valuating work packages

Costs are ________ when an item is ordered even though actual payment may take place at some later time.

d. committed

When evaluating work packages that have a negative cost variance, you should focus on taking corrective actions to reduce the costs of:

c.activities that will be performed in the near term.

When the budgets for all the work packages are summed,

a.they cannot exceed the total project budgeted cost.

A second method for determining the forecasted cost at completion assumes that, regardless of the efficiency rate the project or work package has experienced in the past, the work to be performed on the remaining portion of the project or work package will be done according to budget. If the cumulative actual cost is greater than the cumulative earned value, then

c.the FCAC is greater than the TBC.

Large projects would have charge codes for the work package numbers to

c.determine how the actual costs compare to the planned costs.

It’s crucial that cost variances and inefficiencies be identified early so that

d.corrective action can be taken before the situation gets worse.

Costs related to ___________ are for outsourced work when the project teams or contractors do not have the expertise or resources to do certain project tasks.

b.subcontractors and consultants

It’s important that the person estimating the percent complete not only assess how much work has been performed but also consider

d.what work remains to be done.

The contractor might try to negotiate payment terms that require the customer to do one or more of the following except

d.make a single payment at the end of the project.

As data are collected on _______, including portions of any committed cost, they need to be totaled by work package so that they can be compared to the ________

c.actual cost, cumulative budgeted cost.

The _____ is the amount that was actually spent to accomplish the work that was scheduled to be performed up to that point in time.

c.cumulative actual cost (CAC)

At the beginning of the project, it may not bepossible to estimate the costs for all activities with a level of confidence regarding their accuracy. This is especially true for

c.longer-term projects.

In many projects, large dollar amounts are expended for materials or services (subcontractors, consultants) that are used over a period of time longer than one cost reporting period.

True

Materials costs in the project costs estimate are the estimated costs of materialsthat the project team or contractor

d.needs to purchase for the project.

Determining the earned value involves collecting data on the percent complete for each work package and then converting this percentage to a dollar amount by multiplying the _______ of the work package by the percent complete.

b.total budgeted cost (TBC)

When evaluating work packages that have a negative cost variance, you should focus on taking corrective actions to reduce the costs of:

a.activities that have a large cost estimate.

Another indicator of cost performance is cost variance (CV). If the cumulative earned value is greater than the cumulative actual costs, then

c.the CV is positive.

The _____ is the sum of the estimated costs of all the specific activities that make up a work package or the project.

a.total budgeted cost (TBC)

____ involves the following: Analyzing cost performance to determine which work packages may require corrective action, Deciding what specific corrective action should be taken, and Revising the project plan— including time and cost estimates—to incorporate the planned corrective action.

b.Cost control

Based on analysis of actual cost it is possible to forecast what the total costs will be at the completion of the project or work package.

True

The percent complete estimate for a work package is subjective and requires an underestimated guess compared to the scope of the work package.

False

The key to effective cost control is to analyze cost performance on a regular and timely basis.

True

A method for calculating the forecasted cost at completion assumes that the work to be performed on the remaining portion of the project or work package will be done at the same rate of efficiency as the work performed so far. If the cost performance index is greater than 1.0, then

b.the FCAC is less than the TBC.

Earned value, the value of___________, is a key parameter that must be determined throughout the project.

a.the work actually performed

Labor costs in the project costs estimate are the estimated costs for the various types or classifications of ___________ and are based on the estimated work time (not necessarily the same as the activity estimated

b.people who are expected to work on the project

The project cost estimate is allocated to

b.the resources in the project.

If the cumulative earned value is $10 and the cumulative actual costs are $20, then the CPI is

d.0.5

Allocating total project costs for the various elements to the appropriate work packages will establish

a.a total budgeted cost (TBC) for each work package.

The total project cost is often estimated during the_______ phase of the project or when the project charter or a proposal is prepared

a.initiating

Managing cash flow involves making sure that sufficient payments are received from the customer in time so that

c.you have enough money to cover the costs of performing the project.

To keep track of _________, it’s necessary to set up a system to collect, on a regular and timely basis, data on funds actually expended.

c.actual cost on a project

Committed costs are also known as discharged or postponed costs.

