 2 days with
potential contractors to discuss procurement. Today, you were
informed by Management that there is a very high probability for the
project to be cancelled. You should  CANCEL THE MEETING AS
There is no point in having the meeting and wasting time if there is a high
probability for the project to be cancelled.
8. You are managing a project in a foreign country, where you realize that to
get things done in your project, you may have to pay some tips to the
government officials. You should:  refuse to pay as the same is unethical
and it is bribery
9. Certified PMP Duties are:
1. Ensure that there is no conflict of interest that can compromise the
legitimate interests of a client or customer
2. Disseminate PMP Code of Professional Conduct to other PMI
certificants.
3. Cooperate with PMI concerning ethics violation and the collection of
related information
4. As a PMP Certified project manager, you are responsible to comply with
all organizational rules and policies

Ensure that the technical specifications are appropriately defined IS NOT

THE DUTY OF him as he is not technical expert

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 As a PMP Certified project manager, you are responsible for all the
following EXCEPT:  3

1. Confidentiality of sensitive information which you have access to

2. Managing conflict of interest situations in your project
3. Integrity of your team-members
4. Refraining from offering and accepting inappropriate payments,
gifts and other forms of communication

10. Knowledge gained in one company is not proprietary information and can
be used in subsequent jobs. Choice 1, Choice 3 and Choice 4 are
inappropriate because you may have to work in projects for the competitor
which will adversely impact products of the first company you worked for.
This is acceptable so as long as you do not unethically use any contacts
or proprietary information from the first company.
11. When you join a new company, you realize that all the project managers in
the new company have the responsibility of managing individual product
releases of a software product and the co-ordination of these releases over
time. Since you are a Certified PMP, you realize that the situation is 
program because it involves several projects being done simultaneously, and
elements of ongoing operations
12. You have been informed by the project sponsor that there has been a
revaluation of projects within your company and your project will not be
getting any additional funding. In this case, you should  Means it is not
going to continue and hence you need to PERFORM ADMIN CLOSURE
13. You are the project manager for a construction company which
wants to build a water treatment plant close to a residential locality.
Although the project owner and sponsor have got the legal approval
for constructing the water treatment plant, some of the owners of
residential properties have approached you with concerns regarding
the potential impact to the environment - in this case, you must 
Try to find appropriate resolution of issues between the different
stakeholder
14. A project manager disclosed some crucial information to a
prospective seller. Which code of professional conduct did he violate
 preventing conflict of interest
15. You are aware that an employee in your project may potentially get a
promotion - however, there is a possibility that he may get
transferred after his promotion, thus impacting your project. In this
situation, you should  After the employee gets the promotion and is
told of the transfer, you ask him to prepare a transition plan  you are not
sure whether the resource will get a promotion or get transferred. So, after
the promotion/transfer are confirmed, you should ask him to do a proper
transition

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16. You are in the vendor management department of your company
which sources computer hardware from companies. You recently
visited a marketing conference for a leading computer hardware
provider, where you were offered a gift-voucher for $ 200 for
attending the conference. You should  Return the gift because it
could be construed as personal gain (I think coz. It is in conference and
within USA)
17. There have been too many disagreements within two team-members
in your project regarding the design of a particular product. You
would like to incorporate the best features of the two designs - and
want to create an environment that avoids conflicts and emphasis
similarities. The conflict-handling mode you would like to emphasize
is  smoothing
18. One of your team-members provided you with a critical report 10
minutes before a bidders conference. You notice some serious
errors in the report. The best thing for you to do is to  Cancel the
Meeting and reschedule to a later date
19. A project Managers responsibility is that upon a reasonable and clear
factual basis to report possible violations of the PMP Code of Professional
Conduct by individuals in the field of project management.
20. You are doing some work under contract, when the buyer requests
you to add some additional requirements which were not defined in
the original contract. Since satisfying the buyer is of paramount
interest, you go ahead and incorporate the requirements as part of
the project. You are violating which Code of Professional Conduct 
Responsibility to maintain and satisfy the scope and objective
21. You are managing a project in a foreign country, where you realize
that you will have to pay a fee to some government agencies to get
your work done. You should  PAY FEE – No problem as it is not
same as Bribe
22. If a risk emerges that was not anticipated in the risk response plan, or its
impact on objectives is greater than expected, the planned response may
not be adequate. It may be necessary to perform additional risk response
planning to control the risk.
23. Question: As a PMP Certified project manager, you are responsible
to comply with all organizational rules and policies. In this context,
you have the responsibility to all of the following except  4 as he
need not inform PMI but to client, parties etc.
1. Provide accurate and truthful representations concerning all
information directly or indirectly related to all aspects of the PMI
Certification Program
2. Report possible violations of the PMP Code of Professional Conduct
by individuals in the field of project management.
3. Cooperate with PMI concerning ethics violations and the collection of
related information

