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PMP Examination Preparation

Part Number: LGdPMP01
Course Edition: 10.0
ISBN 978-0-9821856-5-0

Notices
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Table of Contents
 Chapter 1 — PMP® Application & Exam ……………………….…………………….…1
 Student Guide Overview ………………………………………………..………….1
 Course Expectations …………………………………………………..……………2
 PMI’s Assumptions ………………………………………………..……………….3
 The Certification Process ………………………………………..…………………5
 PMP® Candidate Requirements ………………………………..……………..…….6
 The PMP® Exam …………………………………………………..…….………….8
 Domain Tasks ……………………………………………………………………..10
 The Required Score ……………………………………………………………….17
 What Makes the PMP® Exam So Difficult? ………………….……………...……18
 Test Taking Strategies …………………………………………………………….19
 Final Comments Before Starting ……………………………………..…….……..21
 Exercise 1 — Application & Exam ...………….………………………….…...….23
 Exercise 1 — Application & Exam Answers ……………………………..………25
 Chapter 2 — Types of Exam Questions ……………………………………………..…...26
 Chapter Overview ………………………………………….…………..………….26
 Questions With Two Right Answers ………………….……………..……………26
 Situational Questions …………………………………………...…………………27
 Math or Modeling Questions ………………………………………………...……28
 Long winded questions & questions with extraneous information ……………….29
 Understanding Versus Memorization ………………………………………...…...30
 Questions With Invented Terms ……………………………………………...…...31
 Answers With More than One Component ………………………………..……...31
 PMIisms ………………………………………………………………..…………32
 Why People Fail The Exam ……………………………………..………………..34
 Exercise 2 — Types of Questions …………………………………..…………….36
 Exercise 2 — Types of Questions Answers …………………………………..…..37
 Chapter 3 — The Basics of Project Management — Part 1 ……………………….…...38
 What is the Perfect Structure? ………………………………………………...…..38
 Organic or Simple Organizations …………………………………………………39
 Functional Organizations ……………………………………………………..…..39
 Projectized Organizations ………………………………………………..………..42
 Matrix Organizations …………………………………………………..……….…45
 A Weak Matrix Organization …………………………………………………..…45
 A Balanced Matrix Organization ……………………………………………..…..46
 A Strong Matrix Organization ……………………………………………..……..46
 Advantages of a Matrix Organization ………………………………………..…...47
 Potential Issues With a Matrix Organization …………………………………..…48
 Virtual / Hybrid / PMOs …………………………………………………………..49
 Exercise 3 — Organizations and Project Management ………….…………..……51

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 Exercise 3 — Organizations and Project Management Answers ……………..……...57

 Chapter 3 — The Basics of Project Management — Part 2 ………………………….…....60
 Project Management Defined ……………………………………………….………..60
 Projects vs. Operations ………………………….……………………………………60
 Projects, Programs & Portfolios ……………………………………………………...60
 The PMO ……………………………………………………………………………..64
 Other Terms ………………………………………………….…………………….…65
 The Key Drivers ……………………………………………………………………...66
 Deming’s PDCA Cycle & the PMI® Process Model …………………..……………..67
 Development Methodologies / Life Cycles …………………………………….…… 69
 The Predictive Model ……………………………………………………….72
 Iterative Life Cycles ……………………………………………...……….. 74
 Incremental Life Cycles …………………………………………………… 77
 Adaptive Life Cycles ………………………………………………………..78
 Agile Methodologies ………………………………………………………. 79
 Hybrid Life Cycles ………………………………………………………… 91
 Agile Development and the PMBOK® Guide ………………………………………. 91
 The Ten Knowledge Areas ………………………………………………………….. 92
 Conclusions …………………………………………………………………………. 93
 Exercise 4 — The Basics of Project Management …………………………………...94
 Exercise 4 — The Basics of Project Management Answers …………………….… 105
 Chapter 4 — Project Integration Management ………………………………………..… 111
 Overview ………………………………………………………………………...… 111
 4.1 Develop Project Charter ……………………………………………………….. 111
 4.2 Develop Project Management Plan ……………………………………….…… 116
 4.3 Direct and Manage Project Work ………………...………………………….… 120
 4.4 Manage Project Knowledge ………………………………………...…………. 122
 4.5 Monitor & Control Project Work …………………………………………….... 124
 4.6 Perform Integrated Change Control …………………………………...………. 126
 4.7 Close Project or Phase …………………………………………………….…… 127
 Integration Management Summary ……………………………...………………….129
 Exercise 5—Integration Management ……………………………………...……… 130
 Exercise 5—Integration Management Answers ………………………………….....142
 Chapter 5 — Project Scope Management ……………………………………...…...……..148
 Overview ……………………………………………………………………………148
 5.1 Plan Scope Management ……………………...………………………………...150
 5.2 Collect Requirements …………………………………………………...………151
 5.3 Define Scope ……………………..……………………………………….…….157
 5.4 Create WBS ……………………………………………….…………………….159
 5.5 Validate Scope ………………………………………………………..………...162
 5.6 Control Scope …………………………………………………………………...163
 5.5 Scope Management Summary …………………………………………………..165

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 Exercise 6 — Scope Management …………………………………………………..166

 Exercise 6 — Scope Management Answers ………………………………………...174
 Chapter 6 — Project Schedule Management ……………………………………………..179
 Overview ……………………………………………………………………………179
 6.1 Plan Schedule Management ………………………………………………….....179
 6.2 Define Activities ………………………………………………………………...181
 6.3 Sequence Activities ……………………………………………………………..184
 Precedence Diagramming …………………………………………………………...184
 Exercise 7 — Precedence Diagramming ……………………………………………187
 Exercise 7 — Precedence Diagramming Answers ………………………………….190
 Conditional Diagramming …………………………………………………………..192
 Dependencies, Leads & Lags ……………………………………………………….192
 6.4 Estimate Activity Durations …………………………………………………….195
 PERT Estimating or Three Point Estimating ……………………………………….196
 Exercise 8 — PERT ………………………………………………………………...199
 Exercise 8 — PERT Answers ………………………………………………………201
 6.5 Develop Schedule ……………………………………………………………….204
 Critical Path Methodology ………………………………………………………….205
 Exercise 9 — The Critical Path Method (CPM) ……………………………………209
 Exercise 9 — The Critical Path Method (CPM) Answers ………………………….215
 Resource Leveling and Critical Chain Methodology ……………………………….221
 Exercise 10 — Critical Chain Project Management ………………………………...224
 Exercise 10 — Critical Chain Project Management ………………………………...226
 6.6 Control Schedule ………………………………………………………………..234
 Time Management Summary ……………………………………………………….236
 Exercise 11 — Schedule Management ………………………………………..…….237
 Exercise 11 — Schedule Management Answers ………………………………..…..249
 Chapter 7 — Project Cost Management …………………………………………………...256
 Overview ……………………………………………………………………………256
 7.1 Plan Cost Management …………………………………………………..……...257
 7.2 Estimate Costs …………………………………………………………………..258
 7.3 Determine Budget ……………………………………………………………….260
 Depreciation ………………………………………………………………………...265
 Straight Line Depreciation ………………………………………………………….266
 Production Method of Depreciation ………………………………………………...266
 Accelerated Depreciation …………………………………………………………...267
 Double Declining Balances …………………………………………………………267
 Sum of the Year Digits ……………………………………………………………...267
 Exercise 12—Depreciation ………………………………………………………….269
 Exercise 12—Depreciation Answers ………………………………………………..274
 7.4 Control Costs ……………………………………………………………………277
 Earned Value Management (EVM) …………………………………………………279

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 Earned Value Forecasting …………………………………………...……………...283

 Cost Management Summary …… ………………………………………………….286
 Exercise 13— Earned Value Management ……………………………...……….....287
 Exercise 13— Earned Value Management Answers ……...………………...……...294
 Exercise 14 — Cost Management …………………………………………………..298
 Exercise 14 — Cost Management Answers ………………………………………...310
 Chapter 8 — Project Quality Management ………………...…………...………………...317
 Overview ……………………………………………………………………………317
 8.1 Plan Quality Management ……………………...……………………………….320
 8.2 Manage Quality ………………………………..………………………………..326
 8.3 Control Quality …...………………………...………………...………………...334
 Quality Management Summary ……………………………………...……………..338
 Exercise 16 — Quality Management ……………………………………………….340
 Exercise 16 — Quality Management Answers ……………………………………..350
 Chapter 9 — Project Resources Management ………………………….…………..…….355
 Overview ……………………………………………………………………………355
 9.1 Plan Resources Management ……………………….…..……………………...355
 9.2 Estimate Activity Resources ……………………………...…………………… 360
 9.3 Acquire Team ……………………….…………………………………..………362
 9.4 Develop Team …………………………………………………………….…….364
 Teams Assessments ……………………………………………..………………….367
 9.5 Manage Team ………………………….………………………………….…….371
 Emotional Intelligence ……………………………………………………………...373
 Leadership ……………………………………………………………………...….. 379
 9.6 Control Resources ……………………………………………...……………… 382
 Final Terms ………………………………………………………………………....384
 Resources Management Summary …………………………………….……………385
 Exercise 17 — Human Resource Management …………………………………….386
 Exercise 17 — Human Resource Management Answers …………………………..396
 Chapter 10 — Project Communication Management ………………………………..…..401
 Overview ……………………………………………………………………………401
 10.1 Plan Communications Management ………………………….……………….404
 10.2 Manage Communications ……………………..………………………………407
 10.3 Control Communication …………………..………………………………….. 409
 Communications Management Summary …………………………………………..411
 Exercise 18 — Communications Management …………………………………….412
 Exercise 18 — Communications Management Answers …………………………..422
 Chapter 11 — Project Risk Management …………………………………………………427
 Overview ………………………………………………………………………...… 427
 11.1 Plan Risk Management ………………………………………………………. 429
 11.2 Identify Risks ………………………………………………………………….433
 11.3 Perform Qualitative Risk Analysis ……………………………………….…...438

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 11.4 Perform Quantitative Risk Analysis …………………….……………….…….441

 Expected Monetary Value ……………………………………………………….… 443
 Exercise 19 — Expected Monetary Value …………………………………….……447
 Exercise 19 — Expected Monetary Value Answers ………………………………..450
 Exercise 20 — Decision Trees ……………………………………………………...451
 Exercise 20 — Decision Trees Answers …………………………………...……….455
 11.5 Plan Risk Responses ……………………………………………….…………..458
 11.6 Implement Risk Responses …………………………………………………….461
 11.7 Monitor Risks …………………….……………...…………………...….…….462
 Risk Management Summary ………………………………………………………..463
 Exercise 21 — Risk Management …………………………………………………..465
 Exercise 21 — Risk Management Answers ………………………………………...477
 Chapter 12 — Project Procurement Management ……………………………..…………484
 Overview ……………………………………………………………………………484
 12.1 Plan Procurement Management ……………………………...……………….486
 12.2 Conduct Procurements ………………………………………………………...492
 12.3 Control Procurements ………………..………………………………………..495
 Procurement Management Summary ……………………………………………….498
 Exercise 22 — Procurement Management …………………………………….……499
 Exercise 22 — Procurement Management Answers …………………………….….508
 Chapter 13 — Stakeholder Management ……………………………………………...…..512
 Overview ……………………………………………………………………………512
 13.1 Identify Stakeholders …………………...……………………………….……..512
 The Salience Model …………………………………………………...…………….514
 13.2 Plan Stakeholder Management ……………………………...…………….…..518
 13.3 Manage Stakeholder Engagement …………………………………….….…...520
 13.4 Monitor Stakeholder Engagement ………………………..…………….….….521
 Stakeholder Management Summary ………………………………………………...523
 Exercise 23 — Stakeholder Management Exercise ……………………………...…524
 Exercise 23 — Stakeholder Management Exercise Answers ……………………....527
 Chapter 14 — Professional Responsibility …………………………………………….…..531
 Overview ……………………………………………………………………………531
 Your Duty to the Profession ………………………………………………….……..531
 Scope and Estimates …………………………………………………………….…..531
 Authority …………………………………………………………………….….…...532
 Above All Else ………………………………………………………………….…..532
 Exercise 24 — Professional Responsibility ……………………………………...…534
 Exercise 24 — Professional Responsibility Answers ……………………………....545
 Course Presentation …………………………………………………………………………549

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Course Introduction
Student Guide Overview
This student guide is designed to be the primary resource for your PMI Project
Management Professional or PMP® Certification Exam Prep course. The course
itself is an online course which includes video lecture, exercises, and practice
quizzes. It is specifically designed for the PMP® Exam released in March, 2018.
However, if you have not purchased the online course you will still find this book
extremely useful in preparing for the exam. Regardless of whether you have
purchased the online course or not, it is highly recommended that you obtain a copy
of the PMBOK® Guide from the PMI® online bookstore.
Throughout the guide major points are called out in the sidebar to improve
learning. These comments appear with one of several indicators to highlight the
type of information provided. These indicators include:

TIPS — Key tips to help ensure that you pass your test.

WARNINGS — Major pitfalls that often cause people to fail the test.

FORMULAS — Major formulas or calculations used in the exam.

PRACTICE EXAMS — Practice exams to help you prepare for the exam.

INFORMATION — Quick points of general information about the PMP®

exam.
ONLINE COURSE REFERENCE — Shows which slide the content is
referring to.
The course is divided into 14 chapters that can be covered in three days when
administered in the live, instructor-led format. The chapters are designed to take Slide 2
participants through the entire PMP® Certification Exam. The 14 chapters include
the following:
 Chapter 1 — Application and the PMP® Exam
 Chapter 2 — Types of Exam Questions
 Chapter 3 — The Basics of Project Management
 Chapter 4 — Project Integration Management
 Chapter 5 — Project Scope Management
 Chapter 6 — Project Schedule Management
 Chapter 7 — Project Cost Management
 Chapter 8 — Project Quality Management
 Chapter 9 — Project Resource Management
 Chapter 10 — Project Communications Management
 Chapter 11 — Project Risk Management
 Chapter 12 — Project Procurement Management
 Chapter 13 — Project Stakeholder Management
 Chapter 14 — Professional Responsibility
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Not all chapters have the same level of difficulty. When studying, you should
therefore allot your time based upon the suggested level of difficulty. Most
candidates find the information/knowledge areas fall on a spectrum from most
difficult to least difficult that looks like this:
 Learning the 49 PMI processes, inputs, outputs, tools and techniques Focus your
 Learning the 42 processes defined by the Role Delineation Study studies
 Integration Management based on the
level of difficulty
 Risk Management
 Cost and Schedule Management (most of the tools and techniques are
the same in both knowledge areas)
 Procurement Management
 Quality Management
 Scope Management
 Resource Management
 Communication Management
 Stakeholder Management
This manual provides some additional resources to assist your learning. The first is
a copy of the PowerPoint material used to develop the online course. Additionally,
there are three documents that will help you prepare for the exam. These include
the PMP Handbook, the Current PMP Exam Content Outline, and the PMP Sample
Questions. Each of these items are PDFs that you may download and print and are
found at:
Download the
https://www.pmi.org/certifications/types/project-management-pmp/exam-prep PMP®
Credential
Course Expectations Handbook

Welcome to the world of PMI® and PMP® Certification! Today, project

management is one of the fastest growing, most in-demand professions in the
world. This course is designed to help you navigate the mountain of information
surrounding certification and help you successfully prepare to pass the PMP®
certification examination. Unlike other certifications, it is totally unrealistic to
expect that you can take ANY exam prep course and immediately pass the exam.
You must invest your own time to pass. As part of completing this course, you
should plan on spending 30-40 hours studying for the test. This largely means
taking practice exams and reviewing content based on the practice results. This
book is the primary resource for your review. Where necessary, your manual also
recommends additional resources for added information. You must
This course assumes you are already are familiar with the 2017 6th edition of the plan to spend
30 to 40 hours
PMBOK® Guide. If you have never read the PMBOK® Guide, stop now and visit studying to pass the
the PMI marketplace at http://marketplace.pmi.org/Pages/default.aspx? exam.
Category=PMBOKGuide to obtain a copy of it immediately. Although the exam is
NOT based on the Guide, it is the most important resource. We strongly
recommend that you read the PMBOK® Guide using the three read technique used
by many of the top graduate schools in the United States. In this technique:

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 First skim the entire work taking not more than 90 minutes to two hours for the Use the three
entire book focusing on the headings, graphics and captions. Don’t worry that read
you can’t remember anything. You are just getting the big ideas at this point. technique to
quickly learn the
 Secondly, read for understanding and highlight important information. PMBOK® Guide.
However, be careful. The PMBOK® Guide is incredibly information dense and
there is a tendency to highlight too much.
 Finally, review your highlighted content to ensure your learning.

At first blush it might not seem like the three read technique is a time saver,
however using this technique will save significant time and dramatically increase
your understanding and retention—both of which will increase your likelihood of
passing the exam on the first try.
Despite the fact that the PMBOK® Guide is very important for the exam, it is a
misconception to think that the PMI-PMP® Exam is based on the PMBOK® Guide.
This is not the case. The exam is actually based on a document called the Role
Delineation Study, or RDS, which is conducted every three to five years as part of
PMI’s standards development process. The RDS is a available on Amazon or
PMI’s bookstore. However, be forewarned it is not your typical read. The RDS is
a social science survey report showing what skills, tools, and techniques real-world
project managers are using to deliver business results. Unfortunately, the
information is not presented in a way that provides much help. Outside of the
PMBOK® Guide there are twelve books are considered foundational for the exam.
The PMBOK® Guide is merely one of the 12 although it provides the framework
for project management. The other books used as a foundation for the exam
include:
 Project and Program Risk Management, R. Max Wideman, Editor
 Quality Management for Projects and Programs, Lewis R. Ireland Slide 4
 Doing Business Internationally, Walker, Walker and Shmitz
 The Cultural Dimensions of International Business, Gary P. Ferraro
 Global Literacies, Robert Rosen
 How to Lead Work Teams, Fran Rees
 Principles of Project Management, PMI®
 Project Management A Systems Approach, Harold Kerzner
 Human Resource Skills for the Project Manager, Vijay K. Verma
 Earned Value Practice Standard, PMI®
 The Scrum Guide™ , Jeff Sutherland and Ken Schwaber
These books provide significant information used by the people who write the
exam questions. However, it is NOT recommended that you read all of these
books to prepare for the test unless you are really struggling with a topic and wish
to have all the source information.
PMI’s Assumptions
As you prepare for the PMP® exam, it is important that you understand some basic
assumptions made by the exam item writers. These tidbits can be thought of as
free points of wisdom for the exam. They provide much needed context for

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specific questions. One of the basic assumptions PMI® makes with the exam is that
you have real-world experience managing projects. You prove this assumption
through the answers you provide on your application concerning your post
positions.
The next assumption PMI® makes concerns the type of project you are leading. In
the real-world, we are all leading very different sized projects across a wide range
of industries. Unfortunately, it is impossible to test across that range. Therefore,
PMI® standardizes the basic project used as the baseline for the exam. This is
typically a large project in a matrixed organization. Examples of large projects
include:
 Deploying a new accounting, ERP, or CRM system for any organization of
more than 500 people.
 Building a new building, road, light-rail system, or other large traditional
engineering endeavor.
 Developing a new commercial product.
 Creating a new manufacturing process for medium to heavy industry or
hardware for a high technology firm.
 Developing a new support operation for an organization of more than 500
people, such as a new accounting operation, call center, or help desk.
The best way to succeed on the exam is to keep one point of focus. Unless the
question provides a different scenario, the following circumstances apply as you go
through the exam. You work as a project manager for a large multinational called
Slide 5
the Acme Widget Factory. You are leading a project to develop a new product that
is critical to the organization’s success. You are managing 100 resources located in
five different time zones on two different continents. You work in a matrixed
organization and none of the resources are dedicated to only your project or report
directly to you. It is not enough to simply have worked on projects like these. To
be successful with the exam, it is also important that you assume nothing goes
perfectly. You are expected to have confronted the following challenges:
 Significant issues with scope change.
 Significant schedule and cost overruns.
 Problems managing resource constraints.
 Problems managing product quality.
 Significant resource burnout.
 A sense of fighting your processes to complete the real work.
The first “free” question is about what the acronym PMP® represents. PMP®
stands for Project Management Professional® when formally spelled out. The Slide 6
second “free” question is “When was PMI® founded?” PMI® was founded in
1969. The third set of “free” questions deals with understanding why PMI®
believes it is important that project managers become certified. PMI® offers three
main reasons for certification from the project manager’s perspective:
 It gives you higher income potential
 It proves you know international standards
 It’s required by a growing number of employers

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Image 1: PMI’s Website Navigation

The Certification Process

Part of being successful in obtaining the PMP® is understanding the process that Slide 7
one must be undertaken to qualify and sit for the exam. This process begins by
visiting PMI’s website at http://www.pmi.org and selecting Certifications / Project
Management Professional (PMP) as shown in the Image 1 on the this page. If you
are ready to apply now select the Apply Now link found on the certification
navigation. Once on the PMP® Certification page you can select the link for the
Handbook to obtain a copy of the PMP® Certification Handbook. This publication
provides all the information you need to know about the actual certification
process, and is an excellent resource to have on hand as you complete the
application itself. The handbook downloads as a PDF file. It is recommended that
you save a copy. Next to the Handbook is a link for the exam content outline, and
another link that will take you to a page dedicated to exam guidance. The Exam
content outline and the exam guidance are less helpful than you would think, so we
will skip them for now.
Once you have downloaded the handbook the real work begins. Select the Apply
Now button. This will allow you to begin the application process. If this is the first
time you have visited the site you are required to create a personal login. This
login is valid for 90-days and allows you to complete the application over several
sittings rather than all at once. The web application is very similar to a job
application and requires you to prove you have the requisite amount of professional
experience to sit for the PMP® exam. The form asks for your experience
LEADING projects, but does NOT require that you actually held the title of
project manager. As you complete the application, you are required to categorize
your hours of experience based upon the five process groups found in the
PMBOK® Guide. It is not required that you have hours reported in all the process
groups on every project, but it is required that in total you have spent time in all the
process groups. Most importantly, it is critical that you complete the application
using the terminology found in the PMBOK® Guide and not the terminology from
your organization. This is important because most of the application reviewers do
not have experience within your organization and have been trained based upon
PMI’s standards. You do not want to do anything that would confuse your
reviewer and thereby slow down the application process.

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Do not be tempted to exaggerate your experience in any way. PMI® is very good
at weeding out embellished applications and you will likely be caught.
Additionally, such efforts are clear violations of the PMI® Code of Conduct.
PMI® targets an audit rate between 12% and 18% of all applications received.
Therefore, it is also possible to be selected for an audit without having a problem
on your application. Should you be selected for an audit, PMI® will contact each
of your former employers to confirm the information provided, and you will be
asked to provide formal proof of your degree and educational status. PMI®
commits to completing their portion of the audit process in five to seven days but
you are allowed up to 90-days to collect all the information. Should you be audited
you can reasonably expect the process to add 30-days to your timeline.
Once you have completed the Experience Verification Form you must submit it to
PMI®. You are not required to submit payment at the time of application but you
must pay the test fees prior to being able to schedule your exam. PMI® provides a
significant enough discount to PMI® members that it actually costs less to join
PMI® and pay for the test than to pay for the exam as a non-member. The fees for
the exam are:
®
 PMI members pay $405 (retaking the test costs $275)
 Non-members pay $555 (retaking the test costs $375)

Once you have received your acceptance notification from PMI® and have paid
your exam fee you can schedule the test. With limited exceptions, the test is
delivered as a computer-based exam and is not based on a set schedule. The exam
is administered by Prometric Testing Centers. In most locations it can be taken
Monday through Friday during normal business hours as well as on Saturday. This
does not necessarily mean, however, that you can take the exam whenever you
like. Prometric provides support for most standardized exams so there is often
significant competition to get a seat. Therefore, you should schedule your exam at
least two weeks prior to your target date and have a little flexibility around your
date and time. To schedule your exam or to find the nearest testing center visit
Prometric’s website at:
http://prometric.com/PMI
PMP® Candidate Requirements
Many candidates are confused by PMI’s requirements for entry to the exam. There
are two major components of the requirements: your professional experience and
your education that is specific to project management.
PMI® breaks a candidate’s experience into two categories, referred to as Category I
and Category II. The defining criteria for which category you are placed in is
whether or not you hold a four year bachelor’s degree or global equivalent.
Candidates do not receive additional consideration for advanced degrees. Those
holding a four year degree are considered Category I candidates and those without
a four year degree or equivalent are considered Category II candidates. The
category determines the number of hours of professional experience required to
qualify for the exam.
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 Category I Experience — This indicates a minimum of three years/36

months unique non-overlapping professional project management experience
during which at least 4,500 hours were spent leading and directing project
tasks.
 Category II Experience — This indicates a minimum five years/60 months
unique non- overlapping professional project management experience during
which at least 7,500 hours were spent leading and directing project tasks.
Regardless of the category claimed, applicants are also required to complete 35
hours of formal education in project management. These are formally referred to
as “Contact Hours.” This is one of the greatest areas of confusion for PMP®
candidates so please read this carefully.
A contact hour is an hour of formal education with an instructor—or it’s
equivalent. The actual course may be delivered using almost any method
including online or virtual courses so long as there is a way to test the learning
such as a post-course exam and/or survey. Self-directed learning will usually
NOT qualify.
Contact hours do not expire and college or university courses may be included.
When counting the hours of college or university courses, use the rule of thumb
that one hour of face-time in the classroom with an instructor counts as one
contact hour. Therefore, if your university was on a typical trimester system
(fall, spring and summer) with 15 week semesters, and if your course met three
times a week, you would claim 45 contact hours for a three credit hour course.
Finally, contact hours are the same as professional development units or PDUs.
PDUs represent the continuing education credits that a PMI® certificate holder
must obtain in order to keep their certification current. The PMP® requires an
individual to obtain 60 PDUs over a three year period. However, any credits
toward PDUs received prior to the certification date may not be counted. More
information about PMI’s continuing education requirement can be found in the
certification handbook. Make sure to consult with your instructor should you
have any concerns about the courses you have taken.
PMI® periodically makes changes to the exam and its processes including, but
not limited to: changes to the application, processing targets, qualification
requirements, the passing score, the breakdown of questions on the test, and/or
test administration. For the latest information contact PMI® directly. If there is
a difference between information in this book and information given by PMI®,
always follow PMI®.

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Should you have questions about certification or any other PMI® specific Slide 8
information you should contact PMI® Customer Care at:
Project Management Institute
Certification Dept.
14 Campus Boulevard
Newtown Square, PA 19073-3299 USA
Tel: +1-610-356-4600
Fax: +1-610-356-4647
E-mail: [email protected]
If you do not have access you the internet, it is possible to complete the application
using the application found in the PMP® Certification Handbook. Once you have
completed the application simply mail it in to the address listed above. Using the
paper application will significantly slow down the review process, however. PMI®
says they will review paper applications within 10-days of receipt for an individual
and within 20-days for a group. The standard for online applications is five days.
You should not hold these as guarantees as it has been known to take longer based
on the volume of applications PMI® has at any point in time.
The PMP® Exam
The standard format for the exam is a four hour, 200 question, computer-based test
(CBT) administered in English. PMI® does allow for paper-based testing in limited
circumstances. Those circumstances include:
 Candidates who live at least 186.5 miles/300 km from a Prometric CBT site.
®
 Employers (Corporate Sponsors) who wish to administer a PMI examination
to their employees. In this case, there is no restriction on distance. Only
employees of that one organization may test at the event. PMI® also reserves
the right to cancel a corporate session if less than 10 participants are scheduled
to take the exam.
®
 PMI maintains additional restrictions for paper-based testing. To learn more
about paper-based testing contact PMI® directly at [email protected].
Although the test is only provided in English,
PMI® does provide additional language support Arabic Hebrew
in several additional languages. In such Brazilian Portuguese Italian
situations the exam question is given in English
on one half of the screen and the question and Chinese (Simplified) Japanese
possible answers are on the other half of the Chinese (Traditional) Korean
screen translated into a second language. The
available languages are shown in the Image 2. French Russian
German Spanish
Upon entering the testing center you must
provide two forms of identification. One of Image 2: Additional Languages Supported
these must be a government issued photo ID.
Many of the testing centers provide storage for personal items. However, it is
strongly recommended that you do not take anything other than your two forms of

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ID, keys, and a non-scientific calculator with you.

Should you get any math questions, the calculator can come in handy and often
prevents simple errors. Fewer and fewer candidates every year get questions
requiring significant math, but they are still possible and it is foolish to risk the
chance of losing valuable points to simple math errors. Just make sure the
calculator you bring is non-scientific. The testing center will provide scratch paper
and pencils for your use.
Once you enter the testing center and provide your identification you will be led
into the testing room. Depending on the center, there will be somewhere between
one and more than a dozen workstations. Each workstation is the same, and
provides access to the battery of tests administered by Prometric. The person
sitting next to you might be taking the PMP® exam, or they might be taking any
number of other exams. Even if the person sitting next to you is taking the PMP®
exam they will not have the same test as you. So any effort to copy them will
provide no benefit. When you sit to take the exam it is automatically generated
from a test bank of more than 2,500 potential questions.
Although no examination preparation organization has access to this test bank,
PMI® does disclose some important information about the test. To learn more
about the test makeup, review the Project Management Professional Examination
Specification available at the PMI® marketplace on PMI’s website.
Exam questions are broken into Slide 9
Percentage of
six basic groupings and the Domain Questions
number of questions per group
is weighted based upon the table Initiation 13%
shown in Image 3 to the right. Planning 24%
When you sit at your Executing 31%
workstation you will be allowed Monitoring and Controlling 25%
up to 15-minutes to complete a
tutorial that helps candidates Closing 7%
®
become familiar with the Image 3: PMP Examination Blueprint
computer interface and the
format in which the exam is presented. This time is not considered part of the four
hours allowed for the actual test. There is also a 15-minute post-exam survey that
asks you about your experience and preparation. Both of these 15-minute sections
are optional.
Each of the 200 questions is accompanied by four potential answers of varying
lengths. The four hour time limit is more than enough time to complete the exam.
The average time to complete the test is between 2.5 hours and three hours. Of the
200 questions, 25 questions are pretest, or validation questions. These questions
do not count in either the numerator or denominator of your exam score. However,
it is impossible for the candidate to know which questions are real and which
questions are part of the evaluation bank. Therefore, it is critical that you consider
every question real. The pretest questions are used by PMI® to constantly develop
and test new potential questions for the test bank.

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Domain Tasks
An issue that many PMP students struggle with is understanding the difference
between the processes found in the PMBOK® Guide and those defined by PMI’s
Role Delineation Study. The two are actually very close but they are not in a one-to
-one relationship. There are 49 processes defined in the PMBOK® Guide and 42
tasks found in the Role Delineation Study. It is important that you understand both
sets of processes. For the purposes of this manual we will refer to the items found
in the PMBOK® Guide as “Processes” and the items found in the Role Delineation
Study as “Tasks.” Both are grouped into the five process groups shown in Image 3
(Initiating, Planning, Executing, Monitoring and Controlling, and Closing). Much
of this course focuses on the Processes found in the PMBOK® Guide. We will start
however, with the Tasks and then relate them to the Processes as we go.
The Tasks are often an easier place to start because they are designed to represent a
specific task done by the project manager and/or the team in the execution of a
project. There is absolutely nothing that says that you must do all of the tasks or
processes on any given project. Remember, these simply represent the most
common or generally accepted practices PMI® has seen based on their Role
Delineation Study (RDS). These tasks did NOT change with the release of the 6th
edition of the PMBOK Guide, and will only change when the RDS is updated. It is
fully expected, and even encouraged, that every project manager and their team
must define the “right” processes and tasks on each specific project. This includes
the selection of the specific methodology the team wishes to use.
The June, 2015 version of the Exam Content Outline defines the following tasks:
 Initiating Domain — 13% of the Exam
Slides 10-11
1. Perform a project assessment based on the available information, the
lessons learned from previous projects, and the meetings held with
relevant stakeholders. This provides the information necessary to
evaluate the feasibility of new products or services within the given
assumptions and/or constraints. This task is a mouthful, but it simply
means that someone must look at what the organization and others have
done in the past to determine if the project can really be done in the
current situation. This task is all about determining whether or not the
project will provide the desired business value given the specific
conditions that currently exist.
2. Identify the key deliverables based on the business requirements in order
to manage customer expectations and direct the achievement of project
goals. This task was new for the 2016 exam, and brought an agile
perspective to the PMP®. It pushes project leaders to prioritize the
project’s requirements from most important to least. It also demands
that a project focuses on business needs rather than simply project
deliverables.

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3. Perform stakeholder analysis using the appropriate tools and techniques

in order to align expectations and gain support for the project. This
Knowledge Area was first added to the PMBOK® Guide with the 5th
edition. The most recent Role Delineation Study found that most
successful project leaders are investing more and more time in
understanding who their stakeholders are, how much influence they have
on the project, and what they really want to ensure those stakeholders are
ready and willing to provide the support that the team needs to deliver
business results.
4. Identify high level risks, assumptions, and constraints based on the
current environment, organizational factors, historical data, and expert
judgment, in order to propose an implementation strategy. It is critical
the team selects the appropriate strategy to deliver the expected business
value. The team must understand the potential bumps their project might
encounter and select an appropriate strategy.
5. Participate in the development of the project charter by compiling and
analyzing gathered information in order to ensure project stakeholders
are in agreement on its elements. In previous editions of the PMBOK®
Guide it was either not discussed at all or it was assumed that this was
completed before the project manager was assigned. The 5th edition of
the Guide changed that and adopted the approach that many project
managers experience in the real world. Most project managers find that
the charter is rarely completed before they are assigned to it. More often
than not, they are required to work with the sponsor and other
stakeholders to create a charter.
6. Obtain project charter approval from the sponsor in order to formalize
the authority assigned to the project manager and gain commitment and
acceptance for the project. Once the charter is completed it is approved
by the sponsor. This step is important because it informs the team about
the sponsor’s expectations and the limits of their authority. The level of
authority given to the project manager and team often provides critical
information to everyone else about how important the project truly is to
the sponsor and organization.
7. Conduct a benefit analysis with the relevant stakeholders to validate
project alignment with organizational strategy and expected business
value. This was a new task for the 2016 exam. It focuses attention on
the need to align the project with the organizational strategy. That’s
right! Project managers are supposed to be part of the strategic
leadership team, and every project is supposed to be aligned with the
organizations strategy.
8. Inform stakeholders of the approved project charter to ensure common
understanding of the key deliverables, milestones, and their roles and
responsibilities. This task was also new for 2016. It results from the fact
that all project managers face a constant requirement to carefully manage
expectations, and constantly must work to ensure a common
understanding with the stakeholder community.
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 Planning Domain — 24% of the exam Slide 12 - 14

1. Review and assess detailed project requirements, constraints, and

assumptions with stakeholders based on the project charter, the lessons
learned, and by using requirement gathering techniques in order to
establish detailed project deliverables. Once the PM and team have a
charter they have a starting point to begin project work. But before they
begin they must determine what set of deliverables will meet the defined
requirements.
2. Develop a scope management plan, based on the approved project scope
and using scope management techniques, in order to define, maintain,
and manage the scope of the project. We haven’t started the course yet
and already terms like requirements, deliverables, and scope are being
used with ease—assuming that everyone understands exactly what these
mean. Unfortunately, many students think of these terms as synonyms.
They are not. According to PMI®, a REQUIREMENT is a condition or
capability that is required to be present in a product, service or result to
satisfy a business need. (PMBOK® Guide 2017 p.719). SCOPE is the
sum of the products, services, and results to be provided as a project. It
has two forms: PROJECT and PRODUCT SCOPE (PMBOK® Guide
2017 p.722). Finally, a DELIVERABLE is any unique and verifiable
product, result or capability to perform a service that is required to be
produced to complete a process, phase or project (PMBOK® Guide 2017
p.704). When we discuss the SCOPE MANAGEMENT PLAN we are
talking about a component of the project or program management plan
that describes how the scope will defined, developed, monitored,
controlled, and validated (PMBOK® Guide 2017 p.722). That’s a lot to
remember. To simplify things, think of requirements as being tests
against which the output of the project are measured: it must do this, or
have that. DELIVERABLES are any unique and verifiable product,
result or capability to perform a service that is required to be produced
to complete a process, phase, or project (PMBOK® Guide 2017 p.7214).
The deliverables must meet the stated requirements. Scope comes in
two forms: project and product. PRODUCT SCOPE is the features and
functions that characterize a product, service, or result (PMBOK® Guide
2017 p.715). PROJECT SCOPE is all the work performed to deliver a
product, service, or result with the specified features and functions
(PMBOK® Guide 2017 p.717).
3. Develop a Cost Management Plan based on the project scope, schedule,
resources, approved project charter and other information, using
estimating techniques, in order to manage project costs. This is arrived
at using estimating techniques. The Cost Management Plan is the
second “Management Plan” encountered. Both it and the Scope
Management Plan are combined with several other planning documents
to make up the Project Management Plan. The Cost Management Plan
sets the rules that the PM and team will use to define, manage, and
change the project budget and actual costs.

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4. Develop the project schedule based on the approved project deliverables

and milestones, scope and resource management plans in order to
manage timely completion of the project. The project schedule helps to
ensure that the team can deliver when they promise. In addition to
creating a schedule, the team also must define a schedule management
plan which defines how the team will define and manage the project
schedule.
5. Develop the human resource management plan by defining the roles and
responsibilities of the project team members in order to create a project
organizational structure and provide guidance regarding how resources
will be assigned and managed. The most important part of any project is
the people. To ensure the organization has the right people doing the
right things, the PM uses a Human Resource Management Plan.
6. Develop the communications management plan based on the project
organizational structure and stakeholder requirements, in order to define
and manage the flow of project information. Like all the management
plans found in this course, the communications management plan
defines how the team intends to manage all aspects of the area in
question. This means basic practices as well as changes. The notion is
that before the team defines the specifics for the area, they must first
agree with key stakeholders to a basic set of rules they will follow.
7. Develop the procurement management plan based on the project scope,
budget, and schedule, in order to ensure that the required project
resources will be available. Sometimes the project requires the team to
purchase things from outside the organization. This can include paying
for outside consultants or components of some kind, and means the team
must have a plan established.
8. Develop the quality management plan and define the quality standards
for the project and its products, based on the project scope, risks and
requirements, in order to prevent the occurrence of defects and control
the cost of quality. This course will spend a significant amount of time
talking about what quality really means. For now, it is enough that you
recognize the need to have a plan in place to define it and the processes
necessary to manage it.
9. Develop the change management plan by defining how changes will be
addressed and controlled in order to track and manage change. This
plan defines how changes will be addressed and controlled. When most
project professionals hear about change management they immediately
think scope change, but change can occur in any area of the project. The
change management plan simply sets the ground rules for making a
change.
10. Plan for risk management by developing a risk management plan;
identifying, analyzing, and prioritizing project risk; creating the risk
register; and defining risk response strategies in order to manage
uncertainty and opportunity throughout the project life cycle.
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Successful management of risks is critical to project success. It requires

establishing rules for defining, analyzing and executing responses to
risk.
11. Present the project management plan to the relevant stakeholders
according to the applicable policies and procedures in order to obtain
the approval to proceed with project execution. Once all the various
plans are completed, the entire package is presented to the project
sponsor and other key stakeholders.
12. Conduct kick-off meeting, communicating the start of the project, key
milestones, and other relevant information in order to inform and
engage stakeholders and gain commitment. This meeting announces the
start of the project and covers the key milestones and other relevant
information. It is essential for managing stakeholder’s expectations and
instilling good communications. This is part of the initiating process
and occurs before the team has planned out the project because it
provides critical information needed for planning.
13. Develop the stakeholder management plan by analyzing needs, interests,
and potential impact in order to effectively manage stakeholders’
expectations and engage them in project decisions. This was a new task
for the 2016 exam and highlights the importance of having a plan for
managing stakeholders. They are the reason that teams do projects and
far too many projects fail because the PM or team members see the
stakeholders as a hurdle to overcome rather than as a critical part of the
team to incorporate in decisions in order to achieve overall success.
 Executing Domain — 31% of the Exam

1. Acquire and manage project resources by following the human resource

Slide 15
and procurement management plans in order to meet project
requirements. Thus far we have been focused in the planning process
which has dealt with creating the various management plans that define
the rules that the organization is supposed to follow to execute the
project. This task is the first of many tasks which simply follows those
guidelines.
2. Manage task execution based on the project management plan by
leading and developing the project team in order to achieve project
deliverables. PMI® does not assume the team has all the skills
necessary to deliver the desired project results. Instead, it is assumed
the project manager must work with the rest of the organization to
provide training and leadership to develop the required skills.
3. Implement the quality management plan using the appropriate tools and
techniques in order to ensure that work is performed in accordance with
required quality standards. The PMI® framework requires the project
manager to first define quality and then work to ensure that the team
meets that standard. It is critical that you really understand what PMI®
means when they talk about quality.
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4. Implement approved changes and corrective actions by following the

change management plan in order to meet project requirements. Every
project faces changes. The key to success is dealing with those changes
appropriately by ensuring that everyone follows the change
management plan.
5. Implement approved actions by following the risk management plan in
order to minimize the impact of the risks and take advantage of
opportunities on the project. Risks are both good and bad things. They
occur on every project regardless of how much the team plans. The key
therefore, is following the processes the team defines for managing
those risks.
6. Manage the flow of information by following the communications plan
in order to keep stakeholders engaged and informed. This is a new task
for the 2016 exam. The plan in this task is sometimes called the
communications management plan. The task highlights the need for the
team to focus on constant communication and information flow with
stakeholders.
7. Maintain stakeholder relationships by following the stakeholder
management plan in order to receive continued support and
management expectations. Stakeholders, stakeholders, stakeholders.
They are the key to successful project management. This task was new
for the 2016 exam and represents yet again the continued shift towards
emphasizing that stakeholder engagement is necessary for good project
execution.
 Monitoring and Controlling Domain — 25% of the Exam

 Measure project performance using appropriate tools and techniques in Slide 16
order to identify and quantify any variances and corrective actions.
Quantitative measurement is a key aspect of attaining project success.
Only by using objective measures can the team determine variances and
define appropriate corrective action.
 Manage changes to the project by following the change management
plan in order to ensure that project goals remain aligned with business
needs. Throughout the project, the team will face a variety of changes.
Therefore, it is critical that they follow the approved change
management plan and constantly reconfirm that the project fits with the
organizational strategy.
 Verify that project deliverables conform to the quality standards
established in the quality management plan by using the appropriate
tools and techniques to meet project requirements and business needs.
This task is simply about following through on the practices that were
established when quality was defined.