False

If you put off corrective actions until some point in the distant future, the negative cost variance may deteriorate in the project.

True

There are two approaches to establishing the total budgeted cost for each work package:

d.top-down and bottom-up.

When the CPI goes below 1.0 or gradually gets smaller, corrective action should not be taken, the project is performing well.

False

It may be easier to estimate the costs for________, but as the project progresses, the project team can progressively elaborate the estimated costs as more information is known or becomes clear to allow for more accurate estimated costs.

b.near-term activities

Travel costs in the project costs estimate are for

a.travel (other than local travel) required during the project.

The __________ is the amount that was budgeted to accomplish the work that was scheduled to be performed up to that point in time.

c.cumulative budgeted cost (CBC)

Once a total budgeted cost has been established for each work package, the second step in the project budgeting process is to

c.distribute each TBC over the duration of its work package.

A cost is determined for each period, based on when the activities that make up the work package are scheduled to be performed, to create

b.the time-phased budget.

Contingency costs in the project costs estimate, also referred to as _________, are to cover unexpected situations that may come up during the project, such as items that may have been overlooked when the initial project scope was defined, activities that may have to be redone because they may not work the first time (redesigns), or a high probability or high impact risk that may occur.

b.reserves

The ________ for the entire project or each work package provides a baseline against which actual cost and work performance can be compared at any time during the project.

b.cumulative budgeted cost (CBC)

The cost performance index (CPI) is a measure of the cost efficiency with which the project is being performed. If the cumulative earned value is greater than the cumulative actual costs, then

a.the CPI is greater than 1.0.

Cumulative actual cost (CAC) should be calculated to compare to the cumulative budgeted cost (CBC).

True

The key to managing cash flow is to ensure that cash comes in faster than it goes out.

False

The budget for each work package is

b.distributed over the duration of the work package.

The key to effective cost control is waiting to address negative cost variances and cost inefficiencies after they are identified.

False

It is good practice to have the person who will be responsible for the costs associated with the work make the cost estimates.

True

The contractor’s outflow of cash can be controlled by

d.delaying payment until it is due.

Equipment costs in the project costs estimate are for equipment

d.that must be purchased as part of the project

Plot__________ curves on the same graph to reveal any trends toward improving or deteriorating cost performance.

CBC, CAC, and CEV

It is important to use the__________ as the standard against which actual cost is compared.

phased budget

In many cases, there will be a tradeoff—reducing cost variances will involve a reduction in project scope or a delay in the project schedule.

True

T/F: At the beginning of every project, it is possible to estimate the durations for all activities with a high level of confidence regarding their accuracy.

False

Having the person who will be responsible for performing a specific activity estimate the duration for that activity _____ from that person and _____ that may be introduced by having one person estimate the durations for all of the activities

generates a commitment, avoids any bias

T/F: A consistent time base, such as hours or days or weeks, should be used for all the estimated durations of activities in a network diagram

True

If an organization or subcontractor has performed similar projects in the past and has kept records of how long specific activities actually took, these historical data:

can be used as a guide in estimating the durations of similar activities for future projects

If an organization or subcontractor has performed similar projects in the past and has kept records of how long specific activities actually took, these historical data

can be used as a guide in estimating the durations of similar activities for future projects.

In order to establish a basis from which to calculate a schedule using the estimated durations for the activities, it is necessary to

select an estimated start time and a required completion time for the overall project.

T/F: Padding estimates with the vision of becoming a hero when the activities are completed in less time than estimated is not a good practice.

True

When estimating durations for activites with a high degree of uncertainty, one approach is to provide 3 estimates to help calculate your overall estimate… these 3 estimates are…

an optimistic estimate, a pessimistic estimate, and a most likely estimate.

Earliest start time (ES) is the earliest time at which a specific activity can begin

calculated on the basis of the project estimated start time and the estimated durations of preceding activities.

Earliest finish time (EF) is the earliest time by which a specific activity can be completed, calculated

by adding the activity’s estimated duration to the activity’s earliest start time: EF = ES + Estimated Duration.

Latest start time (LS) is the latest time by which a specific activity must be

started in order for the entire project to be finished by its required completion time.