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 4. Disclose to PMI about significant circumstances that could be
construed as a conflict of interest or an appearance of impropriety

24. One of your team-member was late to a critical bidder conference,

which caused a lot of confusion  You should talk with the team
member to understand why he was late and how to prevent similar
situations in the future
25. EVM might be used not only to control cost and time but also to coordinate
changes across the entire project.
26. In project management, the Constructive Roles are: Information Seeker,
Information Giver, Consensus Taker  Recognition Seeker is not!
27. In Information Seeker, Gate Keeper, Initiator and Withdrawer,
WITHDRAWER is the DESTRUCTIVE ROLE
28. In your organization, you are the project manager of the engineering
department. But if questions related to manufacturing arise, they are passed
up to the engineering department head, who consults with the head of the
manufacturing department. Once the manufacturing head gets the answers,
he passes it the engineering department head, who in turn passes answer
back down to you. The organization structure you are working on is 
functional
29. Withdrawal, Forcing, Compromising  Mostly used in Project
Management
30. Compromising is LOSE-LOSE, Confrontation, I think is Win-Win, Forcing is
Win-Loose (Other two I think)
31. Quality Audits, Reward and Recognition Systems and Information
Retrieval Systems are tools for  Executing

- 22 -
 32. Lessons Learned is an output of all the processes mentioned above
Except Contract closeout (It is output of ICC, Schedule Control,
Administrative Control)
33. Defining Requirements gives Customer Satisfaction
34.

35. You are in the build phase of your project, when you realize that
because of a design error, the product will not meet the performance
parameters specified by the customer. In this context, what should
you do first  Discuss with your team to try to find out alternatives
means to solve the issue

TOTAL NUMBER OF QUESTIONS IN PROF RES IS 47

TIME MANAGEMENT

1. Graphical Evaluation and Review techniques are similar to PERT but have
the distinct advantages of allowing for looping, branching, and multiple
project end results.
2. In a Normal Distribution, the PERT duration (also called mean)
= (Pessimistic + 4* (Most Likely) + Optimistic)/6
= (10 + 4 * 13 + 16)/6

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 = 13

1 Standard Deviation (sigma)

= (Pessimistic - Optimistic) / 6
= (16 - 10) / 6
=1

So, if the the comany has a quality requirement of 6 sigma,

Mean - 6 Sigma = 13 - 6 * 1 = 7
Mean + 6 Sigma = 13 + 6 * 1 = 19

So, the task can be completed within 7 days to 19 days.

3. Resource leveling often results in a project duration longer than the
preliminary schedule.... Resource reallocation from non critical to critical
activities is a common way to bring the schedule back, or as close as
possible to the to its originally intended duration
4. For what activities to be crashed look at per extra month how much it
costs, and then go for lower per month cost activities for crashing
5. Simulation involves calculating multiple project durations with different
sets of activity assumptions. The most common technique is called Monte
Carlo Analysis, in which a distribution of probable results is defined for
each activity and is used to calculate a distribution of probable results for
the whole project
6. Attributes of the activities - including responsibility (i.e. who will perform
the work), geographic area or building (where the work has to be
performed) and activity type (i.e, summary or detailed) - are very important
for further selection and sorting of the planned activities in a convenient
way for the users. WBS classification is also an important attribute that
allows useful activity ordering and sorting.
7. Milestone charts (see Figure 6-7) are similar to bar charts, but only identify
the scheduled start or completion of major deliverables and key external
interfaces.
8. Any of the dependencies may require specification of a lead or lag to
accurately define the relationship. An example of a lag: there might be a
desire to schedule a two-week delay (lag) between ordering a piece of
equipment and using it
9. A project may have negative project float. To deal with such conditions, if
the project has to be completed on time, the project manager will have to
either fast-track or Crash the project schedule  Project Float = CPM
Duration – Desired Duration of Completion
10. If there is delay in project schedule – then try to crash / fast track  do not
ask the resources to work extra hours or overtime
11. If more critical paths  risk of the project increases
12. Schedule Development Inputs  Project Network Diagrams, Activity
duration estimates, Calendars, Leads and Lags

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13. As with the WBS, the activity list must include descriptions of each activity
to ensure that the project team members will understand how the work is
to be done.
14. The different classes of estimates are (DCA-FO) 35-25-15 (10 range),
10-5 (5 Range)