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 Monitor and assess risk by determining whether exposure has changed
and evaluating the effectiveness of the response strategies in order to
manage the impact of the risks and opportunities on the project. There
are a variety of techniques that may be used to respond to different
project risks. The key is alignment, or making sure the team uses the
best response strategy to achieve the desired end. This means that the
team must constantly judge how well each response is working.
 Review the issue log, update if necessary, and determine corrective
actions by using appropriate tools and techniques in order to minimize
the impact on the project. An ISSUE is a current condition or situation
that may have an impact on the project objective (PMBOK® Guide 2017
p.709). Issues may have positive or negative outcomes and are
documented in the issue log.
 Capture, analyze, and manage the lessons learned, using lessons learned
management techniques in order to enable continuous improvement.
Successful teams know they cannot keep making the same mistakes
over and over again. It is critical that teams review what has happened
on projects in the past.
 Monitor procurement activities according to the procurement plan in
order to verify compliance with project objectives. Lessons learned
provide an opportunity to focus on continuous improvement. This is a
task often foreign to PMP® students. Make sure you understand PMI’s
perspective on procurement to avoid missing points on questions that
are easy otherwise.
 Closing Domain — 7% of the Exam

 Obtain final acceptance of the project deliverables from relevant

stakeholders in order to confirm that project scope and deliverables Slides 17 - 18
were achieved. To call any project a success it must meet the
quantifiable, objective success criteria everyone agreed to at the
beginning, and the key stakeholders must sign off that this has
happened.
 Transfer the ownership of deliverables to the assigned stakeholders in
accordance with the project plan in order to facilitate project closure.
More than just producing the desired results, the product or service of
the project must be put in operation for the project to have real value to
the organization. This step ensures that the team does not get forced
into operations management.
 Obtain financial, legal, and administrative closure using generally
accepted practices and policies in order to communicate formal project
closure and ensure transfer of liability. For many students of the exam,
this step is foreign. It represents a critical focus of dotting the i’s and
crossing the t’s necessary for true project closure. In the real-world, this
is a paperwork step sometimes handled by those outside the project
team.
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 Prepare and share the final project report according to the
communications management plan in order to document and convey the
project performance and assist in project evaluation. As has already
been stated, lessons learned and continuous improvement are key topics
for test takers. You must focus on these two ideas and understand the
importance that PMI® places on them.
 Collate lessons learned that were documented throughout the project
and conduct a comprehensive project review in order to update the
organization’s knowledge base. This is yet another task dealing with
lessons learned and continuous improvement. Hopefully, you already
see the trend.
 Archive project documents and materials using generally accepted
practices in order to comply with statutory requirements and for use in
future projects and audits. This was a new task with the 2016 exam and
represents a continuation of the efforts seen in the last couple of items.
There has always been an idea that project managers should look at
what the organization has previously done to understand how to avoid
common pitfalls. This task formalizes that process.
 Obtain feedback from relevant stakeholders using appropriate tools and
techniques and based on the stakeholder management plan in order to
evaluate their satisfaction. This task was also new for the 2016 exam.
It provides the opportunity for the team to check in with the key
stakeholders to ensure that their needs have been met. It focuses the
attention of the team on meeting the needs of the business. It is the very
reason projects are undertaken in the first place.
Required Score
Once you begin the actual exam make sure to answer every question because there
is no penalty for incorrect answers, but questions left blank are considered wrong. Slides 19
As you progress through the exam, mark any question you are unsure of for review.
At the end of the exam you can check all the questions or only those questions that
you have marked for review. Upon completing the exam, and your review, the
system will ask if you are ready to have the exam scored. Once you confirm you
are ready for the exam to be scored it will take less than ten seconds for the results
to be presented. It is important to remember that the PMP® Exam is a pass/fail
exam. The passing score is 61% or 106 of the 175 graded questions.
Unfortunately, only 68% of the exams taken are actually passed! Stop for a
moment and think about those two numbers. What they suggest is that this exam is
so difficult that only about two-thirds of those who take the test can answer enough
questions correctly to obtain a D– or better. Simply put, the PMP® Exam is likely
the most difficult standardized test you will ever take. Do not underestimate how
hard it will be!

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What Makes the PMP® Exam So Difficult?

So what makes the PMP® Exam so tough? The standards for the profession are
well-known. There are lots of organizations providing exam preparation courses.
And PMI® requires every candidate to meet a requisite number of hours of both
experience and education. Shouldn’t everyone pass? No! If everyone passed the
exam it would seriously undermine the value of the certification. The PMP®
certification does not prove qualification any more than having a doctor be Board
Certified proves they are a good physician. All any certification proves is that a
test has been passed and the holder of the certification has a foundational level of
knowledge.
Typically, there are nine reasons why the PMP® Exam is so difficult. These Slide 20-21
reasons include:
®
 Many people assume that the test simply covers the PMBOK Guide. As has
already been discussed, there are 12 books that are considered fair game for the
exam. The PMBOK® Guide is just one of these. Memorizing everything in it
will not ensure passage of the exam. However, the PMBOK® Guide is the most
important of the 12 books for preparation purposes.
 The exam requires more than memorization. Many other certifications simply
require you to regurgitate information from a textbook, standard, or an exam
prep course. In many cases, it’s possible to take those exam preparation
courses and then immediately take the actual exam. This is not possible with
the PMP® because memorizing a bunch of formulas and information is not
enough. Passing the PMP® requires memorization, real world experience, and a
clear understanding of the PMI® perspective.
 A large percentage of the exam questions ask what would you do in a given
situation. Unfortunately, the PMBOK® Guide answer is almost never one of
the four choices. Just like the real-world, the exam requires to select the best
choice from a list of sub-optimal options. If you do not have real-world project
management experience you won’t be able to do this. And if you have not
memorized the processes and framework in the PMBOK® Guide you will not
know the PMI® way of thinking about a topic. Miss either one of these two
components and you fail the exam.
 The exam focuses on the five process groups and ten knowledge areas found in
the PMBOK® Guide. The PMBOK® Guide is the standard for the profession of
project management. There are well over two million PMBOK® Guides in
circulation. However, the Guide does not represent a formal methodology for
doing projects. It is a framework. There are more than 30 major
methodologies that are fully compliant with the standard. Passing the exam
requires you to understand the difference between these.
 The exam requires you to answer questions from PMI’s perspective and not the
perspective of any current or past job. This fact requires a very delicate
balancing act. As was previously mentioned, it is impossible to pass the exam
without real world experience. However, relying too heavily on personal
experience will cause you to fail the exam. Instead, PMI® requires you to
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answer the questions from the perspective of the standard meaning you must
assume the “typical” project PMI® uses for test design.
 Some questions might be a series. This means the first question in the series
asks you to solve a math problem or model and then anywhere from one to four
additional questions asks what the resultant value tells you about the situation.
If you get the first question wrong you will likely get all the associated
questions incorrect as well. Missing a series of questions like this is a quick
way to fail the exam.
 Some of the questions are based on the inputs, outputs, tools and techniques
found in the 49 processes described in the PMBOK® Guide. This creates a list
of several hundred items that must be learned correctly. That’s a lot of
information and it takes time. It is not required to memorize each input, output,
tool and technique, but you do need to have a strong sense about them and
when one is called out where it fits in a specific process. Manage your time
accordingly!
 A number of key formulas will likely be on the exam. These formulas include:
Earned Value, Critical Chain or CCPM, PERT, EMV, and CPM. Studying
these formulas is a lot like purchasing insurance. The formula you are most
likely to see on the exam is the one you have studied the least or with which
you are least comfortable. In fact, if you really study hard and master all the
formulas, it’s even possible to not get any questions requiring their use. On the
other hand, if you don’t study them you will be the one person that seems to get
an exam of nothing but math. Which one of these scenarios sounds better to
you?
 Another 10%-15% of the exam will require the use of other formulas such as
the formulas for Didactic communication, standard deviation, depreciation, or
net present value (NPV). The same rules apply here as above.
Test-Taking Strategies
The PMP® exam is similar to a lot of other standardized exams, and as such you Slide 22
can apply a number of commonly used test-taking strategies to improve your
results. These strategies will not replace knowing the subject matter, but they can
provide a significant lift to your score when you are nervous or struggle with
specific questions. These strategies include:
 Predict the answer: If you have studied hard and truly know the material, a
great technique is to predict the correct answer to a question before you read the
choices. This technique is especially effective on questions that test your
factual knowledge or ask you to fill in the blank or complete a sentence. By
first predicting the answer you can avoid being distracted by choices that don’t
agree with your knowledge. Once you make your prediction make sure to read
all of the choices so you can be sure to select the answer that most closely
meets your expectations.

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 Your first instinct: Often, test-takers struggle because they overthink the
questions. If you have done your homework, you will know the information
and must have confidence in that knowledge. It is critical that you trust your
first instinct. That little voice you hear is right more often than not. Research
has shown that your intuition often works faster than your reasoned mind. If
you have studied, your subconscious will often retrieve information before you
have a chance to work out the associations that support it.
 Read the whole question: Predicting the right answer and trusting your
instincts does NOT justify failing to read the entire question. Adding or
deleting one word can significantly alter the meaning of a question. Far too
often, test takers scan a multiple-choice question and recognize a few familiar
words. They then quickly progress to the answers where they find exactly what
they believe to be the correct choice. Unfortunately for them, test designers
also know about this tendency and regularly design questions taking it into
account. The only way you can avoid this pitfall is to read each question
carefully and then read it again before continuing to the potential answers.
PMI® allows up to four hours for the exam. This is more than enough time to
complete the exam. There is absolutely no reason to rush through the exam.
Take the time to carefully read each question and all the potential answers
before attempting to select the appropriate answer.
 Look for wrong answers: Once you have read the question carefully twice it is
time to examine the potential answers. One of the best way to simplify a
multiple-choice exam is to limit the number of potential choices. Focus on
removing the obviously wrong answers from the list before you consider the
potential right ones. Sometimes identifying an incorrect answer can help you
find the correct one as often the right answer is the exact opposite of one of the
wrong answers. This is not always the case, but it is a quick enough tactic to
help in many cases.
 Don’t overanalyze: It is very common for test takers to be nervous. When you
are nervous the brain often runs wild with a hundred different thoughts and
scenarios for each question. To succeed, you must take a deep breath and
SLOW DOWN! You have plenty of time to complete the exam. Focus on the
actual words in front of you. Do NOT create complex interpretations or try to
get into the mind of the test designers. Answer the question in front of you and
limit your thoughts to the information presented.
 Key words: Do you struggle with poor reading comprehension skills? If so,
you are like 60% of the people who take the PMP® exam. You can
dramatically improve your understanding by using the provided scratch paper
to jot down a few key words or phrases. This practice helps you to concentrate
on the process of reading by forcing the mind to weight the relative importance
of the question parts. This process will help you think more deeply and
carefully about the question.
®
 Confusing answer choices: The PMP exam is full of long winded questions
and answers. Many candidates are confused by such wordy content. As a
result, they tend to focus on the answers that are shorter and often easier to

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understand. Don’t make this mistake. The length of an answer or its confusing
diction has nothing to do with its validity. When you see a long winded
question or answer pay extra attention and try rephrasing it to ensure your
understanding.
®
 True statements: Often PMI uses information within the four potential
answers that is completely factual. That’s right, the information is true, but just
because the information provided in the answer is true it does NOT make the
answer necessarily correct. It is critical that you learn to tell the difference
between a factual answer and a correct one.
 No pattern: Many students believe they can decipher a pattern in the answers
on the test, or that they should always select a specific letter like “C”. This is
one of the worst ideas you can possibly take into the testing room. Remember,
your exam is generated from thousands of potential questions. The criteria for
being included in your test is whether or not the question gives us the correct
number of questions for a specific area. Additionally, the system randomizes
the answers so that two candidates could be sitting next to each other and get
the same question, but find the correct answer is a different letter.
Final Comments Before Starting
It is very important that you plan on taking your exam within 45-days of
completing this course. Although according to PMI® you have up to one year to
complete the exam from the date of your application acceptance, our experience
has been that students who do not complete the exam within 45-days have a high
probability of never taking the exam at all. It all starts by making the commitment.
You WILL complete the process within 45-days from the end of this class. The
clock is ticking so it’s time to get serious.
You must have a plan for studying for the exam. There are a few techniques we
recommend. First, become part of a study group. Studying with others can really
help. Each time your group meets it is a great practice to have each member of the
group present a different PMBOK® Guide knowledge area until each person
presents each area. The single best thing you can do to prepare for the exam is
teach the material to someone else. Studies have shown you will retain more than
90% of what you teach to others.
Should it be required, you may take the PMP® exam up to three times in one 12-
month period. If you fail the exam three times in that period PMI® requires you to
wait a full 12-months before you can test again. We have never had a candidate
who needed to take the exam three times. In fact, 99% of our candidates pass on the
first attempt. Do not become the exception. We know the test and have a proven
method to get you ready. This process and the knowledge you need has absolutely
nothing to do with the way your organization manages projects. As much as you
might want to argue with some of the processes, most—if not all of them—have
their basis in common sense, have been designed to work across a wide range of
industries, and are on the test. Arguing about questions or answers will not
accomplish anything but waste your time and create confusion.

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The rest of this course is designed to follow the basic structure of the PMBOK®
Guide with practice exams designed to facilitate learning at the end of each section.
The first two chapters are the exceptions as they simply introduce information
about the test and learning process. Chapter three in the Student Guide represents
chapters one through three of the PMBOK® Guide. Chapters four and onward
align with the same chapter number found in the PMBOK® Guide.
There are two types of questions in this guide:
 Questions designed to facilitate your learning of the processes, formulas,
inputs, outputs, tools and techniques. These are memorization questions and do
not reflect the questions you will see on the real exam. However, they are a
powerful tool to help you learn the information that will allow you to answer
the real exam questions.
 Questions designed to simulate what you will see on the real test.

It is important that you do not write in the course book when taking your practice
exams because you will want to retake the practice tests multiple times. Finally,
you will know that you are ready for the real exam when you regularly score 90%
or better on the practice tests.

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Exercise 1 — PMP® Application and Exam Exercise 1—The

Application &
These questions are not designed to replicate or reflect actual exam questions. Exam
They are designed to ensure you clearly understand the topics discussed in this
chapter, which will help you study for the PMP® Exam.
1. Which of the following correctly represents the acronym PMP®?
A. Project Mentoring Professional
B. Project Management Professional
C. Program Management Professional
D. Portfolio Management Professional
2. Which of the following is a benefit to holding the PMP® credential?
A. Higher income potential
B. Shows knowledge of a global standard
C. It is required by a growing number of companies
D. All of the above
3. If you have a four-year baccalaureate degree how many hours of professional
experience leading projects do you need?
A. 3,600
B. 4,500
C. 7,500
D. None of the above
4. If a candidate is attempting to qualify to sit for the PMP® exam how many
contact hours must be completed?
A. 35
B. None, PDUs are required
C. 45
D. 21
5. If you do not have a four-year baccalaureate degree how many hours of
professional experience leading project do you need?
A. 6,000
B. 4,500
C. 9,000
D. 7,500
6. Which of the following best describes a contact hour?
A. Contact hours are the same as PDUs
B. Contact hours represent hours of formal instruction or education in the
field of project management
C. Contact hours represent hours spent reading about or training in the
field of project management
D. None of the above

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7. How many questions are in the PMP® exam?

A. 175
B. 250
C. 200
D. 150
8. Which of the following PMBOK® Guide knowledge areas represents the largest
percentage of test questions:
A. Executing
B. Monitoring and Controlling
C. Planning
D. Initiating
9. What is the required passing score for the PMP® exam?
A. 68%
B. 80%
C. 61%
D. 75%
10. Approximately what percentage of test questions will be a direct quote from the
PMBOK® Guide?
A. 15%
B. 21%
C. 5%-10%
D. 0%

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Exercise 1 — PMP® Application and Exam Answers

1. Answer B: The PMP® is the most popular project management certification in
the world. It stands for Project Management Professional.
2. Answer D: All of the above are true according to PMI®.
3. Answer B: Under PMI’s Category I qualifications for people who hold a
baccalaureate degree, each candidate must possess at least 4,500 hours of
professional experience leading projects and 36 months of experience.
4. Answer A: For all PMP® candidates 35 contact hours must be obtained. A
contact hour is the same as an hour of face time with an instructor.
5. Answer D: Under PMI’s Category II qualifications for people who do not hold
a baccalaureate degree, each candidate must possess at least 7,500 hours of
professional experience leading projects and 60 months of experience.
6. Answer B: Contact hours represent hours of formal instruction or education in
the field of project management. Contact hours are the same as PDU categories
1, 3 and/or 5.
7. Answer C: The PMP® exam contains 200 questions of which only 175 are
actually graded. 25 questions are being evaluated for future addition to the test
bank. The test requires you to get 106 of the 175 graded questions correct.
8. Answer A: The executing process group represents 27% of the PMP® exam.
The planning process group represents 23%.
9. Answer C: 61% or 106 of the 175 scored questions must be answered correctly
to pass the PMP ®exam. Approximately 68% of all exams receive this score or
better.
10. Answer D: You should expect none of the correct answers on the exam to be
exact quotes from the PMBOK® Guide because of the focus on situational
questions.

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Types of PMP® Exam Questions

Chapter Overview
The PMP® exam item writers structure the exam in a variety of ways.
Understanding the types of questions is important to ensure you don’t miss
otherwise easy points because of the question structure. Additionally, questions
types are used in combination and not in isolation. This can significantly increase
question complexity. This chapter discusses a number of “PMIisms” you must
learn to dramatically improve your test score. It also reviews the most common
reasons people fail the exam. Finally, many students complain about the level of
ambiguity in the questions. Don’t be surprised if you don’t like the way the
questions are structured or if you feel like PMI® is trying to “trick” you. Let’s be
clear. PMI® is NOT trying to trick you. PMI® is using a well tested, proven
technique for evaluating knowledge.
There are seven different types of questions for which you need to prepare:
 Two right answers.
 Situational questions.
 Math or modeling questions.
 Long winded questions and/or questions with extraneous information.
 Understanding vs. simple memorization.
 Questions with invented terms.
 Questions with more than one component in the answer.
Questions With Two Right Answers
The first type of question you might encounter are questions with what appears to
Slide 24
be more than one right answer. On the PMP® exam there is NEVER more than
one right answer. However, test designers are very good at writing questions in a
way that it appears two or more answers are correct. Often these questions offer
multiple factual statements. However, only one of the facts or statements actually
answers the question asked. These questions effectively weed out less experienced
project managers. The more real world experience you have, the less difficulty
these questions will pose.
The key to correctly answering these questions is remembering three simple rules.
 Begin to answering each question by eliminating any answers you know are
wrong. In many cases this means you can eliminate two choices, leaving two
potential correct answers. You have just gone from a 25% chance of getting the
question correct to a 50% chance—doubling your odds!
 Always assume you will be dealing with sub-optimal choices, just like the real-
world. Simply put, the textbook answer is not going to be one of your choices. Focus on what
you would do
 In a situation where you might want to do more than one of the choices it is first.
important to ask yourself, what you would do first? PMI® has a very specific
perspective on this. The first thing you must always do is evaluate your

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alternatives. Only then should you communicate to stakeholders or do anything

else.
Let’s look at a sample question:

During your daily standup, a teammate reports that they are struggling with a Slide 25
critical task that is causing the project backlog item to be delayed. What should
you do?
A. Immediately inform the sponsor and key stakeholders.
B. Evaluate alternatives with the team.
C. Trust the team to handle it.
D. Keep pushing ahead as there is nothing you can do.

Most people are able to immediately eliminate D because it means ignoring the
problem. The other three options might be a bit tougher. Immediately informing
the sponsor and key stakeholders might seem like a good idea if you are a
proponent of transparency, but it is a terrible idea. Most senior leaders do not
respond well to project managers who come in with problems and no potential
solutions. Project leaders are hired to lead. Option B provides a reasonable
solution in evaluating alternatives based what was just suggested. Option C also
appears reasonable given that this question suggests yours is an agile project. Agile
development places a strong emphasis on trusting the team. However, agile
development does NOT suggest that the scrum master or project leader should just
assume the team will handle problems. The correct answer is B — Evaluate
alternatives with the team. It is always the first step in the process.
Situational Questions
The most important questions to prepare for on the exam are the situational
questions. These questions attempt to place you in a real-world situation and
require you to determine the best answer. In most cases the textbook answer is not
one of the four choices. As a result, you must pick the best from four sub-optimal
answers where you probably don’t really like any of the choices. Isn’t that often
the way things work in the real world?
Let’s examine a sample question.
Molly works for a large multi-national organization that manufactures steel as a Slide 26
project coordinator. He organization is matrixed. She is responsible for three
different projects, each with teams of ten to 20 team members who are also
assigned to multiple projects. Yesterday she received an email from the vice
president of stamped products complaining that one of her three projects was
failing to meet the customer’s expectations, and they had sent notification of their
intent to cancel the contract. What is the most likely cause of this problem?
A. The customers in question were not involved early enough in the
process.
B. Molly failed to get the customer to sign the scope statement.
C. Scope definition happened after the backlog definition.
D. The customer did not read their e-mail.
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This question requires two skills. First you needed to eliminate the answer or Stakeholders
answers you know to be false. In this case, most students are able to eliminate must be
option D. Rarely is PMI® ever flippant and “the customer did not read their e- engaged
mail” definitely qualifies as a flippant answer. The other options all look at least early and often for
the project to
possible. Most experienced project managers have struggled with scope and succeed.
requirements issues so the question has a ring of truth to it. PMI’s perspective on
scope and requirements issues is that they often occur because stakeholders become
involved way too late in the process to actually impact the results. The team is then
forced to deal with significant changes to meet the true stakeholder needs. The
way PMI® phrases this problem is to say that stakeholders are usually not involved
earlier enough in the process. When you know this basic PMIism and have real
world experience to back it up, this question becomes very easy. Based on the
information provided, you cannot tell whether or not Molly failed to get the
customer to sign the scope statement. Nor can you tell if scope definition happened
after the backlog definition. Both of these answers describe specific scenarios that
require additional information to confirm. Option A, “the customers in question
were not involved early enough in the process” is the correct answer because it
follows the PMI® mindset and matches the information provided.
Math or Modeling Questions
Most exam takers fall into one of two camps. Camp one struggles with the
situational and ambiguous questions. Camp two struggles with questions requiring
a strong working knowledge of the math and modeling in project management.
Fortunately—or unfortunately, depending on who you are—the PMP® exam has a
lot more of the former than the latter. However, this does not mean you do not
need to know the formulas and modeling. There are many different ways PMI® can
test your knowledge of these equations beyond just making you solve a math
problem. As we’ve said, it’s a lot like insurance. The one time you are not
prepared will be the time you need the information. The good news is that these
often represent the easiest questions on the exam because they have absolute right
and wrong answers. The difficulty with these questions comes from two aspects.
 First, you must actually know the equations and models and also know how to
use them. This is simple memorization, but it must be done. This course will
examine all of these equations.
 The second aspect making these questions difficult is that they often are used as
part of a series that requires you to build the model first and then answer two or
three questions about the results. If you do not build the model or complete the
equation correctly in the first question you will not get the rest of the questions
correct either. It is almost impossible to pass the exam if you get these series
questions wrong.
Let’s look at a sample.

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The first question might ask what is the project

duration for the following series of tasks (See
Image 4)?
A. 34
B. 35
C. 37
D. 38
The second question would then ask for the
critical path of the network. Or you could get Image 4: Model Sample Tasks
several questions about the slack or float of
various tasks. You could also be asked situational questions. Such as what would
you do if a particular task fell behind a certain number of days. Of course, if you
can’t build a precedence diagram or calculate the critical path you are going to miss
all of these questions. In this case, D is the correct answer to the question.

Long winded questions and/or questions with extraneous

information
The most common type of questions encountered on the exam are extremely long
winded questions or questions that contain a large amount of extraneous
information. These questions present a problem because it’s often difficult to
determine what information is truly important. There are a several things you can
do in order to dramatically increase your likelihood of getting these questions
correct.
 Read each question and potential answer twice before attempting to answer it.

 Jot down any key words or phases you notice in the question.

 Ask yourself what is the question really asking? Then, go through the question
and eliminate information that does not help address that issue.
 Finally, carefully examine the last sentence. Often this last sentence includes Read every
the real question. In many cases, the last sentence will even have everything question and
necessary to answer the question. However, do not assume this to be true. answer twice
Make sure to carefully read the entire question twice. before answering.

Examine the following example:

You are the project coordinator for a textile manufacturing company that is based in Slide 27
Southeast Asia. Your project’s original budget was $648,000 USD, and you have
already spent $462,000 USD. You currently have a CPI of 0.86 and an SPI of 0.62.
Your project has an EV of US $399,000 and an ETC of $288,316. You are more
than halfway through your project, and have a TCPI of 0.86. Your sponsor has just
requested a major shift in project scope; what should you do?
A. Try to convince the sponsor to change their mind.
B. Agree to implement the changes immediately.
C. Evaluate the changes for impacts to the cost and schedule.
D. Stop the project until the issue is resolved.
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This question has a lot of information from a discipline called earned value
management (EVMS) with which you might or might not yet be familiar.
Answering this question correctly requires that you to know about earned value.
Knowing earned value allows you to know that it has nothing to do with the
question being asked. Only the last sentence is pertinent. The last sentence asks
what would you do if the person paying for the project asks for a significant shift in
scope. The answer to this question is found in the most important PMIism. The
first thing you must always do is analyze the situation and develop alternatives. You MUST
Simply getting the sponsor to change their mind is rarely a valid option without first read the
doing some analysis. Similarly, you should never agree to implement changes PMBOK®
without completing the requisite analysis. You also rarely have time to just stop the Guide to pass the
project until you can solve the problem. In analyzing alternatives two key areas of exam!
examination are cost and schedule. Once you remember those factors the question
is easy. Only option C, “evaluate the changes for impacts to the cost and schedule”
takes this concept into account.
Understanding Versus Memorization
Many people who attempt the PMP® exam try to pass by memorizing the PMBOK®
Guide. More often than not, they fail. The importance of the PMBOK® Guide
creates a major point of confusion for the exam. Many exam preparation books and
publications suggest you do not need to read the PMBOK® Guide. If you didn’t get
this point earlier, let’s make it again. Although the PMP® exam is based on the
Role Delineation Study, and although there are twelve other resources used for the
exam, the PMBOK® Guide is the most important resource for the exam. YOU
MUST READ THE PMBOK® GUIDE TO SUCCESSFULLY PASS THE
EXAM. However, you will not pass the exam just by memorizing the 49 different
processes and the inputs, tools and techniques, and outputs found in the ten
knowledge areas of the PMBOK® Guide. To pass the exam you must be able to
take that knowledge and apply it to real situations.
So what kind of questions can PMI® ask that require memorization as a baseline
and at the same time require knowledge of practical application? Examine the
following sample question:
At lunch you are sitting with a new employee within the organization. They are an Slide 28
experienced scrum master and commenting about how frustrated they are with the
organizational requirement to use a Work Breakdown Structures for their projects
especially early in the process when requirements are so poorly defined. You
comment that a properly done WBS is similar to an FBS and an important tool for
project success even early in the project. Which of the following statements best
justifies this statement?
A. The WBS is a great communication tool.
B. A well formed WBS provides a strong visualization of the product of the
project across its phases.
C. A well formed WBS is similar to a FBS allowing for task assignments.
D. The WBS allows for progressive elaboration using placeholder work
packages.

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To answer this question correctly you must know what a WBS really is. A Work
Breakdown Structure is a graphical representation of the deliverables of the project
that is then further extended to include the tasks and activities needed to produce
the desired project results. It has nothing to do with time or resources and is only
organized based upon things that belong together. There is a lot of debate within
the agile community around the differences and similarities between a feature
breakdown structure and a work breakdown structure, but most experts agree that
well formed WBSs and FBSs are largely the same. Although PMI® considers the
WBS an excellent communication tool, it is vague and not the best answer. A well
formed WBS has nothing to do with time so B is not a correct choice. A WBS also
has nothing to do with resources so C is excluded. Option D mentions the use of
progressive elaboration using placeholder work packages and is a true statement.
Therefore, both A and D are true statements, but option D is the best answer
because it is both true and specific. For the 2016 exam the WBS was de-
emphasized, but it is still worth knowing.
Questions With Invented Terms
Making up terms is a very old test designer’s trick to weed out candidates who
really don’t know the material. A few well placed highly technical sounding terms
can quickly throw off the unprepared. PMI® rarely attempts to trick test takers by
requiring you to remember complicated acronyms and most terms are completely
spelled out. However, the only real solution is to actually know the subject matter.
Again, this takes you back to the need to study the PMBOK® Guide and this book.
If you truly put in your time you will quickly be able to pick out questions with
made up terms like the one shown here:
Your boss wants to know what cost performance measures your team must achieve Slide 29
to complete the project within the original budget. Which of the following do you
provide to her?
A. The Cost Performance Index
B. The To-Complete Performance Index
C. The Remaining Budget Ratio
D. The Estimate For Completion
In this question two of the answers are fabricated terms and two are real. Only one
of the real terms is correct. The Remaining Budget Ratio and Estimate For
Completion are both fake project management terms that sound like real terms.
Although the Cost Performance Index is real, it also is not correct. The correct
answer is the To-Complete Performance Index or TCPI.
Answers With More than One Component
Questions with more than one component in the answer require you to carefully
examine the component pairings within each option in order to find the correct
answer. Many students struggle with these questions and are frustrated because
they feel the questions are a gimmick or trick. They are not. In fact, with a little
practice these can be some of the easiest questions on the exam. So what is the best
way to deal with these questions? The answer is the same as with several other

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sections. First, you need to know the processes of project management. Knowing
the basic processes of project management will often allow you to determine the
correct answer because the options will often include sets of made up processes.
Begin by eliminating the incorrect choices. Second, like all questions, ask yourself
what is the test really asking.
Let’s examine a potential question:
According to the PMBOK® Guide, how stringently must a project manager ensure Slides 30
that all the defined process interactions occur?
A. Interactions within the planning process are dependent on the nature of
the project, and so there is a great deal of flexibility.
B. Interactions within the planning process are not dependent on the nature
of the project and are only depend on the PMBOK® Guide, so there is
not significant flexibility.
C. Interactions within the planning process group are not dependent on the
nature of the project but there is significant flexibility based on the
definitions in the PMBOK® Guide.
D. None of the above is true.
There is a lot of text to get through with these answers. And most of them have
more than one piece of information. However, this question is actually very easy.
If you have read the PMBOK® Guide you know that PMI® presents a framework
and not a formal methodology. Because it’s a framework, the only answer that is
possibly correct is one that allows for flexibility and not rigid structure. Therefore
option A is the correct answer.
These questions are very similar to the longwinded questions. The only difference
is that in these questions it’s the answers that are long and not the questions. Note
that it’s also possible to see questions where both the question and the answer are
long. Make sure to take your time and read both the questions and answers
carefully.
PMIisms
What is a PMIism? A PMIism is a heuristic and represents our interpretation of the
PMP® exam authors’ perspective on an issues. Because test preparation book Slides 31-32
authors are not allowed into the test writing sessions, we cannot say for sure if
these beliefs are true—and they are not endorsed by PMI®. However, we believe
they accurately reflect the exam itself. We have had great success preparing
candidates for the exam based on these assumptions and recommend that you take
them to heart. Each of these assumptions can be used on almost every question.
 There is a basic assumption that you keep historical records for all your
projects. These records are important for the organization to continue to make
improvements. Remember, continuous improvements and lessons learned are
very important to PMI®.
 You must understand the process of project management (what to do first,
second, third, etc.). This process is found in the PMBOK® Guide. The Guide

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presents 49 processes in ten knowledge areas and five process groups. It is

NOT assumed you do each process on every project. You are supposed to have
the subject matter expertise to determine which processes are appropriate.
 You must not only understand the topics, but you must also understand why
you should care about them. It is not enough to simply memorize the processes
presented in the PMBOK® Guide. You must also understand each process so
you can correctly apply it to the various situations presented on the exam. Most
of the questions will present you with a situation and the PMBOK® Guide
answer will not be one of the four choices.
 Everything should be coordinated with the stakeholders of a project and
expectations managed. Missed expectations are a common theme for PMI® and
a constant issue in the real world. Almost every project manager has some
experience with a stakeholder who was dissatisfied with a project because the
project manager was not aware of their expectation. According to PMI®, the
project begins with stakeholder analysis, and stakeholder analysis continues
throughout the project.
 All roles and responsibilities must be clearly defined. Roles and
responsibilities are a type of expectation. Just like the expectations of all other
stakeholders, the roles and responsibilities of the project team must be defined
so that everyone knows what they are supposed to do. Failing to clarify roles
and responsibilities often causes a team to miss deliverables and disappoint
expectations.
®
 A project plan is not a Gantt chart. For many, Microsoft Project represents
everything they know about project management. A large number of people
even believe they are the same thing. As any true professional project manager
knows, they are absolutely not the same! PMI® provides a very specific
definition of a project plan that encompasses significantly more than a simple
Gantt chart. Although a Gantt chart can be part of a project plan, it is never one
by itself. A real project plan can include a wide range of documents based on
the methodology being used. It is critical that you understand this relationship.
 A WBS is not an organization chart but it is a key element of successful project
management. PMI® is very fond of work breakdown structures. In fact, key
elements of the planning process group center on the creation and development
of the WBS. PMI® also believes that the WBS is a powerful communication
tool that project managers should use.
 Project managers are awesome and are very skilled. Hey, it is the Project
Management Institute after all! A key component of PMI’s strategy is
promoting the work done by practitioners. You should not be surprised that
PMI® wants to pat you on the back. However, this position occasionally
creates a point of separation with your personal experience. In the real-world,
many project managers do not get as much authority or respect in their
organizations as PMI® assume you project managers get. If that is you, for at
least the four hours of the exam imagine that you have that authority.

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 PMI does not support gold plating. Simply put, gold plating is evil! Gold
plating is adding extra functionality or features into a product that have not
been agreed to by the sponsor. This is bad because the project manager is held
accountable to deliver the triple constraints of a schedule, a budget and a list of
agreed upon features, requirements or scope. Adding something without
approval often causes one leg of this triangle to change without balancing the
others—and that is a major problem.
 The preferred estimating techniques are almost always consulting experts and
using bottoms up methods. In most of the processes that require that some sort
of estimate be developed, there are several choices. Expert judgment and
bottoms up estimating are always options on the list. From PMI’s perspective,
these represent the best choice and using them together gets your most
knowledgeable people to provide estimates at a level where they will be the
most accurate.
 Environmental factors always influence a project. Projects are never done in a
vacuum. They are done in the real world. And in the real world our
surroundings and our situation have a major impact on every project.
Why People Fail The Exam
A lot of people take the PMP® exam. In fact, the number of people is quickly Slide 33
approaching 150,000 each year. When considering all the ways to design a test
most people would agree that one of the easier designs is where every question
offers four potential multiple choice answers. However, the numbers tell a
different story. Each year only approximately 68% of all exams taken achieve the
requisite 61% passing score. That means nearly one-third of all exams are failed
on a test where simply guessing provides a one in four chance of a correct answer!
Simply put, this exam is hard. To increase your odds of success it is very
important that you understand the most common causes of failure. These include:
 Many people fail because they believe they can pass the test by relying only on
their professional experience. Probably 60% of all failed exams fall into this
category. Every exam prep instructor has had at least one student who believed
because they were a practicing project manager for a long time they did not
need a prep class. These people represent the hardest group to help. If the
exam was about how their particular organization managed projects they would
be correct. Unfortunately, it is not. The exam covers how PMI® believes
projects are to be managed — and that can be a very different thing. Sadly,
most of these grizzled old veterans will not believe in the need to study until
they have failed a few practice tests. Don’t let your ego get in the way of your
success!
 At the other extreme are those people who fail the exam because they lack real-
world project management experience. As has already been stated, it is
impossible to pass the PMP® exam by memorizing the PMBOK® Guide or any
other book. A significant number of questions on the test are situational in
nature. If you have never experienced similar situations, you will lack the
appropriate context to answer the question correctly.

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 Candidates often miss a large number of questions because they fail to read the
questions carefully. The questions can be wordy. PMI® often uses language
that is difficult to understand. One reason for this is that some of the questions
are designed by people who have english as their second language.
Additionally, many questions can be confusing because they include words like
EXCEPT or NOT. Make sure to take your time and read every question twice
before you answer it.
 Many people also get questions wrong because they fail to read all of the
potential answers. This issue arises when test takers read an early answer and it
sounds pretty good. However, if they would have read all the options, they
would have found a better answer. Remember that you are always trying to
find the BEST answer and not the perfect answer. The only way you can do
that is if you read every potential answer!
 Another common mistake test takers make is simply not trusting their own
knowledge. This often happens when you change an answer. 90% of the time
your first instincts are correct. Do not change an answer unless you are
absolutely positive about the change. If you have doubts, the odds are you are
changing a correct answer to an incorrect response.
®
 The final thing that causes candidates to fail the PMP exam is nervousness.
No matter how hard you prepare you will be nervous when taking the exam.
Depending on who you are, nervousness can have a major impact on your
score. Do not be surprised if your actual score is 10%-15% points lower than
your average practice score. To allow for this drop we recommend that you
study until you score 90% or better on all your practice exams before you
attempt the real test.
If you avoid these common pitfalls and follow the instruction laid out in this
manual you can successfully navigate the PMP® exam.

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Exercise 2 — Types of Questions Exercise 2 —

Types of
These questions are not designed to replicate or reflect actual exam questions. Questions
They are designed to ensure that you clearly understand the topics discussed in this
chapter, which will help you study for the PMP® Exam.
1. Which of the following is a type of exam question you should expect?
A. Two right answers
B. Situational questions
C. Extraneous information
D. All of the above
2. Which of the following is not an assumption made by PMI®?
A. There is a basic assumption that you keep historical records for all your
projects.
B. You must memorize the exact process of project management (what to
do first, second, etc.).
C. You must not only understand the topics but also why you should care
about them.
D. Everything should be coordinated with the stakeholders of a project and
expectations should be managed.
3. Which of the following is not a basic belief of PMI®?
A. All roles and responsibilities must be clearly defined
B. A project plan is not a Gantt Chart
C. A WBS is not an org chart but is a wonderful and key element of
successful project management
D. All of the above are PMI® beliefs
4. Which of the following is a basic belief of PMI?
A. PMI® does not support gold plating (adding extra functionality)
B. Expert judgment and bottoms up is preferred
C. Environmental factors are influencing the project
D. All of the above
5. Which of the following is a common reason why people fail the PMP® exam?
A. Belief that they can pass the test from their experience (not studying)
B. A lack of PM experience
C. Failure to read the questions
D. All of the above

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Exercise 2 — Types of Questions Answers

1. Answer D: The PMP® Exam is attempting to test both knowledge and
understanding of a global standard and generally accepted practice within the
profession requiring a number of question types.
2. Answer B: PMI® does not want you to simply memorize process. It is much
more critical that you understand the processes and know how to apply them.
3. Answer D: Each of these are basic assumptions made by PMI®.
4. Answer D: Each of these are basic assumptions made by PMI®.
5. Answer D: Each of these are common reasons why people fail the PMP® exam.

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The Basics of Project Management — Part 1

What is the Perfect Structure?
It’s time to get down to business and start learning the concepts of project
management that you will need to pass the exam. We will begin with some
basic foundational topics. The first of these topics is how to best structure your
team and organization.
When considering organizational structure it is important to know that there are Slide 35
two forces that determine how to best group people. These forces are
DIFFERENTIATION and INTEGRATION. According to http://Merriam-
Webster.com, differentiation is the development from the one to the many, the
simple to the complex, or the homogeneous to the heterogeneous. If you are like
most readers you are now completely confused. Don’t be. Differentiation
happens in any organization where a small group of people create a culture that
is distinct from the larger group. This can be because of a shared knowledge,
products, or geography. Integration is defined as the act or process or an
instance of integrating: such as incorporation as equals into society or an
organization of individuals of different groups. This definition is likely equally
unhelpful. However, it too is a simple concept. Integration represents the force
or power of bringing people together. Differentiation is a force that isolates
people and groups. Integration is a force that brings them together. Together
they create two forces that pull the organization in opposite directions. When
discussing project management, these forces create a series of predictable To determine
organization types: the organization
type look at the
 Organic or simple title of the PM, who
 Functional they report to, how
 Multi-divisional much time resources
 Matrix dedicate to the
 Projectized project and how
 Virtual much admin support
 Hybrid they receive.
 PMO
This list represents a continuum moving from the project leader having no
authority and the organization not showing any focus on the profession of
project management to the project leader having significant authority and the
organization seeing project management a critical business profession.
For the exam, it is important that you can determine the type of organization
based upon the clues given in the question. These questions can be very easy if
you just look for the key indicators:
 The first clue is the title of the person serving the project
management function. An expeditor or coordinator is someone with
very little power. A project expeditor primarily acts as a
communications coordinator and staff assistant. The project

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coordinator has limited power to make decisions and usually reports to a

higher-level manager. A project manager has more power.
 The second clue you should examine is who the project leader reports
to. If they report to a functional manager it is likely the PM has little
power and is therefore more of a functional organization. If the project
leader reports to someone who is the leader of project managers such as
in a PMO, the organization is more of a projectized organization.
 The third clue to the organizational structure is how much time the
various resources dedicate to each individual project. The more their
time is split, the more the organization has a functional structure. The
more the resources are dedicated to a single project, the higher the
likelihood they are part of a projectized organization.
Let’s examine these organizational structures in detail.
Organic or Simple Organizations
The linear progression begins with the organic or simple structure. It is best Slide 36
exemplified by small, startup organizations where every member of the team has
multiple roles and responsibilities. Typically, no one in the organization has a
project management title. The project is often managed by the owner of the
organization and there is no administrative support. From a purely project
management perspective, this is the weakest organizational structure. It happens
often because the organization is in its early formation stages and there is little
structure for any department. Each member of the team is scrambling to cover
multiple areas and any project management tools or expertise is purely
happenstance. This is not necessarily a bad thing. Remember the organization is
in its infancy and having a robust project management practice would be unrealistic
at this point.
Functional Organizations
The next type of structure is the functional organization. A functional organization
is one where the staff is organized by their job or function. Common functional
departments include sales, engineering, marketing, accounting, or finance. In
functional organizations, expertise — or drive for deep technical knowledge — is
the dominant force. In these organizations, resources have one clear supervisor,
typically referred to as the manager of the technical area. The manager then reports
to the director of the area, who reports to the vice president of the area and so on.
The number of layers in this hierarchy is largely driven by the size of the
organization.
Another key characteristic of a functional organization is that projects are only
handled within the functional area. This is a highly localized approach to dealing
with projects. Each resource and/or resource manager only cares about the project
in terms of how it impacts their functional area. Little to no consideration is given
to the areas of the project outside one’s individual silo. This aspect of a functional
organization is usually the cause of significant criticism because it means that

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Slide 37

Image 4: A functional organization chart

project stakeholders get passed from one resource to another without anyone taking
general responsibility for the overall project. To better understand a functional
organization, examine the functional organization chart shown in Image 4.
Notice that the project leader is called an Expeditor or Project Coordinator. Also
note that the project leader reports to one of the functional departments. Although
it is difficult to tell, these two clues indicate that the project manager has almost no
formal authority. They also indicate that the project leader serves more as an
administrative assistant than anything else. However, a functional organization
produces a number of advantages including:
 Clear reporting relationships — Within a functional organization each Slide 38
resource knows very clearly who they report to because the
organizational structure is based on vertical silos.
 Highly specialized expertise — The vertical structure of functional
organizations allows resources to develop deeper knowledge of the skill
set that is targeted or described by the function. This can be contrasted
to a non-functional organization, which requires resources to be stronger
generalists.
 Easier to manage — This advantage is very much an opinion. The
argument is that it is easier because you only have to manage a single
skill set and you manage within the framework of the vertical silo.
 Homogeneous groups — Functional organizations, by definition,
create homogeneous groups, where the members are alike or have
similar skill sets. This advantage ties directly to making them easier to
manage.
 Drive for technical excellence — In a functional organization the
resources in the individual silos are typically incentivized to achieve
superior knowledge and performance in the technical aspects of their
work.
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 Clear career path — When the organization is structured into

functional silos the resources are presented with a well understood
progression for their career. Often this means the individual starts out
as a junior resource, then becomes a senior resource, then a manager or
team leader, a senior manager, a director and finally the vice president
of the silo.
 High quality organizational knowledge — Within each individual silo
the functional organizational structure makes it possible to develop deep
technical knowledge because you have several resources with the same
skill set all focused on being the best in that technical area.
A functional organizational structure is not perfect. According to PMI® there are a
number of disadvantages, or issues, with a functional organizational structure.
These include the following:
 Conflicting priorities from overlapping projects — Functional Slide 39
organizations often struggle to provide consistent visibility across all the
silos of the organization. This can cause resources to become frustrated
because they are asked to complete multiple tasks at the same time
without prioritization.
 Project boundaries are limited to one’s discipline — In a functional
organization projects are typically only handled within the individual
silo. This can create a number of problems including the development
of incomplete solutions, incorrect solutions, expensive solutions, or
significant post-project repairs.
 Barrier to customer influence and satisfaction — Functional
organizations often struggle to meet the needs of their stakeholders
because they do not have a single individual who can act as a
stakeholder, who has the authority to address issues, and who the team
can approach with concerns. The stakeholders therefore end up having
to go to each silo to deal with different issues.
 Employee development opportunities are limited — In a functional
organization the silo leaders are primarily focused on developing the
core competencies of the silo. Skills that are perceived to be outside that
silo are generally not supported.
 Project Manager is dependent on personal influence — In a
functional organization all (or almost all) of the organizational power is
held by the functional managers. Project managers are generally
perceived as administrative aids who report to functional managers.
Therefore, they must rely on forms of personal influence such as being
well-liked.
 Hierarchical decision and communication processes — In a
functional organization resources are organized into silos based upon
their technical skills. Communication has to follow the chain of
command up one structure and then across to the leader of another silo
before filtering down to the technical resources in the other skill area.
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 Overwork technical issues vs. build to a standard — Because

resources in a functional organization are organized according to
technical skill, they often focus on building the perfect technical
solution rather than simply the right solution.
 Fosters part-time roles — In a functional organization resources are
usually asked to serve as operational resources and work on multiple
projects. As a general rule, resources only handle a project within their
functional area. This often leads to resources that are less than 20%
dedicated to a single project.
If a functional organization is less than perfect, moving towards the opposite
organizational structure might prove advantageous.
Projectized Organizations
The opposite extreme from the functional organization is the projectized
organization. In a projectized organization the resources are organized based upon
the projects to which they are assigned. Each resource is assigned to only one
project and each team has all the resources the project requires for completion.
Image 5 shows a sample of a projectized organization chart.