Latest start time is calculated by

subtracting the activity’s estimated duration from the activity’s latest finish time: LS = LF- Estimated Duration

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Latest finish time (LF) is the latest time by which a specific activity must be

completed in order for the entire project to be finished by its required completion time

The ES and EF times are determined by calculating forward—that is, by

working through the network diagram from the beginning of the project to the end of the project.

Calculate the earliest finish for Task B if its predecessor, Task A, finishes on day 3 and the duration of Task B is 2 days

day 5

Calculate the earliest finish for Task D if one of its predecessors, Task A, finishes on day 3, its other predecessor, Task C, finishes on day 4, and the duration of Task D is 2 days

Day 6

Calculate the latest finish for Task D if one of its successors, Task F, has a latest start on day 9, its other successor, Task E, has a latest start on day 10, and the duration of Task D is 2 days

Day 9

T/F: If the total slack is zero, the activities on the path do not need to be accelerated but cannot be delayed.

True

T/F: One way to determine which activities make up the critical path is to find which ones have the least slack.

True

Positive slack indicates the maximum amount of time

that the activities on a particular path can be delayed without jeopardizing completion of the project by the required completion time

Total slack for the project is the difference between

EF time of last activity and the project required completion time.

It is important to know what types of resources are available, in what quantities, and during what time periods to determine ___

if the right types of resources will be available in sufficient quantities during the time periods that the project requires.

T/F: For large projects that involve several hundred people performing various activities over several years, it is practical to have each person estimate activity durations at the beginning of the project.

False

When estimating resources for activities to estimate the activity’s duration, the

availability of each resource has to be taken into account.

The estimated duration for each activity must be the total elapsed time—

the time for the work to be done plus any associated waiting time

T/F: “Gantt chart “is another name for the network diagram tool for planning and scheduling.

False

People sometimes perform to expectations, their effort will expand to fill the whole number of scheduled days allotted

even if the activity could have been performed in a shorter time.

T/F: The project team can progressively elaborate the estimated durations as more information is known or becomes clear to allow for more accurate estimated durations

True

T/F: A change in the estimated duration of any activity on that path will cause a corresponding change in the slack for that path

True

T/F: Throughout a project, changes may occur that have an impact on the schedule

True

When concentrating your efforts to accelerate project activities with negative slack, you should focus on activities that…

are near term and those with long durations.

T/F: An updated project schedule can (and should) be generated regularly that forecasts whether the project will finish ahead of or behind its required completion time

True

As the project progresses, the actual finish times (AFs) of completed activities will determine

the earliest start and earliest finish times for the remaining activities in the network diagram, as well as the total slack

T/F: Changes to a project (and thus the project schedule) might be initiated by the customer, or the project team, or they might be the result of an unanticipated occurrence

True

Eliminating negative slack by reducing durations of activities will typically involve a trade-off in the form of

an increase in costs or a reduction in scope

T/F: It is necessary to monitor the progress to ensure that everything is going according to the plan.

True

If a project slips behind schedule, and If the planned corrective actions do not result in an acceptable schedule, then

the steps for schedule control need to be repeated

Total Slack is sometimes called:

float

Total slack for the entire project is the difference between

EF time of the last activity and the project required completion time

Free Slack is different than Total Slack…Free slack is the amount of time a specific activity can be

postponed without delaying the earliest start time of its immediately succeeding activities

The key to effective project control is measuring actual progress and comparing it to planned progress on a timely and regular basis and

taking any needed corrective action immediately

The project control process must occur regularly throughout the project and include all of the following EXCEPT

Having a single inspection of the project’s deliverables at the end of the project.

T/F: Project management is a proactive approach to controlling a project to ensure that the project objective is accomplished, even when things do not go according to plan.

True

Schedule control involves four steps. Place these steps in their proper order by stating the letter sequence of their proper order.A. Analyzing the schedule to determine which areas may need corrective actionB. Recalculating the schedule to evaluate the effects of the planned corrective actionsC. Revising the plan to incorporate the chosen corrective actionsD. Deciding what specific corrective actions should be taken

ADCB

The estimated types and quantities of resources required for an activity together with the availability of those resources will influence the

estimated duration for how long it will take to perform the activity

A project consists of 3 tasks, A, B & C. The tasks have a serial relationship A-B-C. The required total completion time is 25 days. Task A is planned to take seven days. Task B is planned to take five days. Task C is planned to take eight days. The tasks have a serial relationship. How much slack does the project have?