• Definitive: + 5%
• Capital Cost: + 10-15%
• Appropriation: + 15 - 25%
• Feasibility: + 25 - 35%
• Order of Magnitude > + 35%
15. The objective of duration compression includes all the following
except:3  Duration Compression includes fast-tracking but not
simulation
1. Shorten the project schedule without impacting scope
2. Do compression of tasks for the least incremental cost
3. Do simulation to calculate distribution of probable reasons for the
whole project
4. Do activities in parallel which would normally be done sequentially

16. Milestone Events, as such will have ZERO duration  these are better
choice to give presentations to management
17. As different techniques like crashing, fast tracking, resource reallocation
etc. are being considered for Resource Leveling, there is a real potential
for the costs to increase but it increases project duration, Utilization of
weekends, extended hours or multiple shifts, Productivity increases by
using different technologies and/or methodologies
18. The length of the different paths are:

• Start -> 1 -> 2 -> End : 10

• Start -> 3 -> 5 -> End : 11
• Start -> 4 -> 5 -> End : 12

Since the longest path is Start -> 4 -> 5 -> End, this is the critical
path. Length of the critical path is 12.

Slack = Late Finish - Early Start

Late Finish of Task 3
= Length of Critical Path - (5->End + 3->5)
= 12 - (4 + 5)
=3

Early Start of Task 3 = Start->2 = 2

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 So, Slack in Task 3
= Late Finish - Early Start =3-2=1

19. ADM uses only finish to start

dependencies and may require the use of dummy activities to define all
logical relationships correctly  Note that CPM, PERT and ADM uses
Dummy activities
20. Path Method (CPM) calculates a single, deterministic early and late start
and finish date for each activity based on specified, sequential network
logic and a single duration estimate
21. As a project manager of a construction company, you always prefer
to do concrete curing during the weekend holiday, because no work
can be done on the building for 2 days while the concrete curing is
being done. This helps you decrease the: Elapsed Time
22. Float is the amount of
time an activity can be delayed without delaying the
project finish date. It can also be called as Slack, Total
Float, and Path Float. Free Float is the amount of time an activity
can be delayed without delaying the early start of an immediately
following activity
23. The second advantage of
PERT is that one can determine the probability of meeting specific
deadlines by development of alternative plans. If the decision maker is
statistically sophisticated, he can examine the standard deviation and the
probability of accomplished data.

So, standard deviation gives an idea of the probability of whether a task

will happen. Standard Deviation is a measure for the probability of
getting a result - hence it is a good indication for the risk of
completing the task in time
24.

- 26 -
Note that the 1,2,3,6 Sigma Values are 68%, 95%, 99.7%, and
99.9%

25. Question: All the following statements about float are correct except:
3
1. Float refers to amount of time an activity can be delayed from its
early start without delaying the project finish date.
2. Float changes as the project progresses and as changes are made
to the project plan
3. Float is the amount of time an activity can be delayed without
delaying early start of any immediately following activity.
4. Float can also be referred to as Slack, Total Float or Path Float.

Justification: Free Float is the amount of time an activity can be delayed

without delaying the early start of an immediately following activity. (This is
different from the float)

26. The project Network Diagram is an input to what process  Sch Dev
27. If shipment gets delayed in 2 weeks  Review the performance reports
to determine which planned dates have not been met, and the impact on
critical path
28. The moment slack is being asked, check if it is on CRITICAL PATH
29. If management wants to complete the project in 20 weeks, then project
float will be : 20 - 23 = -3 weeks. The project float compares the critical
path with an externally imposed date and may be negative. (you may be
forced to fast-track or perform crashing to ensure that the project is
completed within the dates required by management). But, there will be no
change to the critical path
30. Schedule Development means determining the start and finish dates for
project activities. If the start and finish dates are not realistic, then the
project is unlikely to be finished as scheduled

In your project, you realize the importance of determining the start

and finish dates for project activities. If the project start or end dates
are not realistic, then the project may not be completed on time. This
is done as part of:  3

1. Activity Sequencing
2. Activity Duration Estimating
3. Schedule Development
4. Activity Definition

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31.