Slide 40

Image 5: A projectized organization chart

Projectized organizations present a number of key advantages. These advantages
include:
 Strong project manager role — It is important to remember you are studying Slide 41
for a certification managed by the world’s largest organization dedicated to the
advancement of project management. As a general rule, things that make

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project managers stronger are perceived by PMI® to be good.

 Full-time administrative staff with clear accountability — A key
indication of a projectized organization is that the project manager is
supported by a full-time administrative staff that reports directly to the
project manager. This is an advantage for the project manager since it helps
them achieve the desired project results.
 Fosters collocation — Collocation means resources are physically located in
the same facility. This is an advantage because it makes it easier to
communicate with other resources and stakeholders on the project.
 Improves focus —Improved focus on what? The overall project—as
opposed to individual components of the project. This is a more holistic
view.
 Cost and performance tracking of projects — Many organizations
struggle with tracking the real performance of their projects. Projectized
organizations have an advantage in this area. Because the organization is
structured around the various projects, it’s easier to determine the results of
each team. In an organization where everyone is working on multiple
projects simultaneously this is much more difficult.
 Decision-making based on overall project view — The core premise of a
projectized organization is that performance improves when each team
member is focused on only one project. This concept extends to decision-
making as well. When the entire team is focused on only a single project
they are more likely to make good decisions.
 Customer relationships tied to various projects — In a projectized
organization the end customer is able to communicate with a single point of
contact—the project manager—for all needs. This reduces the likelihood of
miscommunication.
However, projectized organizations are not perfect either. They suffers from a
number of potential issues. These issues include the following: Slide 42
 Reduction of employees’ professional identity — Employees often
associate themselves more with their level (such as senior engineer, director,
or manager) rather than with the project to which they are assigned. In a
functional organization this is perfectly aligned. However, in a projectized
organization the focus is on the project, not one’s level, and therefore
individuals can struggle to find their place.
 Reduced focus on technical competence — This issue is similar to the
reduction of professional identity. However, instead of the issue concerning
one’s level within the organization, the primary issue is technical skill or
role. This issue occurs when people view themselves according to their core
skills or their roles, rather than according to the project to which they are
assigned.

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 Leadership by the non-technically skilled — Often project managers do

not come from a technical background. When the organization is projectized
the position of project manager is seen as a technical expertise unto itself.
Although the project manager is highly skilled in the processes, tools and
techniques of project management, they do not necessarily know anything
about the key fields of expertise that are required to actually execute the
project. As a result, the technical resources may not always respect the
project manager and therefore might treat them as administrators with little
authority.
 Focus on administrative work vs. technical work — A focus on the
administrative work often stems from the leadership issue cited previously.
Because the project leader does not come from a technical background, she
might focus on the area where she feels most comfortable, which is often the
administrative work of project management.
 De-valuing of functional managers — In any organization there is only a
limited amount of power. In a functional organization all the power resides
with the functional managers at the expense of the project managers. In a
projectized organization the exact opposite is true. The project managers
hold the vast majority of power at the expense of the functional managers.
As you can image, whoever lacks authority will feel devalued and frustrated.
 Process vs. deliverable emphasis — A process versus deliverable emphasis
is a fancy way of raising some of the same concerns held in the two previous
bullet points. A projectized organization can struggle because it becomes too
focused on the project management processes rather than the desired output.
 Creates redundancy of efforts — In projectized organizations the focus is
on the successful completion of the individual project. Each person is
assigned to one and only one project. The result is a situation where no one
is focused on evaluating the various projects against one another. In the end,
the organization can end up with two “successful” projects where the only
differences are minor and everyone feels the organization could have been
better served if only one of the projects had been completed.
 Project end can be a traumatic event — In projectized organizations each
resource is assigned to a single project. When a project ends the resources
assigned to that initiative are potentially out of work. This can be a major
concern for the resources and can cause a situation where projects never end,
they just enter a new phase.
If both functional and projectized organizations are so significantly flawed we
could be in a lot of trouble. Fortunately, most organizations attempt to find
some middle ground between the two extremes. We refer to this middle ground
as a matrix organization.

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Matrix Organizations Slide 43

Matrix organizations combine the elements of both functional and projectized

organizations. The different weighting of functional and projectized
characteristics allows matrix organizations to be categorized into three types:
Weak, Balanced, and Strong. Often the easiest way to think of matrix structures
is to imagine a linear continuum with the functional organization on the far left
followed by the weak matrix, the balanced matrix, the strong matrix
organization, and finally the projectized organization on the far right.
A Weak Matrix Organization
Often for the PMP® exam candidates are required to differentiate between the
various types of organizations. For many, the most difficult two organizational
types to tell apart are the functional and the weak matrix organizations. The
differences between these two are often miniscule. In the functional
organization the project manager has no authority because the functional
manager has it all. In a weak matrix organization, the project manager has
slightly more power—something incrementally higher than zero. In a weak
matrix organization the title of the project manager is likely to be project
coordinator. In a weak matrix organization the project manager will not have
significant administrative support. The project resources will primarily be
focused on their functional duties. The resources will also be assigned to
multiple projects. The project manager in a weak matrix organization reports to
a functional manager. Image 6 on the next page shows a weak matrix
organization.
Slide 44

Image 6: A Weak Matrix Organization

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A Balanced Matrix Organization

The absolute middle in the linear continuum of structures is the balanced matrix
organization. The balanced matrix attempts to take the best of both the
functional and projectized organizational structures in equal proportions. The
key way to recognize a balanced matrix organization is that the project leader is
called a project manager, and everyone report to this person. In a balanced
matrix organization, the project manager reports to a functional head. The
balanced matrix organization is the only one where a titled project manager
reports to a functional head. Balanced matrix structures pull resources from
functional department and they receive a moderate amount of administrative
support. However, resources are not fully dedicated to a single project. Image 7
shows a balanced matrix organization.
Slide 45

Image 7: A Balanced Matrix Organization

A Strong Matrix Organization

The last type of organization is the strong matrix. The strong matrix structure is
most closely aligned to a projectized organization. This means the project
manager has more power than in any other matrix structure. In a strong matrix
organization the project managers are organized into a department of their own.
This department is often referred to as a Project or Program Management Office
or PMO. It is headed by a manager just like any of the other functional units.
This fact serves to immediately elevate the power of project managers within the
organization. In a strong matrix organization project management has at least an
equal footing with all other functional departments. In a strong matrix
organization the project manager has full time administrative support. However
just as in all the other forms of matrix organizations, in a strong matrix structure
the project resources are not dedicated to only one project. In many cases
resources are assigned to multiple projects and also hold operational

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responsibility. What makes this structure unique is the fact that a single
department owns process, methodology definition, and practice maintenance. It
also allows for a single executive to own the entire portfolio of new initiatives
within the organization. Image 8 shows a strong matrix organization.
Slide 46

Image 8: A Strong Matrix Organization

Advantages of a Matrix Organization

 Visible project objectives — Matrix organizations shift power from
Slide 47
functional managers to project staff in order to increase the visibility of
projects and to improve their performance.
 Improved control of resources by project managers — Since project
managers theoretically have more authority it stands to reason that they also
have better control over project resources. This improved control happens at
the expense of the authority of functional managers.
 Rapid response to contingencies — If project managers have greater
authority and are focused on the projects they own then they are more likely
to see problems earlier in the lifecycle and therefore respond more quickly.
 Greater support from functional managers — This is often the subject of
debate. The theory is that because project managers have greater authority
and visibility they receive greater support from the functional managers. The
problem comes from the fact that the project managers have gained this
authority and visibility often at the expense of those same functional
managers.
 Coordination of efforts across organization — As the organization gives
more authority to project managers they become more effective at
coordinating the various aspects of the project across the entire organization.

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Remember, project managers provide a single point of focus for the project.
 Project end is not a traumatic event — This advantage addresses one of
the major concerns of a projectized organization. In projectized
organizations the staff has no job when the project ends. This does not
happen in functional organizations because the resources are part of their
functional teams. Matrix organizations gain the advantage found in
functional organizations through the hybrid model while also improving on
project focus.
 Strong technical base — This is another advantage shared with functional
organizations. Because the functional organizations still exist in matrix
structures, projects gain access to the strong technical knowledge provided
by the hierarchical, skill-based functional organizations.
 More effective dissemination of information — This advantage is also the
subject of much debate. The theory is that because matrix organizations have
both the vertical communication found in functional organizations and the
horizontal communication found in projectized organizations the staff should
have a lot more accurate information and should have a greater ability to
quickly communicate with other project stakeholders. However, there is also
a chance that all this communication will cause confusion.
Matrix organizations have a number of challenges as well. These challenges
include:
Potential Issues With a Matrix Organization
 Project personnel report to more than one boss — This issue is often Slide 48
referred to as a “dotted line relationship.” In many cases, resources are
forced to choose between conflicting instructions given to them by the
project manager and the resource manager. In these situations the resource
rarely wins.
 Complex to monitor and control — As organizations become more
complex with bidirectional leadership (both functional and project) the
metrics used to monitor real performance become more complicated. As
they become more complicated the probability of providing false indications
of performance become greater.
 Conflicts with resource allocation and project priorities — What should
the resources be working on at any given moment? Functional managers
often have responsibilities for operational efforts as well as project work.
Their priorities are often very different from those of each project manager.
This can lead to project work not getting done.
 Potential for duplication of effort with “independent” projects — As the
organization moves closer to the projectized structure, the tendency is to
examine the team’s efforts based on the totality of the project. While this is
good from a project management standpoint, it can create a blind spot by not
comparing all projects. The result can be a portfolio with several similar
products or services when only one was needed.
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 Power struggles and competition for scarce resources — In any

organization there is competition for the limited resources available to
complete work. However, in matrix organizations, that competition is
heightened by the power struggle that can exist between project managers
and functional managers.
Virtual / Hybrid / PMOs
At far end of this side of the continuum are the virtual, hybrid, and PMO
organizations.
Virtual organizations are a new concept found in the 6th edition of the PMBOK®
Guide. In a virtual organization, team members work is disparate locations and
communicate through the use of advanced technology. In a virtual organization
the project leader have low to moderate levels of authority. There is no typical
of time put in by the project leader. Much of this is because resources work on
multiple projects at the same time. Virtual organizations also have a wide range
of administrative support structures.
Hybrid organizations represents a catchall group. A hybrid organization can be a
mixture of all the other organizational structures. In each of the specific
characteristics that describe structures a hybrid is described as mixed.
The final type of organizational structure is the PMO, and we will discuss it later
in this course.
Regardless of the organizational structure, a few simple clues can help you
answer likely exam questions quickly. Review the table below in Image 9 to
ensure that you have a firm grasp on these keys. On the exam you are likely to
experience a number of questions where the organizational type is not defined.
When this happens, assume it is a matrix organization.

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Slide 49

Image 9: Organization Structures

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Exercise 3 — Organizations and Project Management Exercise 3 —

Organizations
Some of these questions are not designed to replicate or reflect actual exam & PM
questions. They are designed to ensure you clearly understand the topics
discussed in this chapter which will help you study for the PMP® Exam.
1. In what type of organization does the project manager have little or no
authority?
A. Functional
B. Weak matrix
C. Balanced matrix
D. Projectized
2. In what type of organization is the functional manager likely to maintain
project budget control?
A. Weak matrix
B. Balanced matrix
C. Strong matrix
D. Projectized
3. In that type of organization does each employee have one clear superior and
is grouped by specialty such as sales, marketing, engineering, accounting,
etc.?
A. Projectized
B. Balanced matrix
C. Weak matrix
D. Functional
4. In what type of organization is the project coordinator likely to be a part-time
position with almost no administrative support?
A. Balanced matrix
B. Weak matrix
C. Functional
D. Projectized
5. In what type of organization is the project manager likely to have a variety of
possible budgetary control models?
A. Functional
B. Balanced matrix
C. Projectized
D. Any of the above

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6. Sally is a frustrated project coordinator. All of her resources split their time
between operational responsibility and project work. It seems she can only
get about 10% to 15% of their time. She also has very limited authority, and
has very little administrative support. In what kind of organization does
Sally work?
A. Functional
B. Weak matrix
C. Balanced matrix
D. Strong matrix
7. Kevin is a full-time project manager within his organization. He gets some
administrative support, but really has to fight to get time from his resources
because of his low level of authority. In what type of organization does
Kevin work?
A. Weak matrix
B. Balanced matrix
C. Strong matrix
D. Projectized
8. Ann is new to her company, the XYZ Widget Co. She really likes her job
because although she has to interface with functional managers, she has a
high degree of authority within the company, can quickly get the resources
she needs, and gets a lot of administrative support. In what kind of
organization does Ann work?
A. Functional
B. Balanced matrix
C. Strong matrix
D. Projectized
9. Jim is a project manager within the ABC Company. Within his organization
there are departments but these groups provide support services to the
various projects. In what kind of organization does Jim work?
A. Functional
B. Balanced matrix
C. Strong matrix
D. Projectized
10. The project manager’s role in a weak matrix organization is most like what?
A. A true project manager
B. A project sponsor
C. A coordinator
D. A functional manager

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11. The term used to describe most modern organizations that use multiple
organizational structures is what?
A. Composite organization
B. Balanced Matrix
C. Projectized
D. Functional
12. In which of the following organization types can a PMO not exist?
A. Functional
B. Balanced matrix
C. Composite
D. A PMO may exist in any organization type
13. A project manager takes a job with a new firm. He has little experience and will be
working in a matrix organization. Based upon his situation he should expect
communication with his stakeholders to be:
A. Complex
B. Formal and written
C. Formal and verbal
D. Informal and written
14. A very seasoned project manager leaves a position in an organization that was
highly projectized for a job in an organization that is a balanced matrix. His new
manager is very senior in the organization. Based on this information, he can expect
communication to be:
A. Complex
B. Less structured
C. More structured
D. Easy
15. A project coordinator takes a new position and she is concerned about the amount of
work it will take to communicate with all the stakeholders. The organization
employs more than 30,000 people in 12 different locations. Her project team is a
strong matrix organization. In her previous job her resources were projectized. As
a general rule, what can she expect the communication to be?
A. Complex
B. Simple
C. More structured
D. Hard to automate

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16. Two project managers in a weak matrix organization argue over which of
them is more senior. Eventually they determine that one of them is actually a
project manager and the other is a project expeditor. How is the expeditor
different from the project manager?
A. The manager cannot spend money
B. The expeditor cannot make decisions
C. The manager reports to a higher level authority
D. The expeditor can spend money
17. A project manager comments to their spouse about how frustrated they are at
work. Everyone is telling their resources what to do. In a functionally
organized firm who can formally direct project resources?
A. The functional manager
B. The project sponsor
C. The senior manager
D. All of the above
18. Two project managers are discussing how frustrated they are with their
projects because of the number of people who provide direction to their
project resources. In a matrix organization, who can direct project
resources?
A. The project manager
B. The functional manager
C. The project sponsor
D. All of the above
19. Sam is talking to Sally about his new job. As he describes his position he
concludes that although he is called a project manager he is actually a project
coordinator. Sally comments that he’s doing better than her because she’s a
project expeditor. Which of the following most accurately describes the
difference between a project expeditor and a project coordinator?
 The project coordinator cannot make more decisions
 The project coordinator can make more decisions
C. The project expeditor reports to a higher level manager
D. The project expeditor has more authority
20. A project manager is trying to complete a complicated COTS software
project but is struggling to get enough attention to complete the required
work. Most of the resources needed are focused on completing operational
work and the project manager doesn’t have authority to shift their focus or
assign other resources. In which type of organization must the project
manager be working?
A. A functional organization
B. A technical matrix organization
C. An operational matrix organization
D. A weak matrix organization

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21. Cathy is a new project manager with very little real experience. She’s been
assigned to lead a project for which her boss feels she’s perfectly suited. Her
organization is a matrix organization. Based on these characteristics she
should expect communications to be:
A. Simple
B. Mostly verbal
C. Mostly automated and written
D. Complex
22. Ralph is currently leading a project in the planning phase when two key
stakeholders come to him and ask for an explanation of the development
methodology being used on the project. They are specifically interested in
where it came from and how it differs from the methodology being used on
most of the projects being done within the organization. As Ralph explains
the methodology, the stakeholders become nervous about a number of new
terms he uses (which they are unfamiliar with) and how this new
methodology will impact the organization. They stakeholders are long-time
associates of Ralph’s. What should he do?
A. Ask the stakeholders to trust him as they are long-time associates
B. Supply the stakeholders with a glossary of terms for the new
methodology
C. Notify the PMO of the stakeholders’ concerns
D. Advise the stakeholders that he will keep them informed regularly on
the project
23. A young project manager has just been assigned to his second project even
though he has yet to complete his first project. The first project is relatively
small and both the project manager and his boss believe the project manager
has the capacity to manage both efforts at the same time. However, as time
passes the second project begins to grow significantly in scope and the
project manager quickly comes to believe he needs help. In talking about the
situation with his peers, the project manager learns a similar project was
completed 18 months prior. What should the project manager do?
A. Wait to see if the second project continues to grow in scope
B. Make sure the scope is agreed to by all stakeholders
C. Obtain the historical records and guidance from the project
management office (PMO)
D. Contact the project manager from the previous project for guidance
24. A project manager gets assigned to a manufacturing effort for a new product
and gathers their team to begin work. Although the team has worked
together on previous efforts they struggle to create the project charter.
Which of the following best describes the real problem?
A. Constraints and assumptions have not been defined
B. The project deadline has not been set
C. They have not identified the project objectives
D. They are working on an operation and not a project
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25. The previous project manager for your project did her work without much
formal organization. There is little management control and there are no
clearly defined deliverables. Which of the following would be the best
choice for getting the project better organized?
A. Define the project methodology
B. Adopt a lifecycle approach to the project
C. Develop specific work plans for each work package
D. Develop a description of the product of the project
26. The project cycle differs from the product life cycle in that the project life
cycle:
A. Does not incorporate a methodology
B. Is different for each industry
C. Can spawn many projects.
D. Describes project management activities
27. You are a Project Manager leading a large project within a manufacturing
organization that is matrixed. One day one of your resources approaches
you and states that she does not know which of her several assignments for
different projects is most important. Who should determine the priorities
between projects in the organization?
A. The project management office (PMO)
B. The project manager
C. The project team
D. The project management team

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Exercise 3 — Organizations & Project Management

Answers
1. Answer A. PMBOK® Guide – Although a weak matrix provides a project
manager with limited authority, only the functional organization provides the
project manager with little or no authority. Remember, according to PMI the
project manager is a very powerful position.
2. Answer A. PMBOK® Guide – According to PMI, the project manager has a
very powerful role. As the organization gets closer to a projectized
organization, the PM gains more influence. The organization in which they
have the least authority is the weak matrix, and this is where the functional
manager has budgetary authority.
3. Answer D. PMBOK® Guide – In a functional organization, people are
organized based upon the job they perform. These silos provide the basis for
power within the organization. Project managers in such organizations have
very little authority.
4. Answer C. PMBOK® Guide – The key to this question is the fact that the
role is called a coordinator, is part-time and has no administrative support. A
coordinator who had a little administrative support would have been a weak
matrix, but as it is represented in this question, it is a functional organization.
5. Answer B. PMBOK® Guide – Only in a balanced matrix organization are
there mixed models of budgetary control.
6. Answer B. PMBOK® Guide – Sally works in a weak matrix organization.
The keys to this question are the facts that she gets some administrative
support (even though it is not much) and she does have a little authority. If
not for these two differences she would be in a functional organization.
7. Answer B. PMBOK® Guide – The fact that Kevin is full time tells you that
he does not work in a weak matrix organization. The fact that he has a low
level of authority tells you he does not work in a strong matrix or projectized
organization. Only the balanced matrix organization meets such criteria.
8. Answer C. PMBOK® Guide – The key to this question is the fact that
functional managers still exist in Ann’s organization. Without this difference
she could be in a projectized organization.
9. Answer D. PMBOK® Guide – Only in a projectized organization are there
departments that either report directly to the project manager or provide
support services to the various projects.
10. Answer C. PMBOK® Guide – Weak matrix organizations maintain many of
the characteristics of a functional organization. The project manager’s role is
more like a coordinator or expediter than a manager.
11. Answer A. PMBOK® Guide – Most modern organizations involve all of the
structural types to one degree or another at their various levels. These
organizations are called composite organizations.
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12. Answer D. PMBOK® Guide – A PMO can exist in any of the organizational
structures—including a functional organization. However, the more the
organization moves towards a projectized organization, the more likely a
PMO becomes.
13. Answer A. PMBOK® Guide p.28 – This is a tricky question because much
of the information is unnecessary to correctly answer it. The only piece of
information necessary to answer this question is the fact that the organization
is a matrix. In matrix organizations communication is complex because of
the importance placed on communicating with the many power structures.
14. Answer A. PMBOK® Guide p.28 – This is a tricky question because much
of the information is unnecessary to correctly answer it. The only piece of
information necessary to answer this question is the fact that the new
organization is a balanced matrix. In matrix organizations communication is
complex because of the importance placed on communicating with the many
power structures.
15. Answer A. PMBOK® Guide p.28 – This is a tricky question because much
of the information is unnecessary to correctly answer it. The only piece of
information necessary to answer this question is the fact that the new
organization is a strong matrix. In matrix organizations communication is
complex because of the importance placed on communicating with the many
power structures.
16. Answer B. PMBOK® Guide p.28 – A project expeditor has no authority to
make decisions or spend money. Typically a true project manager can make
decisions and often reports to a higher-level authority, but this is not
guaranteed.
17. Answer A. PMBOK® Guide p.28 – In a functional organization, the
functional manager has the power to direct resources. The project manager
must use influence to get the functional manager to direct the resources
necessary to achieve project tasks.
18. Answer D. PMBOK® Guide p.28 – In a matrix organization, either the
functional manager, project manager or a sponsor could have the power to
direct resources.
19. Answer B. The project coordinator can typically make more decisions than
an expeditor. They also usually have more authority and report to a higher
level manager than the expeditor.
20. Answer A. This is an example of a functional organization because the
project manager does not have any power to shift resources that are focused
on operational activities.
21. Answer D. Matrix organizations increase the complexity of
communications. This question has little to do with the amount of
experience the project manager has. Additionally, it is not possible to tell if
the communication would be written or verbal with the information given.

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22. Answer C. Many students believe this is an unfair or trick question. It is

not. It represents a fairly common type of question on the exam. The key to
remember here is that although you might do several of the items listed, you
would do one of them first. The very first thing to be done is notify the PMO
because they are the keepers of the organization’s project management
policies, procedures and methodologies.
23. Answer C. The concept of continuous improvement is very important to
PMI®. A key element to continuous improvement is keeping of historical
records for just such a situation as this. Although the project manager might
do several of these items, the very first thing they should do is review the
historical records from past similar projects.
24. Answer D. Read the question carefully. Did you notice the question
describes an operation? Operations are not managed the same way as
projects. Attempting to do so is what is causing the problem.
25. Answer B. Don’t be tempted to select “developing a work plan” for each
work package. Although this would help control each phase, it would do
nothing for the integration of the phases. Answer B is the only option that
both improves the scope of the project and the integration.
26. Answer B. The project life cycle does incorporate a methodology—for doing
the work. It is the product life cycle that spawns many projects. Project
management activities are described in the project management process. The
project life cycle is different for each industry, so that is the correct answer.
27. Answer A. Because this question deals with multiple projects, the only
answer that can be correct is the project management office or PMO. A
PMO deals with multiple projects.

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The Basics of Project Management — Part 2

Project Management Defined
According to the PMBOK® Guide 6th edition (p.4), project management is the Slide 51
management of a temporary endeavor undertaken to create a unique product,
service, or result. Projects are completed by every kind of organization to
produce a wide range of results using a large number of different tools,
techniques and methodologies. This makes defining project management in a
purely black and white context nearly impossible. PMI® focuses on what is
called the Body of Knowledge or the BOK. The BOK represents everything that
has ever been written or recorded about the management of projects. This is a
huge amount of information that cannot possibly be consolidated into a single
work. Instead, PMI® created the Guide to the Project Management Body of
Knowledge or the PMBOK® Guide. Think of the Guide as a map to what is
considered generally recognized as good practice for the field of project
management. It is critical that we unpack the concept of generally recognized
good practice as over the years it represents the root of much misinterpretation.
Generally recognized as good practice is broken into two components. First,
generally recognized means there is consensus by the majority of those
executing projects around the knowledge and practices being successfully
applied to most projects most of the time. Notice this statement doesn’t say
ALL projects. It says MOST. This means that by definition, there are always
exceptions to the standards. If as you go through the standards you find yourself
disagreeing with the standards because that is not the way your organization
does things don’t panic! It just means you are possibly not doing what most
organizations do and there is likely nothing wrong with that so long as the
organization has confirmed that the practices are best for you. Also recognize
that at least for the exam you MUST understand and know the standards.
The second component of this statement is good practice. This phrase simply
means that whatever the knowledge, skill, tool, or technique in question is found
to enhance the chances of creating the expected business value. According to
PMI® the practices described in the PMBOK® Guide are descriptive and not
prescriptive. In other words, PMI® does NOT say you must do these practices.
Instead, PMI® describes practices that are considered best. Unfortunately for
many readers of the Guide, a number of these practices conflict with each other.
Don’t worry or get confused. Just remember that PMI® is NOT suggesting you
do every practice in any specific order. PMI® also provides the Lexicon of
Project Management Terms to ensure your understanding of the terms used in
the Guide.
Projects vs. Operations
In simplest terms, everything an organization does can be placed into two
categories: operations and projects. There are no exceptions. Everything falls
into one of these two categories. They are both critical to an organization’s
success. Operations manage the existing processes, products, services, or

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results. Projects focus on the new things being created. While operations focus on Slide 52
consistency, stability and repeatability, projects focus on change. Operations focus
on removing the waves from processes. Projects, on the other hand, create the next
product, service or result — and these naturally create waves. Operations and
projects do, however, have several characteristics in common. The obvious thing
they have in common is that both operations and projects are accomplished by
people. Also, people are a kind of resource that is often limited in both operations
and projects. Finally, in both projects and operations there are efforts are made to
plan and control the people and processes involved.
For the PMP® exam, it is important that you can compare and contrast projects and
operations. Here are the common characteristics held by projects:
 Have unique charter and goals — Projects are created to generate a very
specific and defined set of results. To help ensure that this actually happens,
projects have charters that define the boundaries, the success criteria and the
specified goals.
 Might have unique organization — The organizational structure defines
whether or not the project will have a unique organization assigned to produce
it. Projectized organizations will have a unique organization defined, while
functional or matrix organizations will not.
 Develops a unique product or service — Projects produce a unique product
or service — in contrast to operations which manufacture the same product,
such as a car or a widget. Projects are not used to create repetitive products or
services.
 Defined start and end dates — Projects are not continuous. In addition to
having specified scope with defined success criteria projects also have defined
start and end dates. These factors create what is commonly referred to as the
triple constraints of project management (time, costs, scope and quality).
 Mostly heterogeneous teams — Projects require teams with varying and often
dissimilar skills. This makeup is also determined by the organizational
structure. The closer an organization is to being projectized, the more
heterogeneous the team will be.
A better understanding of the difference between projects and operations can be
had by comparing the common characteristics of each. Here are the common
characteristics of operations:
 Usually has semi-permanent charter — Operations can exist for a significant
period of time — often significantly longer than projects. The agreement to do
the operation and the rules under which it exists form the basic operational
charter.
 Semi-permanent organization — Operations require teams that are long-term
and stable to deal with the repetitive nature of the operation. Therefore, semi-
permanent structures often make the most sense.

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 Maintains an existing set of practices — As has been previously stated,

operations are mainly concerned with maintaining the consistency of
performance according to an existing set of standards. The key here is stability.
 Provides a standard product or service (e.g. an assembly line) — A key
differentiator for operations is that they produce a manufactured product,
process, service or result that can be produced repeatedly.
 Are continuous — Unlike projects that have defined start and end dates, the
other key differentiator for operations is that they are ongoing or continuous.
Remember, the key to differentiating projects and operations is to focus on the
constraining factors found in projects that are not found in operations, such as
defined scope, schedule and costs.
In addition to differentiating projects and operations, PMP® candidates must be
able to differentiate between the levels of effort required for management.
Projects, Programs, and Portfolios
Within the field of project management three levels are defined. The lowest level is Slide 53
the project. A project is a temporary endeavor undertaken to create a unique
product or service. Above a project is a program. A program is a group of related
projects managed in a coordinated way. The projects involved in the program are
connected in some way that justifies adding the management expense and effort
required to coordinate them. Finally, above a program is a portfolio. A portfolio is
a grouping of related and unrelated projects and programs that are grouped for

Slide 54

Image 10: Comparing projects, programs and portfolios

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visibility and control purposes. Often, portfolios are created based upon budgetary
authority, but they can be formed for many reasons. An example of a simple
portfolio is everything for which an executive has budgetary responsibility. To
better understand the relationship between projects, programs and portfolios
examine how each address the issues of scope, change, planning, management
success, and monitoring.
Projects
 Scope — Projects have defined objectives. Scope is progressively elaborated
on throughout the project’s life cycle.
 Change — Project managers expect change and therefore implement processes
to keep change managed and controlled.
 Planning — Project managers elaborate on high-level information, turning it
into detailed plans throughout the project cycle.
 Management — Project managers manage the project team in order to meet
the project’s objectives.
 Success — Success is measured by the product and project quality, timeliness,
budget compliance, and degree of customer satisfaction.
 Monitoring — Project managers monitor and control the work of producing
the products, the services or the results that the project was undertaken to
produce.
Programs
 Scope — Programs have a larger scope and provide more significant benefits.

 Change — The program manager must expect change from both inside and
outside the program and must be prepared to manage it.
 Planning — Program managers develop the overall program plan and create
other high-level plans to guide detailed planning at the component level.
 Management — Program managers manage the program staff and the project
managers. They provide vision and overall leadership.
 Success — Success is measured by the degree to which the program satisfies
the needs and benefits for which it was undertaken.
 Monitoring — Program managers monitor the progress of program
components to ensure the overall goals, schedules, budget, and benefits of the
program are met.
Portfolios
 Scope — Portfolios have a business scope that changes with the strategic goals
of the organization.

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 Change — Portfolio managers continually monitor changes in the broad

environment.
 Planning — Portfolio managers create and maintain the necessary processes
and communication protocols necessary for the aggregate portfolio.
 Management — Portfolio managers may manage or coordinate portfolio
management staff.
 Success — Success is measured in terms of the aggregate performance and
value indicators.
 Monitoring — Portfolio managers monitor the aggregate performance and
value indicators.
For the PMP® exam it is important you remember that most of the questions focus
on projects and not programs or portfolios. However, you should be able to
differentiate between the three. Additionally, you need to be thinking about the
right size of project. In general, you should imagine that you are leading a project
that combines at least 50 to 100 resources from several continents and that lasts
more than a year and has a value of greater than U.S. $1,000,000. Furthermore,
you should assume that your project goes through a formal review and
prioritization process within your organization.
The PMO
A PMO is a department within the organization that centralizes the management of
projects. In most cases, the PMO takes one of three roles:
 PMOs provide project management for the various projects within the
organization and are responsible for the results of those projects.
 PMOs provide tools, techniques, policies, methodologies, and templates for the
organization to manage various projects.
 PMOs provide guidance and support to the organization on how to manage
projects. This includes providing training for the project managers on the
processes and tools of project management.
Remember, a PMO is not a person, but an organization or department. Most of this
manual is focused on describing the role of the project manager, but the PMO is
different. Here are some of the ways the PMO is different:
 PMOs often have the power to terminate projects.

 PMOs often have the power to provide resources to projects.

 PMOs often manage the interdependencies between projects.

 PMOs often monitor an individual projects’ compliance with organizational

policies.
 PMOs often gather lessons learned and share the information throughout the
organization.

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 PMOs often provide centralized communication about projects.

 PMOs are often more heavily involved early in the project.

PMI® describes three types of PMOs that each have varying degrees of control and Slide 55
influence over the project. These include:
 Supportive — These PMOs act as a consultative role. Their primary function
is to provide things like templates, best practices, training, access to pertinent
information, and most importantly lessons learned from previous projects. You
should think of this type of PMO as a repository. This type PMO has very little
power or control over the projects in the organization.
 Controlling — Controlling PMOs do NOT directly manage projects.
However, this type of PMO mandates compliance to varying degrees. The
PMO maintains this control by establishing project management frameworks
and methodologies that must be adopted. It also requires the use of specific
templates, forms, and tools.
 Directive — Directive PMOs take the most direct and overt control of projects.
Directive PMOs include the organization’s project managers who are assigned
by and report to the PMO. In this form of a PMO a high degree of control is
maintained.
When discussing a PMO realize that they can have oversight over the entire
organization or a single area.
Other Terms
Management by Objectives (MBO) — MBO is a management technique that Slide 56
requires all processes, initiatives and operations to be tracked against specific,
defined objectives. If the project does not support or follow a defined objective it
is likely to lose it’s resources and sponsor support and will therefore fail. MBO
only works if management strongly supports it. MBO has three basic steps:
 Establish unambiguous and realistic objectives.

 Regularly evaluate if the objectives are being met.

 Implement corrective action when necessary.

Work Performance Data — These are the raw observations and measurements Slide 57
that are identified during the activities performed in the project work: % of work
that has been physically completed, start and finish dates & technical measures.
Work Performance Information — This is the performance data that has been
collected from the controlling processes. It includes the status of deliverables,
status of change requests, etc.
Work Performance Reports — These are the physical or electronic records of
work performance.

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Project Life Cycle — These are a series of phases that a project passes through Slide 58-60
from its initiation to its closure. They provide the basic framework for managing
the project.
Project Phases — These are logically related project activities that culminate in
the completion of one or more of the deliverables.
Predictive — These are also known as fully plan driven. They are ones where the
scope, time and cost are determined as early as possible. They arise in the Waterfall
method of management.
Iterative and Incremental — These are project phases that intentionally repeat
one or more project activities as the team’s understanding increases.
Adaptive — Change driven, adaptive, or Agile methods of management are
intended to respond to high levels of change and stakeholder involvement with
fixed time and fixed cost.
Constraints — Constraints are factors that limit the options of the project manager
and the project team. Common constraints — such as time, budget, requirements,
resources or risks — can dramatically impact the results, like the customer
satisfaction. It’s the management’s responsibility to set the priority of each
constraint within a project. It is the project manager’s and project team’s
responsibility to analyze the impacts that any changes will have according to the
project constraints.
OPM3™ — OPM3™ stands for Organizational Project Management Maturity
Model. It is PMI’s model to help organizations determine their level of project
management maturity. PMI® publishes a separate standard for OPM3™.

Stakeholders and Stakeholder Management — Stakeholders represent anyone

with a vested interest in the project. That interest can be positive or negative. This
means stakeholders can like or dislike your project. Stakeholder management is the
process by which a project manager deals with stakeholders. As you will see later
in this course, stakeholder management is only formally called out once in the
processes of project management. However, it is something you must constantly
do.
Once you have a firm grasp on the hierarchical relationships between project,
programs and portfolios, and are conversant with the structures of project
management and the basic terms, it is time to focus on the real drivers of projects
and the project’s success.
The Key Drivers
The PMI® perspective on project management contends that it really comes down
to carefully managing six key drivers:
 Scope — The project’s scope is it’s defined objectives. The key for the project
Slide 61
manager is to avoid scope creep.

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 Quality — Quality is the degree to which the product, service or result meets
the stated requirements.
 Schedule — The project schedule is the committed delivery date for the
project.
 Budget — The budget is the forecasted expenditure for the project.

 Resources — The resources are the people and/or materials needed to complete
the desired product, service, or result.
 Risk — Unknown events happen on every project. Being able to manage the
unknowns is perhaps the most important skill of a true professional project
manager.
Deming’s PDCA Cycle and the PMI® Process Model
One of the key elements to passing the Slide 62
PMP® exam is understanding the
process model for project management
as defined by PMI®. Like most of the
process models widely used in the
world today, PMI’s model finds its
roots in Edward Deming’s famous
PDCA cycle. The PDCA cycle
represents a well formed process
where the work is first planned, then
the work is executed according to the
plan, the results are checked against
the expected outcomes, and finally
any variances are acted upon. PMI®
builds on this basic model to explain
the process every well-managed
project goes through regardless of Image 11: The PDCA Cycle
size, cost or scale.
To understand the PMI® model, it is important to know a number of key concepts
(PMBOK® Guide 6th Ed. p.18):
 Project life cycle — The series of phases that a project passes through from its
start to its completion.
 Project phase — A collection of logically related project activities that
culminates in the completion of one or more deliverables.
 Phase gate — A review at the end of a phase in which a decision is made to
continue to the next phase, to continue with modification, or to end a program
or project.
 Project management processes — A systematic series of activities directed
toward causing an end result where one or more inputs will be acted upon to
create one or more outputs.

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 Project management process group — A logical grouping of project

management inputs, tools and techniques, and outputs. The Project
Management Process Groups include Initiating, Planning, Executing,
Monitoring and Controlling, and Closing. Project Management Process Groups
are NOT project phases.
 Project management knowledge area — An identified area of project
management defined by its knowledge requirements and described in terms of
its component processes, practices, inputs, outputs, tools and techniques.
Slide 63

Image 12: Interrelationship of PMBOK Guide Key Components in Projects PMBOK Guide 6th Ed.
p.18

In the 6th edition of the PMBOK® Guide changed how PMI® represented this model
in hopes of reducing confusion between the defined framework and various
methodologies or life cycles (See Image 12). The new representation begins at the
top with the project life cycle which represents the actual process used for your
specific project. In general terms, each life cycle goes through a similar series of
steps where the project is first started. Once the organization recognizes it has a
project on its hands and decides to manage it as such, the effort must be organized
and preparatory work completed. The team then uses its defined processes to
complete the project work, and eventually the project ends.
Beneath the project’s specific life cycle sits the five PMI® process groups:
initiating; planning; executing; monitoring and controlling; and closing. These five
containers represent placeholders for the 49 specific processes defined in the ten
knowledge areas of the PMBOK® Guide. It is at this point that examining PMI’s
previous model holds value for understanding the project management framework.
The model (Image 13) begins with a project sponsor or initiator defining a business
or organizational need. The need is further defined until someone recognizes that it
should be a project. At that point the initiating process group begins.

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Slide 64

Image 13: The PMI® Process Framework PMBOK® Guide 2013 p.54

The initiating process group has two key goals: to develop a project charter and to
identify stakeholders. The charter authorizes the project and is discussed further in
the next chapter. Identifying the stakeholders is discussed in the stakeholder
management chapter. Once the charter is created and stakeholders have been
identified, the project progresses into the planning process group.
The planning process group is the largest of the five project management process
groups. It also has the potential for a looping relationship with the executing
process group. This relationship is the point of the confusion with students of
project management. If both the planning process group and executing process
Group are done just once it creates a linear life cycle such as in a waterfall or
SDLC. But the model also allows for the planning and executing process groups to
be completed many, many times in a back-and-forth relationship.
Deciding when planning is complete, and when it is time to execute the project is
the monitoring and controlling process group. This process group acts as the
project’s eyes and ears. The monitoring and controlling process group might also
decide that a project requires more planning after execution has begun, or that all
the project work is complete.
Lastly, there is the closing process group. Whereas the executing process group
produces deliverables, only the closing process group produces the final product,
service, or result. Additionally, the closing process group produces project records
which then become assets to the organization because they allow it to engage in
continuous process improvement, which is very important to PMI®.
Development Methodologies /Life Cycles
Development methodologies and life cycles are critical to project success.
However, a development methodology should not be confused with project

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management. This section examines how development methodologies impact

projects and provides a basic understanding of the five families of development
methodologies. The purpose of this discussion is not to make you an expert at any
one of the methodologies presented, but rather to provide enough information to
give you a clear understanding of how they work. This understanding will provide
the knowledge necessary to properly align the results of the project, the
organization, and the team with a methodology most likely to produce success.
Above all else remember that almost any project can succeed with almost any
methodology. The key is understanding the risks and benefits of each so you can
make informed choices.
Development methodologies are easier to understand when they are placed within a
construct that allows the comparison of one methodology against another. Image
14 shows such a construct.
Slide 65

Image 14: Lifecycles or Methodologies

The horizontal axis in the model measures the amount of formality or a structured
process the methodology uses. A key representation of this formality is found in
the volume of required documentation. Methodologies with low formality typically
require little documentation, while methodologies with highly structured processes
usually require significantly more documentation. However, do not equate the
amount of process and formality with the quality of the management or likelihood
of success.
The vertical axis in Image 14 represents the number of loops or iterations a project
goes through. A methodology that only cycles once through its steps is said to be
highly linear or sequential. If the methodology is highly linear it often appears to
be rigid. Methodologies that are highly linear tend not to loop back on themselves

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or repeat steps. If the methodology is not highly linear then it is iterative. This
means that the methodology allows the project to repeat steps as more information
is learned about the project. Recognize that it is not required that only pure
methodologies be used. Experienced project managers regularly combine
methodologies to best meet specific business needs as is represented by a hybrid
life cycle. This is a key ability for project success. However, the project leader
must understand the basics of the major methodologies to build that custom
methodology. Image 15 shows the “Big 3” types of life cycles together to give you
a visual reference.
Slide 66

Image 15: The Major Life Cycles / Methodologies

We have already offered a basic definition of the core methodology or life cycle
classes, but we have not really dove into them in any detail. That discussion begins
with a better understanding of the predictive model.
Understanding the various life cycles that fit into this model is a very important
aspect of your studies. PMI® describes life cycles as generally either being
adaptive or predictive. In the simplest terms, these two concepts represent
constantly evolving planning where the project is broken into small components
over a less determined timeline versus project planning that is done in a linear
fashion with a specific development plan structured specific scope, schedule and
cost estimates. However, all of these life cycles are broken into phases specifically
associated with the development of products, services and results. The discussion
of lifecycles or methodologies has a variety of options beyond the basic predictive
and adaptive. These include:
 Predictive life cycles — In a predictive life cycle the team spends significant
time in the early phases of the project determining project schedule, scope, and
cost estimates, often referred to as the project’s triple constraints. Throughout
the rest of the project, the team then works to tightly manage any scope
changes. A predictive life cycles include the Software Development Life Cycle

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and the Waterfall Methodology. This model works well when it is reasonable
to expect that all the requirements are knowable at the beginning of the project
and it is critical to maintain stable scope, schedule and cost targets. However,
this model does not typically respond well to missed or changing requirements.
 Iterative life cycles — Iterative development generates a cyclical process that
often has a single general roadmap. However, it uses a series of steps where
each step learns from the previous ones to produce the overall product, service
or result. An iterative process embraces the fact that many projects struggle
with knowing at the beginning what the final product should look like and
responds by building in as many learning opportunities as possible. An often
used tool in iterative development is prototyping.
 Incremental life cycles — In incremental life cycles the product, service, or
result of the project is produced using a series of chunks. The most common
implementation of incremental delivery has the team delivering business value
in a series of releases rather than one large chunk. The big difference between
this model and an iterative cycle is that those using an incremental life cycle
will work to maintain the original road map, and few opportunities exist for
feedback from the customer until the final product, service or result is released.
 Adaptive life cycles — Adaptive life cycles may be iterative, incremental, or
agile. In an adaptive model, project scope is defined at the beginning of each
iteration and only generally at the beginning. These life cycles are also called
agile or change-driven. Agile methodologies are all the current rage. Scrum,
Extreme Programming, DSDM, Feature Driven Development, and Crystal are
all examples. These models typically have smaller collocated teams and offer
critical advantages when the team is dealing with poorly defined or changing
requirements.
 Hybrid life cycles — A hybrid life cycle is a combination of the adaptive and
predictive life cycles. In this model, the team uses a predictive model for those
requirements that are either well known or fixed and uses an adaptive model for
requirements that are unknown, incomplete, or evolving. This is not an
undefined process where the team is allowed to do whatever it wants. In most
cases, the team follows a process defined by the larger organization to ensure
consistency of process.
It is up to the team to decide the best life cycle for the particular project in their
specific organization. However, the information provided above, which largely
aligns with the limited information found in the PMBOK® Guide, is definitely not
enough to make a real-world decision on the best methodology to use. It also isn’t
enough to get you through the exam. To help you better understand methodologies
review the following:
The Predictive Model
The use of the term “waterfall model” comes from its linear series of steps that
proceed downward like a waterfall. Work is completed in a sequential manner with
one deliverable being completed and approved prior to moving to the next

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deliverable. These gates are commonly referred to as phase gates, stage gates, Slide 67
milestones or go-no-go decision points. Some common names for these gates
include:
 Stakeholder Review
 Requirements Review
 Use Case Review
 Critical Design Review
The waterfall model uses an extremely linear process. This process begins with the
definition of the business need. This is referred to as conceptualization or analysis.
It then continues through all the steps in the waterfall until ending in the
deployment of the product or service of the project. The Software Development
Lifecycle or SDLC is one of the best known waterfall models. Like many waterfall
models it has five steps or phases.
 Analysis — The business need is defined and the top level scope is defined for Slide 68
the product or service that will best meet the need.
 Design — The specific requirements that are necessary to complete the product
or service are defined.
 Development — The product or service is built in accordance with the
previously defined requirements.
 Testing — The product is tested to ensure that all the features and functionality
are working in accordance with the requirement. In addition, integration testing
is completed to ensure the product or service will function correctly within the
global environment.
 Deployment — The product or service is completed and moves into the
operations phase.
Waterfall Advantages
 A waterfall model offers the easiest departmentalization and managerial Slide 69
control.
 A waterfall model forces the team to completely define all requirements before
proceeding to the next phase. This is also its biggest disadvantage.
 The waterfall model has strong emphasis on documentation and the
development of source code.
 The waterfall model provides a very structured and disciplined approach to
development. This high degree of structure may also be seen as a disadvantage
by many.
Waterfall Challenges
 Real world projects rarely follow a purely sequential process. In practice steps Slide 70
are often repeated multiple times or the project must go backwards to continue
progressing.