Positive 5 days slack

A project consists of 3 tasks, A, B & C. The tasks have a serial relationship A-B-C. The required total completion time is 25 days. Task A is planned to take seven days. Task B is planned to take five days. Task C is planned to take eight days. Task A takes nine days to be completed instead of seven days. How much slack does the project have now that Task A is finished?

Positive 3 days slack

ES = 9, EF = 14

A resource requirements plan illustrates

the expected utilization of resources by time period during the time span of the project.the budget for material and cost resources.

Resource leveling, or smoothing, is a method for

developing a schedule that attempts to minimize the fluctuations in requirements for resources

Resource-limited scheduling is a method for

developing the shortest schedule when the number or amount of available resources is fixed and cannot be exceeded

When several activities need the same limited resource at the same time, the activities with

the least slack have first priority

Activities can be delayed only to the point where all their positive slack is used up, as any further delays would cause the project to

extend beyond the project completion time

In addition to showing the technical constraints among activities, how does the network logic also take into account resource constraints?

Activities that use the same resource may not be able to occur in parallel to each other

In resource-limited scheduling, the lower priority activities get delayed. How does the delaying of activities affect the project?

The delaying of activities may delay the project

Resource utilization charts based on each activity’s earliest start time are said to be based

on an as-soon-as-possible (ASAP) schedule

Resource utilization charts based on each activity’s latest start time are said to be based

an as-late-as-possible (ALAP) schedule

The statement, “Network diagrams illustrate the technical constraints among activities,” means the activities are constrained because

one activity cannot be started until the predecessors are finished.

Why are activities drawn in a serial relationship in a network diagram?

From a technical standpoint, the activities must be performed in that sequence.

________ assist with the complexity of generating a resource-leveled schedule and resource requirements graphs and tables.

Project management information systems

Allocating total project costs for the various elements to the appropriate work packages will establish

a total budgeted cost (TBC) for each work package

the FCAC is less than the TBC

the FCAC is greater than the TBC

A third method for determining the forecasted cost at completion is to re-estimate the costs for all the remaining work to be performed and then add this re-estimate to the cumulative actual cost. If the amount of cumulated actual costs is less than difference between the total budgeted cost and the re-estimate, then

the FCAC is less than the TBC

Another indicator of cost performance is cost variance (CV). If the cumulative earned value is greater than the cumulative actual costs, then

the CV is positive

Calculate the forecasted cost at completion if the cumulative actual cost is $10,000 and the re-estimate of remaining work to be performed is $5,000.

FCAC = $15,000

Calculate the forecasted cost at completion if the total budgeted cost = $10,000, the CEV is $8,000, and the CAC is $4,000.? Use the formula involving the CPI to calculate FCAC?

FCAC = $5,000

reserves

Costs are ________ when an item is ordered even though actual payment may take place at some later time.

committed

Earned value, the value of___________, is a key parameter that must be determined throughout the proj

the work actually performed

If the cumulative earned value is $10 and the cumulative actual costs are $20, then the CPI is

near-term activities

It’s crucial that cost variances and inefficiencies be identified early so that

corrective action can be taken before the situation gets worse

people who are expected to work on the project

Once a total budgeted cost has been established for each work package, the second step in the project budgeting process is to

distribute each TBC over the duration of its work package

Plot__________ curves on the same graph to reveal any trends toward improving or deteriorating cost performance.

CBC, CAC, and CEV

The _____ is the amount that was actually spent to accomplish the work that was scheduled to be performed up to that point in time

cumulative actual cost (CAC)

The ________ for the entire project or each work package provides a baseline against which actual cost and work performance can be compared at any time during the project.

cumulative budgeted cost (CBC)

T/F: The key to effective cost control is to analyze cost performance on a regular and timely basis

True

To keep track of _________, it’s necessary to set up a system to collect, on a regular and timely basis, data on funds actually expended

actual cost on a project