32. Question: You are using an Arrow Diagramming method to construct a

project network diagram - you use arrows to represent the activities and
connect them at nodes to show their dependencies. You can use all the
following as Inputs for this process EXCEPT: 4

1. List of All Activities that will be performed on the project

2. Description of the product
3. Mandatory and Discretionary Dependencies
4. Schematic Display of project`s activities and logical relationships

33. Major difference between Decomposition in context of Activity

Definition as compared to Decomposition in Scope Definition is that 
Final output of Decomposition in Activity Definition is described as activities and
not deliverables

TOTAL NUMBER OF QUESTIONS IN TIME MANAGEMENT = 75

INTEGRATION MANAGEMENT

1. The project plan is a document or collection of documents that should be

expected to change over time as more information becomes available

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 about the project. The performance measurement baselines will usually
change intermittently, and then generally only in response to an approved
scope of work or deliverable change
2. Project Management Information system (PMIS): A PMIS consists of tools
and techniques used to gather, integrate and disseminate the outputs of
project management processes
3. Corrective Action is an output of Integrated Change Control and not a
"Tool".
4. Which common tool is required for Project Plan Development,
Project Plan Execution and Integrated Change Control  PMIS
5. To integrate the various processes and measure the performance of
the project throughout project lifecycle, a project manager should
use EVM
6. Question: Which of the following is not an example of project
integration management?
1. Integrating the work of the project with the ongoing operations of the
performing organization.
2. Making tradeoffs between competing objectives and alternatives to
meet or exceed stakeholder needs and expectations.
3. Integrating product scope and project scope
4. For change in scope of the project, figuring out what the impact will be
to the project from a cost and schedule perspective
7. A lower position in a project organization can often be helpful in avoiding
and resolving conflict  Note a reason of Conflict
8. The project plan includes the Risk Management plan. Risk Management
plan includes defining key risks, including constraints and assumptions,
and planned responses and contingencies
9. Integrated change control requires:...Ensuring that changes to the product
scope are reflected in the definition of the project scope
10. Question: You are the Project Manager for an aircraft manufacturing
company developing a new range of supersonic fighter planes. Since
government funding is essential for your project, you hire a lobbying
firm to get Government support for funding your project. This is an
example of:  1
1. Integrated Change Control
2. Risk Management
3. Cost Management
4. Project Planning Methodology
11. In many application areas, configuration management is a subset of the
change control system and is used to ensure that the description of the
projects product is correct and complete.
12. Question: Because of the change in scope of your project, you may
have to do all the following except:
1. Co-ordinate changes across knowledge areas
2. Do Scope Planning
3. Make changes to the project baselines

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 4. Perform Configuration Management

Justification: Scope Planning is the process of progressively elaborating and

documenting the project work(project scope) that produces the product of
the project.

13. Task Dependencies are not evident in a WBS. WBS does not specify the
time frame in which different tasks should be accomplished.
14. Question: You are the Project Manager for a construction company
responsible for developing an estate. During implementation time,
you spend some time with your team overseeing the work being
done by them. You will require all the following tools except  4
1. Product Skills and Knowledge
2. Work Authorization system
3. Organizational procedures
4. Earned value Management
15. During Project Plan Execution, which area will the Project Manager
spend least time on  Documentation
16. Anytime there is a potential request for a change from a customer,
1. Understand what functionality was requested - Talk with team-
members to access the implication of the change
2. Open up a Change Control if there is a formal Change Control
Mechanism
3. Communicate the change to Management, and inform Customer about
the impact of the change (e.g. increase in sizing, schedule etc.)
4. If change is accepted, go ahead and implement the changes

If there is a confirmed change request, the first thing to do is to open up

a change control

17. Lessons Learned: The causes of variances, the reasoning behind the
corrective action chosen, and other types of lessons learned should be
documented so that they become part of the historical database for both
this project and other projects of the performing organization. The
database is also the basis for knowledge management.
18. Integrated change control is concerned with a)influencing the factors that
cause changes to ensure that changes are agreed upon b) determining
that a change has occured, and c) managing the actual changes when
and as they occur. The original defined project and the integrated
performance baseline must be maintained by continuously managing
changes to the baseline, either by rejecting new changes or by approving
changes and incorporating them into a revised project baseline.
19. If you would like to find out who will be approving changes in your
project, you can refer to the  CCS
20. Integrated change control includes coordinating changes across
knowledge areas. For example, a proposed schedule change will often

- 30 -
 affect cost, risk, quality and staffing.

Reference: PMBOK 2000 Page 47

Please note that amongst the available alternatives, Procurement will not
be impacted unless you have outsourced some work and that work will be
impacted by your schedule change. All the remaining control processes
(i.e. Cost, Scope and Staffing) are directly impacted by a proposed
schedule change

TOTAL NUMBER OF QUESTIONS IN INTEGRATION = 47

PROJECT MANAGEMNET FRAMEWORK

1. Projects involve doing something that has not been done before and
which is, therefore, unique. A product or service may be unique even if the
category to which it belongs is large....