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 The waterfall model requires the project team to know and define all the
requirements at the beginning of the project. This can be extremely unrealistic.
 Waterfall models often cause a large time gap between requirements definition
and when stakeholders actually see the product or service of the project. This
gap can cause the stakeholders to become uncomfortable with the progress or to
change requirements. There is also a risk the product or service may no longer
meet stakeholder needs.
Selecting a waterfall methodology is often warranted if any of the following are
true:
 The project has requirements that are extremely well known and unlikely to
change.
 The project involves a high volume, transactional system where errors or
incomplete requirements could damage existing capabilities.
 The project team is made up of new and inexperienced resources or resources
that have never worked together before.
 The project would benefit the organization was not allowed to alter
requirements.
To better understand how these decisions should be made, examine the following
situations:
Imagine a credit card processing system. Several million times a day merchants
send credit card transactions into your system. If your team was to deploy
inaccurate or incomplete components the entire system might fail. This would both
significantly and negatively impact the business. This situation would provide a
timely opportunity to use a waterfall methodology.
Now imagine a new website. What would be the impact on the site if one or two of
the pages were not completed when the site is deployed? You would not be able to
see those pages, but all the other pages would work correctly. This may lead the
project manager to select a different methodology, such as one where the project
manager could deliver some type of actual product so the stakeholders could
determine what they really want prior to the end of the project.
Iterative Life Cycles
The most common form of an iterative life cycle is the Spiral methodology. A
spiral methodology is one of the only formal methodologies that uses prototyping Slide 71
to prove capabilities or investigate requirements and functionality. This
methodology is often referred to as “chunking” because it makes use of discrete
phases to produce parts of the overall product, service, or result of the project.
These chunks are not considered “production ready until they are combined with
the other components at the end of the timeline.
Iterative development is a rework scheduling strategy in which time is set aside to
revise and improve parts of the system. The concepts of iterative development

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creates loops in the process of executing a project that allow the team to change
their process to improve execution and delivery. In a single looped linear process,
the team is stuck with the process with which they start the project. This is a key
advantage to seasoned, experienced teams. Those teams have completed multiple
projects together and hopefully those experiences provide insights on the current
effort. Agile projects get lots and lots of chances to deliver because they use lots of
short iterations. Each one requires a short cycle of reflection to determine the best
way to improve the process and deliver better results.
Iterative development allows for segregated teams based on their functional areas.
For example, a project might have a group of stakeholders and team members
solely focused on the definition of requirements. These individuals would begin
immediately on the project defining the requirements by chunk. They would begin
by defining the first chunk, then the second, the third, and so on.
As soon as the first chunk is defined a second team or individual begins defining
the design specifications for the first chunk before moving on to the second, third,
and so on. There would also be sub-teams assigned to development and testing that
each would begin work as soon as the first iteration was ready.
Within each of these chunks, the team often produces one or more prototype to
prove technology, designs, methods or other key aspects. In each chunk the project
goes through four stages:
 Determine objectives, alternatives and constraints.
 Evaluate alternatives, identify and resolve risks (prototype).
 Develop and verify the next level of the product.
 Plan the next phase of the project.
The spiral model also demands the project manager make a strong effort to
determine how many phases or chunks the project will take before beginning the
looping process since a failure to effectively make this determination will often
lead to a significant problem with schedule and cost control. Remember, iterative
development still tries to fix the schedule and budget in the broad sense.
In the spiral model, a prototype is built during the “evaluate alternatives” phase.
After gathering feedback about the prototype, the project team determines the next
level of the project. The next level of effort and deliverables are planned and then a
new phase begins. This process continues in a looping fashion with more and more
iterations until the final product is ready for evaluation and testing.
Spiral Advantages
 The spiral model is evolutionary in nature allowing the features and functions Slide 72
to evolve over time thereby creating a better final product.
 The spiral model provides a strong focus on the project risks. The iterative
process mitigates risk by using prototypes to ensure the team can actually
deliver the desired results before too much time or money is invested.
 Prototypes allow for rapid evaluation of the solution provided by the project

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team. It allows the team to make adjustments to the solution based on the
changing business environment.
 Other models can be incorporated into the spiral model to assist the developers
or to address special needs of the project team.
 The project team and sponsor can more quickly see the results of the project
and alter requirements as needed.
Spiral Challenges
 The project teams must have strong risk assessment expertise. The primary Slide 73
advantage of the spiral methodology is that it provides for better risk
management. If the project team lacks skills in this area the advantage doesn’t
exist.
 The model has a greater potential to overrun costs and schedules because a
spiral methodology uses looping iterations. Even though the project manager is
supposed to define the number of these loops, often additional loops are added
to allow for new requirements or new information. This can cause the schedule
and/or costs to slip.
Prototyping
When prototyping, the project team builds a smaller version of the product or a Slide 74-75
core piece of the product’s functionality. This process allows the project team to
test theories, evaluate alternative solutions, or prove they are capable of delivering
specific features. The prototyping process also allows the team to make
refinements to the product requirements as new information is learned. Prototyping
assumes that it is difficult to know all the project requirements at the inception of
the project. To be able to discover and refine the requirements, the developer must
build a simplified version of the system and present it to the customer for
evaluation and feedback.
The most important thing to remember about prototyping is that it is only used to
solicit feedback, prove capabilities, and gather and refine requirements. It should
never be released as a finished product. Deploying prototypes is a common error.
Preventing this from happening requires the project manager to consistently and
carefully manage stakeholder expectations. There are three issues that must be
carefully managed with your stakeholders when prototyping:
Slide 76
 The prototype should never be deployed as a product. This often happens and
causes significant frustration as the prototype is rarely designed to handle the
load of real world use.
 Creation of the prototype will cost additional money without providing an
immediate product. However, it is expected that this will save money in the
long run.
 The use of prototypes can dramatically increase the likelihood of a problem
called architectural compression. This problem occurs when organizations
build one system either on top of or beside another repeatedly without

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consideration for the overall architecture. Eventually, the entire foundation

collapses under the weight of all of the independent components. The use of
prototypes can often make this problem worse because they rarely have any
consideration for the overall architecture.
To be successful with the spiral methodology the project manager must keep a
careful eye on the needs of the overall structure of the project and work to
constantly manage expectations.
Incremental Life Cycles
Incremental life cycles get us closer to true agile development, but NOT all the
way there. In incremental development the team breaks the project into smaller
components or chunks that each have value to the customer, and at the completion
of each chunk the customer receives a working product, service or result. This
product might only have one or two capabilities, but those capabilities work in the
production environment per the project requirements. Each subsequent release add
new, complete functionality to product with only very limited rework occurring on
previously completed features. It is different from iterative development because it
does not focus on a single release of the product, service or result and it typically
makes use a complete team instead of one broken by functional areas.
Incremental delivery is also different from iterative development because of its
focus of having a complete process in each cycle. This means that each project
chunk goes through a similar evolution of requirements, design, testing, release to
production and operation with the entire team participating in each part.
Incremental development is a staging and scheduling strategy in which the various
parts of the system are developed at different times or rated and integrated as they
are completed. This means that the features or requirements do not have to be
completed as part of a single release. When a team uses incremental delivery they
are able to deliver features or requirement in a wide range of orders defined by the
team. This fundamentally changes how projects are executed. Suddenly, it what is
delivered at any point in the project. This notion is somewhat similar to the ideas
surrounding Object Oriented Programming where features and requirements are
delivered as discrete objects independent of others.
The incremental life cycle is especially advantageous when working with new or
unfamiliar technology and has the advantage of producing production ready
product, service, or result early in the project timeline. It also has the advantage of
experiencing lower costs to change requirements as compared to other models.
Team often experience less difficulty developing and testing the project product
because of the focus on small pieces of functionality, and the iterative model
allows the customer to more quickly provide feedback.
Iterative development is not perfect however, and does have some disadvantages.
The most important of which is the fact that the team may experience significant
struggles with the overall system architecture because no time is ever spent
building an overall architecture. It also requires a seasoned and skilled project
manager to lead the effort because there is often less formalization of the process
and documentation.
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Adaptive Life Cycles

Adaptive development is most commonly known as agile development. It is
typically both iterative and incremental in nature. In addition to incremental and
iterative development, agile processes change the way work is completed by team
members. Agile development makes extensive use of WIP or work in progress.
Although there is no rule or requirement to do so, most traditionally managed
projects use a concept called best resourcing. In best resourcing whichever
resource possesses the highest skill level is assigned to execute the task. WIP
represents a very different way to task project work. To better understand WIP
let’s exam a simple example.
Imagine that you are part of a project team that has three deliverables to complete
and three resources on the team. Each resource is the perfect resource to complete
one of the three tasks. Additionally, the team is constrained by only being allowed
six time/cost units to complete its work. How
do you decide who does what? One option Deliverable X Slide 77
would be to use best resourcing. Option 1
represents this choice. In this option, the Option 1 A A
person who is the most skilled at the work
does each task. As a result, Deliverable X is Option 2 A C A
worked on by Resource A, Deliverable Y is
worked on by Resource B, Deliverable Z is Deliverable Y
worked on by Resource C. Notice that the
statement says each deliverable is “worked Option 1 B B
on” by the specified resource and NOT
“completed by”. That is because, like many Option 2 B B C
real-world projects, our example struggles
with schedule and budget limitations. At the
end of six time/cost units the team runs out of
Deliverable Z
time and/or money. Unfortunately, the team is Option 1 C C
only 2/3rds complete with each deliverable.
This puts the project sponsor in an incredible Option 2
bind. They have spent all the time and money
the planned for the project, but have nothing Image 16: WIP
of tangible value to show for it. The only logical choice is to spend 50% more than
planned to complete the deliverables as the alternative is to walk away from the
initiative with nothing to show for the effort.
Now let’s look at Option 2. In this option, we do not assign the best, most skilled
resource to complete the task. Instead we assign a capable resource to the first two
deliverables. For Deliverables X and Y nothing changes between the two models.
However, with Deliverable Z we see a change. Instead of assigning Resource C to
begin working on Deliverable Z where they are the most capable resource we
instead ask them to help Resource A with Deliverable X. We do this because of
the principles of managing WIP. This principle argues that we want to limit the
amount of Work In Progress occurring at any single point. The principle can be
thought of like a water main. The objective of the Water Department is to ensure

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the maximum amount of water is constantly available to the end users when they
turn on their faucets. Contrary to what you might think, the best way to ensure
high water pressure is to ensure the mains are less than 100% full. Remember, the
mission is to get each drop to the customer as quickly as possible. If you ask your
friendly neighborhood civil engineer, they will confirm that the water will travel
the fastest when the pipe is less that 100% full. We do the same thing with our
project tasks when using WIP. We need to have all hands focus on getting one
deliverable through the process, then another, and another, and so on until the
project is complete. The team’s focus is on throughput and not just starting as
many things as possible.
Now let’s go back to our time/cost limitation. Remember, we still only have six
time/cost units to spend on our project. In Option 2, both Resources A and C start
out working on Deliverable X. At the same time Resource B begins working on
Deliverable Y. Once Deliverable X is complete Resource C shifts over and helps
Resource B complete Deliverable Y. At the end of the same six time/cost units
both Deliverables X and Y are complete. Immediately you might have just
thought, “Yeah, but you have nothing done with Deliverable Z.” And, you would
be correct. However, advocates of WIP would argue this is a positive not a
negative. In addition to maximizing throughput (remember we now have two
deliverables completed), the team has eliminated all waste. Waste in this case is
defined as any partially completed work product when the team runs out of time or
money. In this case, we are talking about Deliverable Z. Nothing was done on it
so there is no waste. This puts our Project Sponsor in a powerful position because
now they truly have a choice. Should they spend the extra 50% time/cost to
complete Deliverable Z or not? If the team has correctly applied another common
Agile principle of completing the most important work first than Deliverables X
and Y were the two most important and Z is less important. The key question for
our Sponsor centers on whether or not Z is worth the added 50%. If she walks
away now, she has gotten her two most important deliverables and stayed within
budget. WIP gives the power back to business and removes the common complaint
that they were forced to complete a project because they had already invested so
much. Good money no longer needs to follow bad.
Agile Methodologies
Today there are more than 16 different methodologies that are considered part of
the agile family. Some of these like to refer to themselves as “frameworks”, but
the PMBOK® Guide refers to them as methodologies or life cycles because they
each have specific rules and processes that must be followed. The most common
of these methodologies include Scrum, Extreme Programming (XP), Feature-
Driven Development (FDD), Dynamic Systems Development Method (DSDM),
and the many forms of Crystal. Two less common, but no less important closely
related methodologies include Lean Software Development and Kanban. For the
purposes of the PMP® we will focus on Scrum only.

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Scrum
Scrum is far and away the most popular agile methodology globally. It was first
defined as “a flexible, holistic product development strategy where a development
team works as a unit to reach a common goal” as opposed to a “traditional
approach” (read a linear approach such as Waterfall) in January,1986 by Hitotaka
Takeuchi and Ikujiro Nonaka in the New Product Development Game published in
the Harvard Business Review. This article described a new approach to
commercial product development that they argued would increase both speed and
flexibility based upon their examination of numerous case studies in
manufacturing, photocopier, and printer industries. They called this the holistic or
rugby approach. The idea was to create a single, small cross functional team that
possessed all, or at least most, of the skills required to complete the project and this
team would work singularly on the project across multiple overlapping phases
constantly passing work back and forth until complete.
In the early 1990s Ken Schwaber used a version of this approach at Advanced
Development Methods while Jeff Sutherland with others developed a similar
approach at Easel Corporation. Sutherland is believed to be the first to refer this
approach as, “Scrum.” In 1995, Sutherland and Schwaber jointly presented a paper
describing the “Scrum Methodology” at the Business Object Design and
Implementation Workshop held as part of the Object-Oriented Programming,
Systems, Languages, and applications 1995 in Austin, Texas. The two continued
to work together for several years bringing together their ideas on Scrum until in
2001, Schwaber published Agile Software Development with Scrum coauthored by
Mike Beedle.
Scrum is based on two aspects of industrial process theory: self-organization; and
emergence.
 Self-organization is the idea that the development team will decide what work Slide 78
needs to be accomplished and who will do the work to deliver the desired
business results.
 Emergence is the idea that information, requirements and facts will emerge as
the project progresses. The key is that the team uses processes, tools, and
techniques capable of harnessing this new information for the betterment of the
organization.
The creators of Scrum argue that traditional linear approaches for projects such as
Waterfall are based on the concepts of defined processes. Defined processes are
repeatable processes such as in manufacturing. Imagine working at the Acme
Widget factory. In order to produce widgets of a consistent level of quality it is
imperative that our machines stamp and assemble each widget the same way. The
more consistently we can stamp the widgets the less variance we see in the finished
product. As we move forward we also try to increase the rate of production. With
smaller and smaller variances and greater and greater production we are able to
take our widget production to a point where we commoditize the production of
widgets. Commoditization is defined as the process in which goods that have
economic value and are indistinguishable in terms of attributes (uniqueness or

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brand) end up becoming simple commodities in the eyes of the market or

consumers. This means widgets become easy to obtains for the consumer because
many different organizations make them uniform, plentiful, and affordable. Our
widgets are like laundry detergent. If you go to most major grocery stores you find
an entire row of detergent. All of it priced similarly and largely indistinguishable
from each other. In manufacturing this is largely a good thing. However, such
processes in project management are not good.
To understand why we first must understand how projects relate to the overall
operation of the organization. In any organization, regardless of its purpose, there
are only two types of things occurring operations and projects or new initiatives.
The purpose of operations is to keep the organization moving forward. Operations
are all about repetition or doing the same thing over and over again constantly
seeking to become more efficient and squeeze just a little more cost out of the
process. This is possible because we are producing the exact same thing day after
day. A defined process is perfectly tailored to operational management because
we want people to follow the exact same steps day after day. Projects or new
initiatives are a very different animal. They are all about creating something we
haven’t had before. They are about creating something new and in some way
different. By this definition, the processes we used to execute the last project
won’t necessarily work with next. Success relies on flexibility, and flexibility
requires a different way of doing things. Projects have the greatest chance of
success when empirical processes are used.
Empirical processes are used in situations where it is difficult to have consistent
likelihood of success processes. Therefore, empirical processes focus on creating a
situation with the highest using three primary drivers.
 Visibility – The aspects of the process that affect the outcome must be visible Slide 79
to those controlling the process and what is seen must be true. The team cannot
successfully manage or optimize that which they cannot see. Therefore, the
first key is to ensure the team can see all pertinent information.
 Inspection – The various aspects of the process must be examined frequently
enough that unacceptable variances in the process can be detected. It is not
enough to say you can see what is going on in a process. The team must also
regularly examine all aspects of that process so they can determine when
variances are occurring that are beyond what the team has determined is
allowable.
 Adaptation – If one or more of the processes are determined out of control the
processes change. Once you can see the drivers in a process and have taken the
time to examine those variables to ensure you know which variables are in
control and which ones are not, the only thing left is to fix those processes that
are not performing as expected. This step is called adaptation.
Scrum Roles
Scrum is both infinitely simple and incredibly powerful. Learning Scrum requires
you to know its three roles, four artifacts or documents, and five meetings. That’s
it! We begin by describing the three roles of Scrum.
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The first role is the product owner or PO. The PO is the individual responsible for Slide 80
representing the interests of all stakeholders, obtaining funding, defining the initial
requirements, defining the return on investment or ROI, and the project objectives.
They are the primary owner of the product backload, a document where the user
stories, features or requirements of the project are listed in rank order from most
important to least important from the perspective of the business. The closest term
in the PMBOK Guide® to the product owner is the project sponsor, but there are
some differences. Theoretically, a sponsor exists as the all powerful leader. They
give the project manager and their team the authority they need to execute the
project. The rule when discussing a project sponsor is that you want the most
powerful one you can find because the project manager is only as powerful as their
Sponsor. This concept creates a hierarchical structure and a direct reporting
relationship from the sponsor to the project manager, and then to the team. In
Scrum, it is not assumed that the PO is this all powerful entity. Instead, we simply
say that the product owner is responsible for certain areas. This means that the PO
either has the direct authority to provide the funding and other items or the must go
into the greater organization and obtain those things. Scrum doesn’t care which.
When the development team needs more information about a user story, they rely
on the product owner to either know that information or ensure that the correct
people are in the room to provide that information.
The second role is the development team. In earlier Scrum writings, this role was
referred to as simply the team. This is the small group of people who actually do
the work to deliver the product, service, or result of the project. The development
team is self-managing, self-organizing, and cross functional. The team does not
have a project manager or functional leader who directs the team’s efforts. The
development team is also small. According to the rules of Scrum, the team size is
six plus or minus three. This puts the optimal team size somewhere between three
and nine individuals. This is an important aspect of agile development. Research
has repeatedly shown that smaller teams are much more successful than larger
ones. Scrum also defines the development team as being multi-functional meaning
it contains all the skills the team needs to complete the work of the project.
Furthermore, the team is 100% dedicated to one and only one project. This notion
of a team is often difficult for people new to agile development, especially the idea
of a team being dedicated to one and only one project. “How is that even possible
in the real world?” They ask. It works because the typical Agile team is much
smaller than teams in traditional projects. It is still the same total number of total
people in the organization, but by breaking the whole into smaller independent
teams the organization is able to divide and conquer.
The third and final role is the scrum master. The scrum master is responsible for
the scrum process, teaching scrum to everyone, implementing scrum so it fits with
culture, and ensuring that everyone follows scrum’s rules and practices. The
closest approximation to in a linear project is the project manager, but there are
some key differences, at least from the perspective of the Agilist. Most Agilists
believe that traditional project managers are only part of hierarchical organizations
with the project manager at the top. All the resources report to the PM.
Additionally, this person serves as an administrator directing the team, but having

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no technical skills or knowledge of the project. This is a huge over simplification

of the role, but makes for a nice comparison. A scrum master serves as a
facilitator. Remember, a scrum development team is self-managing. The
expectation is that the scrum master role is to only help the team, to ask probative
questions, to ensure the team knows the scrum process and follows it.
Development team members report to each other and not the scrum master so the
scrum master has no formal authority to make anyone do anything.
Throughout much of the literature and in this book a fourth role is added to the list
that is not officially part of scrum, but often unwittingly included. It is the team.
The team is different from the development team because it includes all three
scrum roles. It is defined as everyone involved in delivering the project. It is the
product owner, the scrum master and the development team together. As we go
through the rest of this discussion it is important that you can differentiate the team
from the development team.
Everyone involved in the project fits into one of these three roles. For many, this is
a bit disconcerting. What do you do if you are a business analyst or quality
assurance person how do you fit in when there are only three roles and you aren’t
one of them? In most situations, these additional roles are included as part of the
development team. They represent other resources needed to complete the work of
the project. However, occasionally they also might fit in to the organization as
resources used by the product owner to define the requirements of the project.
We have now covered the three roles found in scrum so it is time to move on to the
four documents necessary required to implement scrum. The first of these
documents in called the product or project vision. Most people are familiar with Slide 82
this document by another name, the project charter. Many Agilists would contend
that the two documents are not the same thing, but this has more to do with many
project managers failing to create proper charters than the comparison. The vision
sets the direction of the project and guides the scrum team. In 2004, Schwaber
described the vision this way, “The minimum plan necessary to start a scrum
project consists of a vision and a product backlog. The vision describes why the
project is being undertaken and what the desired end state is.: (Schwaber 2004,
p.68) A well formed vision is a single page document that answers a number of
questions. These questions cover five major areas.
The Business Need — This question is sometimes referred to as the problem
statement. What is the problem the business needs solved? This can be a very
broad topic that includes questions such as who is going to buy the product or who
is the target customer? Successful projects solve a point of pain for the business.
Someone has to need the thing produced by the team for it to have value. These
questions and others such as how does the product of the project compare to
existing products, both from competitors and our organization, or what are the
product’s unique selling features must be answered by the business.
Project Justification — It is not enough to simply solve a business need. That
need has to be significant enough that it warrants spending time and money to

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solve it. Projects exist in a competitive landscape. The business must be able to
explain why doing this project is the best expenditure of the available resources.
Success Criteria — This is where the rubber hits the road. It answers the question,
how will we know when we are successful? It is where the business defines the
attributes that are critical to satisfying their needs, and the overall success of the
product. The measures must be quantifiable and objective to prevent different
people from interpreting the project’s results differently.
Prioritization — This area is all about determining how the project fits into the
landscape of all the other projects going on within the organization. This is critical
information for the Team to know. Understanding where a project rates versus all
the other work the organization is trying to accomplish informs the team about the
likely level of support they are likely to receive. It is also a good idea to
understand how the product owner values three legs of the triple constraints. This
will also provide guidance about how much support the project is likely to receive.
Constraints and Assumptions — This last area provides critical information for
the development team because it allows the business to define limitation with
which the team must live. This includes issues like budget limitations, time
constraints, technology or resource limitations.
A common way to validate your vision is to answer the elevator test. Can you
explain the product, service or result of the project in the time it takes to ride up in
an elevator? (Moore 2006 p. 152). No project can begin without a vision. It is how
the organization recognizes a potential project exists. Regardless of methodology
every project should have a vision.
The second document in the list of four is a ranked product backlog. More often
than not the literature talks about just the product backlog. A product backlog is a Slide 83
listing of the user stories, features or requirements. These items are often referred
to as product backlog items or PBIs. The key is the “ranked” portion. It is a key
aspect of using the product backlog. Ranking the backlog requires the business to
prioritize the items in the backlog from most important to the business to the least
important. Sometimes the backlog is further defined into groups of user stories that
belong together. The development team uses the backlog to define which features
to deliver when. Each of the items on the backlog items relatively independent of
each other. Additionally, the items on the backlog may be reprioritized at any time.
Before moving to Scrum process, there are a few additional terms pertinent terms
which must be introduced.
User Stories — A story is a self-contained unit of work agreed upon by the
developers and the stakeholders. Stories are the heart of Scrum, and the building
blocks of the sprint. Each user story must be producible in a single sprint. Often,
this requires the development team to break stories down until they fit into a single
sprint. Additionally, each story must provide functionality that has real value to the
business. A user story is different from a feature however as a feature represents a
distinct element of functionality that provides capability to the business while a
user story is a small aspect of a feature that is used to get feedback from

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stakeholders and find out if you are doing anything wrong. In the real world of
implementing agile the two terms are often used synonymously.
Themes — Themes may be thought of as groups of related stories. Often the
stories all contribute to a common goal or are related in some obvious way, such as
focusing on a single customer. Sometimes stories within a theme may be
dependent on each other, and then do not necessarily encapsulate a specific work
flow or be delivered together.
Epics — Epics resemble themes in the sense that they are made up of multiple
stories. Sometimes they also resemble stories in the sense that may appear as a big
story. Unlike themes, epics often comprise a complete workflow for a user and
they typically cut across all or some of the three business dimensions (time, scope
and organizations). Another important difference is while the stories that comprise
an epic may be completed independently, their business value isn’t realized until
the entire epic is complete. This means that it rarely makes sense to deliver an epic
until all of the underlying stories are complete. In contrast, while stories
comprising a theme are related, each is independent enough to be delivered
separately and still provide some measurable sense of business value. A related
rule of thumb is to automatically further break down any story that is estimated
above a certain threshold. A good starting point for this threshold may be where
your team has historically tended to become inaccurate with their estimates. Epics
are most often seen when teams are implementing SAFe as they are often used to
enhance business value of the FULL solution set or bring a range of technologies
together. They are often key economic drivers for the portfolio,
Rocks — Rocks are pieces of functionality used as placeholders when there is an
absence of information. The rock acts as a signpost signifying the team does have
information about a feature or requirement.
Sprint — A short iteration of fixed time where features are produced that have
tangible value to the customer. The original Rules of Scrum stated that each sprint
was 30 days in length. However, over the years Scrum has adopted the practices
from other agile methodologies and the common practice is to see sprints of
between two and six weeks in length. The key is that each sprint must be the exact
same fixed length, and each MUST produce fully tested functionality that has real
value to the customer.
Release — A release is a group of related sprints. Releases become necessary for a
variety of reasons. The Rules of Scrum require every sprint to provide fully tested,
production ready features. However, there are many situations where it is either
impractical or ill advised to put the features completed from a single sprint into
production. Imagine an organization that has set release windows where new code
can be put into the production system. In these situations, the Development Team
simply places the results from sprints “on the shelf” until all the releases that are
part of the release are complete and then the entire group of features is place into
production together.
The next artifact included in the set of four is the team or scrum board. The team
board is the primary tool used by a Scrum team to manage the sprint. The team

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board is an information radiator, or a large graphical representation of project

information that is maintained within easy visual range of all participants in the
team’s shared workspace. The team board is broken into columns with each
column representing the status of the items listed in it.
Slide 84

Image 17: A Sample Team or Scrum Board

The far left most column contains the product backlog items or user stories
assigned to the current sprint. Each of the other columns represents the tasks
required to deliver that story. The next column moving from left to right is To Do.
This column is for the tasks that have not started and still need to be completed.
The In Progress column represents tasks on which the team is currently working.
The number beneath the column represents the maximum number of tasks that are
allowed within the column. These numbers are part of using Kanban to managing
work in progress or WIP. The values for each column are defined by the team at
the beginning of the project. For the In Progress column, this number is 5 meaning
there can be up to five tasks in progress at the same time. The next column is
validate. This column contains the tasks that are complete and ready for testing. In
this example, only three tasks can be present at a time. The next column is
Impeded. This column is for tasks that are currently blocked. The team needs to
focus on these items to resolve whatever the issue is. Only two items are allowed
to be impeded at a time. The final column is Done. This column is where the team
places it complete, fully tested tasks. At the end of the sprint all the tasks which
begin in the To Do column end in the Done column.
At the bottom of the team board is a single row dedicated to something called
technical debt. Ward Cunningham, one of the authors of the Agile Manifesto, said
that “so problems with code are like financial debt. It’s OK to borrow against the

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future, as long as you pay it off.” The notion here, is that sometimes teams push
products and services into production quickly to get some experience. In many
cases this is both a necessary evil and/or a good idea. Eventually, however the
team has to go back to that completed item and incorporate that learning into the
product. This process is called refactoring. Therefore, technical debt represents is
the process of taking short cuts and delivering product, service or result that is not
quite right for the task currently being done. Doing so reduces the team’s
productivity, and eventually the team must go back a correct these imperfections.
The fourth artifact used in Scrum is a burndown chart. A burndown chart is
another information radiator used by the team to show stakeholders how the team is
doing on the current sprint. Each day of the sprint is represented by a vertical bar
showing the number of story points remaining in the sprint. A story point is an
arbitrary estimate of the work required to complete the task. The rate at which the
team produces story points is called its velocity. The team begins the sprint with a
forecasted rate of productivity with the end of the sprint fixed. As the sprint
progresses, the team constantly must evaluate how it is doing against that forecast.
If it finds the velocity is falling beneath the forecast they must adjust the number of
stories being produced because the team is not allowed to change the end date of
the sprint.
A fifth artifact that is occasionally included, but does not nicely fit into the memory
jogger is the sprint backlog. Let’s now take a look at the basic Scrum process.
This process is relatively simple, but it is critical that it be exactly followed for one
to gain the benefits of Scrum. The most commonly cited source for what
specifically these rules or guidelines are is the Scrum Guide available from the
Scrum Alliance or Scrum.org.
Slide 85

Image 18: A Burndown Chart

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Every project begins the same way. Someone creates a vision and a ranked product
backlog and the team enters a release planning meeting. The release planning
meeting serves several purposes. The development team first uses the meeting to
examine the backlog items to determine how they need to be grouped together to
produce releases. Additionally, the team must determine how long each sprint
needs to be. Remember, each user story must fit into a single sprint. So the team is
tasked with getting a sprint length that is as short as possible, but long enough to
deliver fully tested, production ready results that have real value to the business.
To do this, the team must somehow determine estimates for each PBI. There are a
number of techniques commonly used for this purpose that are discussed later in
this book. The estimates are used by the development team to ensure each sprint is
approximately the same size. Once the development team has determined how
long the sprints will be and how the sprints will be grouped into releases, then team
is done with the release planning meeting. Approximately once a quarter the team
must revisit the release planning meeting.
The next step in the process is the sprint planning meeting represents the first step Slide 86
of the process that gets repeated with each sprint. The purpose of the sprint
planning meeting is to plan the work of the current sprint, and it officially kicks off
the sprint. The meeting is broken into two parts.
To begin the meeting the team sits and examines the ranked product backlog. The
goal of the development Team is to produce the most important features to the
business first. That means they take the maximum number of items they can
produce in a single sprint starting at the top of the list and work down until they
have all they can reasonably complete. There are a number of factors that can limit
this production, but let’s keep it simple for now. Sometimes, as the team examines
the backlog they discover there are User Stories that appear lower down the
backlog, but that it makes sense to pull those items up into the current sprint
because they relate to the current work in some way, make it easier to produce
future items, or are just easier to produce right then. It is perfectly acceptable to
occasionally pull those items up so long as it is an exception and not the rule. In
addition to selecting the user stories to be produced in the current sprint, the team
must also get a lot more detail about those items.
The process of gaining more detail about a feature or backlog item is called
backlog grooming. This is process where the product backlog items are defined in
enough detail that the development team can build the feature. This is a
requirements definition process, and is expected to take half the meeting. The
second half of the meeting is used to break apart those now well defined PBIs into
the tasks needed to complete the user stories, defining the task order, any
dependencies, and any specific resource requirements. Earlier we established the
rule that no user story could be larger than a single sprint. Now we establish a
similar rule concerning the size of the tasks used to deliver the PBIs. The rule is
that not task can be larger than a single day. Some sources say no task can be
larger than two days. The problem I have with this two-day alternative is that it
fails to align with Scrum’s measurement system, the daily scrum. In addition, each
task must either be a whole day or half day. No other options are allowed. This
means exacting estimates of “X” number of hours are completely unnecessary.

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The first half of the meeting requires heavy involvement by the PO. However, the
second half does not. Remember, the development team is self-governing so there
is no need for a project manager or product owner to tell the team members what
tasks they should do. Each sprint then becomes a small project with a fixed
duration. The development team’s plan must include all the resource requirements,
dependencies, task order, and any other necessary information to complete the
work. This plan is documented using a visual posted in a war room called a team
or scrum board. The scrum board is recreated for each sprint. In the original rules
of scrum the sprint planning meeting was expected to take a full work day.
However, in the real world where sprints average between two and three weeks the
sprint planning meeting rarely takes longer than four hours. Once the development
team has created their scrum board they end the sprint planning meeting and begin
executing what they just planned.
The goal of the execution phase in Scrum is to produce the just defined User
Stories or features by the end of the sprint. These features must be fully tested and
truly ready for production. Remember, part of the release planning meeting
process was to determine how long the sprints needed to be so the development
team had enough time to produce working product, service or project result that
was fully tested and ready for production. This means we test and test in every
sprint. This process often limits the number of features we can produce in each
sprint, but it also tends to produce a better finished product.
To reach the goal, the team uses a standard process every single day to complete
the desired work. This is where Scrum really adds value to organizational
performance. The early leaders of Scrum learned an obvious lesson often missed
by their linear project management cousins. In more linear projects, the team often
struggles to determine they are in trouble and react. This happens because of the
basic mechanisms use to report progress. In most project, reporting is done on a
weekly or alternating week basis. The team comes together either via a conference
all or physically and is asked report where they are with their tasks. The most
common answer is, “right on track.” If a numeric value is required, the most
common value is 90%. Yet, somehow it always takes twice as long to do the last
10% as it did the first 90%. Furthermore, no one reports they are behind until it is
the last possible second when they suddenly discover they can’t meet the deadline.
This all happens because of the reporting model. It is not because of bad people. It
is a problem with the project measuring increments. If the team is working on a
project expected to take several years to complete it is likely OK to have every
other week or weekly reporting. However, when the project is a year or less that is
likely not frequent enough. Scrum long ago figured out a lesson most of us
consider common sense. Smaller things are much easier to manage than larger
ones. One of the reasons Scrum works is that it aligns its measurement with
reporting frequency.
Every day in a Scrum project the team uses the same process. This is part of what Slide 87
creates its cadence. Each day begins the same way with a meeting called the Daily
Scrum. This is a ten to fifteen minute meeting that provides the Team with basic
project status and communication. Each day the Development Team stands around
the Scrum or Team Board and answers three questions:

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 What did they accomplish yesterday?

 What are they going to accomplish today?
 What impediments do they have?

The focus is supposed to be on the second and third questions as the first is
historical and there is no chance to impact it. Each member of the Development
Team reports their results to the other members of the Development Team and
NOT to the Scrum Master or Product Owner who are also present. The Scrum
Master is tasked to act as a facilitator and the PO is only an observer. As each
Team member reports their answers to the three questions at the same time they
move physical representations of the tasks on the Team Board. The team is
allowed to spend a quick moment or two solving simple problems, but cannot get
sidetracked as the meeting is only allowed to take 10 to 15 minutes. Once each
member of the Development Team has answered the three questions the meeting
disbands and everyone begins working on the tasks for that day. While the
Development Team works to produce the days results, the Product Owner works on
grooming yet undefined User Stories for future sprints while also working with the
Scrum Master to remove impediments. No one from the business may add a
feature to a sprint once work has commenced, but may add, delete or change items
on the Product Backlog at their discretion. The Development Team occasionally
has to take User Stories out of the current sprint as new information is learned and
may at their discretion pull up a new item if the situation warrants.
On the last day of each sprint two meetings are conducted. First, the Team
conducts a Sprint Review. This one hour to 90 minute meeting allows the Product Slide 88
Owner to present the results of the sprint to the customers. This is all about
showing working product to the people who will really use it. The Development
Team wants the product owner to take this responsibility because it both provides a
connection from them to the users and helps to ensure their engagement throughout
the sprint. The Team is allowed a few hours to prepare for this meeting.
Once the Sprint Review is complete, the Development Team conducts a Sprint
Retrospective. If the Sprint Review is all about the product of the project, the
Sprint Retrospective is all about the process. The Product Owner is not allowed to Slide 89
attend the Retrospective and the Scrum Master is only present as a facilitator. This
meeting provides the Development Team the opportunity to review the process and
find the best way to improve the process. The team uses a wide range of games
and tools to answer the question, “If tomorrow we were 1,000% more efficient
what we do to get there?” It is singularly focused on the process the Development
Team is using to achieve their results.
The next day the process begins again with a new sprint and the Sprint Planning
Meeting until either the Development Team delivers all the promised functionality
or is out of time and money at which point the Product Owner must decides to
close the project or obtain more. That is all there is to the basic Scrum process.
However, before we completely leave Scrum I want to spend a minute and add a
few connected ideas that are often added to Scrum as a team becomes more
advanced.

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The first if these ideas is a revisit of a previous topic. If you remember back
several pages we discussed Work In Progress or WIP. Managing WIP requires the
Team to limit the number of tasks being worked a single moment based on priority.
However, none of the Scrum tools we have so far discussed force this to occur.
One tool that is often added to Scrum to achieve this desired result is Kanban. We
are not going to introduce Kanban here, just describe its implementation with
Scrum.
Within the Team’s Scrum Board, there are a series of columns that each represent a
separate state in the work’s progress. When using Kanban, the only alteration the
Team makes to the Board is adding numeric values for each column. These values
represent the maximum number of items that can be present in that column. The
effect of these limiters is to force the Team to focus on getting tasks all the way
through the process rather than allowing them to stagnate in one particular state
(usually the Impeded State).
Another practice sometimes used by Scrum teams is Iteration 0. This is NOT part
of Scrum found in the Scrum Guide. Remember the basic rule we established for
Scrum that said every single sprint would be the same length of time and must
produce functionality that has real value to the business? Iteration 0 violates both
those rules. The goal of Iteration 0 is to produce two items that do not initially
have value to the business. These are the core architecture and feature list. It is not
unusual for this work to take significantly longer than a single sprint, and as such it
violates the Rules of Scrum requiring and out. If a team has decided to use
Iteration 0 because they believe the project needs a more formal architectural plan
and/or work on its feature list it is important that the team also provides an iteration
or milestone plan to ensure the team quickly moves into more standard Scrum
sprints.
Hybrid Life Cycles
A hybrid life cycle is one that combines one or more of the other life cycles. It
offers the highest degree of variability and complexity. For the exam, it is unlikely
you will see many if any questions on it as it is almost impossible to establish any
standards for them.
Agile Development and the PMBOK® Guide
Over the last decade an unnecessary battle has waged between proponents of agile
development and the world of professional project management. According to
many Agilists, the practices expressed in the PMBOK® Guide are old, and dated
representing a linear way of executing projects using only predictive life cycles.
PMPs often argued that agile development was costly, unpredictable, and a
dangerous way to manage business critical initiatives. Sadly, neither of these
views is true. While there are many projects led by PMPs using predictive life
cycles, there has never been anything in the PMBOK® Guide that mandated it be
done that way. The Guide also has never suggested agile development offered any
less chance of success than any other methodology. In fact, PMI® has funded a
significant amount of research looking at methodologies and success. That

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research has consistently found there are great advantages to applying agile
concepts. Yet, the battle raged. With the 6th edition of the PMBOK® Guide finally
addressed this disagreement head-on by making a significant effort to specifically
call out applications of agile development throughout the Guide. Simply put, as a
professional project manager and a PMP candidate you have an obligation to know
and understand the basics of agile development. The PMP® exam for which you
are preparing will give you ample opportunity to prove that knowledge.
The Ten Knowledge Areas
PMI® takes these six elements and adds four more factors that are elaborated on in
chapters four through 13 of the PMBOK® Guide. These chapters are referred to as
the ten knowledge areas of the PMBOK® Guide. Appearing in order, these
knowledge areas are:
 Integration Management   Resource Management  Slide 92
 Scope Management   Communications Management 
 Schedule Management   Risk Management 
 Cost Management   Procurement Management 
 Quality Management  Stakeholder Management

Within these knowledge areas, the 49 defined processes of project management are
found. It is necessary for you to memorize each of the individual processes to pass
the exam. However, simply memorizing the processes, their makeup, and how
they relate to one and other is not enough. To successfully pass the PMP® exam,
you must clearly understand why each process is important and how it relates to
successfully completing a project. Remember, you cannot read into this
requirement an attempt by PMI® to suggest that on every project you must
complete every one of the processes.

Slide 95

Image 19: Where the processes live

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Conclusions
The process groups are highly interconnected and often flow in non-sequential
patterns to produce successful projects. The simplest way of saying this is that you
do not know for sure what is going to happen on any given project so you must be
prepared to deal with change. Change might require you to enter or make use of
another process group. This happens when you run into problems that require
additional planning, when you start a new project because the scope warrants a
second effort, or when you are simply unable to complete the project so it is
cancelled.

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Exercise 4 —
Exercise 4 — The Basics of Project Management The Basics

Some of these questions are not designed to replicate or reflect actual exam
questions. They are designed to ensure you clearly understand the topics discussed
in this chapter, which will help you study for the PMP® Exam.
1. Which of the following is not an output of a project?
A. A product or artifact that is quantifiable
B. A capability to perform a service
C. A manufactured product
D. All of the above
2. Which of the following is not a characteristic shared by both projects and
operations?
A. Performed by people
B. Generates repetitive outputs
C. Are constrained by limited resources
D. Are planned, executed, and controlled
3. Which of the following is an example of an operation?
A. The development of a new product
B. Constructing a building
C. Producing a new car
D. Developing a new marketing campaign
4. Which of the following is a key element of defining an operation?
A. Operations maintain an existing set of practices
B. Operations have unique charters and goals
C. Operations have defined start and end dates
D. None of the above
5. Which of the following is an that is organization likely to be project-based?
A. Organizations who derive most of their revenue from performing
projects
B. Organizations that have adopted management by projects
C. Both A & B
D. None of the above
6. Which of the following is not a factor in the development of organizational
culture and style?
A. Shared values, norms or beliefs
B. Technical certifications
C. Policies and procedures
D. View of authority relationships

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7. Who is responsible for determining what the “appropriate practice” for the
project is?
A. The project sponsor
B. The project manager
C. The key stakeholders
D. The project management team
8. Which of the following is the best description of the primary purpose of the
PMBOK® Guide?
A. To define the proper methodology for managing project
B. To identify the PM knowledge considered good practice
C. To establish the international PM standards
D. To define proper PM practices
9. Which of the following is not a common characteristic of a project?
A. A project is temporary
B. A project produces a unique product or service
C. A project has repetitive tasks
D. A project uses progressive elaboration
10. Which of the following is part of the temporary nature of projects?
A. The project team seldom outlives the project
B. The project team existed prior to the project being created
C. The market window is not usually temporary
D. The project team is always broken up at the end of the project
11. Which of the following represents the best definition for progressive
elaboration?
A. Developed in steps and continuing in increments
B. Developed with a continuous process
C. Developed with explicit steps
D. Developed in accordance with the defined project phases
12. Which of the following is a reason to authorize a project?
A. A market demand
B. A specified organizational need
C. A regulatory requirement
D. All of the above
13. Which of the following correctly identifies the project management process
groups?
A. Initiating, planning, developing, testing, and deployment
B. Initiating, planning, executing, monitoring and controlling, and closing
C. Envisioning, planning, developing, deployment, and closing
D. Envisioning, planning, executing, monitoring and controlling, and
closing.