A project to bring a new drug to market may require thousands of doses of

he drug to support clinical trials
2. Your IT company is responsible for making software virus programs.
You are responsible for managing both the individual product
releases and the co-ordination of multiple releases over time 
Program
3. Pfeffer defines power as "the potential ability to influence behavior, to
change the course of events, to overcome resistance, and to get people to
do things that they would not otherwise do."…The negative sense, of
course derives from the fact that attempts to reconcile these interests
result in power struggles and organizational games that can sometimes
take on a thoroughly unproductive life of their own.
4. These phase-end reviews are after called phase exits, stage gates or kill
points
5. Project Office: There is a range of uses for what constitutes a project
office. A project office may operate on a continuum from providing support
functions to project managers in the form of training, templates, etc. to
actually being responsible for the results of the project
6. In a projectized organization, most of the resources are often collocated.
Most of the organizations resources are involved in project work, and
project managers have a great deal of independence and authority.
Projectized organizations often have organizational units called
departments, but these groups either report directly to the project manager
or provide support services to the various projects. (Maximum Influence of
PM is in Projectized organizations) (Least power in Functional ones)
7. People exhibit a greater resistance to change than other factors
8. Weak Matrix  Project Mgr is a coordinator and expeditor

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9. Preparing a financial plan requires both Project Management and Industry
specific skills
10. Project life cycles generally define what technical work should be done in
each phase
11. Question: Which of the following statement(s) about project
customer and project sponsor is (are) correct?  4
1. Along with the customer, the sponsor threshold for risks should be
taken into account
2. Along with the customer, this sponsor may provide key events,
milestones, and deliverable due dates
3. Along with the customer, the sponsor formally accepts the product of
the project.
4. All of the above.
12. Politics is about getting collective action from a group of people who may
have quite different interests. It is about being willing to use conflict and
disorder creatively. The negative sense, of course, derives from the fact
that attempts to reconcile these interests result in power struggles and
organizational games that can sometimes take on a thoroughly
unproductive life of their own.
13. In a matrix organization, Project Manager does not have authority about
doing Personnel Performance Management; this task is done by the
Functional Managers.
14. As a project Manager, Problem solving is high in your list of
priorities. Which statement about Problem Solving is not accurate?
4
1. Problem solving involves a combination of problem definition and
decision-making
2. Problems may be technical, managerial or interpersonal.
3. Decision Making includes analyzing the problem to identify viable
solutions, and then making a choice from among them
4. You should try to solve a problem as soon as it is identified

15. Solving Technical problems from functional managers is not influencing it

is problem solving
16. The ability of the stakeholders to influence the final characteristics of the
projects product is highest at the start and gets progressively lower as the
project continues. A major contributor to this phenomenon is that the cost
of changes and error correction generally increases as the project
continues.
17. The five constraints in the Triple Constraint are: (Chp – 5,6,7,8 and
Customer Satisfaction)
• Time
• Quality
• Cost
• Scope of Work
• Customer Satisfaction

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18. Core processes: Some planning processes have clear dependencies that
require them to be performed in essentially the same order on most
projects. For example, activities must be defined before they can be
scheduled or costed.
19. You are one of ten full-time project managers in your organization.
You all share two administrative persons. There are generally 30 - 40
projects per year that involve about 30% of the organization
employees - however, these employees do not report to you. Your
organization can best be classified as:  2

1. Projectized
2. Balanced
3. Strong Matrix
4. Weak Matrix

20. A program is a group of projects managed in a coordinated way to obtain

benefits not available from managing them individually. Many programs
also include elements of ongoing operations  NASA Launching of
Satellites
21. Kotter(4) distinguishes between leading and managing while emphasizing
the need for both: one without the other is likely to produce poor results.
He says that managing is primarily concerned with "consistently producing
key results expected by stakeholders" --- Managing is primarily concerned
with "consistently producing key results expected by stakeholders," while
leading involves:

• Establishing Direction...
• Aligning People...
• Motivating and Inspiring...

22. Subprojects within projects may have distinct project life cycles. For
example, an architectural firm hired to design a new office building is first
involved in the owners definition phase when supporting the construction
effort. The Architects design project, however, will have its own series of
phases from conceptual development through definition and
implementation and closure
23. Question: You are a project manager in an Information
Technology(software) company, but you recently got an offer as a
project manager in a construction company with 25% salary hike.
You have excellent technical knowledge in software field, but do not
have much exposure to the Construction Industry. In this context, 
3
1. You should attend training classes related to construction industry
to get more technical expertise in the field
2. You should not take up the assignment because you will lose out
on the experience and skills gained in Information Technology field

- 33 -
 3. You should take up the assignment because similar project
management skills will be required in the Construction company, as
was required in the software company
4. You should try to get more information about project management
in the Construction Industry and then make an informed decision about
whether to take up the new opportunity

Justification: Project Management skills span across industries and the

knowledge gained in one industry can be used in other industries.
A project manager need not be technically qualified in the industry to
succeed.

24. When properly defined, the scope of the project - the work to be done -
should remain constant even as the product characteristics are
progressively elaborated
25. Major categories of socio-economical influences are:
• Standards and Regulations
• Internationalization
• Cultural Influences
• Socio-Economic Environmental Sustainability

26. In balanced org, Project Mgr reports to Functional Manager!

27. Problem solving involves combination of problem definition and decision-
making... Problems may be technical (differences of opinion about the
best way to design a product), managerial (a functional group is not
performing according to plan), or interpersonal (personality or style
clashes)
28. The authority of a project manager is greatly dependent on 
Organizational Structure
29. A tangible verifiable work product to ensure proper definition of
product of the project is also called DELIVERABLE
30. Project Portfolio Management refers to the selection and support of
projects or program investments. These investments in projects and
programs are guided by the organization’s strategic plan and available
resources.
31. Agreements may be negotiated directly or with assistance; mediation and
arbitration are two types of assisted negotiation
32. Factors like Probability of successfully completing the project, Cost
of changes, Cost of error correction etc. are highest AT THE END
33. A project manager is responsible for managing project costs and
human resources. Factors like Cost and Staffing level for a project 
Are low at the start, higher toward the end, and decrease rapidly as
project draws to a conclusion
34. Please note that the final core process in Planning Phase is Project Plan
Development

- 34 -
TOTAL NUMBER OF QUESTIONS IN FRAMEWORK = 54

PROJECT PROCUREMENT MANAGEMENT

1. In a Lump-sum contract, the profit is:  4

1. Determined by the buyer during contract sign-off
2. Determined by the seller during contract sign-off
3. Provided by the buyer to the seller at end of project if defined
performance criteria are met
4. Not known at time of the contract sign-off

2. Procurement planning is the process of identifying which project needs

can be best met by procuring products or services outside the project
organization.
3. Administrative Closure is performed after contract closeout
4. Output from the Contract Closeout process  Contract File
5. If it is a non-core item, it may make sense to consider outsourcing as an
option - it may be cheaper than making the item inhouse.  Note that you
may lean for making it if  item under consideration is a capital item
which can be used for other projects in the same organization (so,
ongoing need of the item)
6. The objective of contract negotiation is to build a lasting relationship.
Maximizing monetary return in itself should not be a main consideration
because quality, responsibilities and authority, applicable terms and law,
technical and business management approaches should also be
considered.
7. Correspondence: Contract Terms and conditions often require written
documentation of certain aspects of the buyer/seller communications,
such as warnings of unsatisfactory performance and contract changes or
clarifications.
8. Early termiation of a contract is a special case of Contract Closeout
9. Which is the best thing to do during the Solicitation process?
1. Determine whether a product should be outsourced or manufactured
in-house
2. Ensure that prospective sellers clearly understand the technical and
contract requirements
3. Clarify on the structure and requirements of the contract, before sign-
off
4. Prepare an independent estimate to check the proposed price of the
different sellers

10. The only situation where a contract may be nullified is because it violates
the law of the country.
11. A procurement audit is a structured review of the procurement process
from procurement planning through contract administration.

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12. Evaluation Criteria are an input to Source Selection, not contract
administration
13. Incentives are provided in contracts to ensure that the goals of both the
buyer and seller are the same
14. Independent Estimates (which is a Tool/Technique for Source Selection):
For many procurement items, the procuring organization may prepare its
own independent estimates as a check on proposed pricing.

• Option 1 is Make or Buy Analysis - done during Procurement Planning

• Option 2 is Bidder Conference - done during Solicitation
• Option 3 is Advertising - done during Solicitation
15. Cancellation of the contract has to be done by both the seller and buyer
(i.e. it cannot be done unilaterally by the buyer)
16. Fixed Price contract should not be entered into if scope is not well-defined
 GO FOR “Cost Plus Fixed Fee”  This is best from minimizing buyers’
risk if the scope is not well defined
17. The statement of work (SOW) describes the procurement item in sufficient
detail to allow prospective sellers to determine if they are capable of
providing the item.
18. Your company has defined some Criteria to be used throughout the
organization to rate or score proposals. From your project
perspective, these will be  Evaluation Criteria
19. Standard Form is not an output of procurement planning ; Input for Souce
Selection is PROPOSAL
20. Procurement management plan should describe how the remaining
procurement processes (from solicitation planning through contract
closeout) will be managed. For example,
• What types of contracts will be used?
• If independent estimates will be needed as evaluation criteria, who will
prepare them and when?
• ....
• how will multiple providers be managed?