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14. Which of the following is not one of project management’s triple constraints?
A. Time
B. Costs
C. Scope
D. Requirements

15. Which of the following is not one of the PMBOK® Guide’s nine (9) knowledge
areas?
A. Cost management
B. Human resources management
C. Requirements management
D. Quality management
16. Which of the following is not one of the PMBOK® Guide’s nine (9) knowledge
areas?
A. Time Management
B. Risk management
C. Communications management
D. Contract management
17. Which of the following is not a key element to understanding the project
environment?
A. Understanding specific government regulations
B. Understanding the cultural and social environments
C. Understanding the international and political environments
D. Understanding the physical environment
18. Which of the following is not a term used to define application areas?
A. Technical elements, such as a specific kind of engineering
B. Financial elements, such as a knowledge of reading financial statements
C. A management specialization, such as government contracting
D. Industry groups or verticals, such as telecommunications, automotive,
or financial
19. Which of the following is the best definition of a standard?
A. A government requirement, which specifies product, process or service
characteristics
B. A document established by consensus and approved by a recognized
body that provides for common and repeated use
C. A guideline that describes a preferred approach
D. Mandated compliance by some governmental organization

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20. Which of the following is not a key common element of understanding the
project environment?
A. The cultural and social environment
B. The international and political environment
C. The outside environment
D. The physical environment
21. Which of the following best represents the definition of a program?
A. A temporary endeavor undertaken to create a unique product or service
B. A group of related efforts managed in a coordinated way to obtain
benefits and control not available from managing them separately
C. A collection of efforts or groups of efforts and other work that are
grouped together to facilitate effective management of that work to
meet strategic business objectives
D. None of the above
22. Which of the following statements is a key element of a subproject?
A. They are based on the project processes
B. They often involve specialized technology
C. The subproject can consist of a series of even smaller subprojects
D. All of the above
23. Which of the following is not true about a project management office?
A. A PMO should always have direct control over all project activities in
the organization.
B. A PMO is an organizational unit to centralize and coordinate the
management of projects.
C. A PMO oversees the management of a project, programs or a
combination of both.
D. PMOs can operate on a continuum from providing project management
support functions to software, policies, and actual direct management of
projects.
24. What does a project life cycle define?
A. What technical work to do in each phase
B. What the deliverable dependencies are
C. Who will complete each deliverable
D. How each deliverable is approved

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25. Which of the following is a characteristic that most project life cycles share in
common?
A. Projects might or might not have phases, but are defined by deliverable
handoffs.
B. Phases are usually sequential and are usually defined by some sort of
technical information transfer or component handoff.
C. Projects are defined by iterative phases that continue for a predefined
period.
D. Projects do not have phases and are usually defined by the need to have
requirements defined at the beginning of the project.
26. Which of the following is not common for a project’s life cycle?
A. Cost and staffing levels tend to be low at the start, peak during the
intermediate phases and drop rapidly as the project concludes
B. The level of uncertainty and risk of failure is highest at the beginning
and improves throughout the project
C. The cost of project changes and correcting errors gets progressively
lower as the project continues
D. The ability of stakeholders to influence the project’s characteristics is
highest at the beginning and gets progressively lower
27. When are project phases generally considered to be completed?
A. When a review of the accomplished work and the deliverables has taken
place, and they have been accepted
B. When a managerial decision to continue to the next phase has been
made
C. When the deliverables have been accepted
D. A & B
28. Two characteristics of a deliverable are:
A. They are quantified and usable
B. They are part of the process and are tangible
C. They are measurable and verifiable
D. None of the above
29. Bob is a project manager whose project has been closed at the end of the third
phase of the five phases that were initially planned. What should Bob’s next
course of action be in terms of the current project?
A. Seek a review with the key stakeholders
B. Seek a review with the project sponsor
C. Complete a review with the project team
D. Nothing, this is a legitimate decision

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30. Which of the following is not part of formal phase completion?

A. Review of the completed phase deliverables
B. Acceptance of the phase deliverables
C. Review of any phase documents
D. Authorization of the subsequent phase
31. Which of the following is not a name used for a phase-end review?
A. Milestones
B. Phase exits
C. Phase gates
D. Kill points
32. Which of the following is true about projects?
A. Most projects are not linked to the ongoing work of the organization
B. Some projects can be initiated informally for a limited amount of time
to secure formal approval for additional phases or activities
C. The preliminary planning process is never handled as a separate project
D. All of the above
33. Which of the following is a justification to initiate a project?
A. A business problem
B. A change in the competitive marketplace
C. Regulatory requirements
D. All of the above
34. Which of the following is a key distinction between projects and operations?
A. Operations often require key resources
B. Projects have limited budgets
C. Operations are ongoing and repetitive
D. All of the above
35. Which of the following statements about a project’s life cycle is true?
A. The project life cycle defines what resources will be involved and what
work is to be completed in each phase
B. The project life cycle defines which resources will complete each
deliverable
C. The project life cycle defines what deliverables are required
D. The project life cycle defines when deliverables are to be completed
36. When participating on a project over time, stakeholders have varying levels of
what?
A. Responsibility and authority
B. Authority and influence
C. Responsibility and influence
D. Influence and support

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37. In dealing with stakeholders, which group is most often overlooked?

A. Stakeholders who have little organizational influence
B. Stakeholders who are challenging to work with
C. Stakeholders whose view of the project is negative
D. Subject matter experts
38. Which of the following is not considered a key stakeholder on every project?
A. The end user
B. The project team
C. The PMO
D. The general public
39. The single most important responsibility for a project manager in terms of the
stakeholders is what?
A. Manage stakeholder expectations
B. Clearly define stakeholder requirements
C. Provide visibility to negative stakeholders
D. Ensure stakeholders approve all critical scope changes
40. Your project sponsor approaches you and asks for a detailed project schedule.
Which of the following would be required to meet her request?
A. Work Breakdown Structure
B. An approved budget
C. Quantitative risk assessment
D. All of the above
41. Early in the project management planning process, a key stakeholder argues
that he should take charge of the project. Based upon the standards for
professional project management who should be in charge of the project at this
juncture?
A. The stakeholder in question
B. The project manager
C. The project sponsor
D. The technical lead
42. Which of the following is not a stakeholder management responsibility?
A. Exceeding stakeholder expectations
B. Meeting stakeholder expectations
C. Managing stakeholder expectations
D. None of the above
43. In which of the following process groups can stakeholders be identified?
A. Initiating and planning
B. Planning, monitoring and controlling
C. Initiating, planning, and monitoring and controlling
D. Any of the process groups

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44. A project manager comments to a coworker that she is having a lot of trouble
with a large number of scope changes in her project. Which of the following is
a likely cause of the large number of changes?
A. Not involving stakeholder early enough in the project
B. Having too many project stakeholders
C. Not having a senior enough sponsor
D. All of the above
45. Management by Objectives works only if:
A. The process is well documented
B. The processes do not impact the objectives
C. It is supported by the management team
D. The processes are defined in the project charter
46. In which of the following process groups are stakeholders not identified?
A. Initiating
B. Closing
C. Executing
D. Stakeholders can be identified in any process group
47. Jane is a project expediter working at a manufacturing company. Her main
project is currently in the planning process. Her project sponsor comes to her
and asks for information about the project management methodology the
company has decided to deploy. He asks her why they are using it and where it
came from. What should Jane do?
A. Provide the information to the project sponsor
B. Advise the owners of the new methodology of the request
C. Provide the sponsor with the appropriate templates
D. All of the above
48. Sam is a project manager working for a consulting company. He is currently
responsible for a large multi-million dollar effort with resources in seven
locations. One day three stakeholders come into his office and are very upset
because they just realized that requirements they see as critical are not included
in the project scope. What is the most likely cause of the absence of these
requirements?
A. The sponsor decided against including their requirements
B. The stakeholders in question were not involved early enough in the
process
C. The stakeholders are new to the organization
D. All of the above

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49. Linda is a project manager for a major engineering project. She is in her third
year on the project and has been in charge since project’s inception. Her boss,
the Vice President of Engineering, walks into Linda’s office one day to inform
Linda that it is likely that her project is going to be postponed because several
of the project’s major stakeholders are unhappy with the project. Which of the
following is likely the cause of Linda’s problems?
A. Linda has been late with deliverables
B. Linda’s project is over budget
C. Changes in the triangle have caused a reduction in project scope
D. Any of the above
50. Iain is a program manager at a small engineering firm. He is currently leading
a project with 14 resources that provides a new design for a major urban hub.
He is almost through with the execution phase. Iain just learned that several
environmental interest groups intend to protest his design at an upcoming
public hearing. What is the most likely cause of their issues?
A. They are extremist groups
B. The interest groups were not included early in the project process
C. Key elements of project scope have been dropped
D. All of the above
51. Regina is a project manager for a major engineering project. She is in her third
year on the project and has been in charge since project’s inception. Her boss,
the Vice President of Engineering, walks into Regina’s office one day to inform
Regina that it is likely that her project is going to be postponed because several
of the project’s major stakeholders are unhappy with the project. What should
Regina do?
A. Revisit the scope statement
B. Ask to freeze the project
C. Try to convince her boss that the project can be saved
D. Open a dialogue with unsatisfied stakeholders
52. What is the relationship between the project manager and the stakeholders?
A. The project manager is a stakeholder
B. The project manager supervises the stakeholders
C. The project manager reports to the stakeholders
D. The project manager communicates with the stakeholders
53. In Scrum, the team activity is monitored and coordinated on the following
basis:
A. Hourly
B. Daily
C. Weekly
D. Monthly

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54. The Product Owner of your project is absent due to a planned vacation. Who
should assume the Product Owner’s responsibilities at a sprint planning
meeting?
A. The ScrumMaster
B. The Team
C. A person selected by the Team
D. The CEO
55. You are new on an internal Agile project for a company with well developed
processes. You need to find the list of prioritized project requirements. Where
will you most likely find this list?
A. Sprint Backlog
B. Product Backlog
C. Iteration Backlog
D. The Release Plan
56. In a Scrum Project, the typical length of an iteration is:
A. Between 2-6 weeks
B. 30 days
C. 45 days
D. 90 days
57. Which of the following statements BEST describes the relationship between
Agile Development and the PMBOK Guide?
A. The PMBOK Guide represents PMI's methodology for executing
projects. While Agile Development represents a software development
framework.
B. Agile Development represents the newest way to execute a project
while the PMBOK Guide represents the old way of executing a project.
C. The PMBOK Guide represents the overall framework for executing
projects and Agile Development represents a set of specific
methodologies used in project execution.
D. Agile Development represents the overall framework for executing
projects and the PMBOK Guide represents a set of specific practices
used in large scale projects.
58. Which of the following terms refers to a staging and scheduling strategy in
which the various parts of the system are developed at different times or rated
and integrated as they are completed?
A. Iterative development
B. Incremental development
C. Staged development
D. Agile development

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59. Which comparing traditional linear development to agile, which of the

following statements is most likely to be true?
A. Agile development makes extensive use of best resourcing to ensure
optimal productivity while traditional development uses WIP.
B. Both traditional development and Agile make use of best resourcing to
ensure optimal productivity.
C. Both traditional development and Agile make extensive use of WIP to
ensure optimal productivity.
D. Agile development makes extensive use of WIP while traditional
development uses best resourcing to ensure optimal productivity.
60. Which of the following concepts represents the idea that information,
requirements and facts will be seen over time as the project progresses?
A. Convergence
B. Emergence
C. Self-organization
D. Dynamic evolution

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Exercise 4 — The Basics of Project Management Answers

®
 Answer C. PMBOK Guide p. 5 – Manufactured products represent
operations because of their mass produced, repetitive nature.
®
 Answer B. PMBOK Guide p.6 – Projects and operations share many of the
same characteristics. However, projects do not attempt to produce the same
product over and over again.
®
 Answer C. PMBOK Guide p.7 – The objective of an ongoing operation is to
sustain the business. A project’s goal, on the other hand, is to attain a specific
objective and terminate.
®
 Answer A. LGd PMP Exam Prep Course – Projects have unique charters,
goals and defined start and end dates. Operations have semi-permanent
charters, semi-permanent organizations, maintain an existing set of practices,
provide a standard product or service, and are continuous.
®
 Answer C. PMBOK Guide – Project-based organizations are those whose
operations consist primarily of projects. These organizations generally fall into
two categories: organizations that derive most of their revenue from projects or
organizations that have adopted management by projects.
®
 Answer B. PMBOK Guide p. 27 – Each of the items except technical
certifications is listed as a factor in the PMBOK Guide influencing culture.
®
 Answer: D. PMBOK Guide 2008, p.13 – The project management team must
define what good practice means in each project on a case-by-case basis.
®
 Answer B. PMBOK Guide 2008, p.13 – According to the PMBOK® Guide,
“The Primary purpose of the PMBOK® Guide is to identify the subset of the
Project Management Body of Knowledge that is generally recognized as good
practice.”
®
 Answer C. PMBOK Guide p.5 – Projects are temporary endeavors
undertaken to create a unique product or service. This rarely includes repetitive
work.
®
 Answer A. PMBOK Guide p. 5 – Because of the definition of projects, the
project team seldom outlives the project. They are by definition temporary and
so are their teams.
®
 Answer A. PMBOK Guide p.7 – Progressive elaboration means developing a
project in steps, and continuing in increments. This often necessitates that
definitions are broad at the beginning and get more specific as time progresses.
®
 Answer D. PMBOK Guide p. 10 – Each of the examples represent
justifications to create a unique product or service using a defined team, budget
and schedule.

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13. Answer B. PMBOK® Guide p.19 – According to PMI every project—

regardless of development methodology—uses the process groups of Initiating,
Planning, Executing, Monitoring & Controlling, and Closing. This process is
often iterative.
 Answer D. The triple constraints of project management include time, costs,
and scope and quality.
®
 Answer C. PMBOK Guide – The nine knowledge areas include: integration,
scope, time, cost, quality, human resources, communications, risk and
procurement management.
®
 Answer D. PMBOK Guide – The nine knowledge areas include: integration,
scope, time, cost, quality, human resources, communications, risk and
procurement management
®
 Answer A. PMBOK Guide – Although understanding specific governmental
regulations is key to project success, this is not considered a part of project
environment.
®
 Answer B. PMBOK Guide – Although important, understanding business
finance is part of general business management and skills and is not considered
an application area of knowledge for most projects.
®
 Answer B. PMBOK Guide p. 13– While several of the options deal with
standards, only B is the actual definition.
®
 Answer C. PMBOK Guide – The outside environment is not a key element in
understanding the project environment.
®
 Answer B. PMBOK Guide – The first answer is the definition of a project.
The third is the definition of a portfolio. B is a program.
®
 Answer D. PMBOK Guide – Each of the included statements could be true
for a given subproject. When projects are divided into more manageable
components, these pieces are often referred to as subprojects.
®
 Answer A. PMBOK Guide – Although it would be very nice, a project
management office does not have to have direct control over all projects.
®
 Answer A. PMBOK Guide – Project life cycles generally define: What
technical work to do in each phase. When the deliverables are to be generated
in each phase. Who is involved in each phase. How to control and approve
each phase
®
 Answer B. PMBOK Guide – The PMBOK Guide lists four major
characteristics that projects share. One of these is the handoff of work
packages or deliverables.

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25. Answer C. PMBOK® Guide – The cost of project changes and the correction
of errors gets progressively higher on most projects because of the amount
already invested and because of the fact that changes or errors often force the
rework of already-produced deliverables. It is this fact that often justifies the
significant amount of work done at the beginning of the project to define
requirements.
26. Answer A. PMBOK® Guide – A project phase is generally considered
concluded when the key project stakeholders have actually accepted the
deliverables from that phase. This might also include an overt decision to
continue to the next phase. However, this does not preclude multiple phases
from occurring at the same time.
®
 Answer C. PMBOK Guide – A deliverable is a measurable, verifiable work
product such as a specification, feasibility report, detailed design document, or
working prototype. Some deliverables can correspond to the project
management process, whereas others are the end products or components of the
end products for which the project was conceived.
®
 Answer D. PMBOK Guide – The answer is nothing because according to the
®
PMBOK Guide a phase can be legitimately closed without the decision to
initiate any other phases for a wide variety of reasons.
30. Answer D. PMBOK® Guide – Formal phase completion does not include
authorizing the subsequent phase. For effective control, each phase is formally
initiated to produce a phase-dependent output of the Initiating Process Group,
specifying what is allowed and expected for that phase.
31. Answer A. PMBOK® Guide p. 23 – Phase-end reviews can be called phase
exits, phase gates, or kill points. Milestones are significant points or events in
the project such as when the phase-end review has been completed, but they are
not the review itself.
32. Answer B. PMBOK® Guide – Many projects are linked to operational work of
the organization while other organizations only formally approve projects after
the completion of a feasibility study, or manage the preliminary planning phase
as a separate project. Some projects can initially be informal for a limited
amount of time before formal approval has been secured.
33. Answer D. PMBOK® Guide – The driving forces that creates the stimuli for a
project are typically referred to as problems, opportunities, or business
requirements.
34. Answer C. LGd PMP® Exam Prep course. While it is true that operations
often require key resources, projects do also. Projects and operations also both
have limited budgets. However, whereas operations are ongoing and repetitive,
projects are fixed to a set time.
35. Answer A. LGd PMP® Exam Prep Course. The project lifecycle defines what
resources will be involved in each phase and what work is to be done in each
phase.

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36. Answer A. PMBOK® Guide p.24 – This is an example of the kind of question
on the exam where multiple answers look right. According to the PMBOK
Guide, responsibility and authority is the correct answer—even though project
managers must watch the stakeholders’ influence and their level of support
throughout the project.
37. Answer C. PMBOK® Guide p. 23 – Negative stakeholders are often
overlooked by the project team and because of this they risk failing to bring
their projects to a successful end.
38. Answer D PMBOK® Guide p. 25 - This is one of the many questions where
your ability to select the best answer—as seen by PMI®—becomes critical.
Many select the PMO because not every company has a Project or Program
Management Office. However, this is not the best answer. The PMO is listed
in the PMBOK® Guide as a key stakeholder, but the general public is not.
39. Answer A. PMBOK® Guide p. 23 – All of these items are important. But
because stakeholders often have very different or conflicting objectives, it is
most important that the project manager manage the stakeholder expectations.
40. Answer A. In the project management process the approved budget and the
quantitative risk assessment both come after the project schedule. Only the
WBS is required from this list.
41. Answer B. In the project management process, the project manager should be
named as early as possible and should take charge of the project upon their
assignment. It is considered a poor choice to allow a stakeholder to take charge
of the project.
42. Answer A. Exceeding stakeholder expectations is the same as gold plating.
Gold plating is a key evil according to PMI® that should never be done.
43. Answer D. Stakeholder management is an ongoing part of the project
management process. The identification of stakeholders is a key element of
this and must be done in all of the process groups.
44. Answer A. Many projects involve a significant number of stakeholders or
suffer from not having a senior enough sponsor. These issues do not
necessarily have any impact on scope change. However, not having
stakeholders involved at an early enough stage can dramatically increase the
amount of scope change.
45. Answer C. Any management methodology requires the management team to
support it in order to be effective.
46. Answer D. Stakeholders can be identified at any point in the PM process.
47. Answer B. This question is another example of a question requiring you to
determine what you would do first. In this situation it would be best if you
immediately notified the owners of this request. In many cases this is going to
be a PMO.

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48. Answer B. The most common cause of disconnected stakeholders and

requirements is a failure to engage the stakeholders at an early enough point in
time. Stakeholders should be engaged in the project as early as possible.
49. Answer C. The single most likely cause of the loss of stakeholder support is a
reduction in scope that causes the loss of deliverables desired by the
stakeholders. Unless proper stakeholder management is done, the project
manager will not know which stakeholders have strong attachments to which
deliverables and, as a result, difficulties will ensue when scope changes occur.
50. Answer B. Public interest groups are often one of the most difficult groups of
stakeholders with which to work. However, they are project stakeholders, and
as with all stakeholders it is critical that the project manager engage with them
as early as possible as the number one cause of stakeholder issues is a failure to
engage them at an early enough point.
51. Answer B. This is another example of the “what would you do first” type of
question. In this case, although you might do several of the items, you would
first freeze the project.
52. Answer A. Although several of these answers might be true, the only thing
that is definitely true is that the project manager is also a project stakeholder.
53. Answer B. The Rules of Scrum advocate a daily fifteen minute standup
meeting done face-to-face called the daily scrum.
54. Answer A. In the absence of the Product Owner, it is the responsibility of the
ScrumMaster to prepare adequate product backlogs for the sprint planning
meeting. Source: Ken Schwaber, Agile Project Management with Scrum
Appendix A.
55. Answer B. The Product Backlog is designed to hold prioritized project
requirements. Source: Ken Schwaber, Agile Project Management with Scrum,
Chapter 1.
56. Answer B. The typical length of an iteration is one complete cycle within a
project and is usually 20 business days or 30 sequential calendar days. Source:
Ken Schwaber, Agile Project Management with Scrum, Appendix B.
57. Answer C. The relationship between Agile Development and the PMBOK®
Guide has traditionally been contentious. Many Agilists try to argue Agile
Development and the PMBOK Guide are at odds. However, nothing could be
further from the truth. The PMBOK Guide represents generally accepted
principles and practices. It does NOT represent a methodology that can be
followed step-by-step. Many Agilists also claim that their particular concepts
are a framework representing a loose scaffolding. However, most thinkers
agree Agile represents an aggregation of methodologies.

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58. Answer B. Alistair Cockburn defines Incremental development as a staging

and scheduling strategy in which the various parts of the system are developed
at different times or rated and integrated as they are completed. This means
that the features or requirements do not have to be completed as part of a single
release. When a team uses incremental delivery they are able to deliver
features or requirement in a wide range of orders defined by the team. This
fundamentally changes how projects are executed. Suddenly, it what is
delivered at any point in the project. This notion is somewhat similar to the
ideas surrounding Object Oriented Programming where features and
requirements are delivered as discrete objects independent of others.
59. Answer D. Agile Development makes extensive use of WIP or Work In
Progress. Although there is no rule or requirement to do so, most traditionally
managed projects use a concept called Best Resourcing. In Best Resourcing
whichever resource possesses the highest skill level is assigned to execute the
task. WIP argues that we want to limit the amount of Work In Progress
occurring at any single point. The principle can be thought of like a water
main. The objective of the Water Department is to ensure the maximum
amount of water is constantly available to the end users when they turn on their
faucets. Contrary to what you might think, the best way to ensure high water
pressure is to ensure the mains are less than 100% full. Remember, the mission
is to get each drop to the customer as quickly as possible. If you ask your
friendly neighborhood civil engineer, they will confirm that the water will
travel the fastest when the pipe is less that 100% full. We do the same thing
with our project tasks when using WIP.
60. Answer B. Emergence is the idea that information, requirements and facts will
emerge as the project progresses. The key is that the team uses processes,
tools, and techniques capable of harnessing new information as it becomes
available for the betterment of the project.

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Integration Management
Overview
The Integration Management Knowledge Area is found in the fourth chapter of
the PMBOK® Guide. For many PMP® candidates it is one of the most difficult
knowledge areas to learn. Students struggle with Integration Management
because the topic comes up very early in the course but it is about bringing other
processes together — processes with which they are not yet very familiar. This
creates a problem. When should we discuss Integration Management? At the
very beginning of the course when students are not yet familiar with the other
processes? Or at the end after they have learned about everything else that must
be brought together? For the sake of consistency, we have chosen to handle the
Integration Management Knowledge Area in the same order as the PMBOK®
Guide.
What is Integration Management anyway? Integration Management is where all
the other processes are brought together and reconciled. The PMBOK® Guide
says this a little bit differently. The PMBOK® Guide (p.63) defines Integration
Management as “the processes and activities needed to identify, define, combine,
unify and coordinate the various processes and project management activities
within the project management process groups.” According to PMI®, Integration
management is the ONLY knowledge area that CANNOT have its
accountability transferred to a specialist. It must be managed by the project
leader. It is the project leader that is ultimately responsible for the project as a
whole. As you go through this chapter, it is important that you remember these
processes can be iterative.
The Integration Management Knowledge Area is comprised of six individual
processes. There is one process found in the initiating, planning, executing and
closing process groups and there are two processes found in the monitoring and
controlling process group. The seven processes involved with integration
management include:
 4.1 — Develop project charter Slide 97
 4.2 — Develop project management plan
 4.3 — Direct and manage project work
 4.4 — Manage project knowledge
 4.5 — Monitor and control project work
 4.6 — Perform integrated change control
 4.7 — Close project or phase
4.1 Develop Project Charter
All
The first process found in the integration management knowledge area is the PMBOK®
develop project charter process. Notice how the process title appears. It is in Guide
verb/noun format. Every one of the 49 processes are titled the same way. They processes
are always verb/noun format. This can help you with the memorization process. are in verb/noun
Developing a well formed project charter is critical to the overall success of the format

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project. However, in the real world project charters are often not done well — or
even done at all. To understand why they are often not done correctly we have to
begin with an understanding of the purpose of the project charter.
The primary purpose of the project charter is to authorize work to begin on the
project. However, the charter also provides some other basic information. In Slide 98
addition to authorizing work to begin, the charter does the following:
 Names the project manager and project sponsor

 Explains how the project supports the organizational strategy

 Explains the business need and why the need exists

 Defines any constraints and assumptions that exist (this includes any deadlines,
budget limitations, resource limitations, any known risks, and scope must-
haves)
 Defines the project success criteria (it is always recommended that success
criteria be quantitative in nature as subjective success criteria usually leads to
project failure)
The charter does NOT include detailed requirements, the project schedule, the
project budget or other detailed information. Remember, from PMI’s perspective
the project has not started yet. The charter is the document that authorizes the
project manager to begin the planning process and to determine what it is going to
take to successfully complete the project. Once the plan is submitted, the sponsors
maintain the right to cancel the project if they deems the plan not what they desire.
The inputs to the develop project charter process include:
Slide 99
®
 .1 Business documents — When discussing business documents the PMBOK
Guide is primarily referring to the business case and benefits management plan.
The business case is a document written from the perspective of the business
that explain how the expected project outcomes justify the necessary
investment. The second document referred to in the PMBOK® Guide is the
benefits management plan. This is a documented explanation defining the
processes for creating, maximizing, and sustaining the benefits provided by a
project or program.
 .2 Agreements — Agreements are used to define the initial intentions for a
project. They may take many different forms such as memorandums of
understanding (MOUs), service level agreements (SLAs), contracts, etc.
 .3 Enterprise environmental factors — Enterprise environmental factors
represent the first of a number of items we like to call freebes. Freebes
represent items that almost always appear in the listing of inputs, tools and
techniques, or outputs. Enterprise environmental factors represent the things
going on around the project that could impact it. They are almost always an
input to a defined process. It is far easier to memorize the few times they do
not appear than it is to try and learn all the times they do appear. Examples of
enterprise environmental factors include things like governmental or industry
standards, organizational infrastructure, and marketplace conditions.
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 .4 Organizational process assets — Organizational process assets are the

second freebe. Process assets include things like organizational policies,
processes, templates, or historical information that could be used by the project.
Again, they are almost always an input.
Notice the numbering that appears before each of the inputs. These numbers help
to locate the information for the item in the PMBOK® Guide. Each chapter in the
PMBOK® Guide is numbered. As has been previously mentioned, Integration
Management is chapter four. Since the Develop Project Charter Process is the first
process in the chapter it is process 4.1. Each of the inputs are further defined with
a .1 before the final numeric identifier appear.
At this point more time is warranted on the business case. The business case tries
to answer the question why should we do this project? There are two different
ways to answer this question. The two different ways to determine business value
are as follows:
 Benefit measurement methods — These are comparative tools that are used to Slide 100
look at one potential project versus another. They include peer reviews and
scoring models as well as the kind of economic models that will be described in
detail in just a few moments.
 Constrained optimization methods — These are advanced mathematical
models that are used to calculate project value. The methods that are included
in this class are linear, integer, dynamic and multi-objective programming.
As was mentioned above, there are a number of economic models with which you
must be comfortable. They include the following:
 Payback period — The Payback Period represents the amount of time
(typically expressed in months) before the money invested to complete the
project is returned in profit. That point is referred to as the break even point.
 Future value — The Future Value represents the value of an investment at
some future point based upon a provided interest rate. Very few test
candidates, if any, have to calculate the future value. But understanding it is
necessary to answer the comparative questions that are more common. It is
defined by the formula: The Future
FV = PV * (1 + i) n Value
Calculation
where PV = Present Value, i = Interest Rate and n = Term in Question
 Present value — The present value, or discounting, refers to a future value that Slide 101
has been discounted to express it in today’s currency. For example, imagine
you had $100 buried in a coffee can in your backyard. Twenty-five years later
you dig up the coffee can and find the $100 bill. Does it still have the same
purchasing power? Absolutely not! Inflation has made that $100 worth
significantly less. This equation also is not often seen on the exam, but it is
necessary to understand the next formula. The equation for the present value is: The Present
PV = FV / (1 + i) n Value
Formula
where FV = Future Value, i = Interest Rate, and n = Term in Question
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 Net Present Value (NPV) — The Net Present Value is almost identical to the Slide 102
present value. In the Present Value calculation you discount the value—
typically representing a revenue stream—to account for inflation or some other
similar rate. Net Present Value does the same thing, but it also takes into
consideration the money that must be spent to complete the project over time.
To do so it costs the Present Value from the net costs to obtain the NPV.
 Internal Rate of Return (IRR) — If you have followed these equations
carefully, you might have noticed the variables in each are largely the same. In
addition, each equation assumes that the term and interest rates are provided.
In an Internal Rate of Return equation, it is the interest rate that must be
determined. Unfortunately, there is no simple equation to calculate the internal
rate of return. To solve for the IRR you must use the NPV calculation and
select the middle-most interest rate of the four potential answers. You are
looking for an interest rate which produces an NPV of zero. Based upon the
result from the first calculation you can determine if you need a larger or
smaller value. You should not have to calculate the NPV more than twice to
determine the correct IRR.
 Benefit / Cost Ratio (BCR or BCI) — Most people are used to talking about a
cost / benefit ratio and this is the same thing. The only difference is that the
benefits are always placed in the numerator and the costs in the denominator.
This is done so that any value greater than one is good.
 Depreciation — These are calculations used to reduce the value of a large asset
primarily for tax purposes. This takes into account the wearing out of
equipment. Although possible, it is unusual to select a project based upon
depreciation. The four most common methods of depreciation are discussed
later in this course.
 Opportunity Cost — Opportunity cost is the value of the next highest
alternative—assuming the alternatives are mutually exclusive. It defines what
you are giving up by making the choice.
 Sunk Costs — Sunk costs refer to the money that has already been spent on the
project. It cannot be recovered. You should never make a project decision
based upon sunk costs because it could be good money following bad.
 Economic Value Added (EVA) — This concept rarely appears on the exam,
but references whether the project returns more value to the organization than it
costs to produce.
 Working Capital — Working Capital is an accounting term defined as the
current assets minus the current liabilities. It shows how much money the
organization has available to invest on projects.
 Law of Diminishing Returns — The Law of Diminishing Returns argues that
with every process you reach a point where adding one more dollar of cost will
not add an equal return of value. If you discover that increasing the costs by a
dollar does not provide at least a dollar return, you should not invest any more.

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The most common type of questions seen on the PMP® exam that deals with these
equations doesn’t actually require you to calculate anything. The most common
type of test question simply asks you to compare several projects where no two
projects have the same kind of data. One project might provide an NPV while
another revenue, a third the Future Value, and the last one has a BCR. At first
glance this might be impossible to solve. However, it is actually very simple. You
need to first look for any BCR data. Remember that any value greater than one is
good. There is no set value with FV, PV, NPV or IRR that is guaranteed to be
good. When taking the test you should never assume information that is not
provided. This means you cannot assume a positive value just because of the size
of the value unless you are given the Benefit / Cost Ratio.
Although these determination methods appear in the business case, they are also
tools and techniques that are available to develop the project charter. The tools and
techniques used in the develop project charter include:
 .1 Expert judgment — Expert judgment is simply relying on your subject
matter experts (SMEs). It is PMI’s preferred tool and technique in many
situations — in fact, it is the most common tool and technique. It is always a
good guess if you have no idea. Almost every process has expert judgment as a
tool and technique.
 .2 Data gathering — These include a diverse set of tools such as
brainstorming, focus groups and interviews. Brainstorming represents a group
creativity technique where the team attempts to find a conclusion by gathering
information through a spontaneous discussion by the members. Typically, a
dry erase board or other tool is used to capture the information for both
historical purposes and to help the team maintain focus.
A focus group is often used for specific product research. In a focus group a
demographically diverse group of people is brought together for a guided, open
discussion about a product, service or project result. The goal is to use the
information collected from the small group to represent expected results from a
larger populations. The keys are that the discussion is led by a facilitator and
that the members of the group are free to talk with other group members.
Throughout the process researchers observe the group taking notes for future
analysis.
Interviews require the team to meet with stakeholders to elicit information
about the product, service or results of the project.
 .3 Interpersonal and team kkills — Techniques such as conflict management,
facilitation, and basic meeting management are commonly cited here. We will
discuss these concepts in the communications and resource management
knowledge areas.
 .4 Meetings —Meetings are perhaps the easiest tool or technique used in this
are. The important thing to remember about them for the purposes of the test is
that they are held with key stakeholders to define the key project drivers such as
success criteria, requirements, milestones, etc.

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The easiest part of the develop project charter process is the output. This process
only has two outputs. As you have probably already guessed, the first output to the
develop project charter process is the project charter. Upon receiving the signed
charter the project manager begins the real work on the project. Above all else
remember that no project ever begins without a charter. Charters empower the
project manager and provide the team with their success criteria. They also MAY
provide other information necessary to get the project off the ground.
The second output from the develop project charter process is the assumption log.
This document is used to track all assumptions and constraints throughout the
project life cycle.
4.2 Develop Project Management Plan
The second process in the integration management knowledge area appears in the
planning process group and is the develop project management plan. The develop
project management plan process is one of the most important processes found
anywhere. It is the process that aggregates the outputs from the other processes
found in the planning process group. It also Slide 103
defines which project management processes will
be used in the project, as well as how the project
will be executed, monitored, controlled, and
closed. Remember that the project management
plan is a living, breathing document that must be
updated throughout the project’s life. The develop
project management plan process is made up of
four inputs that include:
 .1 Project charter — The project charter was
Image 20: Develop PM Plan
just completed as one of the very first Slide 104
processes done in the project. It set a marker notifying everyone that there was
a project and you were its leader. It also defined the project success criteria and
a number of other critical elements you need to move forward regardless of
methodology. If your organization uses an agile methodology like scrum, this
document was called a project vision.
 .2 Outputs from planning processes — As soon as the team enters the
planning stage, something PMI® calls the planning process group a lot begins to
happen. If you have already scanned the PMBOK® Guide, you likely already
noticed the fact that virtually every knowledge area has a process that calls out
the creation of some form of a plan. These documents define the rules used to
manage that particular area and therefore become part of the overall project
management plan. The processes used to create these subsidiary plans are often
occurring at the same time the team is developing their overall project
management plan. Be careful and do not let this confuse you.
 .3 Enterprise environmental factors — As was stated in the develop project
charter process, enterprise environmental factors are almost always at play. As
the team begins to develop the guidelines and plans they intend to use many so
called environmental factors can influence their work. The most important

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ones include any legal or regulatory requirements, industry standards, or

organizational best practices.
 .4 Organizational process assets — Just like environmental factors,
organizational process assets are almost always in play. For developing a
project management plan these include things like organizational policies,
processes, and procedures or templates the organization has. Perhaps the most
important potential process assets come in the area of change control processes
and procedures the organization might have or require.
There are a lot of different ways teams develop their project management plans. A
lot of that has to do with all the different methodologies the team might also
choose. PMI® does not require the use of any one methodology. Therefore, they
also must provide significant flexibility in how the project is planned. The tools
and techniques used by the team include:
 .1 Expert judgment — The single most common way of getting anything done
according to PMI® is to trust your subject matter experts. They are the people
who must do the work. They also usually have the specific knowledge about
the various tools the team will use along with the specific resources, skills and
other resourcing aspects.
 .2 Data gathering — In the last process we discussed the importance of data
gathering and listed a number of specific techniques. Each of those techniques
apply here plus one additional. PMI® describes checklists as being another data
gathering technique used to develop the project management plan. A checklist
is a standardized list of items the team must consider as part of the planning
processes. It guides the team in developing the project plan and helps ensure
items are not forgotten. However, checklists also can be dangerous as people
often consider everything complete because they have “checked all the boxes”
or they end up dealing with checklists that are unnecessarily long. The
important thing to remember is that checklists are meant to be guides and
should never be considered 100% accurate.
 .3 Interpersonal and team skills — Interpersonal and team skills deals with
the soft skills required to relate to other members of your team. They include
ideas such as conflict management, facilitation, and meeting management. We
will discuss these areas when we reach resource management and
communication management.
 .4 Meetings — Much to many team members chagrin, much of our time is
spent in meetings discussing various project aspects. When we are examining
the develop project management plan process one meeting in particular is
important. It is the kickoff meeting.
A kickoff meeting is a special, and very important kind of project meeting. It is the
first official meeting of the project and should be done regardless of intended
methodology. The kickoff meeting provides the team an opportunity to get their
initial understanding of the project requirements beginning with the project success
criteria presented from the project charter. A kickoff is typically conducted with
both the project team and the major project stakeholders present to ensure both

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groups hear the same information. It is often conducted using a variety of games or
brainstorming techniques to capture the stakeholders’ initial input while the team
listens without providing solutions. For the exam, remember that a kickoff can be
done to initiate either the project or a new project phase.
The only output for the develop project management plan process is the project
management plan. As has been stated, the project management plan is the
aggregation of the outputs from the other processes found in the planning process
group. But what does that really mean? For many practicing project managers this
is a point of much confusion. Many believe a project plan is a Microsoft Project®
file and/or a schedule. Neither of these is a true project plan. A real project plan
potentially includes a lot of different components. In addition, there are even more
items that are considered project documents, but not part of the project
management plan. The documents are important even if they are not part of the
official plan document. The table below shows the items that form the basis of a
project management plan and those basic items that are considered project
documents. As you examine the list notice that almost all of the knowledge areas
found in the PMBOK® Guide produces a plan document. Don’t be overwhelmed
by the size of the list. Remember, not every document is used on every project. It
is up to the team to decide which apply to every specific project.
Below is a sampling of the various plans that give you a flavor of their purpose.
Notice how each one establishes a set of basic rules for the management of that
particular area.

Slide 105

Image 21: The Project Management Plan and Project Documents, PMBOK® Guide 6th ed. p. 89

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 The scope management plan — The scope management plan describes how
the team plans to define, develop, monitor control and validate scope.
 The requirements management plan — The requirements management plan
describes how requirements will be identified, collected, managed and
controlled. It is part of the scope management process.
 The change management plan — The change management plan deals with all
potential variances to baselines. This includes scope and requirements
variances as well as variances to schedule, costs, quality, and any other area of
the project. The goal is to prevent negative changes and to enhance positive
changes. No matter what, the key is to follow the change management plan.
 The configuration management plan — What version of your plan are you
on? Doesn’t it make sense to ensure that everyone has the correct version of
any document? That’s what the configuration management plan is all about. It
defines how any changes to documents are made and how people are notified of
those changes.
 The process improvement plan — A key element of project management for
PMI® is the idea of continuous process improvement. Every project needs a
plan for how you will continue to get better.
For the exam, it a good idea to assume you have all these plans included as part of
your project management plan. To give you a sense of the other project documents
potentially involved with managing a project we define some of those documents
as well. The key is not that you memorize the list, but instead focus on the trends
you see. Notice the number of items that represent baselines, logs, and registers.
 Scope baseline — The scope baseline includes the scope statement, work Slide 106
breakdown structure (WBS), and WBS dictionary.
 Milestone list — The milestone list is a listing of the major, defined milestones
for the project.
 Resource calendars — A good project manager knows when their resources
will be available to complete project work and does not assume they will
simply be there when the schedule says they will.
 Schedule baseline — The schedule baseline represents a snapshot or picture of
the schedule as promised to the sponsor. It is critical that the project manager is
always comparing the actual delivered results to the scheduled results found in
the schedule baseline.
 Cost baseline — The cost baseline is the same as the Schedule Baseline, except
it is focused on the project budget instead of the schedule.
 Risk register — The risk register is a critical document for project success.
The risk register documents all the known potential risks, their triggers,
categories, owners, and the response strategies. The risk register is discussed
extensively in the risk management knowledge area.
The scope, schedule and cost baselines combine to form the performance

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management baseline. Image 22 shows the documents that make up a true project
management plan.
Slide 107

Image 22: The Project Management Plan

4.3 Direct and Manage Project Work

The next process found in the integration management knowledge area is direct and Slide 108
manage project work. Just as the develop project management plan process is the
key to the planning process group, this is the big process for the executing process
group. It is here that the project manager and the project team ensure that the
deliverables are completed according to plan, that plans are updated, and that
change requests are managed. Be very careful about this section on the exam.
Make sure you read the questions carefully as is it very easy to confuse the
executing process group with the direct and manage project execution process.
They are not the same! The key to doing well in this section is understanding that
it is the project manager’s responsibility to do what ever it takes to ethically ensure
the completion of the project. The project manager must often act as the
intermediary between the stakeholders and the team and is responsible for ensuring
a common understanding of the project. On the exam — just as in the real world
— if a project goes badly it will be the project manager’s fault. You must do
everything you can to help others and ensure everyone is on the same page.
The direct and manage project work process has five inputs. The inputs to the
direct and manage project work process includes the following:
 .1 Project management plan — When executing the project it is the project Slide 109
manager’s responsibility to ensure that the team is following the plan.

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 .2 Project documents — For the direction and management of project work Slide 106
several project documents that are important including the change log, lessons
learned register, milestone list, project communications, the project schedule,
requirements traceability matrix, risk register, and the risk report.
 Approved change requests — Notice that the input here is not “change
requests,” but “approved change requests.” Only approved change requests
should ever alter the actions of the project team. Approved change requests in
this context also includes corrective action, preventive action and defect repair.
 .3 Enterprise environmental factors — Here is our old friend again. Like
most processes, the directing and managing project execution process can be
influenced by enterprise environmental factors.
 .4 Organizational process assets — Organizational process assets often
influence the directing and managing of project execution. They area also one
of the constants.
There are three tools and techniques used in the direct and manage project
execution process. They include the following:
 .1 Expert judgment — As always, expert judgment is a tool and technique
used in this process.
 .2 Project Management Information System — The PMIS is used to contain
the information about the project. Therefore it is critical to the direct and
manage project work process.
 Meetings — Meetings come primarily in three types: informational exchange,
decision making, or brainstorming, option evaluation or design.
The outputs to the direct and manage project work process create problems for
some candidates. Take some time to study them carefully. They include the
following:
 .1 Deliverables — Be careful with the deliverables. Recognize that they are not
the same thing as the final product, service or result of the project. They are
components which make up that final output.
 .2 Work performance data — This refers to the information from project
activities that is specifically related to the results. It includes deliverable status,
schedule progress, and any costs incurred. They are raw observations at the
lowest level of detail.
 .3 Issue log — An issue log is a document used to track conditions or situations
that may have an impact on one or more project objective.
 .4 Change requests — Some students find it confusing that “approved change
requests” is an input to a process whereas “change requests” is an output.
Don’t let it confuse you. This is a looping, ongoing process. As approved
changes occur they can cause other changes to be requested.
 .5 Project management plan updates — As the changes are approved and
made the project documentation must be updated to reflect the changes. This
might include any of the documents in the plan.
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 .6 Project document updates — There are some project documents that are
not considered part of the project management plan. As execution occurs and
changes happen these documents must be updated. These documents include:
 Requirements documents
 Project logs (such as issue or assumption)
 Stakeholder register

.7 Organizational process assets updates — Organizational process assets are

documents, templates and other tools used to drive organizational processes. It is
not unusual for the team to learn new things as the project progresses that can
impact various processes used by the organization. Additionally, the project may
cause changes to occur with one or more process. These changes can require
updates.
4.4 Manage Project Knowledge
The manage project knowledge process is new in the 6th edition of the PMBOK® Slide 110
Guide. It is a process designed to use existing knowledge and create new
knowledge to deliver the desired business results. It also affords the team an
opportunity to contribute to organizational learning. This process takes the
components of the project management plan and other project documents as they
are being used in the direct and manage project work process and integrates the
various enterprise environmental factors and organizational process assets to
generate updates to these documents along with lessons learned. An easy way to
think about this process is to think of it as the formalization of continuous
improvement.
For project managers, you must deal with two types of knowledge explicit
knowledge or knowledge that is easy to explain to others and tacit knowledge
which represents knowledge that is very personal such as know-how or experience.
The goal of every project manager is to ensure every member of the team has the
knowledge they need to deliver the desired project results. The real question is
how do you get knowledge out of peoples’ heads and into the culture or
environment so everyone know the same information?
The inputs to the manage project knowledge process include:
 .1 Project management plan — Managing project knowledge requires the Slide 111
team to look at the complete project management plan to ensure maximum
understanding.
 .2 Project documents — If you recall from our last process, there is a very
long list of documents included in the set called project documents. For the
management of project knowledge it is especially important to include the
lessons learned register, project team assignments, the resource breakdown
structure or RBS, the source selection criteria, and the stakeholder register.
 .3 Deliverables — Deliverables represent our project results. To improve or
gain new knowledge the team must review the results they produce using the
defined tools and techniques.