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21.

22.

23. Make-or-buy analysis: This is a general management technique and a part

of the initial scope definition process that can be used to determine
whether a particular product can be produced cost effectively by the
performing organization. Analysis should include both indirect as well as
direct costs.

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 24. Statement(s) of Work: The statement of work (SOW) describes the
procurement item in sufficient detail to allow prospective sellers to
determine if they are capable of providing the item. "Sufficient detail" may
vary, based on the nature of the item, the needs of the buyer, or the
expected contract form.
25. Procurement audits: A procurement audit is a structured review of the
procurement process from procurement planning through contract
administration. The objective of a procurement audit is to identify
successes and failures that warrant transfer to other procurement items on
this project or to other projects within the performing organization.
26. Early Termination of a contract is a special case of contract closeout
27. The product description is generally broader than a statement of work. A
product description describes the ultimate end product of the project; a
statement of work describes the portion of that product to be provided by a
seller to the project. However, if the performing organization chooses to
procure the entire product, then the distinction between the two terms
disappears.
28. The statement of work(SOW) describes the procurement item in sufficient
detail to allow prospective sellers to determine if they are capable of
providing the item. "Sufficient detail" may vary, based on the nature of the
item, the needs of the buyer, or the expected contract form.

TOTAL NUMBER OF QUESTIONS IN PROCURMEENT = 48

RISK MANAGEMENT

1. Decision Tree Analysis: A Decision Tree is a diagram that describes a

decision under consideration and the implications of choosing one or
another of the available alternatives. It incorporates probabilities of risks
and the costs or rewards of each logical path of events and future
decisions. Solving the decision tree indicates which decision yields the
greatest expected value to the decision-maker when all the uncertain
implications, costs, rewards and subsequent decisions are quantified.
2. Residual Risks are those that remain after avoidance, transfer, or
mitigation responses have been taken. They also include minor risks that
have been accepted and addressed, e.g. by adding contingency amount
to the cost or time allowable.
3. Profit of Build : $ 5,000
Profit of Buy : $ 3,500
Opportunity cost of Build = Profit you give up if you do not buy = $ 3,500
4. As part of Risk Management process, you just created an overall risk
ranking of the project, created list of prioritized risks, identified
which risks need additional analysis and determined trends in risk
analysis results. What should you be doing next?  2
1. Assessing the impact and likelihood of identified risks

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 2. Analyzing numerically the probability of each risk and its impact on the
project objectives
3. Determining actions to enhance opportunities and reduce threats to
project objectives
4. Keeping track of identified risks and ensuring execution of risk plans

5. Reports commonly used to monitor and control risks include Issues

Logs, Action-item Lists, Jeopardy Warnings and Escalation Notices.
6. Please note that Risk Probability and Impact, and Data Precision Ranking
have already been done as part of Qualitative Analysis and Brainstorming
has been done as part of Risk Identification.

Sensitivity Analysis is the only task in Quantitative Risk Management, that

needs to be done after Qualitative Risk Analysis.
7. Triggers, sometimes called risk symptoms or warning signs are indications
that a risk has occurred or is about to occur.
8. Results from an earned value analysis may indicate potential deviation of
the project at completion from cost and schedule targets. When a project
deviates significantly from the baseline, updated risk identification and
analysis should be performed
9. Risk Mitigation may take the form of implementing a new course of action
that will reduce the problem... It may require a prototype development to
reduce the risk of scaling up a from a bench-scale model

In your project, you decide to create a prototype first to ensure that it

is accepted by stakeholders before moving on to build your product.
This is an example of  1

1. Risk Mitigation
2. Risk Avoidance
3. Simulation
4. Project Assumptions Testing
10. 10. Question: While doing risk response planning, you realize that there is
a very critical risk which may have a high impact on the project
completion. So, you create a fallback plan which could include any of the
following conditions EXCEPT:  1
1. Subcontracting the project to an outside Vendor
2. Developing Alternative Options
3. Allocation of Contingency Reserves
4. Changing project scope

11. The probability of the activity happening every year is 25%. So, the
probability that the task will happen in the 3rd year is also 25%
12. Qualitative Risk Analysis requires accurate and unbiased data if it is to be
helpful to project management. Data Precision Ranking is a technique to

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 evaluate the degree to which the data about risks is useful for risk
management.
13. Workarounds are unplanned responses to emerging risks that were
previously unidentified or accepted. Workarounds must be properly
documented and incorporated into the project plan and risk response plan.
14. Question: All the following statements relating to transferring of risk
to a contractor are true EXCEPT:  2

1. Transferring risk requires payment of a risk premium

2. Fixed price contracts transfer risk to the seller if the design is
unstable
3. Cost reimbursable contract leaves more of the risk with the
customer or sponsor
4. Cost reimbursable contract helps reduce cost if there are
mid-project changes

15. Interviewing techniques are used to quantify the probability and

consequences of risks on project objectives. A risk interview with the
project stakeholders and subject-matter experts is the first step in
quantifying risks.
16. Reducing scope, adding resources and using familiar approaches
are all examples of Risk Avoidance
17. Risk Monitoring and Control is the process of keeping track of the
identified risks, monitoring residual risks and identifying new risks,
ensuring the execution of the risk plans, and evaluating their effectiveness
in reducing risk.
18. Sensitivity Analysis helps to determine which risks have the most potential
impact on the project. It examines the extent to which the uncertainty of
each project element affects the objective being examined when all other
uncertain elements are held at their baseline values.
19. Project risk reviews must be regularly scheduled. Project risk should be an
agenda item at all team meetings. Risk ratings and prioritization may
change during the life of the project. Any changes may require additional
qualitative or quantitative analysis
20. Additional Risk Response Planning: If a risk emerges that was not
anticipated in the risk response plan, or its impact on objectives is greater
than expected, the planned response may not be adequate. It will be
necessary to perform additional risk response planning to control the risks.
21. Question: In your new project, you objective is to develop a new
pharmaceutical drug. After doing a financial analysis, your finance
manager provided you with these statistics:

• 30% probability of success with benefits of $ 700,000

• 70% probability of failure with loss of $ 300,000

Based on this information, you  3

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 1. Suggest that the project to proceed ahead
2. Suggest that the project to be stopped
3. Communicate to your senior management that you cannot make a
decision about whether to proceed with the project
4. Start working on the project and ask your finance manager for
additional information.

22. Question: As a project manager, you put a lot of emphasis on Risk

Management. You just completed Data Precision Ranking to evaluate
the degree to which the data about risks is useful for risk
management. What could be a next step?  4

1. Perform a structured review of project plans and assumptions, both

at the total project and detailed scope levels
2. Develop checklists for identifying risks based on historical
information and knowledge that has been accumulated from previous
similar projects
3. Conduct planning meetings to develop the risk management plan
4. Conduct interviews to quantify the probability and consequences of
risks on project activities

Justification: Data Precision Ranking is a tool and technique for Qualitative

Risk Analysis.

• Option 4 refers to "Interviewing" which is a tool and technique for

Quantitative Risk Analysis. Quantitative Risk Analysis is conducted
after Qualitatitive Risk Analysis
• Option 1 refers to "Documentation Reviews" which is a tool and
technique for Risk Identification. Risk Identification is conducted before
Qualitatitive Risk Analysis
• Option 2 refers to "Checklists" which is a tool and technique for
Risk Identification. Risk Identification is conducted before Qualitatitive
Risk Analysis
• Option 3 refers to "Planning Meetings" which is a tool and
technique for Risk Management Planning. Risk Management Planning
is conducted before Qualitatitive Risk Analysis

23. The most usual risk acceptance response to to establish a contingency

allowance or reserve, including amounts of time, money, or resources to
account for known risks
24. Corrective action: Corrective action consists of performing the contingency
plan or workaround
25. Risk Trigger is an output from Risk Identification and is not included in
Risk Management Plan (Risk Management Plan is an output from Risk
Management Planning which occurs before Risk Identification.

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 26. S-curve: Graphic display of cumulative costs, labour hours, percentage of
work, or other quanitities, plotted against time. The name derives from the
S-like shape of the curve (flatter at the beginning and end, steeper in the
middle) produced on a project that starts slowly, accelerates and then falls
off. Also a term for the cumulative likelihood distribution that is a result of a
simulation, a tool of quanitative risk analysis.
27.

28. The risk response plan (sometimes called the risk register) should be
written to the level of detail at which actions will be taken.

TOTAL NUMBER OF QUESTIONS IN RISK MGT = 53

Framework 54
Integration Mgt 47
Scope Management 71
Cost Management 63
Time Management 75
Quality Management 48
HRM 47
Communications Mgt 47
Risk Mgt 53
Procurement Mgt 48
Professinal Resp 47

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600

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