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 .4 Enterprise environmental factors — When attempting to manage project

knowledge the project leader must clearly understand the organizational culture
along with any specific regulatory and legal constraints. In many project
environments issues of geographic dispersion will be important as well.
Finally, the leader must also understand the knowledge held by the team at that
time.
 .5 Organizational process assets — When dealing with knowledge
management, the project leader must understand all formal knowledge-sharing
and information-sharing procedures within the organization along with specific
communication requirements and all policies, processes and procedures.
The project leader and their team is required to take these inputs and apply four
tools and techniques to deliver the desired outputs. Fortunately, these are largely
common sense. Stop and think for a moment. If you are tasked with leading a
project and need to ensure any knowledge your team develops is incorporated into
the organization for future use how would you do it? The tools and techniques
would likely include:
 .1 Expert judgment — Like most of the processes described in the PMBOK®
Guide, managing project knowledge requires extensive use of expert judgment.
Good project leaders understand the importance of trusting the people who
actually do the project work.
 .2 Knowledge management — On this surface this tool or technique might
appear a little ambiguous. From PMI’s perspective it is not. It represents a set
of practices such as networking, the creation of communities of practice,
meetings, internships or shadowing, knowledge sharing events, workshops,
storytelling, and many other not named. The notion here is that the project
leader finds way to connect people so they can create new knowledge based on
the project work.
 .3 Information management — Information management is closely related to
knowledge management. It represents methods for documenting explicit
knowledge for lessons learned, information gathering and making use of the
project management information system for documentation purposes. It is
doing the work to connect people to information.
 .4 Interpersonal and team skills — These skills are similar to expert
judgement in that they are used over and over again throughout the PMBOK®
Guide. In this case it is referring to skills such as active listening, facilitation,
leadership, networking, and political awareness. Political awareness is new for
the 6th edition of the guide and draws special attention to the requirement for
good project leaders to understand the political environment in which they
operate. Every organization has politics. A good leader understands them well.
Once these tools and techniques are applied within the manage project knowledge
process three outputs are created.
 .1 Lessons learned register — The lessons learned register is created early in
the project life cycle. This document is specific to the project, and once the

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initiative is complete the information is moved to the lessons learned

repository.
 .2 Project management plan updates — The process of managing project
knowledge creates the potential for changes with any of the documents found in
the project management plan. However, these changes must go through the
change management process as defined by the team.
 .3 Organizational process updates — According to PMI, all projects create
new knowledge and part of the processes of project management is to take this
new knowledge and incorporate it into the existing knowledge base.
4.5 Monitor and Control Project Work
It is now time to move into the fifth integration management process which is Slide 112
found in the monitoring and controlling process group. There are two integration
management processes found here. The first of these processes is 4.4 monitor and
control project work. This process is concerned with tracking, reviewing, and
regulating project progress to meet the performance objectives that have been
defined in the project management plan. It is most importantly about comparing
actual results to the promised plan and forecasting the expected results. When
taking the exam it is important to remember that unless it is stated otherwise you
should assume that you are leading a relatively large project that might require a
significant amount of monitoring. This means you would likely not have first hand
knowledge of the actions of all your resources.
There are seven inputs to the monitor and control project work process. They
include the following:
 .1 Project management plan — This process is all about tracking actuals to Slide 113
forecasts, therefore the plan is a critical input.
®
 .2 Project documents — The 6th edition of the PMBOK Guide makes a
significant change in the project documents included in this process. In
attempting to monitor and control project work there are many documents
necessary including the assumption log, basis of estimates, cost forecasts, issue
log, lessons learned register, milestone list, quality reports, risk register, risk
report, and schedule forecasts. Hopefully, it makes sense that managing and
controlling the project work requires all the information the team can have on
hand.
 .3 Work performance information — Whereas most data lacks context, work
performance information is correlated and contextualized and therefore
provides a sound foundation for project decisions. When work performance
data is compared with project management plan components, project
documents and other project variables it becomes work performance
information.
 .4 Agreements — The agreements described in this section are procurement
agreements that include specific terms and conditions with which the team must
comply. If the team is using contractors, these agreements define the oversight
of the contractors.
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 .5 Enterprise environmental factors — As always, enterprise environmental

factors are at play. For this process the Work Authorization System is used.
This is the system that the project manager uses to authorize work to begin on a
specific work package.
 .6 Organizational process assets — Like enterprise environmental factors,
organizational process assets are almost always in play.
The tools and techniques used in the monitor and control project work process
include the following:
 .1 Expert judgment — The best place to start is always having subject matter
experts to provide critical information.
 .2 Data analysis — When monitoring and controlling project work there are a
number data analysis tools and techniques including alternatives analysis, cost-
benefit analysis, earned value analysis, root cause analysis, trend analysis, and
variance analysis. Later in this course we will evaluate each of these
techniques in greater detail.
 .3 Decision making — There are many different ways the team can make
decisions. Leaders can be autocratic, making all the decisions on their own or
they can use the strength of the group. Each decision making type has
implications that we will discuss later in this course as well.
 Analytical techniques — These techniques can be advanced mathematical
methods such as a regression analysis or as simple as grouping methods.
 Project management information systems — Considered part of the
enterprise environmental factors, these provide key information such as
scheduling, cost, resourcing, performance indicators, or others.
 .4 Meetings — Sometimes it just makes sense to talk to people. Don’t over
think this stuff. In many cases the simple answer is best.
The monitor and control project work process has four outputs to it. They include
the following:
 .1 Work performance reports — When work performance information is
combined, recorded, and distributed to cause the team and organization to make
decisions, take action or become aware of. This information becomes work
performance reports.
 .2 Change requests — As the project progresses and work is monitored and
controlled, the needed or desired changes become apparent. These requests
take three specific forms: corrective action, preventive action, and defect repair.
Corrective action represents intentional activity that realigns the performance of
the project. Preventive action is an intentional activity that ensures the future
performance of the project work. Defect repair is an intentional activity that
modifies a nonconforming product or product component.

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 .3 Project management plan updates — Updates to the project management

plan become necessary as changes occur.
 .4 Project document updates — If the changes require you to change
documents found in the project management plan, there is a high probability
that they will also cause changes to other non-project plan documents.
4.6 Perform Integrated Change Control
The other integration management knowledge area process found in the monitoring
and controlling process group is perform integrated change control. Changes can Slide 114
impact any area or process of a project. The potential for significant change makes
it critical that every project has processes established to deal with those changes.
perform integrated change control represents that process. It is the single process
that brings the change control efforts from each of the other knowledge areas
together. Using a few simple PMIisms can dramatically improve your success with
this critical process.
 Always analyze the impacts of potential changes before doing anything else
 Always bring forward options based on the completed analysis
 Always have a change control process
 Always follow your change control process
 It is critical that you understand the root cause of changes to prevent future
unwanted or unexpected changes
 Expectation management is a critical aspect of change management that cannot
be overlooked
 Make sure your documentation reflects the actions taken

In many organizations, a defined part of the change management process is the

change control board (CCB) or change review board (CRB). Regardless of the
name, these boards perform the same function. It is their job to review
recommended actions and requested changes and provide approval. They typically
have final authority over changes on large projects.
The inputs to the perform integrated change control process include:
 .1 Project management plan — Our old friend the project management plan is
Slide 115
never far away. Changes are only changes if there is something to change
from. The project management plan is that something. PMI® specifically calls
out change management plan, the configuration management plan, the scope
baseline, schedule baseline, and the cost baseline. Each of these baselines
represents a snapshot of that item at a point in time.
®
 .2 Project documents — For most of the processes found in the PMBOK
Guide, if you use the project management plan you also use the project
documents. For this process, PMI® specifically calls out your basis of
estimates, the requirements traceability matrix and risk reports.
 .3 Work performance reports — This is information from project activities
related to various results including deliverable status, schedule progress, and
any costs incurred.

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 .4 Change requests — As has already been often stated, changes can be

requested at almost any time.
 .5 Enterprise environmental factors — Our old friends are at work in the
Perform Integrated change control process.
 .6 Organizational process assets — Items such as the change control
procedure, procedures for approving and issuing change authorizations, and the
process measurement database (which is used to aggregate data about process
and product measurements) are all included in the organizational process assets.
The tools and techniques used in the integrated change control process include the
following:
 .1 Expert judgment — Expert judgment is especially valuable when dealing
with changes.
 .2 Change control tools — Be very careful with the change control tool. Do
not confuse change control with configuration control. According to PMI®,
configuration control deals with the specification of both the deliverables and
the processes. Change control deals with identifying, documenting, and
approving or rejecting changes to the project documents, deliverables or
baselines. Within the description of the tools, PMI® says the should support
both activities for configuration control and change management.
 .3 Data analysis — Data analysis uses both alternatives analysis and cost-
benefit analysis
 .4 Decision making — Decision making techniques used for performing
integrated change control include voting, autocratic decision making and
multicriteria decision analysis.
 .5 Meetings — The specific meeting discussed in this area is the change control
board or CCB. A CCB is a group of leaders who are tasked with deciding
whether or not charges are approved or not. They also must communicate with
all members of the organization.
The outputs of the integrated change control process include:
 .1 Approved change requests — The requests the CCB chooses to approve
are the critical output of this process.
 .2 Project management plan updates — Changes can cause required updates
to the project management plan.
 .3 Project documents updates — Just like the Project Management Plan, the
other project documents might require updates due to changes.
4.7 Close Project or Phase
Slide 116
The close project or phase process is the process where all the activities across all
of the project management process groups are brought to a conclusion. This is
necessary for the project (or phase of the project) to be successfully closed. This

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process ensures that all the required project work has been completed correctly and
that the project has met its objectives. It also establishes the procedures to follow if
a project is terminated before completion, i.e., how to investigate and document the
reasons for the actions taken. Do not underestimate the importance of this section.
According to PMI®, proper project closeout is an often overlooked process.
The inputs to the Close Project or Phase Process include the following: Slide 117
 .1 Project charter — The project charter defines the project success criteria,
and is necessary to close any phase or the project as a whole.
 .2 Project management plan — It is impossible to determine whether or not
you have completed all that you are supposed to unless you have a Project
Management Plan that makes it possible for you to comparison what happened
with what was supposed to happen.
 .3 Project documents — The huge list of potential documents are all inputs to
the process of closing a project
 .4 Accepted deliverables — Good project managers are those who manage
deliverables not tasks. It is the aggregation of deliverables that creates the final
product, service or result.
 .5 Business documents — Both the business case and the benefit management
plan are inputs to closing the project or just a phase because they provide a
detailed explanation of why the organization needed the project completed. It
is more information than provided in the charter.
 .6 Agreements — Those contracts used to obtain components and work from
those outside the organization are critical to closing the project.
 .7 Procurement documentation — Agreements are the actual contracts
necessary to complete the project. Procurement documentation represents all
the other documents such as payment records, manuals, or inspection results.
 .8 Organizational process assets — Many organizations have processes,
templates and/or practices that are used throughout the organization to
complete a project.
The tools and techniques used in the close project or phase include the following:
 .1 Expert judgment — This applies almost everywhere. Closing a project or a
phase requires it as well.
 .2 Data analysis — This is also a previously discussed tool. Don’t lose sight
of the simple ideas—they have great power.
 .3 Meetings — This is another common sense tool that appears in the
standards.
There are only two outputs to the close project or phase process. If you look back
at the basic PMI® process model you can easily see what they are.

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 .1 Project documents updates — Most are a little surprised to see that project
document updates appear before the final product, service or result. These
updates appear first in the lessons learned register.
 .2 Final product, service or result — This is it. It’s the reason for doing the
project. This is the only spot where the final product, service or result is an
output.
 .3 Final report — The project’s final report provides a summary of how the
team did throughout the project. It addresses issues like the scope objectives
and all the other objectives. It also provides a summary of the validation
information for the final product, service or result.
 .4 Organizational process assets updates — As has been mentioned earlier,
continuous process improvement is a key concept for the exam. This means
looking at the processes you currently have and improving them based upon
lessons learned.
Integration Management Summary
As you conclude your studies of the Integration Management Knowledge Area Slide 118
focus in on these points:
 The role and components of the charter

 The charter issued by party external to the project

 The project management plan is a collection of other plans, and the level of
detail depends on the project
 Change control must happen throughout the project

 Project closure equals both deliverables AND project records

 No matter what, environmental factors are at play

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Exam 5 —
Exercise 5—Integration Management Integration
Management
 Which of the following is the first process in the integration management
knowledge area?
A. Develop project charter
B. Develop project scope statement
C. Develop project management plan
D. Distribute Information
2. Which of the following is not part of the integration management knowledge
area?
A. Direct and manage project work
B. Develop project management plan
C. Distribute information
D. Monitor and control project work
3. Which of the following information is not captured in the project charter?
A. Initial constraints and assumptions
B. The name of the project manager
C. The project management plan
D. All of the above are captured
4. When should the organization’s business needs be documented?
A. Throughout the entire project process
B. In the planning process
C. In the initiation process
D. Before beginning the initiation process
5. When is a project officially authorized?
A. When the required information has been captured
B. When the project charter is approved
C. When the initial assumptions and constraints have been reviewed
D. When the Project Manager has been selected
6. Which of the following is not a reason to repeat the initiating process group at
the start of each project phase?
A. To keep the project focused on the business need that the project was
undertaken to address
B. It allows the project team to evaluate whether or not the business need
no longer exists
C. It allows the project team to evaluate whether or not the project will be
able to satisfy the business need
D. It ensures project success

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7. Involving the customers and other stakeholders in the initiation process is

important because:
A. It improves the probability of shared project ownership
B. It improves the likelihood of deliverable acceptance
C. It improves stakeholder satisfaction
D. All of the above
8. The initiating process group does all of the following except:
A. Provides for the project management plan
B. Defines the project’s purpose
C. Identifies project objectives
D. Authorizes the project manager to begin work
9. Which of the following project management processes is part of the initiating
process?
A. Develop project management plan
B. Develop project charter
C. Define scope
D. Collect requirements
10. Which of the following project management processes is part of the Initiating
Process Group?
A. Identify stakeholders
B. Define scope
C. Collect requirements
D. Develop project management plan
11. The initiating process group feeds into or accepts input from each of the
following project management process groups except:
A. The planning process group
B. The executing process group
C. The closing process group
D. All of the above

12. The development of the project charter is primarily concerned with which of
the following?
A. Assigning the project team
B. Authorizing the project
C. Providing constraints and assumptions
D. Providing the limits of the project manager’s authority

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13. The progressive detailing of the Project Management Plan—which indicates

that planning is an iterative and ongoing process—is often called what?
A. An iterative feature plan
B. A project management plan
C. A rolling wave plan
D. All of the above
14. Which of the following statements is not true about stakeholder involvement in
the planning process group?
A. The project team should involve only the senior stakeholders and
sponsors in the initial scoping of the project.
B. The project team should use stakeholders in project planning since the
stakeholders have skills and knowledge that can be leveraged.
C. The project team is responsible for creating an environment in which
stakeholders can contribute.
D. All of the above are true.
15. Who (or what) ensures that feedback and refinement do not continue
indefinitely in the planning processes?
A. The project manager
B. The project sponsor
C. The project management plan
D. Organizational policies and procedures
16. According to the PMBOK® Guide, how stringently must a project manager
ensure that all the defined process interactions occur?
A. There is a great deal of flexibility because interactions within the
planning process are dependent on the nature of the project
B. There is not significant flexibility because interactions within the
planning process are not dependent on the nature of the project and only
depend on the PMBOK Guide.
C. Interactions within the planning process group are not dependent on the
nature of the project, but there is significant flexibility based on the
definitions in the PMBOK® Guide.
D. None of the above is true.
17. How do you document the results of the various iterations within the planning
processes?
A. Within the various deliverables
B. As updates to the scope statement
C. As updates to the risk management plan
D. As updates to the project management plan

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18. What typically happens to the project management processes when the project
is divided into phases?
A. Nothing. The project management processes are designed to work with
many methodologies.
B. The process groups are normally repeated within each phase.
C. The process groups must be altered because they are not designed for a
phased-based methodology.
D. None of the above
19. Which of the following statements is true about processes?
A. Not all of the project management processes are needed on every project
B. All of the processes are required on every project
C. All of the process interactions are required
D. None of the above
20. Which of the following statements is not true about projects?
A. Not all of the project management processes are needed on every project
B. Not all of the interactions apply to all project phases
C. Projects dependent on unique resources might skip the definition of
roles and responsibilities as they are already defined
D. None of the above
21. Can process inputs be predefined on a project as constraints?
A. Rarely
B. Never
C. Often
D. Occasionally
22. Which of the following is not a process from the integration management
knowledge area?
A. Create WBS
B. Develop project charter
C. Close project or phase
D. Develop project management plan
23. In which of the following processes would you develop a high-level narrative
of the project?
A. Develop project charter
B. Develop preliminary project scope statement
C. Develop project management plan
D. All of the above

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24. Which of the following statements about the project charter is true?
A. Chartering a project links the project to the ongoing work of the
organization
B. The project charter helps define the organizational strategy
C. A project is not informally recognized until it is chartered
D. All of the above
25. Which of the following is an acceptable reason to need to re-baseline your
$25,000,000 project?
A. The IT department deploys a new project management control system
B. Your primary vendor requests the use of a new Earned Value reporting
methodology
C. Your sponsor approves a $1,500,000 change in scope.
D. The most expensive deliverable on the project comes in 20% under
budget.
26. What kind of project justification would it be if a chemical manufacturer
authorized a project as a result of new national guidelines for handling of toxic
materials?
A. A business need
B. A legal requirement
C. A market demand
D. A social need
27. Which of the following either directly or indirectly should be addressed by the
project charter?
A. Requirements that satisfy stakeholder needs, wants and expectations
B. Summary milestone schedule
C. Functional organizations and their participants
D. All of the above
28. Which of the following describes whether the expected outcomes of the project
justify the investment?
A. Contract
B. Business case
C. Business needs analysis
D. Project justification
29. What kind of project estimate is typically included in the preliminary project
charter?
A. Rough order of magnitude estimate
B. Detailed budget estimate
C. Budget estimate
D. None of the above

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30. Who is responsible to ensure that the knowledge, skills, and processes of
project management are applied as needed by the project?
A. The project team
B. The project sponsor
C. The project manager
D. All of the above
31. Which of the following is usually a core area of emphasis for effective project
integration?
A. The technical expertise of the team
B. Effective use of the change management process
C. Efficient and effective communication throughout the key interfaces
D. Efficient and effective product control
32. Which of the following is a key driving force for communication on a project?
A. Performance
B. Differentiation
C. Optimization
D. Integration
33. You are a project manager meeting with a coworker over lunch. You explain
that you spend a lot of time reviewing historical records from previous, similar
projects to prepare for your current project. Which of the following describes
the best use of those records?
A. Project planning, creating lessons learned, and risk management
B. Life cycle costing, estimating and lessons learned
C. Estimating, risk management and project planning
D. Life cycle costing, lessons learned and project planning
34. You are a relatively new project manager in your organization and have been
given a mentor to help you succeed. While meeting with your mentor she
suggests that when it comes to change, your attention should be given to:
A. Following your change management process
B. Making the changes
C. Tracking and recording the changes
D. Preventing unnecessary changes
35. When designing an effective change management plan it should include all of
the following except:
A. Lessons learned
B. Policies
C. Procedures
D. Meetings

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36. You have just been hired by a company and are a new project manager. You
receive your first project and are preparing to begin your role. To improve your
chances of success, it would be best in this situation to rely on what during the
planning stage?
A. Lessons learned repository
B. Stakeholder input
C. Certification training
D. Scope verification
37. When attempting to lead a project, you struggle because your project is
experiencing a significant number of changes to the project charter. As you
work through these changes, who has the primary responsibility to decide if the
changes are necessary?
A. Project manager
B. Project team
C. Project sponsor
D. Project stakeholders
38. You are a project manager at ABC Corp. Which of the following explanations
would most accurately describe your project management plan to a coworker?
A. A Gantt chart showing the project schedule and resources
B. The project scope document
C. A scope management plan, risk management plan combined with six
other management plans
D. The project management plan is the document that describes how the
project will be executed, monitored and controlled, and closed.
39. As a project manager your boss instructs you to develop a realistic plan. Which
of the following is the best method for achieving a realistic plan?
A. You create the plan with input from the sponsor
B. You create the plan with input from the project team
C. You create the plan with input from the stakeholders
D. The team creates the plan with your input
40. As a new project manager, you discover that you will be required to have 11
stakeholders sign off on your charter. Which of the following is your greatest
concern?
A. The amount of time spent on configuration management
B. Defining your change management process
C. Managing the sponsors
D. Defining your reporting structure

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41. As a professional project manager you know that many of the processes are
ongoing efforts that potentially overlap. In the real world, which of these
processes are you most likely to combine?
A. Collect requirements and create WBS
B. Create WBS and define activities
C. Plan communications and develop human resources plan
D. None of the above—you should not combine these processes in the real
world
42. All of the following are part of performing integrated change control except
which one:
A. Project management plan
B. Change management plan
C. Project management information system
D. Work performance reports
43. You are an information technology project manager and have been asked to
lead a traditional engineering project. You delegate the various processes to the
project resources who are subject matter experts and you serve as the
coordinator of activities and an arbiter for disagreements. What results do you
expect based upon this approach?
A. A team that functions as a cohesive unit with both commitment and
collaboration
B. A team that might start out slow with a large amount of confusion, but
eventually gets organized and performs well
C. A team with strong technical focus and performance, but little interest in
the overall goal
D. A team with poor performance, low morale, significant conflicts and a
significant amount of turnover
44. As a project manager you build your project plan and schedule based upon a
commitment from the senior management that you will have several senior
level resources completely dedicated to your project. When it actually comes
time to do the work you are provided with much less skilled resources. The
best thing to do is which of the following:
A. Remind management that you were promised senior level resources
B. Show management the impact of having the less experienced resources
assigned to your project
C. Rework the project schedule with the new, less experienced resources
D. Crash the project

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45. You are six months into an 18-month project when you receive a change
request from the customer that will not affect the project schedule and is easy to
complete. What should you do first?
A. Evaluate the change’s impacts on the other constraints
B. Get the sponsor’s approval before making the change
C. Get the change completed as soon as possible
D. Go to the CRB
46. You are a project manager within a large PMO. Currently, the PMO is at about
75% capacity when your company wins a new, very large contract that will
require significant organizational resources to execute. What is the first thing
you should do once you hear about the new project?
A. Ask management if you can lead the new effort
B. Ask management how the new project will use organizational resources
C. Fast track your project
D. Ask management how the new project will affect your project
47. You are a project manager and get asked to take over for a retiring coworker.
You meet with the current project manager as part of your transition and
discover that the project is currently on schedule. The current project manager
tells you that the project is only on schedule because he has constantly pushed
the project team to perform. What is the first thing you should do?
A. Determine your management strategy
B. Determine the exact SPI
C. Determine the current cost performance
D. Meet with your new team to outline your objectives
48. During the project you determine that additional material needs to be
purchased. You call your team together to plan exactly how to make the
required change. This is an example of what?
A. Management by consensus
B. Lack of a change management plan
C. Good team relations
D. Management by objectives
49. Linear programming is an example of what type of project selection criteria?
A. Regression analysis
B. Benefit cost measurement
C. Quantitative scoring
D. Constrained optimization

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50. Your company is evaluating three different projects, but can do only one.
Project A has an NPV of $120,000 and will take 6 years to complete. Project B
will take 3 years and has an NPV of $91,500 and Project C has an NPV of
$83,000. Based on this information, which project would you pick?
A. Project A
B. Project B
C. Project C
D. Not enough information to determine
51. A project manager is interested in obtaining a position within his organization’s
project management office. As part of the hiring process the PMO reviews the
project manager’s past performance on projects within the organization. The
project manager has four projects that are reviewed. One project finished ahead
of schedule and had a CPI of 1.04. That project sponsor provided a
recommendation for the project manager. The second project had an SPI of
0.92 and a less than 10% cost variance. In discussions with the sponsor the
PMO team discovers that these results were achieved due to fast tracking the
schedule, that some rework was required after project completion, and that the
product of the project has never been used. The third project was a large
project for the organization with significant visibility throughout the firm. This
project experienced three restarts due to changes that were 30% greater than
other projects within the organization and was completed with 17 items
remaining on the issue log. The final project was relatively low in the
organizational priority system and had an SPI of 0.76, had struggled with
several unexpected items on the risk register, and had to rework their project
charter twice.
The PMO decides not to hire this project manager based on the past
performance. Which of the following statements best justifies this decision?
A. The project manager had consistently missed schedule and cost targets
showing he does not have the skill to work in the PMO.
B. The project manager consistently failed to involve stakeholders showing
he does not have they skills to work in the PMO.
C. The project manager failed to properly use a risk register showing he
does not have the skills to work in the PMO
D. The project manager consistently showed problems managing change
showing he does not have the skills to work in the PMO.
52. Your project has changed significantly and requires changes be made to the
project charter. Who has primary responsibility to decide if these changes are
necessary?
A. The project manager
B. Key stakeholders
C. The project team
D. The sponsor

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53. Which of the following best describes the project manager’s role as an
integrator?
A. The project manager puts all the pieces of a project into a cohesive
whole
B. The project manager puts all the pieces of the project into program
C. The project manager helps the team become familiar with the pieces of
the project
D. The project manager gets the project team together into a cohesive unit
54. As a new project manager you are tasked with delivering an important project
in a short time window. In this situation what would it be best to rely on in
order to improve your chances of success?
A. The organization’s configuration management system
B. Your PMP training
C. Historical information
D. Stakeholder input
55. Which of the following is NOT one of the four fundamental categories acting
upon organizations illustrating the context of a project?
A. Meet regulatory, legal or social requirements.
B. Satisfy senior leadership’s vision of the future.
C. Implement or change business or technological strategies.
D. Create, improve, or fix products, processes, or services.
56. In what kind of life cycle is the project scope, time and cost determined in the
early phases and then any changes are carefully managed?
A. Predictive
B. Iterative
C. Incremental
D. Adaptive
57. What kind of life cycle is agile, iterative, or incremental with the detailed scope
being defined and approved at the start of an iteration?
A. Iterative
B. Incremental
C. Adaptive
D. Hybrid
58. Which of the following is represents the raw observations and measurements
identified during activities performed to carry out the project work?
A. Work performance reports
B. Work performance information
C. Work performance data
D. Work results

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59. The selection of project management processes, inputs, tools, techniques,

outputs, and life cycles phases is called what?
A. Methodology selection
B. Governance
C. Project initiation
D. Tailoring
60. Which of the following often precedes the business case?
A. A benefits case
B. A needs assessment
C. A project charter
D. An alternatives analysis

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Exercise 5 — Integration Management Answers

1. Answer A. PMBOK® Guide p. 71 – Before anything else can be done on a
project the charter must be developed.
2. Answer C. PMBOK® Guide p. 360 – Distributing information is part of the
manage communications process.
3. Answer C. PMBOK® Guide p. 75-81 – The initial scope description and the
resources that the organization is willing to invest are further refined during the
initiation phase. If he or she has not already been assigned, the project manager
is selected. Initial assumptions and constraints are also documented. The
Project Management Plan is created as part of the planning processes.
4. Answer D. PMBOK® Guide p. 30-31 – Before beginning the Initiating Process
Group, the organization’s business needs or requirements are documented.
This may blur the project boundaries. To create the charter a major input is the
business case.
5. Answer B. PMBOK® Guide p. 77 – If he or she has not already been assigned,
the project manager will be selected and initial constraints and assumptions will
also documented. All of this information is captured in the project charter and
the project becomes officially authorized when it is approved.
6. Answer D. PMBOK® Guide p. 19-24 – Repeating the initiating process at the
start of each project phase (methodology or time based development process)
does not ensure success. However, it does serve to keep the project focused on
the business need, it allows the project team to determine if the business need
still exists, and it allows the project team to determine if the project can satisfy
those needs. Therefore it definitely improves the likelihood of project success.
7. Answer D. PMBOK® Guide p. 19-24 – Involving all stakeholders—including
the customers—in the initiating process is important because the easiest time to
change the project is at this early stage. Additionally, it helps improve the
probability of shared ownership, improves the likelihood of deliverable
acceptance, and improves stakeholder satisfaction.
8. Answer A. PMBOK® Guide p. 77-81 – The primary output of the Initiating
Process Group is the Project Charter. This document provides information on
the project’s purpose, identifies the project objectives and, most importantly,
authorizes the project manager to begin work. However, it does not provide the
for the project management plan. That is an output of the Planning Process
Groups.
9. Answer B. PMBOK® Guide p. 71 – This is NOT simply a duplicate question
to #8. It is supposed to be here. The only two processes within the Initiating
Process Group are the Develop Project Charter Process and the Identify
Stakeholders Process. All other choices are part of the Planning Process
Group.

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10. Answer A. PMBOK® Guide p. 25 – The only two processes within the
Initiating Process Group are the Develop Project Charter Process and the
Identify Stakeholders Process. All other choices are part of the Planning
Process Group.
11. Answer C. PMBOK® Guide p. 18 – Because the Initiating Process Group is
supposed to be done at the beginning of each project phase, there is a need to
communicate with each of the other process groups (except the Closing Process
Group) when the project has ended.
12. Answer B. PMBOK® Guide p. 75-77 – The development of the Project
Charter (4.1) is primarily concerned with authorizing the project. It also names
the project manager and will often include any constraints or assumptions.
However, its core function is project authorization.
13. Answer C. PMBOK® Guide p. 160, 185 – Significant changes occurring
throughout the project cycle often trigger a need to revisit one or more of the
project management processes. Although the frequency might vary, this
progressive detailing of the project management plan is the very definition of a
rolling wave plan.
14. Answer A. PMBOK® Guide p. 34-35 – It is critical that the project team gets
as many of the stakeholders involved in the project as early as possible and
keeps them involved throughout the project. To do this, the project manager
and team must create an environment that is conducive to stakeholder
participation. A wide range of stakeholders can have information that can help
the project succeed.
15. Answer D. PMBOK® Guide p. 21-23 – Because the feedback and refinement
process can continue indefinitely if left unchecked, procedures set by the
organization identify when the planning effort ends.
16. Answer A. PMBOK® Guide p. 19-23 – Interactions among the processes
within the planning process group are dependent on the nature of the project.
This makes significant refinement and iterations possible—as well as
reordering of some of the relationships due to the fact that in many projects
information is simply not available until later in the process.
17. Answer D. PMBOK® Guide p. 22-23 – The results of the iterations within the
planning process are documented as updates to the project management plan.
18. Answer B. PMBOK® Guide p.19-21 – When a project is broken into phases
the project management process groups usually repeats it an iterative manner
because they are designed to work in either an iterative or linear manner.
19. Answer A. PMBOK® Guide p. 22 – Not all of the processes are needed in all
projects. This is because flexibility is a key concept for project management.
20. Answer D. PMBOK® Guide p.21-23 – A key concept with the project
management process groups is flexibility. This requirement means that not all
processes are needed on every project and not all of the interactions apply to
every project phase. Unique resources are often predefined.

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21. Answer C. PMBOK® Guide p. 28,39 – It is not at all unusual for process
inputs to be locked into place as a constraint. This usually happens when they
are predefined.
22. Answer A. PMBOK® Guide p. 25 – Creating the WBS is part of Scope
Management. All others are part of Integration Management.
23. Answer A. PMBOK® Guide p. 75-77 – The high level narrative is part of the
project charter.
24. Answer A. PMBOK® Guide p. 75-77 – According to the PMBOK Guide,
chartering a project links the project to the ongoing work of the organization.
The charter does not define the organizational strategy. Additionally, the
charter formally recognizes the project.
25. Answer C. PMBOK® Guide p. 87 – The integrated change control process is
performed throughout the project. This is because no project runs perfectly.
As part of this process, it is critical to maintain only changes that have been
approved . Significant changes in scope may require re-baselining the project.
26. Answer B. PMBOK® Guide p. 7 – Projects can be justified for a number of
reasons that include:
 A market demand
 A business need
 A customer request
 A technology advance
 A legal requirement
 A social need
In this case, the situation describes doing a project because of a legal need. The
key indicator is the national guideline, law or regulation.
27. Answer D. PMBOK® Guide p.75-77 – The project charter is one of the most
important project documents. It is created prior to beginning the project. The
charter should address the following information either by reference or directly:
 Requirements that satisfy stakeholder needs
 Business needs
 The project purpose or justification
 Assigned project manager and their authority level
 Summary milestone schedule
 Stakeholder influences
 Functional organizations and their participations
 Organizational, environmental and external assumptions
 Organizational, environmental and external constraints
 Business case justifying the project including ROI
 Summary budget
28. Answer B. PMBOK® Guide p. 77 – The project statement of work (SOW) is a
narrative description of products or services to be supplied by the project.

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29. Answer A. PMBOK® Guide p. 706 – The Rough Order of Magnitude Estimate
has a variance of -50% to +50% and is the first estimate completed in the
project process.
30. Answer C. PMBOK® Guide p. 51-52 – The project manager—in collaboration
with the project team—is always responsible for determining what processes
are appropriate, as well as the appropriate degree of rigor for any given process.
31. Answer C. PMBOK® Guide p. 72 – This point cannot be emphasized enough.
Communication is key to managing projects successfully. It is the starting
point for all other efforts.
32. Answer D. PMBOK® Guide p. 72 – This question goes back to the constant
battle between the need for differentiation (or subject matter expertise) and the
need for integration (or team members working together). The need for
integration is the key reason to focus on communication.
33. Answer C. PMBOK® Guide p. 104 – Historical records are not typically used
for lessons learned, life cycle costing, or status reports.
34. Answer D. A key component of project management is ALWAYS being
proactive. In this question only one choice is proactive and that is preventing
unnecessary changes.
35. Answer A. PMBOK® Guide p. 104 – Lessons learned are reviews of the
policies and procedures and are not part of the process itself.
36. Answer A. PMBOK® Guide p. 104 – In this case, it would be best to rely on
historical information about the results from past projects within the
organization. Although stakeholder input might help it also might not be
trusted. The only other possible answer is certification training, which taught
that these things are situational.
37. Answer C. PMBOK® Guide p. 75-77 – The project sponsor is supposed to
approve the charter. They are also responsible for approving any changes to
that charter.
38. Answer D. PMBOK® Guide p. 86 – A true project management plan is made
up of plans from each of the knowledge areas except Integration Management.
39. Answer B. PMBOK® Guide p. 82-83 – The project manager is responsible for
creating the plan with the input from their subject matter experts and the team.
40. Answer A. Two key issues are likely to impact this project. This first is
communication. This is the same on every project, but here the number of
signoffs will make communication even more important. The second is
configuration management. Since communication is not one of the choices,
configuration management is the best choice.

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41. Answer B. PMBOK® Guide p. 156-161 – In the real world, many of these
processes are ongoing and overlap. Additionally, not every process is required
on every project. It is up to the project manager to decide when these processes
are appropriate. In this case, the most commonly combined processes (yes, it is
allowed) are to create the WBS and to define the activities—because the
activities are often simply extensions of the work packages.
42. Answer C. PMBOK® Guide p. 113 – The project management information
system is part of Direct and Manage Project Execution but not Performing
Integrated Change Control.
43. Answer D. To be successful, the project manager must actually manage the
project. When he or she acts as a simple coordinator the project will most
likely fail and the resources will become frustrated.
44. Answer B. Remember that a project manager must always be proactive. This
means the PM must get in front of the situation. In this case, the project
manager needs to bring alternatives and recommendations to management. The
answer that most reflects this concept is showing management the impact of
having the less experienced resources assigned to the team.
45. Answer A. The first thing the project manager should do is evaluate the
change for impacts against the major constraints.
46. Answer D. The first thing you should do is obtain or complete an evaluation of
how the new project will impact your project. Only then can you make an
informed choice about what to do next.
47. Answer A. Successful project management has a lot to do with aligning
strategy with project management. This is just such a case. The first thing you
should do is determine your own management strategy and then move forward.
48. Answer B. This is a clear example of the absence of a change management
plan—or at the very least a failure to follow the plan. It should be unnecessary
to bring the team together in this case.
49. Answer D. Linear programming is a form of constrained optimization that
uses advanced mathematics to evaluate choices.
50. Answer A. The years are irrelevant to this question as the whole point of NPV
is to convert the project value into today’s dollars. In this case, project A is the
correct choice with an NPV of $120,000 because it has the highest value.
51. Answer B. This is one of the longest questions you might see. Be careful.
Much of the information in the question is there to misdirect you. This
question takes you back to a core PMIsm. One of the most common problems
is a failure to engage stakeholders early and often enough. This problem is
evidenced in the question by the significant scope changes, the remaining issue
log items and the fact of having to redo the charter.

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52. Answer D. PMBOK® Guide p. 77 – The authorization of a charter comes from

a party outside the project team, typically the sponsor, and that party has final
authority over any changes to the charter.
53. Answer A. PMBOK® Guide p. 52-59 – Although the project manager does
have the responsibility to get the team to function as a cohesive unit, that is not
their role as an integrator. The role of integrator requires the project manager
to put all of the pieces of the project into a cohesive whole.
54. Answer C. PMBOK® Guide p. 52-59 – When you lack the personal
experience, your first resource should be expert judgment . When that is not
available turn to historical information.
55. Answer B. PMBOK® Guide p. 7 – Organizational leaders initiate projects in
response to factors acting upon their organizations. There are four fundamental
categories for these factors:
 Meet regulatory, legal, or social requirements;
 Satisfy stakeholder requests or needs;
 Implement or change business or technological strategies and
 Create, improve, or fix products, processes, or services.
56. Answer A. PMBOK® Guide p. 19 – In a predictive life cycle, the project scope,
time, and cost are determined in the early phases of the life cycle. Any changes
to the scope are carefully managed. Predictive life cycles may also be referred
to as waterfall life cycles.
57. Answer C. PMBOK® Guide p. 19 – Adaptive life cycles are agile, iterative, or
incremental with the detailed scope being defined and approved at the start of
an iteration?
58. Answer C. PMBOK® Guide p. 26 – Work performance data represents the raw
observations and measurements identified during activities performed to carry
out the project work.
59. Answer D. PMBOK® Guide p. 28 – Tailoring is the process of selecting the
inputs, tools, techniques, outputs, and life cycle phases used to manage a
project.
60. Answer B. PMBOK® Guide p. 30 – A needs assessment often precedes the
business case.

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Scope Management
Overview
Scope management is chapter five in the PMBOK® Guide. Slide 120
For most PMP® exam takers scope is one of the easiest
knowledge areas on the exam. But that does not mean you
can ignore it! Make sure to take some time to study this
section like all the others and watch your test scores.
Remember that you goal is to score 90% or better on all
exams before you take the real test.
Scope management is the process of defining what work is
required and then making sure all that work — and only
that work— is done [PMBOK® Guide p.129].
Remembering a few simple concepts will dramatically
improve your performance on the exam in this area.
 You must always plan your work and
then work your plan. No project is ever
conducted without a plan.
 A work breakdown structure must be
created for all projects.
 You must involve all the project
stakeholders in the gathering of Image 23: The Processes of Scope Mgmt.
requirements and not just the project
sponsor.
 You must obtain approval of the project scope before execution ever begins.

 Do not ever gold plate the project. Complete only the agreed upon work and
nothing else.
 Scope changes are allowed so long as they follow the change management
process and have been agreed to by the sponsor and/or key stakeholders. As
part of following the approved change control process, make sure to analyze
any potential changes for the way they will impact time, cost, resource needs,
risks, etc.
One of the few areas of confusion when discussing scope is the fact that there are
two types of scope involved in the scope management knowledge area. These
are:
 Project Scope — The work that must be performed to deliver a product, Slide 121
service or result with the specified features and functions [PMBOK® Guide
2017 p. 131].
 Product Scope — The features and functions that characterize a product
service or result [PMBOK® Guide 2017 p. 131].

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Notice that product scope is all about the characteristics of the product, service or
result of the project. Project scope, on the other hand, is concerned with the work
that must be completed to deliver that product, service or result. As the project
manager, you are responsible for both. An easy way to make a mistake on the
exam is by not reading the question carefully and neglecting to notice the type of
scope being discussed. Be careful and read each question twice to ensure you do
not make this simple mistake.
Another common exam mistake is to assume that you must determine the
requirements of the project as part of your project management processes. A
requirement is not the same as scope. A requirement is a condition or a capability
that must be met or possessed by a system, product, service or component in order
to satisfy a contract, standard, specification, or other formally imposed document.
Requirements include the quantified, and documented needs, wants, and
expectations of the sponsor, customer and other stakeholders. In short,
Requirements are what the customer needs. Product scope refers to all the
requirements that must be met for the specific result to be created. Project scope
refers to all the work that must be done to deliver those requirements/product
scope.
In the integration management chapter you learned that every one of the knowledge
areas produces some type of management plan. Usually they are simply named
after the knowledge area. That’s the case when dealing with scope. The
management plan is the scope management plan. However, unlike integration
management and the project management plan, the scope management plan does
not have a specific process where the plan is called out as an output. Instead, you
must recognize that the scope management plan is one of the many plans produced
by the develop project management plan process. As with all the management
plans, the scope management plan defines how you will manage that particular area
of the project. The scope management plan answers questions such as the
following:
 How will you determine the product scope for the project? This includes the
Slide 122
specific requirements of the product, service, or result.
 How will you balance the needs of all your stakeholders?

 What tools and techniques will the project team specifically use?

 Are there enterprise environmental factors and organizational process assets

that must be accounted for or used?
 What will the scope change management process be?

 How will you measure scope performance and adjust to variances as needed?

In addition to these questions, the PMBOK® Guide outlines a five step process for
scope management. You must be familiar with this process and keep the steps in
order. The steps are as follows:
 Determine the product, service, or result requirements. Make sure all the Slide 123
requirements tie back to the business need described in the charter.

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 Balance the needs of the various stakeholders to determine the correct

requirements.
®
 Develop a Work Breakdown Structure according to PMI standards that is
focused on being deliverable.
 Verify that the scope that has been specified is being accomplished according to
the plan.
 Measure the project scope performance and adjust it according to the Scope
Change Management Plan.
Because there are two different types of scope, there are also two key measure of it. Slide 124
Completion of the project scope is measured against the project management plan.
This answers the question did the team do the work they said they would complete.
Completion of the product scope is measured against the project requirements.
With the 6th edition of the PMBOK® Guide, PMI® introduces a much stronger focus
on non-linear life cycles. When discussing scope management one significant
change occurs when implementing an adaptive life cycle. The collect
requirements, define scope and create WBS processes get repeated in each
iteration. This is different than a linear methodology where these processes are
done at the beginning of the project and only updated as necessary. In adaptive or
agile life cycles the team also repeats the validate scope and control scope process
with each iteration as the major stakeholders provide continuous feedback to the
team.
5.1 Plan Scope Management
The first process found in the scope management knowledge area is plan scope
management. This was a new knowledge area first
included in the 2013 edition of the PMBOK® Guide. Slide 125
It represents the process of defining how the project
will be defined, validated and controlled. In short, it
creates the roadmap from which scope is managed on
a project. The goal of this process is to create two
key documents:
 The scope management plan — This plan
describes how the project scope is defined,
developed, monitored controlled and verified.
The primary components of the Scope
Management Plan include the following:
 The process for preparing the scope
statement.
 The process used to create the WBS from
the scope statement.

 The process use to maintain and

approve the WBS. Image 24: 5.1 Plan Scope Management

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 The process for formally accepting project deliverables

 The process for requesting and approving scope change
 The requirements management plan — This plan describes how the
requirements are analyzed, documented, and managed. Common components
of the Requirements Management Plan include:
 How requirements activities will be planned, tracked, and reported
 Configuration management activities including the following: initiating
product changes, impact analysis, tracing tracking and reporting
changes and then required authorization levels for changes
 Requirements prioritization process
 Product metrics with use justification
 Traceability matrix

The inputs to the plan scope management process include:

 .1 Project charter — The project charter includes a high level description of
the product, service or the result of the project. The charter is necessary to Slide 126
complete the requirements collection process.
 .2 The project management plan — The various sub-plans which make up the
project management plan are used with other factors to determine how to
manage project scope.
 .3 Enterprise environmental factors — Items such as culture, infrastructure,
personnel administration and marketplace conditions are just examples of
factors to consider here.
 .4 Organizational Process Assets — Any processes, tools, policies, or
templates the organization has should be used to benefit the project.
The tools and techniques used in the Plan Scope Management process include the
following:
 .1 Expert judgment — One of the most common traits of great project
managers is that they listen and trust their subject matter experts.
 .2 Data analysis— In analyzing data for project scope it might be important to
examine alternatives and use other common sense tools.
 .3 Meetings — Once the project manager has a trusted team, they must get
together to develop the scope management plan.
The two outputs for the plan scope management process have previously discussed
and are the scope management plan and the requirements management plan.
5.2 Collect Requirements
The second process found in the scope management knowledge area is the collect
requirements process. Requirements can be thought of as what the stakeholders
need from both the project and the product, service, or result of the project. The Slide 127
key is to collect the requirements that solve the business problem defined in the

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Project charter. Requirements can also include

constraints and assumptions specified by the
stakeholders.
Remember that the high-level product, service, or
result of the project is defined in the charter. So the
collect requirements process is about taking those
high level needs and making them detailed and
specific. This is not about defining the specific
product or service that will meet those needs. There
are five inputs to the collect requirements process.
These inputs include the following:
 .1 Project charter — The project charter Slide 128
includes a high level description of the product,
service or result of the project. The charter is
necessary to complete the requirements collection
process.
 .2 Project management plan — The project
Image 25: 5.2 Collect Requirements
management plan includes many other plans
providing critical information about how the team intends to manage the
project. This is critical to collecting requirements.
 .3 Project documents — There are a lot of documents not included in the
project management plan. To collect requirements you may need to look at all
of them.
 .4 Business documents — This is primarily a signpost for the business case
which describes required, desired and optional criteria that meets the business
needs.
 .5 Agreements — The primary type of agreement is a contract that allows the
team obtain any externally provided deliverables or contractors necessary to
deliver the project. These agreements can contain project and product
requirements.
 .6 Enterprise environmental factors — As always we must take into account
what is going on around the organization. Specifically, the team might need to
consider the organization’s culture, infrastructure, personnel administration,
and marketplace conditions.
 .7 Organizational process assets — Many organizations have processes, tools
and techniques that impact the collection of requirements. Most importantly, it
is critical that the team examine historical information and lessons learned
repository.
Your first large section of tools and techniques comes in the collect requirements
process. To get a handle on these items, focus on using common sense. In the real
world there are a number of ways you could gather your requirements on a project.
In most cases a project manager will not use just one of these techniques, but will

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use several of them to ensure all the requirements are captured. The possible tools
and techniques include the following:
 .1 Expert judgement — Many of the requirements come from your subject
matter experts. It is critical that the project leader listens to them.
®
 .2 Data gathering — The PMBOK Guide suggests a number data gathering
techniques including:
Slide 129
 Brainstorming — Brainstorming is a group participation activity where
members of a group verbally collect information about a topic typically
in a free form fashion. Often, a facilitator acts as a note taker writing
ideas on a white board or poster paper. We will talk repeatedly about
brainstorming.
 Interviews — Interviews represent either a formal or informal process
of obtaining information from stakeholders by asking both prepared and
spontaneous questions of participants, usually in a one-on-one
environment. Interviews are important to project leaders because they
often allow the discovery of key information unavailable through any
other manner.
 Focus groups — Focus groups are small groups of individuals brought
together for the purpose of discussing a specific topic. The focus group
is typically led by a trained facilitator who asks pointed questions to its
members and leads it through a discussion that is either video taped or
watched by others. Focus groups are typically designed to create a
more informal discussion amongst a small group about a topic.
 Questionnaires and surveys — Imagine having an organization with
hundreds or thousands of stakeholders. It would be unreasonable to
expect the team to speak to all of them. Questionnaires and surveys
provide a solution. They represent written sets of questions that can be
compiled and responses quantified for more robust analysis.
 Benchmarking — Benchmarking is tool used to compare best
practices, products or services, and practices from both inside and
outside the organization. It allows the team to compare themselves
against the performance of others.
 Nominal group techniques — This is similar to brainstorming but it
requires the group to vote to establish a prioritized listing of the defined
topic items.
 The Delphi technique — This is a three step survey process that makes
Make sure to
use of surveys and subject matter experts. It has three steps: know the
1. Survey the selected subject matter experts. Delphi
2. Aggregate their responses. Technique
3. Feed the aggregated results back to the subject matter experts for
agreement.

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 .3 Data analysis — In this case, much of the data analysis involves examining
documents. The list of documents includes agreements, business plans,
business processes, marketing literature, policies and procedures and a lot of
others.
 .4 Decision Making — Groups make decisions using a lot of different
techniques. PMI® calls out three specific ways that groups make decisions
including voting, autocratic decision making, multicriteria decision analysis.
 Voting — This is exactly what it sounds like. Decisions are made Slide 130
based upon the opinions of a group. There are a number of ways this
can be done:
 Unanimity — This is where everyone agrees on a course of
action.
 Majority — This is a process where the majority of members in
the group decide direction. Anything over 50% wins.
 Plurality — This is used when a simple majority is not possible.
In these cases, whichever group has the largest number wins—
even though it is not a majority.
 Autocratic decision making— This is a fancy way of dictatorship. In
this method, one person makes the decision for the group.
 Multicriteria decision analysis — Multicriteria decision analysis
represents the process of examining situations where teams are dealing
competing decision criteria. Sometimes referred to as MCDA, it was
made popular by Stanley Zionts in 1979. It establishes a basic
framework for making a decision when the team is looking at important
aspects in conflict with each other. A common example is the
relationship between cost and quality.
 .5 Data representation — Data representation addresses the question of how
does the team display information. Two examples of data representation
include affinity diagrams and mind mapping.
 Affinity Diagrams — Affinity diagrams represent a technique used to
sort through a large number of ideas and place them into groups for
review and analysis based upon their natural relationships. They were
originally created in the 1960s by Jiro Kawakita. Teams use affinity
diagrams when they are dealing with a lot of facts that appear in chaos
or when the team is deal with issues seem too large or complex to grasp.
Affinity diagrams are also a good tool when group consensus is
necessary. Affinity diagrams are also known as affinity charts, K-J
method or thematic analysis.
The process for actually doing affinity diagrams is simple. Typically,
affinity diagrams are used after a brainstorming exercise or after
analyzing verbal. The affinity diagramming process begins with sticky
notes and markers. The team begins by writing all their ideas on

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stickies. The stickies are then spread around a table for everyone to see.
In the second step, the team silently moves the stickies into groups. It is
OK if the items are moved multiple times until everyone agrees with the
groupings. The team then discusses the groupings that may lead to
some other changes, The team finally comes up with titles for the
groups.
 Idea/mind mapping — Mind, or idea mapping is a diagramming Slide 131
technique used to visually organize information, and is considered a
type of spider diagram. There are a number of different ways to build
mind maps. Typically, these visual tools are hierarchical and show the
relationship of a component or idea to the whole. Mind maps were
made popular by Tony Buzan who suggested ten guidelines for creating
them:
1. Start in the center with an image of the topic, using at least 3
colors.
2. Use images, symbols, codes, and dimensions throughout your
mind map.
3. Select key words and print using upper or lower case letters.
4. Each word/image is best alone and sitting on its own line.
5. The lines should be connected, starting from the central image.
The lines become thinner as they radiate out from the center.
6. Make the lines the same length as the word/image they support.
7. Use multiple colors throughout the mind map, for visual
stimulation and also for encoding or grouping.
8. Develop your own personal style of mind mapping.
9. Use emphasis and show associations in your mind map.
10. Keep the mind map clear by using radial hierarchy or outlines to
embrace your branches.
 .6 Interpersonal and team skills — This primarily refers to brainstorming for
Slide 132
which there actually is a defined process. It has four steps:
1. A question or problem is posed to the group and each member silently
generates and writes down their ideas.
2. The moderator writes down the ideas on a flip chart until all the ideas
are recorded.
3. Each recorded idea is discussed until all group members have a clear
understanding.
4. Individual vote privately to prioritize the ideas, using a scale of 1 to 5,
with 1 being the lowest and 5 being the highest. After each vote the
ballots are counted and the team revote until the highest option is
selected.
 Observations/conversation — In this process the project team simply
observes stakeholders doing activities that would involve the product,
service or result of the project in order to better understand the user
community’s needs. The team also needs to have conversations with
the stakeholders.

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 Facilitation — Perhaps no skill is as important to a project manager

than facilitation. It is the ability to get groups of people to have often
difficult conversations. There are a lot of tools a good PM can use
including agile tools such as user stories, use cases, joint application
design/development, or quality function deployment.
 .7 Context Diagrams — Context diagrams are a type of scope model. They
visually depict the product scope of the project by showing how people interact
with a business system. If you are at all familiar with use cases, you will
quickly understand context diagrams. However, it is important that you
recognize that they are NOT the same as they do not show the entire process
with actors. A context diagram can be described as the highest level view of a
system. It show the interactions between the major components of a system
and both its inputs and outputs to and from external systems or actors. A
context diagram is a powerful tool especially early in a project because they
force the team to think about the overall context of the project solution thereby
helping to discover unknown requirements.
True context diagrams are made up of boxes and lines. At the center of the
diagram is a labeled box representing the system. This is often referred to as
the process and is usually shown as a rounded rectangle designed to show the
process at the highest level. It is important to note that this process MUST
react in a preplanned way where data is transformed, stored or distributed.
Around this central box are multiple boxes for each external actor. These are
represented by traditional rectangles. An external actor or entity either triggers
the process or receives the output from the process. Finally, connecting the two
types of boxes are lines that define the relationship. These are thought of as
data flows. The two most common ways of displaying context diagrams are
using the Gane-Sarson or Yourdon-De Marco symbol sets.
It is important to remember that context diagrams are high level tools so they
do not include detailed information about alternatives or anything not part of
the main function. They also never show workflows or actors who initiate data
flows.
 .8 Prototypes — Prototypes are used in many different methodologies. When
prototyping the team develops individual components of functionality (or a
small version of the final product) in order to prove capability or understand
functionality. Storyboarding is a prototyping technique commonly used in agile
development.
The outputs from the collect requirements process include the following:
 .1 Requirements documentation — There can be many different forms of
requirements documentation. PMI® does not specify what form a project
manager must use. Instead, the PMBOK® Guide simply states, “requirements
documentation describes how individual requirements meet the business need
for the project.” It is fully expected that these requirements will start out being
generic and get refined as the project progresses. However, before the project
can be baselined, the requirements must be unambiguous, traceable, complete,
consistent, and acceptable to all key stakeholders.

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 .2 Requirements traceability matrix — The requirements traceability matrix

is a table that lists requirements and their origins and then traces them through
the project lifecycle.
5.3 Define Scope
Once the requirements have been defined, the project is ready to move into the next Slide 133
scope management process, which is the define scope process. This process is all
about taking the detailed requirements defined in the collect requirements process
and developing a detailed description of the product
or service that will meet those needs. If you put the
three big pieces together it makes sense. The charter
defined the business need and requirements at a high
level. The collect requirements process took those
high level ideas and added all the details. The define
scope process then answers the question what
specific product meets those needs.
The inputs to the define scope process include the
following: Slide 134
 .1 Project charter — The charter represents the
foundation of the project so it is a critical input to
these early processes. Hopefully the number of
times you have seen the project charter has
highlighted the absolute importance of this
document. Every project should have a charter.
 .2 Project management plan — The Scope
Management Plan defines the process used to Image 26: 5.3 Define Scope
develop the project scope.
 .3 Project documents — From the large list of potential project documents
PMI® asks that you look at the assumption log, requirements documentation,
risk register.
 .4 Enterprise environmental factors — No matter what you do enterprise
environmental factors are at play.
 .5 Organizational process assets — Any processes, tools, policies, or
templates the organization has should be used to benefit the project.
Once the inputs for the define scope process are obtained, it is time to move on to
the tools and techniques. The tools and techniques for the define scope process
include the following:
 .1 Expert judgment — As with almost every process, expert judgment is a key
tool to be used. Trusting your subject matter experts is important for project
success.
 .2 Data analysis — It is key that the project team and major stakeholders

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clearly understand the desired product. This often requires a careful

examination or analysis of the end product and the examine potential
alternatives.
 .3 Decision making — There are a lot of different ways the team can make
decisions. One of the ways is to use multicriteria decision analysis.
 .4 Interpersonal and team skills — A great leader knows they have to use
interpersonal and team skills.
 .5 Product analysis — To successfully complete the project team must
understand the product or service of the project. Doing product analysis might
use techniques such as systems analysis, systems engineering, value analysis,
and value engineering.
The outputs to the define scope process include the following:
 .1 Project scope statement — The project scope statement describes the
project’s deliverables and the work required to create those deliverables in
detail. This statement is critical. It creates a common reference point for
stakeholders and is often used to manage stakeholder expectations. A scope
statement includes the product scope description, product acceptance criteria,
project deliverables, project exclusions, and project constraints. Many students
confuse a project charter and a project scope statement. Both documents are
important, but they are different. The next page offers a comparison of the two
documents. Make sure you understand the differences.
Slide 135
Project Charter Project Scope Statement
Project scope descrip on (progressively
Project purpose elaborated)
Measurable project objec ves and related success
criteria Project deliverables
High‐level requirements Acceptance criteria
High‐level project descrip on, boundaries, and key deliv‐
erables Project exclusions
Overall project risk
Summary milestone schedule
Preapproved financial resources
Key stakeholder list
Project approval requirements (i.e., what cons tutes
success, who decides the project is successful, who signs
off on the project)
Project exit criteria (i.e., what are the condi ons to be
met in order to close or to cancel the project or phase).
Assigned project manager, responsibility, and authority
level.
Name and authority of the sponsor or other person(s)
authorizing the project charter
Image 27: The Charter vs. Scope Statement

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A project charter initiates the project. It defines the project success, empowers
the project leader, defines any constraints and assumptions and prioritizes the
project. The scope statement gives description of the project scope and names
the project deliverables along with the things the team will not deliver.
 .2 Project document updates — As with most of the 49 defined processes, the
define scope process can cause updates to the documents outside the project
plan. However, it should not cause alterations to the project management plan
itself.
5.4 Create WBS
The work breakdown structure, or WBS is one of the Slide 136
most important and most under utilized documents in
the project management world. Much of the under
utilization stems from a lack of understanding of
exactly what a WBS is and how it should be used. A
WBS is a deliverable-oriented, hierarchical
decomposition of the work to be executed by the
project team. It enables them to accomplish the
project objectives and create the required product,
service, or result. This is a fancy way of saying that
the WBS is a picture that resembles an organization
chart, but for deliverables. Although it has
absolutely nothing to do with resources, it does have
boxes organized into a tree like an organization
chart. Each box is a deliverable. Being deliverable-
focused is a very important aspect of a well formed
WBS. It is not supposed to be a listing of the tasks
or activities that are to be accomplished.
In the real world, project managers work very hard to Image 28: 5.4 Create WBS
avoid creating a WBS based upon project phases.
However, when taking the exam you should remember that such time-based
structures are not technically wrong. If you have spent any time in project
management you already know a number of documents that help you understand
when work is to be done. It wouldn’t make any sense to simply have another time-
based tool!
When preparing for the exam, it is critical that you spend a significant amount of
time studying work breakdown structures. They are very important to PMI®. You
must understand the WBS and how to use it. Let’s begin with a number of key
terms for a WBS:
 Work packages — Each individual box in the WBS structure is a unique Slide 137
deliverable or work package. The two terms are synonymous.
 Decomposition — Decomposition is the process of breaking deliverables down
into smaller and smaller deliverables until they can be easily understood and
managed. It is the process used to create the WBS.

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 Progressive elaboration — Progressive elaboration adds the element of time

to the WBS. It simply means that the WBS is not something that is created at
the beginning of a project and then set aside. The WBS is constantly
maintained and more detail is added as it is discovered.
 Placeholder work packages — In some cases, it is not reasonable to have all
the details when creating the initial WBS. The team knows the name of the
deliverable, but has no idea what it really means. In those cases it makes sense
to place a box with the title of the work package in the WBS and then come
back to it when more information is reasonably available.
 Control account — The control account is a management control point where
scope, budget, actual costs, and schedule are integrated and compared to Earned
Value for performance measurement [PMBOK® Guide 6th ed. p.161]. In
simplest terms, it’s the level of the WBS where you measure.
 Planning package — A planning package is a WBS component below the
control account and above the work package with known work content but
without detailed activities.
 Feature breakdown structure — A diagram very similar to a well formed
WBS, but focused on project features or deliverables without listing tasks.
A well formed WBS is made up of three elements:
 The WBS — The Work Breakdown Structure is the picture of the project that Slide 138
is made up of the individual deliverables and resembles an organization chart.
Images 26 on the following page shows a sample WBS.
 The WBS Dictionary — If the only thing that made up a WBS was the Any time the
WBS is used
structure itself, it would not be very useful because the boxes simply do not so is the
contain much information. That’s where the WBS Dictionary comes in. The WBS
WBS Dictionary is where you find a detailed description of each work package. Dictionary.
 The code of accounts — The code of accounts is a numbering system that
creates a unique ID for each work package. The most common form that the
code of accounts takes is simple numbers that are separated by a period as the
work packages are subdivided into smaller pieces. Image 29 shows a sample
WBS with a code of accounts.
The inputs to the create WBS process include the following:
 .1 Project management plan — The project management plan gives the team Slide 140
a lot of information about the project.
 .2 Project documents — The project scope statement is the primary output of
the last step. It describes the product or service being created in detail. This is
necessary to create the WBS, which is a visual representation of the same thing.
Requirements documentation is also included as an input to the WBS.
 .3 Enterprise environmental factors — Industry specific standards specific to
the nature of the project may be used to determine the enterprise environmental
factors.
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Image 29: A Sample WBS

Slide 139

Image 30: A Sample WBS with the code of accounts

 .4 Organizational process assets — Although enterprise environmental factors

are not listed, you might have organizational process assets such as WBS
templates.
The two tools and techniques used in the create WBS process are old friends. They
are decomposition and expert judgment. Remember, decomposition represents the
process of breaking larger items into smaller more manageable ones.
There are two outputs to this process:

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 .1 Scope baseline — As soon as the WBS and WBS Dictionary are complete
the project has its scope baseline. From this point forward the project will be
reporting on what was originally promised in terms of scope, versus what was
really produced.
 .2 Project documents updates — The information collected in the steps taken
to generate the WBS may necessitate updates to some of the non-plan project
documents.
To understand the process of decomposition that is used to Create the WBS
Process, you must know the four questions that allow the user to determine if they
have broken the structure down far enough. These questions are as follows:
 Can you accurately estimate the resources required to do the work?

 Can you accurately estimate the time it will take those resources to complete
the deliverables?
 If you had to assign the deliverable to someone else are you confident they
would know what to do?
 If you complete the deliverables listed in the WBS — and only those
deliverables — will you successfully complete the project?
5.5 Validate Scope
Once the WBS has been created it is time to validate scope. This process moves us
out of the planning process group and into the monitoring and controlling process Slide 141
group. Validate scope is the process where
the project manager and the team review the
completed deliverables with the sponsor
and key stakeholders in order to ensure they
have been completed satisfactorily.
Validating scope requires holding regular
meetings — that are part of the plan — with
the major stakeholders and sponsor in order
to gain formal acceptance of the Image 31: 5.5 Validate Scope
deliverables. This process is not the same
as control quality. In the control quality process the project manager and team are
concerned with the correctness of the deliverables. In the validate scope process
the only concern is if the deliverable was accepted. But this is not the acceptance
of the final product, service or result of the project. It is only the acceptance of the
particular deliverables. The inputs to the validate scope process include the
following:
 .1 Project management plan — Three specific parts of the project Slide 142
management plan are important here. They include the project scope statement,
the WBS and the WBS dictionary. A good rule of thumb to remember for the
exam is that any time the WBS is used the WBS dictionary is used as well. It
also includes the scope baseline.

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 .2 Project documents — The project documents specific to validating the

scope include lessons learned register, quality reports, requirements
documentation, and the requirements traceability matrix provides information
about the requirements and their origin.
 .3 Verified deliverables — Verified deliverables are complete and have gone
through the quality control process to ensure correctness.
 .4 Work performance data — The work performance data might include
items such as the degree of compliance with requirements, the number of non-
conformities, the severity of non-conformities, etc.
There are only two tools and techniques for the validate scope process: inspection
and group decision-making. Inspection is the process of examining the
deliverables to ensure that they meet the acceptance criteria. Terms such as
reviews, product reviews, audits and walkthroughs are often used as forms of
inspection. Group decision-making techniques are methods by which the team
makes a decision collectively.
There are four outputs to the validate scope process:
 .1 Accepted deliverables — This is the single most important output in this
process. The verify scope process is about reviewing the completed
deliverables and ensuring that the stakeholders approve them. The formal
acknowledgment that the deliverables have been accepted is then forwarded to
the close project or phase process.
 .2 Work performance information —This includes all information about the
project’s progress, such as which items have started or finished or regular
updates on status. These might require sponsor sign-off.
 .3 Change requests — Like many of the processes, when you verify scope it
can generate requests to change something in the project. It is common that the
verify scope process can cause deliverables to be rejected. The change request
can come from those rejections, such as happens with defect repairs.
 .4 Project document updates — The verify scope process can cause many of
the documents outside the project plan to be updated. It is critical to consider
lessons learned register, requirements documentation, and requirements
traceability matrix.
For the exam, be careful to not confuse the validate scope process with the control
quality or the close project or phase processes.
5.6 Control Scope
The final process in the scope management knowledge area is the control scope
process. This is the process where the project manager monitors the status of both Slide 143
the project and the product scope in order to manage changes to the scope baseline.
A big part of this process is ensuring that all the requested changes and the
recommended corrective and preventive actions go through the perform integrated
change control process.

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There are four inputs to the control scope Slide 144

process:
 .1 Project management plan — The
control scope process is all about
managing scope change. Therefore you
have to be able to follow some process
to measure impacts of the changes. The
project management plan provides those
processes. It specifically calls for the Image 32: 5.6 Control Scope
scope management plan, requirements management plan, the change
management plan, configuration management plan, the scope baseline,
performance measurement baseline.
 .2 Project documents — In case you didn’t have enough information, you also
look at the lessons learned register, requirements documentation, and the
requirements traceability matrix that tells everyone the origins of all the
requirements.
 .3 Work performance data — As part of the work performance data the team
must also look at the number of change requests received, the number of
requests accepted, and the number of deliverables verified, validated, and
completed.
 .4 Organizational process assets — In the Control Scope Process, the
organizational process assets include things like formal and informal policies,
procedures and guidelines that relate to scope control as well as any monitoring
and controlling processes that exist.
Within the control scope process there is only one tool and technique. That tool
and technique is data analysis. Data analysis includes both variance analysis and
trend analysis. Variance analysis is the process of comparing actual results with the
expected outcomes, and measuring the differences. As part of this process it is
critical that the project manager determines the cause of the variances and the
degree of variance from the baseline. Trend analysis is a process of determining
where the variable is moving over time. It is used as a forecasting tool.
The data analysis done within the control scope process produces five outputs:
 .1 Work performance information — The work performance information
include both planned vs. actual technical performance and other scope
performance measurements and information.
 .2 Change requests — As the scope performance is analyzed and variances to
the baseline are discovered, change requests (such as preventive or corrective
action) may be required.
 .3 Project management plan updates — Scope control can often cause
required updates to the scope baseline—or to any of the other baselines—as
changes are affected.

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 .4 Project documents updates — As baselines change other documents can

require change as well.
Scope Management Summary
The key to the scope control process is remembering that it is a very proactive
Slide 145
process. Sometimes this means determining the root cause of change in order to
prevent future issues. Remember that the project manager does not function simply
as an intermediary who processes change requests. Your job is to control the
project so that you can meet all the baselines. To succeed, you must control the
project scope!
To be successful on the PMP® exam you must remember the following:
®
 The six processes defined in the PMBOK Guide — and in which process
group they each reside.
 The difference between project and product scope.

 That both project and product scope are revised throughout project.

 The WBS is critical. You must understand it completely. You must understand
why it is important and that it is used in many other processes. Also, remember
that the WBS is deliverable based.

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Exercise 6 — Scope Management Exercise 6 —

Scope
1. In which of the following processes would you expect to create a requirements Management
documentation?
A. Define scope
B. Plan scope management
C. Manage scope
D. Collect requirements
2. In which of the following processes would you expect to develop the Scope
Statement?
A. Define scope
B. Collect requirements
C. Verify scope
D. Create WBS
3. In which of the following processes would you expect to subdivide the major
project deliverables and project work into smaller components?
A. Define scope
B. Collect requirements
C. Create WBS
D. Validate scope
4. In which of the following processes would you expect to formalize the
acceptance of the completed project deliverables?
A. Scope sign-off
B. Validate scope
C. Scope control
D. Create WBS
5. In which of the following project processes would you expect to manage
changes to the project’s scope?
A. Control scope
B. Scope change control
C. Collect requirements
D. Validate scope
6. Which of the following defines the features and functions that characterize a
product, service or result?
A. Project scope
B. Project requirements
C. Product scope
D. Scope definition

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7. Which of the following defines the work that needs to be accomplished to

deliver a product, service or result?
A. Project scope
B. Product scope
C. Project requirements
D. Scope definition
8. When is the scope management plan created?
A. During the collection of requirements
B. During the definition of project scope
C. In the verification of scope
D. During the plan scope management process
9. Completion of the project scope is measured against all of the following except:
A. The product requirements
B. The project management plan
C. The scope statement
D. The WBS and the WBS dictionary
10. All of the following are inputs to the define scope process except:
A. Project charter
B. WBS dictionary
C. Project documents
D. Organizational process assets
11. All of the following are tools and techniques used in the define scope process
except:
A. Expert judgment
B. Facilitation
C. Data analysis
D. Decomposition
12. All of the following are inputs to the define scope process except:
A. Project scope statement
B. Project charter
C. Requirements documentation
D. Organizational process assets
13. All of the following are tools and techniques for the define scope process
except:
A. Alternatives analysis
B. Data gathering
C. Multicriteria decision analysis
D. Product analysis

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14. All of the following statements concerning the project scope management plan
are true except:
A. The project scope management plan defines the project scope.
B. Process that enables the creation of the WBS from the detailed project
scope statement.
C. Process that establishes how the scope baseline will be approved and
maintained.
D. Process that specifies how formal acceptance of the completed project
deliverables will be obtained.
15. The project scope statement includes all of the following except:
A. Acceptance criteria
B. Requirements
C. Deliverables
D. Project exclusions
16. All of the following statements are true about decomposition except:
A. Decomposition rarely is done too much or in too much detail.
B. Decomposition is the subdividing of project deliverables into smaller,
more manageable components.
C. Decomposition may not be possible for a deliverable or subproject that
is to be done far in the future.
D. Different deliverables can have different levels of decomposition.
17. All of the following are activities involved in the process of decomposition
except:
A. Identifying the deliverables and related work.
B. Ensuring that each work package has the appropriate activities assigned
to it.
C. Developing and assigning identification codes to WBS components.
D. Structuring and organizing the WBS.
18. You walk into your office on Monday morning to find an approved change
request sitting on your desk that impacts the project scope. This is best defined
as which of the following:
A. Any modification to the agreed upon project scope baseline including
the scope statement, the WBS or the WBS dictionary
B. Any change to a technical requirement
C. Any change to the project management processes
D. Any change to project staffing
19. The project scope change control system includes all of the following except:
A. Necessary documentation
B. An assessment process
C. Required approval levels
D. A tracking and monitoring system

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20. Which of the following is NOT an example of a constraint?

A. Your project sponsor setting budget limits
B. Union rules
C. Specific regulations governing project activities
D. Earned value performance measures
21. A code of accounts allows project staff to do each of the following except:
A. Link work packages with general ledger codes
B. Track work package costs
C. Estimate the costs of WBS elements
D. Identify the level at which the work package is found
22. Creating the single picture of the project found in the WBS is a powerful tool
for what kind of communication?
A. Stakeholder
B. Informal written
C. Formal written
D. Customer
23. At your normal end of week status meeting, one of your resources states that
they are not sure how the parts of the project fit together. Which of the
following documents would best be explain this?
A. Activity list
B. WBS dictionary
C. The project scope management plan
D. The project assignment matrix
24. You have been tasked as the project manager for a new, very high profile
project within your organization. Your project has gotten to the develop project
management plan process and you are struggling to make the plan realistic and
not just reflect the desires of certain players in the organization. Which of the
following is most likely to be effective at achieving this objective?
A. Create the plan yourself with input from the project sponsor
B. Ask the project sponsor to create the plan with your input
C. Create the plan yourself with input from the project team
D. Create the plan yourself with input from key stakeholders
25. During your weekly status meeting, one of your technical experts suggest
adding additional functionality to the project that they believe would greatly
benefit the customer. You promptly document the input and take the suggestion
for approval. This is an example of what?
A. Quality control
B. Scope management
C. Decomposition
D. Progressive elaboration

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26. When should the validate scope process be done on a project?

A. Only during the scope validation process
B. At the end of the project
C. At the end of each phase of the project
D. At the beginning of the project
27. You are the project manager on a major project within your organization. You
think you have done pretty well. The project had a budget of several million
dollars, a CPI of .94 and SPI of .92. The major stakeholders have signed off on
the scope validation process at the end of each phase. All issues have been
resolved and a majority of your resources have already been released to other
projects. Then, one of your primary stakeholders approaches you and wants to
make a dramatic change to the project scope. What should you do?
A. Meet with your remaining team to see if the change is possible.
B. Inform your sponsor.
C. Ask the stakeholder to describe the change.
D. Tell the stakeholder that they need to use the change management
process.
28. You are a project manager working for a consulting agency. During a meeting
with your customer they inform you that they do not want to pay for the time it
will take for you to create a WBS. What is the best thing you can tell the
customer?
A. Tell them you can agree to not charge for the WBS creation time
B. Tell them the WBS is very important as it helps prevent work from
slipping through the cracks
C. Tell them it is required by their contract
D. Tell them you will cancel the contract without it
29. You are a senior program manager within your organization. One of your
project managers approaches you and wants to talk about the WBS that you
asked them to create. They ask why is it so important that they create a WBS.
Your best response is which of the following?
A. It creates a complete picture of the project
B. It provides a list of project risks
C. It produces a list of project activities
D. It helps ensure team commitment
30. As a project manager you are asked to provide some form of documentation to
make sure your team clearly knows what the work is in each work package.
Which of the following do you provide?
A. The product scope statement
B. The preliminary scope statement
C. The WBS dictionary
D. The scope management plan

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31. You have just been given the assignment to be the project manager on a very
high profile, high value project within your organization. As you leave your
boss’s office, they hand you the completed Project Charter and Scope
Statement. The first thing you should do is what?
A. Begin work on the project management plan
B. Ensure the key stakeholders agree with the project charter
C. Create a WBS
D. Define the project scope statement
32. You are the project manager for a very important public works project in your
community. The project is nearing completion and will enter the final phase in
the next week. What should you be focused on most before moving on to the
final phase?
A. Project safety
B. Validating the scope
C. Losing project resource to other projects
D. Variance analysis
33. You are the project manager for a software development project that is using
the SDLC and are about to begin integration testing. With what should you be
primarily concerned?
A. Project testing procedures
B. Project resources multi-tasking
C. Validating the scope
D. Variance analysis
34. You are the project manager for a project that is entering the Closing Process
Group. As you attempt to close the project your sponsor informs you that they
have been approached by several stakeholders who are not happy with the
project deliverables. Which of the following processes could have prevented
this problem?
A. Validating scope
B. Define scope
C. Scope monitoring
D. Integrated change control
35. All of the following are part of the scope baseline except:
A. Project scope management plan
B. The WBS
C. The project scope statement
D. The WBS dictionary

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36. You are the project coordinator for a small project within your organization.
One of the primary stakeholders approaches you with a properly completed
scope change request form. What should you do next?
A. Ask the stakeholder to justify the change request
B. Complete integrated change control
C. Determine how the request was missed during the initial scope
definition
D. None of the above
37. During which part of the project management process is the project scope
statement created?
A. Prior to beginning the project
B. Initiating
C. Planning
D. Monitoring and controlling
38. Halfway through a project that has a SPI of 0.89 and an CPI of 0.93 the project
manager is approached by a senior stakeholder requesting a minor addition to
scope. The project sponsor already rejected the same request prior to the
approval of the performance management baseline. What is the best thing for
the project manager to do?
A. Tell the stakeholder the scope cannot be added
B. Determine the root cause of the request
C. Evaluate the impact of adding the scope
D. Let the sponsor know of the stakeholders’ request
39. When should the Validating Scope Process be done?
A. At the beginning of the project
B. At the end of the project
C. Throughout the project
D. At the end of each project phase
40. You have just started a job as a project manager for a large manufacturing
company. On your first day you are given the completed and signed charter for
a new project. What is the first thing you should do?
A. Begin developing the project management plan
B. Create the project scope statement
C. Begin creating the WBS
D. Confirm all stakeholders had input into the scope

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41. You are the project manager for a multi-year project and are approximately
80% through the project. You are on schedule and budget, but your sponsor is
not happy with the deliverables produced. Which of the following processes
could have best prevented this problem?
A. Define scope
B. Control scope
C. Close project or phase
D. Monitor and control risks
42. You are leading a large multinational manufacturing project. During the
process of collecting the percent complete of project work for your monthly
status reports, one of your resources asks, “percent complete of what?” You
have had issues with this resource on other projects in the past. Instead of
reporting the resource to his boss, you attempt to work through the issue with
him. Which of the following is most likely the real issue?
A. You do not have an issue with the resource’s boss
B. You should have taken the issue to the resource’s manager some time
ago
C. The project lacks an adequate rewards system
D. You failed to assign work packages
43. You are currently leading a project which has an SPI of 1.06 and a ETC of
$276,500. The BCR of the project is 1.45 and you are more than 70% through
the project. Requirements have consistently been changing over the last several
weeks no matter what you have tried. Which of the following are you most
likely to face in the future?
A. Not being able to measure completion of the product of the project
B. Needing to make sure the customer approves project scope
C. Needing to add resources to complete the project
D. Needing to cut costs to successfully complete the project

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Exercise 6 — Scope Management Answers

1. Answer D. PMBOK® Guide p. 147 – Collect requirements, like all the initial
processes for the 10 PMBOK® Guide knowledge areas, is where you define
how you will be managing your efforts. It is where the plan or roadmap is
created.
2. Answer A. PMBOK® Guide p. 154 – Define scope is the process where you
develop a detailed project scope statement that will be used as a basis for future
project decisions.
3. Answer C. PMBOK® Guide p. 156 – In the create WBS process you break
down the major deliverables into smaller, more manageable components. This
process is called decomposition and uses a process called progressive
elaboration (getting more detail over time).
4. Answer B. PMBOK® Guide p. 163-164 – Validate scope is the process where
the acceptance of the completed project deliverables is formalized. This is
where you obtain approval from your major stakeholders that confirms that you
have correctly delivered the right work packages.
5. Answer A. PMBOK® Guide p. 167-168 – Control scope is the process used to
control changes to the project’s scope.
6. Answer C. PMBOK® Guide p. 131 – Product scope is one of two types of
scope with which arise in projects. Product scope deals with the features and
functions that characterize a product, service or result.
7. Answer A. PMBOK® Guide p. 131 – Project scope is one of the two types of
scope with which arise in projects. Project scope deals with the work that
needs to be accomplished to deliver the product or service of the project.
8. Answer D. PMBOK® Guide p. 134 – The scope management plan is created
during the plan scope management process.
9. Answer A. PMBOK® Guide p. 163-165 – Completion of the project scope is
measured against the project management plan, the project scope statement, the
WBS and the WBS dictionary. The product scope, on the other hand, is
measured against the product requirements.
10. Answer B. PMBOK® Guide p. 150 – The inputs for the define scope process
includes the project charter, the project management plan, project documents,
enterprise environmental factors, and organizational process assets.
11. Answer D. PMBOK® Guide p. 154-156 – The tools and techniques used in the
define scope process include expert judgment, data analysis, decision making,
interpersonal and team skills, and product analysis.
12. Answer A. PMBOK® Guide p. 152 – The inputs to the define scope process
include project charter, project management plan (includes scope management
plan), project documents (assumption log, requirements documentation, risk
register), enterprise environmental factors, and organizational process assets.

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13. Answer B. PMBOK® Guide p. 150 – The tools and techniques used in the
define scope process includes expert judgment, data analysis (alternatives
analysis) decision making (multicriteria decision making), interpersonal and
team skills and product analysis.
14. Answer A. PMBOK® Guide p. 137 – The scope management plan may be
formal or informal. The project scope statement defines the project scope.
15. Answer B. PMBOK® Guide p. 154 – The project scope statement describes
the project’s deliverables and the work required to complete those deliverables.
It includes, either directly or by reference to other documents: the project
objectives, the product scope description, the project boundaries, the project
deliverables, the product acceptance criteria, the project constraints, the project
assumptions, the initial project organization, any initially defined risks, any
schedule milestones, any funding limitations, a cost estimate, the project
configuration management requirements, the project specifications, and any
approval requirements.
16. Answer A. PMBOK® Guide p.158 – In the decomposition process, beware of
the desire to break down the deliverables until they are too small or the team
spends too much time on the process. This requires the project manager to
maintain a careful balance between too little and too much WBS detail.
17. Answer B. PMBOK® Guide p. 158-161 – Decomposition of the total project
work generally involves the following activities: identifying the deliverables
and related work, structuring and organizing the WBS, decomposing the upper
WBS levels into lower level detailed components. Developing and assigning
identification codes to the WBS components, and verifying that the degree of
decomposition of the work is necessary and sufficient.
18. Answer A. PMBOK® Guide – When dealing with project scope, an approved
change request is any change or modification to the agreed upon project scope
that includes the project scope baseline, the project scope statement, the WBS
or the WBS Dictionary.
19. Answer B. PMBOK® Guide p. 137 – A project scope change control system—
as documented in the project scope management plan—defines the procedures
by which the project scope and the product scope can be changed. It includes
the documentation, tracking systems, and approval levels necessary for
authorizing changes.
20. Answer D. PMBOK® Guide – Constraints are things that specifically limit
your options. They are usually outside the project team’s control, and can
dictate specific actions that must be performed. Additionally, earned value isn’t
a constraint but a performance measurement technique.

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21. Answer C. PMBOK® Guide p. 158-161 – The code of accounts is the formal
name for the numbering system found in the WBS. It serves two primary
functions: First, it allows the project manager to link the work packages to
specific accounting codes used for tracking project costs, thereby enabling
work package costing. Second, it allows the project manager to identify the
level at which the work package is found.
22. Answer A. PMBOK® Guide p. 156-157 – The WBS is one of the most
powerful communication tools available to the project manager. It should be
used with every stakeholder to envision what the project is all about.
23. Answer B. PMBOK® Guide p. 160-161 – The detailed content of the
components contained in a WBS, including work packages, their complete
descriptions and control accounts is called the WBS dictionary. It is the best
tool for seeing how the project fits together.
24. Answer C. This is a complicated way of asking who creates the Project
Management Plan. The answer is always the project manager with input from
the project team. Input from the project team is necessary to ensure their
commitment to the objectives.
25. Answer B. PMBOK® Guide p. 129 – Project scope management is primarily
concerned with defining and controlling what is and is not included in the
project. You might debate whether or not the project manager was doing the
right thing, but that is not what this question asked. This is an example of
scope management.
26. Answer C. PMBOK® Guide p. 129 – Validate scope is the process of
obtaining the stakeholders’ formal acceptance of the completed project scope
and associated deliverables, e.g. making sure all deliverables have been
completed satisfactorily. This should be done at the end of each phase of the
project.
27. Answer C. This is an example of a PMIism. According to PMI®, your first
responsibility is to listen to the stakeholder without committing to anything
before you choose a course of action. Only when you understand the desired
change can you select the correct path.
28. Answer B. PMBOK® Guide p. 156-162 – This is another example of a
PMIism. In this case it is important to remember that PMI views the WBS as
very important to the project’s success because it helps identify all the
deliverables of the project. Therefore we always do them. Furthermore, you
do not have enough information in the question to accept the other answers.
29. Answer D. PMBOK® Guide p. 156-162 – For many students this is a tough
question because several of the answers are in fact true. But remember that the
question was asking for the best response. D is correct because the WBS helps
ensure team commitment.

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30. Answer C. PMBOK® Guide p. 156-162 – The WBS dictionary provides the
detailed description of each of the project work packages and is therefore the
best thing to provide in this situation.
31. Answer A. PMBOK® Guide p. 82-83 – This is the kind of question where you
must simply remember the order of the steps to get the proper answer. After the
Charter and Scope Statement have been created your next step is to develop the
Project Management Plan.
32. Answer B. PMBOK® Guide p. 163-164 – Validating the scope is done at the
end of each project phase to ensure that the project deliverables meet with the
customers’ satisfaction. It is done at the end of each phase before going to the
next.
33. Answer C. PMBOK® Guide p. 163-164 – Validating the scope is done at the
end of each project phase to ensure the project deliverables meet with the
customers’ satisfaction. It is done at the end of each phase before going to the
next.
34. Answer B. PMBOK® Guide p. 150-152 – Three of the answers to this question
are easy to discount. Scope monitoring, verification and integrated change
control are all part of the monitoring and controlling process group and
therefore are only helpful if the question deals with fixing the problem. Scope
planning is part of the planning process group and is the only one capable of
preventing the problem.
35. Answer A. PMBOK® Guide p. 150-152 – The project scope management plan
is the document that defines how you will manage project scope. The Scope
Baseline is an initial snapshot of what is in scope at a specific moment in time.
36. Answer B. Although several of these answers are good, this is an example of
the need to look for the best answer. In this case the best answer would be to
complete integrated change control. This is the step where the scope change is
evaluated against the impacts on time, cost and other project variables.
37. Answer C. PMBOK® Guide p. 150-152 – The scope statement is the primary
output from the define scope process which is part of the planning process
group.
38. Answer B. You might be tempted to blindly follow your process and determine
the impacts of the choice. Or you might want to just say no. But the question
asked what was the best choice. In this situation the best thing to do is figure
out why the stakeholder keeps asking for something the sponsor has already
rejected.
39. Answer D. PMBOK® Guide p. 163-166 – On any project the scope should be
validated at the end of each phase to ensure that you are still attaining the
desired results.

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40. Answer D. PMBOK® Guide p. 131-132 – You have to be careful with this
question. It is easy to memorize the PMI® process but forget the basics. A
basic PMIism is that most projects have scope problems because of a failure to
engage stakeholders early or often enough.
41. Answer A. PMBOK® Guide p. 150-155 – You have to be careful with this
question. The question asks which process could have prevented the problem.
Two of the answers are from the controlling process group which means they
could have helped manage the problem but not prevent it. One answer is in the
closing process group and therefore would not add much value. Only the
define scope process offers a change to prevent the problem.
42. Answer D. PMBOK® Guide p. 156-161 – A good project manager always
manages deliverables and not tasks. One of the main reasons for this statement
is that it is almost impossible to get a quantitative evaluation of status on a task.
43. Answer A. PMBOK® Guide p. 138-149 – This question has lots of
information, most of which doesn’t matter. The core issue is that requirements
are necessary to measure the completion of the project. Without the
requirements, measurement is impossible. Remember, good project managers
measure deliverables.

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Schedule Management
Overview
For many PMP® candidates, their past experience with project management has Project
largely involved developing a schedule using tools such as Excel® or Project® by Management
Microsoft. Many of these candidates have never learned the tools and is NOT a
techniques necessary to manage a schedule without such tools. While software software tool!
does make the job easier, not having the skills necessary to manage time without
the technology is dangerous. Real project management is a very different animal
from what is provided in any software application. For the exam do not assume
they are the same thing. The schedule management knowledge area is where
PMI® aggregates the information about managing a schedule. If you have
always used a software tool to manage your Planning Process Group
schedules it could be a very difficult section Slide 147
for you. The best advice is to take your time
and learn all the models, math and processes
described here. Not only will they help you
on the test, but they will also make a
significant difference in the real world!
PMI® considers the schedule management
knowledge area to include the processes
required to manage the timely completion of
the project. The knowledge area is broken
into seven individual processes which include
the following:
 6.1 Plan schedule management
Monitoring & Controlling Process Group
 6.2 Define activities

 6.3 Sequence activities

 6.4 Estimate activity durations

 6.5 Develop schedule

 6.6 Control schedule

Image 33: The Time Management Processes
6.1 Plan Schedule Management
Slide 148
Like the scope management knowledge area, the schedule management
knowledge Area uses the initial plan process to develop the rules used to manage
the knowledge area. These rules are referred to as the schedule management
plan. The schedule management plan answers several questions including the
following:
 How will the schedule be created?

 How will schedule changes be evaluated and implemented?

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 How will the schedule be controlled and variances managed?

Be careful here because many PMP® candidates do not do this level of schedule
management on their real projects for a variety of reasons. When preparing for
the exam it is important to remember that you are managing a relatively large
project that requires more documentation and planning than you might be used
to. The schedule management plan includes a number of components:
 The scheduling methodology and any scheduling tools such as software to be
used.
 The schedule baseline against which all progress is measured.
 A listing of the key performance indicators and metrics to be used on the
project to identify variances and how often those metrics are produced.
 Variance thresholds requiring action.
 Rules for how the schedule variances will be managed.
 A defined schedule change control process with all its procedures.

The inputs to the plan schedule management process include the following: Slide 149
 .1 Project charter — Used to provide the limits of authority, business need,
justification, constraints and assumptions.
 .2 Project management plan — Specifically the scope baseline and other
information such as cost, risk and communication information.
 .3 Enterprise environmental factors — Items here might include the
organizational culture and structure, the resource availability and skills and
commercial information.
 .4 Organizational process assets — This is an old favorite that you should
just assume.
The three tools and techniques used in the plan schedule management process
include the following:
 .1 Expert judgment — This the single most powerful tool that project
managers have at their disposal.
 .2 Data analysis — This can involve selecting various scheduling
methodologies, estimating approaches, formats or may detail ways to fast
track or crash the project.
 .3 Meetings — The team may hold meetings to develop the schedule
management plan.
There is only the one output for the plan schedule management process and it is
the schedule management plan.

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6.2 Define Activities

The first process found in the schedule management knowledge area is the
define activities process. This process is a continuation of the create WBS
process from the scope management Planning Process Group Slide 150
knowledge area. It is the process of
identifying the specific activities that need to
be performed in order to produce the project
deliverables defined in the WBS. This
process is done at the lowest level of the
WBS, referred to as the “terminating nodes”.
The term terminating node simply means that
the work package has nothing broken down
further underneath it. In the real world, it’s a Estimates,
common practice for project managers to budgets,
baselines,
focus on the items that contain real value— and schedules are
the deliverables—but for the PMP® exam it is all built at the
important to remember that estimates, activity level for
schedules, and baselines can only be created accuracy on the
once the activities are defined underneath the Image 34: 6.2 Define Activities test.
deliverables. This also means you do NOT go straight to defining activities.
The process starts with establishing the business requirements and success
criteria, then moves to defining the deliverables that meet those requirements,
and ends with identifying the tasks that produce the deliverables. The problem
with this seemingly simple order is that you never have complete information.
The only time any project has all the information is when the project is complete.
Far too many projects fail because the team attempts to have all the requirements
defined at the beginning and then struggles with vast amounts of scope change in
frustration. PMI® focuses on the use of progressive elaboration to ensure project
success.
Progressive elaboration is a process whereby the team continuously iterates and
details the project requirements, features or other characteristics as more
information becomes available. It applies to both the scope and the estimates,
and is based on the assumption that information is imperfect. A common form of
progressive elaboration is the rolling wave plan.
Rolling wave planning requires the team to plan and re-plan the project. Work
to be done in the near term is planned in great detail while work calendared for
the future is only planned at a high level. As the project progresses, the risks,
assumptions, and milestones originally identified become more defined and
reliable therefore more detailed plans can, and are produced. This approach is
very different from a linear methodology such as waterfall where all the
requirements are collected and planned in detail at the very beginning. This is an
approach that iteratively plans for a project as it unfolds, similar to the
techniques used in other forms of software development. The key is to
remember that PMI® says you must plan but they do not say how to plan. Image
35 on the next page shows a simple timeline for a project using rolling wave
Planning. Notice that the example shows a project that uses a linear process.

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Slide 151

Image 35: A Rolling Wave Plan

Even still, the team must work towards complete information which only occurs
at the very end when all the lines come together in the lower right-hand corner.
Both progressive elaboration and rolling wave planning are key concepts for the
exam.
There are three inputs to the define activities process. As you examine the list of
inputs, it is important that you notice the WBS and WBS dictionary are not
among them even though the defined activities are an extension of the
deliverables defined in the WBS. This is because the project management Plan
is inclusive of the WBS and WBS dictionary. If you are unsure of this point,
look back to the scope management knowledge area, process 5.4 create WBS
and examine the outputs and the explanation. The inputs to the define activities
process are as follows:
 .1 Project management plan —The project management plan is the master
Slide 152
planning document for every project so it is naturally the starting point for
most processes. In defining activities, the project management plan is
bringing the schedule management plan and the scope baseline to the party.
 .2 Enterprise environmental factors — There are many enterprise
environmental factors that can impact the process of defining activities, but
the most important is the project management Information system.
 .3 Organizational process assets — Like almost all the processes, the
define activities process may have organizational process assets which must
be addressed. It is key to remember a number of things such as existing
policies, procedures, guidelines and methodologies used in scheduling and
any lessons learned from previous projects regarding scheduling.
The define activities process has four tools and techniques used to produce its
outputs. These tools and techniques include the following:

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 .1 Expert judgment — Expert judgment allows the team to examine the

defined work packages and break them into the requisite tasks necessary for
their creation. Every project needs subject matter experts to ensure the right
tasks or activities get defined and completed.
 .2 Decomposition — Decomposition is the process of breaking deliverables
in to smaller and smaller components until they can be understood and
managed. It is the process used to create the WBS as well.
 .3 Rolling wave planning — The progressive elaboration technique of
rolling wave planning was defined previously. It is important to note that
rolling wave planning is an important tool regardless of the methodology
being used.
Once the tools and techniques are ready to be used, it’s time to produce the five
outputs of the define activities process. These outputs are:
 .1 Activity list — The activity list is simply a comprehensive list of all the
activities that must be scheduled and completed to successfully finish the
project. The activity list must also contain a unique identifier for the activity
and a scope of the work description (understand this to be the WBS
dictionary information) in sufficient detail so that the assigned resource
knows what they are supposed to do.
 .2 Activity attributes — Activity attributes have a similar relationship with
the Activities list as the WBS dictionary has to the WBS. Activity attributes
provide the details about the activities defined in the activity list. Details
such as predecessor and successor relationships, leads and lags, resource
requirements, imposed dates, and constraints and assumptions are just some
of the possible details found here.
 .3 Milestone list — A milestone is a significant point or event in a project. A
milestone list is the list of all the milestones for that project with information
about each milestone. Information about milestones can include whether or
not they are contractually required, target dates, and/or if they are optional.
 .4 Change requests — As the team goes through the process of defining
project activities they often discover items that were missed in previous steps
of the process. Because the stakeholders have theoretically already agreed to
what features or requirements are necessary to meet the project success
criteria, it is necessary to follow the defined change management process.
 .5 Project management plan updates — Just as defining project activities
might generate changes to the project requirements, they also may generate
changes to any other aspect of the project. This means the team may need to
update their project management plan to ensure it reflects those changes.
The important thing to remember is that regardless of project methodology
being used, a lot of the planning activities are iterative. As the team gains
new information, they have to be able to incorporate it into the project. It is
this ability to adapt that helps to ensure success.

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6.3 Sequence Activities Planning Process Group Slide 153

The third process in the schedule management

knowledge area is the sequence activities
process. This is a logical continuation of the
define activities process. In the define
activities process the project manager and
team create a list of the activities that are
required to successfully complete the project.
The next step is to take that list and organize
it graphically based on the order in which
work must be completed. The activity
attributes are key because they display the
relationships between activities (showing
predecessor and successor relationships) and Image 36: 6.3 Sequence Activities
also reveal any required lead and lag time.
The major output of the sequence activities process in something called a A network
diagram has
network diagram. A network diagram is a graphical representation of the nothing to
project tasks, activities and/or deliverables that displays the order of the events. do with PERT!
A network diagram does not include the duration estimates for each activity
because those have yet to be defined. In some cases, network diagrams have
been called PERT diagrams. They are not the same thing and so do not confuse
the two.
The science surrounding these diagrams originated in the late 1950s and 1960s
and was largely the work of four organizations: the U.S. Navy, the U.S. Air
Force, Dow Chemical, and DuPont. These organizations created much of what
we consider the science of project management because they were leading
projects with tens of thousands of resources—some of the largest projects ever
completed. In this era there were no computers with fancy scheduling software
or even white boards so most schedules were built on large sheets of newsprint
taped to conference room walls. Out of these efforts the science of arrow
diagramming arose. People were quickly broken into two camps—activity-on-
arrow (AOA) and activity-on-node (AON)—depending on whether or not they
believed the activities should be placed on the circles or on the arrows in the
diagrams. Over the last 50 years most of this debate has been settled and the
activity-on-node camp won. However, their victory did not come until a major
change was made to the technique.
Precedence Diagramming
The big change that revolutionized sequence diagrams was the move from using
circles to using rectangles represent the nodes, or work. Rectangles are Make sure
necessary because circles only allow one type of relationship between the you know
precedence
various tasks, activities or deliverable, a finish-to-finish relationship. In the real diagramming well
world there are several different types of relationships and project managers for the exam.
needed a way to represent that fact.

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The use of rectangles in diagramming created the graphic technique that almost
every scheduling software application uses today, called precedence
diagramming. You must be capable of using this technique for the PMP® exam.
Precedence diagrams have four types of relationships. Notice that in each of
these relationships the left side of each rectangle always represents the start of
the task, activity or deliverable and the right side of the rectangle always
represents the finish of the task, Slide 155
activity, or deliverable.
The first of the four possible
relationships is a finish-to-start
relationship. This relationship
represents tasks, activities or
deliverables that must be
completely finished before the
next one can begin. In this
relationship the arrow comes out
of the right side of the first task,
activity or deliverable and into the
Image 37: A Finish-to-Start relationship
left side of the second task, activity or
deliverable. This is the most common
type of relationship. Image 37 shows
a finish-to-start relationship.
The second type of relationship is a
start-to-start relationship. In a start-
to-start relationship the second task,
activity or deliverable can begin
anytime after the first task, activity or
deliverable has begun. Image 38
shows a start-to-start relationship.
Notice that the arrow comes out of
Image 38: A Start-to-Start relationship the left side of the first task, activity

or deliverable into the left side of the

second task, activity or deliverable.
The third type of relationship is a
finish-to-finish relationship. Image
39 shows a finish-to-finish
relationship. In a finish-to-finish
relationship the second task may
finish any time after the first task,
activity, or deliverable has finished.
Notice how the arrow in Image 39
comes out of the right side of the first
task, activity or deliverable into the
Image 39: A Finish-to-Finish relationship

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right side of the second task, activity

or deliverable. The impact of both
the start-to-start and finish-to-finish
relationships on a schedule versus
finish-to-start relationships is that
the schedule becomes compressed.
The fourth and final relationship
type in precedence diagramming is a
start-to-finish relationship. The
start-to-finish task type is almost
never used in the real world. This is
because the start-to-finish
relationship means the first task, Image 40: A Start-to-Finish relationship
activity, or deliverable must start
before the second task, activity, or deliverable finishes. Stop and think about
that for a moment. It is completely backwards from what is expected. In fact, in
most cases if this relationship is seen it means the tasks, activities or deliverables
are in the incorrect order. Image 40 shows a start-to-finish relationship.
If you put these four relationships together a Network or Precedence Diagram is
produced as shown in Image 41. In the exam, you will almost exclusively see
finish-to-start relationships. But the other relationships may show up. To ensure
that you understand precedence diagramming, complete Exercise 7 which begins
on the next page.

Image 41: A Network or Precedence Diagram

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Exercise 7 — Precedence Diagramming Exercise 7 —

Precedence
1. Create the precedence diagram based on the following table. Diagramming

2. Create the precedence diagram based on the following table.

3. Create the precedence diagram based on the following table.

4. Create the precedence diagram based on the following table.

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6. Create the precedence diagram based on the following table.

7. Create the precedence diagram based on the following table.

8. Create the precedence diagram based on the following table.

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9. Create the precedence diagram based on the following table.

10. Create the precedence diagram based on the following table.

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Precedence Diagramming Answers

1.

2.

3.

4.

5.

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6.

7.

8.

9.

10.

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Precedence diagramming is not the only type of network diagram that can be Slide 156
done. However, it is the only type of diagramming you must do well to pass the
exam. It is important that you are aware of an alternative technique and know a
few key points about it. That technique is called conditional diagramming.
Conditional diagramming affords the project manager the ability to account for
probability and create conditional
loops. Image 42 shows a network
diagram with conditional looping
and probability. In the diagram
there is an 80% chance of moving
from B to C and there is a 20% Image 42: A Conditional Diagram
chance that you would have to
redo task, activity or deliverable A. Another common way of representing
conditional diagrams is with the eyeball diagram shown in Image 43. The
eyeball diagram is used to represent a single situation (the open circle on the left
of the image) with two possibilities (shown with the right facing arrows).
Readers can tell it is a single situation because the two arrows are connected
with the ellipse. It is called an eyeball diagram
because it resembles an eyeball from the side.
The PMP® exam will not require you to create
these diagrams, but you will need to recognize
them and remember the acronym GERT which
stands for graphical evaluation and review
technique. GERT is the most common form of
conditional diagramming. Also remember the
advantage of conditional diagramming is that it
allows for both probability and looping. Image 43: An Eyeball Diagram

Dependencies, Leads and Lags

There are several other items that can be represented by network diagrams. The Slides 157
first things that might impact a network diagram are the three dependency types.
Dependencies are situations where one task, activity or deliverable is reliant on
another for one or more reason. These include the following:
 Mandatory (hard logic) — Mandatory dependencies are defined as
situations where the ordering of task, activities or deliverables is locked into
place by the work itself and there is no other alternative path.
 Discretionary (soft logic) — Discretionary dependencies are situations
where there is more than one possible path to complete the project work, but
someone has chosen a specific path for some reason.
 External — External dependencies refer to situations where dependencies
are placed on the project team by some outside force, regardless of logic or
preference. Regulations and laws are the most common form of external
dependencies.
In addition to dependencies, project managers must deal with lead and lag time
to determine a network diagram. Lead time occurs whenever a finish-to-start

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relationship allows the successor task to start prior to the completion of the
predecessor. Lag time represents a relationship that requires a delay between
the two tasks. Both leads and lags can impact a schedule. Lead time will
generally shorten a schedule while lag time will increase it. Make sure you
understand the difference.
The inputs to the sequence activities process include the following:
 .1 Project management plan — The project management plan contains a lot
of different components, but the two that are important for sequencing
project activities are the schedule management plan and the scope baseline.
These two documents establish how the schedule will be managed
throughout the project and what has to be completed (e.g. the project’s
current scope).
 .2 Project documents — There are four documents specifically called out
by PMI® to properly sequence the project activities. The first is the activity
list. The list defines the activities that need to be accomplished. The second
are the activity attributes which provide the details about the defined
activities. The team also need to know about any assumptions that have been
made during the planning process so they need the assumption log and they
need to know about any established milestones so they must examine the
milestone list.
 .3 Enterprise environmental factors — The factors that might influence the
Sequence Activities process include things such as governmental regulations
or industry standards, specific tools the team or organization uses, and the
work authorization system.
 .4 Organizational process assets — Many organizations have predefined
tools, templates and processes designed to aid in the creation of a sequence
diagram.
The tools and techniques used in the sequence activities process include the
following:
Slide 158
 .1 Precedence Diagramming
Method (PDM) — Precedence
Diagramming is the preferred and
most common method used to
develop Network Diagrams. It is
absolutely critical that you are
capable of correctly producing a
PDM Diagram to pass the exam.
 .2 Dependency determination and
integration — Dependency
determination is simply the process
of determining what must come first,
second, third, etc. It also defines
exactly how each activity is Image 44: Dependency Determination

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dependent. When discussing dependencies, PMI® defines a pair of axis

when discussing dependencies. These are whether or not the dependency is
mandatory or discretionary and whether the dependency is internal or
external.
Mandatory dependencies are either required by some law or contract
pertinent to the project or inherent to the work. These dependencies are also
referred to as hard logic. Mandatory dependencies do not offer any other
alternative. The work must be done in a particular way. These are often
obvious dependencies because they are clearly stated in the agreement or
law, but project leaders cannot assume this to be the case. Therefore, it is
important to review all agreements and regulations to
Discretionary dependencies represent the team’s preferred way of doing
things. This preference is often because of the team’s knowledge or
experience with the tools or technology being implemented. With
discretionary dependencies there are other ways the work could be completed
but the team simply prefers to complete the work in the desired fashion. It is
very important that the project team documents the discretionary
dependencies because they have an impact on the project’s slack or float and
may require closer scrutiny at some point.
 .3 Leads and lags — Leads and lags add definition to the relationships
defined in precedence diagramming. They allow a successor item (the one
that comes second) to begin or end either Slide 159-
160
earlier or later than defined by the
original relationship. Leads represents
the amount of time the second activity
can begin ahead of the first activity
completing. Whereas lags represent the
amount of time an activity must wait
Image 45: A finish-to-finish relationship
before beginning. To help you better
understand this concept, return to our PDM conversation. Image 45 shows
what should now be a familiar finish-to-finish
relationship where the first task completes before the
second task begins.
Image 46 shows the same two activities, but notice the
change in the finish-to-start relationship because of
lead time. In this image Activity 2 begins sooner than
in the first diagram theoretically compressing the
schedule and allowing an earlier completion date.
Image 47 show lag time which has the exact opposite
effect with
Image 46: Lead time the distance
between the two activities increasing
thereby causing the project to take
longer than in Image 45.
Image 47: Lag time

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 .4 Project management information system — The PMIS includes the

software you use to generate a network diagram, create a schedule, and/or
deal with dependent relationships. In the agile world, it includes the tools
used to create the product backlog and the iteration plan.
There are only two outputs to the sequence activities process. The most
important of these is the project schedule network diagram. The other output is
that the sequence activities process can also generate a number of updates to
project documents including updates to the activity attributes, the activity list,
the assumption log and/or the milestone list. Remember, these documents are
considered outside the project management plan, but that does not mean they are
not important.
6.4 Estimate Activity Durations
Only when the activities have been sequenced can the activity durations be
determined. The estimate activity durations
process begins with its inputs which are as Planning Process Group Slide 161-
follows: 162
 .1 Project management plan — As you
have already probably gathered, the
project management plan, in whatever
form, is almost always an input for the
various required processes. However,
PMI® also regularly calls out specific
components of the plan when they are
important to the process in question. For
estimating activity durations the team
must play special attention to the schedule
management plan which defines how the
schedule will be planned, managed and Image 48: 6.4 Estimate activity durations
changed and the scope baseline which
defines the initial snapshot of what work the team must complete.
 .2 Project documents — Making the project documents an input is a little
like saying everything is an input. However, PMI® does provide more
extensive guidance by listing off several specific documents needed for
estimating activity durations. Most of the list is common sense and includes:
the activity list and attributes, the assumption log, the lessons learned
register, the milestone list, project team assignments, the resource breakdown
structure or RBS, resource calendars, resource requirements, and the risk
register. This is the first time you have seen the resource breakdown
structure. It represents one of two uses of the acronym RBS. We will see the
other when we discuss project risks. A resource breakdown structure is
graphical representation of the hierarchical relationships that exist in the
project reporting relationships.

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 .3 Enterprise environmental factors — As with almost every process,

enterprise environmental factors are at play. This includes other projects
being conducted by the organization, operational requirements, etc.
 .4 Organizational process assets — Many organizations have tools in place
to assist in the creation of duration estimates. These tools can be physical or
electronic.
There are many ways to generate duration estimates within a project. As has
been previously stated, PMI’s preferred methodology is always to use expert
judgment in a bottoms up process. However, that is not the only way to
effectively generate duration estimates.
PERT Estimating and Three Point Estimating
One of the more advanced ways to do estimates is to make use of the project
evaluation and review technique or PERT. This technique assumes that
project estimates are inherently inaccurate. It therefore makes use of probability
to determine project activity durations. To understand PERT, you must first have
a firm grasp on a few basic tenants of the statistics used in probability.
Imagine you were asked to stop at your local grocery store on the way home
from work to purchase a gallon of milk. Assuming that you have worked at your
current location, lived in the same home, and shopped at the same grocery store
for longer than a week or two, how long would it take? If you are like most
people you said around 15 or 20 minutes. Why didn’t you say exactly 15.35
minutes? Mostly likely it is because you know there are a number of factors that
are completely outside your control: traffic, parking, the stock of milk, lines at
the checkout lane, and many others. However, if you were to go to the store on
100 consecutive days and buy milk a pattern would emerge. Although it would
be unlikely that any two trips would ever take the same amount of time, a large
percentage of the trips would be close together and a few of the trips would have
times that were significantly different. This pattern is referred to as a Gaussian
distribution, bell curve or normal distribution and is used to describe any
independent variable. An independent variable is one where the events in one
instance do not impact the results of another instance. Image 49 shows a
Gaussian distribution.
Slide 163

Image 49: A Gaussian Distribution, Normal or a Bell Curve

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Several key factors define the shape seen in a bell curve. The first is the unusual
looking U symbol that appears in the exact middle of the curve. It is
accompanied by a vertical line that splits the curve into two equal halves. This is
the mean of the distribution and may also be represented by an X with a line
over it. The mean is defined as the sum of the values divided by the number of
cases. Next, notice how the image is divided into equal segments that are
marked at the bottom of the image with positive or negative values followed by a
small symbol. This symbol represents the standard deviation or sigma. The
shape of the bell curve is defined by the fact that within one sigma, or one
standard deviation, away from the mean 68% of the cases can be found. Within
two standard deviations 95% of the cases can be found, and within three
standard deviations 99% of the cases can be found.
Most project managers have neither the time nor the inclination to do a project
activity 100 different times. This is where PERT comes into play. PERT
provides a technique that allows the project manager to simulate completing the
project many times over to get more accurate estimates. The key to using PERT
is the use of a three point estimate combined with a Gaussian distribution. PERT
requires three estimates: an optimistic estimate, a pessimistic, and a most likely
estimate. These three estimates are then used in three different calculations to
determine durations.
The first calculation created is the PERT weighted average. The weighted Slide 164
average serves as the mid-point, or mean, of the bell curve that is artificially
created by the following formula:
(4 * The PERT
PERT Weighted Average = Pessimistic + Most Likely) + Optimistic Weighted
6 Average

The most common question concerning this calculation is why does it use four
times the most likely case? The answer is that by using four times the most
likely case, the formula creates the hump required to produce the bell curve
shape. It creates a bell curve with six cases even though there are only three real
values. Once the mid-point of the curve is determined, the PERT standard
deviation is next.
The PERT standard deviation defines the range and shape of the curve. It is
necessary to provide the confidence interval of the estimates. Within one PERT
standard deviation on either side of the PERT weighted average, 68% of the
cases will occur. Within two PERT standard deviations of the PERT weighted
average 95% of the cases will occur. And, within three PERT standard
deviations of the PERT weighted average 99% of the cases will occur. The
formula to calculate the PERT standard deviation is:
Pessimistic - Optimistic The PERT
PERT Standard Deviation = 6 Standard
Deviation
The last calculation used in PERT is the PERT variance. Although this
calculation is not seen as much on the PMP® exam as the PERT weighted

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average or PERT standard deviation, it is still a good idea to be familiar with it.
The formula for the PERT variance is:
The PERT
PERT Variance = PERT Standard Deviation2 Variance
To better understand these three calculations let’s take a look at a simple
example. Imagine you’re leading a small project that has the following duration
estimates:
 Best Case = 5 Weeks
 Most Likely Case = 7 Weeks
 Worst Case = 11 Weeks

Notice the change in terminology from pessimistic and optimistic cases to worst
and best cases. Do not be confused. They mean the same thing. The first step
in the process is to calculate the PERT Weighted Average. In this case the
formula would be:
44
PERT Weighted Average = 11 + (4 * 7) + 5 or or 7.33
6 6

The next step is to determine the PERT Standard Deviation which is:
11 - 5 6
PERT Standard Deviation = 6 or 6 or 1

So what do these calculations tell us?

 The 50% probability point is 7.33 weeks (the PERT Weighted Average).
This means that 50% of the time it should take that amount of time or less
and 50% of the time it should take that amount of time or more.
 There is a 68% chance of completing the project between 6.33 and 8.33
weeks (This is the PERT Weighted Average +/- the PERT Standard
Deviation).
 There is a 95% chance of completing the project between 5.33 and 9.33
weeks (This is the PERT Weighted Average +/- the PERT Standard Deviation
twice).
 There is a 99% chance of completing the project between 4.33 and 10.33
weeks (This is the PERT Weighted Average +/- the PERT Standard Deviation
three times).
Take a few moments to complete the PERT exercise on the following page
before continuing.
PERT is just one of several statistical formulas and concepts that can aid a
project leader in developing a project schedule. It works because the project
manager understands the implications of a standard deviation, but it is not the
only statistical deviation that can help. Other distributions that impact projects
include a binomial distribution, a uniform distribution, a beta distribution, and a
triangular distribution.

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Exercise 8 — PERT Exercise 8 —

PERT
1. A resource gives you a pessimistic estimate of 10 days and an optimistic
estimate of 6 days. What is the standard deviation?
A. 0.67
B. 4
C. 7.33
D. 6.67
2. A resource gives you a pessimistic estimate of 9 days and an optimistic
estimate of 4 days. What is the standard deviation?
A. 6.17
B. 5.33
C. 0.83
D. 6.67
3. A resource gives you a pessimistic estimate of 5 days and an optimistic
estimate of 2 days. What is the standard deviation?
A. 3.83
B. 0.5
C. 3.33
D. 4.33
4. A resource gives you a pessimistic estimate of 15 days and an optimistic
estimate of 6 days. What is the standard deviation?
A. 8.0
B. 11.0
C. 9.5
D. 1.5
5. A resource gives you a pessimistic estimate of 17 days and an optimistic
estimate of 8 days. What is the standard deviation?
A. 12.17
B. 10.67
C. 1.5
D. 1.83
6. A resource gives you a pessimistic estimate of 25 days and an optimistic
estimate of 15 days. What is the standard deviation?
A. 1.67
B. 19.33
C. 7.07
D. 17.67

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7. A resource gives you a pessimistic estimate of 28 days and an optimistic

estimate of 17 days. What is the standard deviation?
A. 21.5
B. 7.78
C. 1.83
D. 17.73
8. A resource gives you a pessimistic estimate of 21 days and an optimistic
estimate of 12 days. What is the standard deviation?
A. 15.5
B. 6.36
C. 14
D. 1.5
9. A resource gives you a pessimistic estimate of 54 days and an optimistic
estimate of 36 days. What is the standard deviation?
A. 3.0
B. 12.73
C. 3.73
D. 42.33
10. A resource gives you a pessimistic estimate of 31 days and an optimistic
estimate of 19 days. What is the standard deviation?
A. 8.49
B. 2.0
C. 24.33
D. 3.33

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Exercise 8 — PERT Answers

1. Answer A. The standard deviation in this case is the PERT standard
deviation. The formula for the PERT standard deviation is Pessimistic -
optimistic / 6. For this question that equals 10 - 6 = 4 and then 4/6 = .67
2. Answer C. The standard deviation in this case is the PERT standard
deviation. The formula for the PERT standard deviation is Pessimistic -
optimistic / 6. For this question that equals 9 - 4 = 5 and then 5/6 = .83
3. Answer B. The standard deviation in this case is the PERT standard
deviation. The formula for the PERT standard deviation is Pessimistic -
optimistic / 6. For this question that equals 5 - 2 = 3 and then 3/6 = .5
4. Answer D. The standard deviation in this case is the PERT standard
deviation. The formula for the PERT standard deviation is Pessimistic -
optimistic / 6. For this question that equals 15 - 6 = 9 and then 9/6 = 1.5
5. Answer C. The standard deviation in this case is the PERT standard
deviation. The formula for the PERT standard deviation is Pessimistic -
optimistic / 6. For this question that equals 17 - 8 = 9 and then 9/6 = 1.5
6. Answer A. The standard deviation in this case is the PERT standard
deviation. The formula for the PERT standard deviation is Pessimistic -
optimistic / 6. For this question that equals 25 - 15 = 10 and then 10/6 = 1.67
7. Answer C. The standard deviation in this case is the PERT standard
deviation. The formula for the PERT standard deviation is Pessimistic -
optimistic / 6. For this question that equals 28 - 17 = 11 and then 11/6 = 1.83
8. Answer D. The standard deviation in this case is the PERT standard
deviation. The formula for the PERT standard deviation is Pessimistic -
optimistic / 6. For this question that equals 21 - 12 = 9 and then 9/6 = 1.5
9. Answer A. The standard deviation in this case is the PERT standard
deviation. The formula for the PERT standard deviation is Pessimistic -
optimistic / 6. For this question that equals 54 - 36 = 18 and then 18/6 = 3.0
10. Answer B. The standard deviation in this case is the PERT standard
deviation. The formula for the PERT standard deviation is Pessimistic -
optimistic / 6. For this question that equals 31 - 19 = 12 and then 12/6 = 2.0

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A binomial distribution is used whenever there are only two possible outcomes. Slide 165
A perfect example is flipping a coin. Although there is an infinitesimally small
change of the coin landing on its side, most people would agree that with each
flip the outcome is either heads or tails. Typically, a binomial distribution is
graphed using two vertical bars displaying the likelihood of each outcome.
Binomial distributions are used in project management as a descriptor in Monte
Carlo simulations.
A uniform distribution represents a scenario where each value of a random
variable has an equal probability of occurrence. The values in a uniform
distribution can be continuous, meaning without limit, or they can be discrete
meaning they have a set range. A simple example of a uniform distribution is the
value shown on a dice when rolled. The values are either 1, 2, 3, 4, 5, or a 6.
Each value has a 1/6th probability of being rolled therefore the distribution is flat
and is described as a discrete uniform distribution. A uniform distribution is
used in project management to obtain a rough order of magnitude estimate where
very little information is available or in risk management when the team is
dealing with several risks that each have an equal probability of occurrence.
A triangular distribution is a continuous probability distribution that begins
with a minimum value, ends with a maximum value, and makes use of a mode,
or most likely value somewhere along the continuum. A triangular distribution is
different from a uniform distribution in that the probability of the random values
are not all the same. Remember, in the uniform distribution each of the potential
values had the same likelihood of occurring. In a triangular distribution, the
minimum and maximum values have a zero probability of happening. The mode
is the value most likely to be seen and so is shown as a spike in the graph which
creates the triangle when combined with the minimum and maximum. In project
management, the triangular distribution is used when an approximation is needed
for a beta distribution to estimate activity duration. It is not uncommon to use a
triangular distribution as an approximation for a beta distribution which is much
more difficult to calculate and graph.
A beta distribution represents a distribution of probabilities when we don’t
know what the probability is. Fortunately, the only time a project manager ever
deals with beta distributions is in some advanced software applications and never
of the PMP® exam.
The final statistical concept we will add to the conversation here is the central
limit theorem or CLT. This theorem simply states that the mean of a large
population of independent and random variables, each having a finite mean and
variance will be normally distributed. Although this theorem might sound
complex it impacts project management in a very practical way. Imagine you
have a project with more than 100 activities or deliverable. The team has
defined three estimates for each one. Is it OK if you use the sum PERT weighted
averages to estimate the overall project duration? The answer is yes, because of
the CTL we assume the project duration follows a normal distribution and the
variance can be calculated by summing the variances of the project activities on
the critical path.

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Having completed the discussion of PERT or three point estimating let’s

examine all the tools and techniques used in the Estimate Activity Duration
process. Remember, the techniques used to estimate time will also be used to
estimate costs in the next knowledge area. These tools and techniques include:
 .1 Expert judgment — As always, expert judgment is PMI’s preferred way
of completing any process. It is always critical that the project manager
trusts their subject matter experts. Asking your subject matter experts for a
single estimate is sometimes referred to as one-point estimating.
 .2 Analogous estimating — Often referred to as top down estimating,
analogous estimating uses the actual results from a previous project to
estimate the current effort. Analogous estimating is typically only used in
the very early processes of a project because it is often the least accurate of
all estimating techniques. Analogous estimating assumes that the two
projects are alike and therefore the durations will also be alike. Problems
often arise when the details of the two projects diverge.
 .3 Parametric estimating — Often referred to as mathematical modeling,
parametric modeling uses a series of variables to calculate the project
estimate. The technique is based on a presumption of the accuracy of the
variables. So long as all of the major variables have been addressed, the
estimate will be accurate. A simple example is the duration estimate to pour
ten miles of a two lane highway. Parametric estimates may also be created
using regression analysis or a learning curve.
 .4 Three point estimating — Also referred to as PERT Estimating, this
technique was discussed at length in the previous section.
 .5 Bottom-up estimating — Bottom-up estimating is almost always the
preferred technique. It requires the team to create estimates for the smallest
unit of delivery and then sum those values together to generate estimates for
the larger items. It assumes the values of the small items equate to the larger
ones without added cost for integration unless specifically added.
 .6 Data analysis — Two types of analysis or examination are specifically
called out by PMI® here. They include alternatives analysis and reserve
analysis.
 Alternatives analysis is the process of examining the potential
different ways the team could execute the project and then calculating
the different durations to find the best outcome.
 Reserve analysis is the process of determining how much reserve is
required. Exam takers must be prepared to address two types of
reserves: contingency reserves and management reserves.
 Contingency Reserves — These represent reserves
controlled by the project manager and they are to be used for Slide 166
know unknowns. This means the project manager and team
can plan for an event that they see as possible. Because the

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event can be foreseen it can be planned for. Management or

sponsor approval is not required to implement the reserve
because approval was already obtained when the project’s
plan was approved.
 Management Reserves — These represent reserves
controlled by the project sponsor or the senior management.
They cannot be accessed without their permission.
Management reserves are used to respond to unknown
unknowns. These are events that cannot be planned for. The
most common type of unknown unknowns are acts of God.
Management Reserves may also be referred to as general
contingency. Often they represent a generic amount of safety
or padding that is added to the overall project estimate.
The outputs of the estimate activity durations process include the following:
 .1 Duration estimates — This process exists in order to arrive at the
duration estimates for each individual task, activity or deliverable.
 .2 Basis of estimates — We have already discussed how the WBS dictionary
and activity attributes add detail to the WBS and activity list. The basis of
estimates serves the same function for the duration estimates.
 .3 Project document updates — Often critical information about the project
is discovered that requires updates to project documents during the estimate
durations process.
6.5 Develop Schedule
Once duration estimates are determined it is time to develop the schedule. For
the PMP® exam it is important that you can visualize this process. First comes
the WBS. Then the WBS is extended with
activities. Those activities are sequenced, Planning Process Group Slide 168
resources are estimated and durations are
estimated. Only then can a schedule be
developed. For the exam it is critical that you
remember that schedule development is an
iterative process. The schedule will
constantly be under review. The goal is to
determine the start and end dates for the
required activities and the entire project so
that it can be used as a comparative baseline
against which real results are measured. The
single most important part of the develop
schedule process is understanding critical
path methodology.
Image 50: Develop Schedule

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Critical Path Methodology Slide 169

Critical path method (CPM) is one of the two major techniques that is used to
determine a project’s schedule. It is both the oldest and the most widely used
technique. The critical path of a project is defined as the longest chain of
dependent tasks, activities or deliverables with zero slack or float. It is the chain
of items through the precedence diagram that defines the overall project
duration. The tasks, activities or deliverables in the critical path do not
necessarily have the greatest risk or the most importance—but they do define the
earliest finish date of the project. There are six key variables used in the critical
path methodology: Slide 170
 The Early Start (ES) — The early start is the
soonest day that the project task, activity or
deliverable can begin.
 Duration (DUR) — The duration is the amount Image 51: The CPM Legend
of calendar time the project task, activity or
deliverable will take. It was defined for each item in the last process.
 Early Finish (EF) — The early finish represents the soonest day that the
project task, activity or deliverable may be completed based on the
dependencies defined in the precedence diagram.
 Late Start (LS) — The late start is the latest day that the task, activity or
deliverable can begin on without impacting the earliest overall delivery date
of the project.
 Float — The slip, slack, total float, or float is the amount of time the task,
activity or deliverable can slip or extend without impacting the earliest
overall delivery date of the project.
 Late Finish (LF) — The late finish is the latest day that the task, activity or
deliverable can end on without impacting the earliest overall delivery date of
the project.
With the definitions in hand let’s examine the steps involved in developing a
critical path model. Begin by examining the precedence diagram shown in
Image 52. Notice how the diagram shows the duration estimates for each

Image 52: A Basic Precedence Diagram with durations and start

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deliverable, task or activity. Also notice that the very first task, activity or
deliverable has an early start value in the upper left hand corner, and it is the
only early start value defined at this point.
The first rule that must be memorized is that the very first task, activity or
deliverable always begins on day zero. This is your anchor point or the
beginning of the project. Unfortunately, you cannot go back in time and start
your projects two weeks prior to today. To calculate the critical path you will
make two passes completely through the network diagram by first going left to
right and then going right to left. As you make these passes it is very important
that you always work in columns and do not skip ahead.
The first pass through the network is referred to as the forward pass because it Slide 171
goes the same way we read, from left to right. The formula you will use in each
box is: The
EF = ES + DUR Forward
Pass
In this case deliverable A is 0 + 2 = 2. A two can now be placed in the upper
right hand value (the early finish) of deliverable A. Because deliverables B, C,
and D all have logical dependencies on deliverable A we also can now place a
two in the early start position of deliverables B, C and D. Working in columns
as our earlier rule stated, we can now determine the early finish values for B, C,
and D.
 Deliverable B: 2+4=6
 Deliverable C: 2+2=4
 Deliverable D: 2+3=5
Those values are then placed into the upper right hand position for each box
before continuing to the next column and deliverable E. Deliverable E is
dependent on deliverable B, and since deliverable B has an early finish value of
six, that becomes the early start value for deliverable E. The forward pass
calculation for deliverable E is now 6 + 2 = 8.
We have now reached a critical point in the forward pass. Deliverables C, D,
and E all feed into deliverable F. This is referred to as a converging (or a
convergence point) and occurs whenever two or more tasks, activities or
deliverables feed into a single item. The rule for a convergence point on the
forward pass is to always take the largest value. In this case we have values of
four, five and eight. The eight is selected and placed into the early start position
of deliverable F.
The forward pass has now been completed and we have determined that the early
finish for the project is 10. The next step is to take the early finish from the last
task, activity or deliverable (deliverable F) and make it the late finish as well.
deliverable F now has a value of 10 placed in both far right position. Now
complete the backward pass. Image 53 shows the CPM model once all passes
are complete. The backward pass begins with deliverable F and progresses from
right to left following the logical dependencies in reverse order. The objective of
the backward pass is to calculate the late start that appears in the lower left

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Slide 171

Image 53: A Completed CPM Diagram

corner of each box. The formula that will be used for the backward pass is:
The
LS = LF – DUR Backward
Using this formula the calculation for deliverable F is 10 - 2 = 8. An eight is Pass
placed in the lower left corner of deliverable F. The next step is to also place an
eight in the lower right position of any deliverable that is a precedent to
deliverable F. In this case, deliverables C, D, and E are all required to complete
deliverable F so an eight is placed in the lower right position of each of these
boxes as well.
Just as with the forward pass, we always work in columns when completing the
backward pass. That means deliverable E is the next value to be calculated. The
late start value for deliverable E is 8 - 2 = 6. The six is placed in the lower left
position for deliverable E and also in the lower right position of deliverable B.
The column of deliverables B, C, and D can all have their late start calculated.
 Deliverable B = 6 – 4 = 2
 Deliverable C = 8 – 2 = 6
 Deliverable D = 8 – 3 = 5

In the next column is another convergence point as deliverable A is a predecessor

to deliverables B, C, and D. Remember the rule on the forward pass for
convergence points? It was always take the largest value. On the backward
pass, the rule is the exact opposite. On the backward pass, always take the
smallest number. In this case, deliverable B has the smallest value with two.
Therefore, two is placed in the lower right position of deliverable A and the final
calculation for the backward pass is completed. The late start for deliverable A
is 2 - 2 = 0. The zero is placed in the lower left position of deliverable A.
The last task to complete the critical path method is to calculate the slack or float
for each task, activity or deliverable. This is done by taking the absolute value
difference between the top and bottom corners on either side. It does not matter
which side you take as it will have the same result. Be careful here. Although it
is theoretically possible to have negative slack or float by taking the real values
and not the absolute value difference, it is not something you will see on the
exam because that would mean your project should have started in the past. A
negative value on the exam is quick clue that you have done something wrong.

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The slack or float appears as the middle value on the bottom of each deliverable.
The values for the sample model are therefore as follows:
 Deliverable A = 0 – 0 = 0
 Deliverable B = 2 – 2 = 0
 Deliverable C = 6 – 2 = 4
 Deliverable D = 5 – 2 = 3
 Deliverable E = 6 – 6 = 0
 Deliverable F = 8 – 8 = 0
The critical path is where the slack or float is zero for every task, activity or
deliverable. Therefore the critical path for this project is ABEF. So what does
this really mean? If any of the tasks, activities or deliverables that are on the
critical path slip, the overall delivery of the project will slip by an equal amount.
When this happens, the first place the project manager should look to take
resources away from is any simultaneous non-critical item. Another way of
thinking about this is to ask yourself would you care if deliverables C or D
slipped two weeks? The answer is no. In both cases you have at least three
weeks slack or float, so such an occurrence would not impact the overall
delivery of the project.
There are three additional terms which might appear on the exam, although
rarely. These are as follows:
 Near-Critical Path — This represents a project path that is close in duration
to the critical path. A significant delay to the near-critical path could cause it
to become critical. The closer these two paths are, the more risk the project
has.
 Free Float — This is the amount of time an activity can be delayed without
delaying the early start of the successor activity.
 Project Float — This is the amount of time an entire project can be delayed
without delaying an externally imposed project completion date.
It is absolutely critical that you can successfully calculate CPM models because
they often produce series questions on the exam. Because of that, a single model
could potentially represent five different questions on the PMP® exam! Exam
questions often ask you what the critical path is for a series of items, what the
overall project duration is, or how much slack or float any particular item has.
To ensure that you are prepared for these types of questions complete Exercise 9.

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Exercise 9 — The Critical Path Method (CPM) Exercise 9 —

CPM
1. Using the included table what is the critical path for the project?
A. B, C, D, F, G, H
B. A, C, D, E, G, H
C. A, B, C, D, E, F, G, H
D. A, B, C, D, F, G, H

2. Using the included table what is the project duration using CPM?
A. 35
B. 38
C. 34
D. 37

3. Using CPM to evaluate the project represented by the included table, which
of the following tasks are not on the critical path?
A. A
B. B
C. D
D. F

4. What is the critical path for the included table?

A. 1, 2, 6, 8, 11
B. 1, 3, 5, 7, 11
C. 1, 4, 9, 7, 11
D. 1, 4, 9, 10, 11

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5. Using CPM and the included table, what is the project duration?
A. 44
B. 42
C. 45
D. 51

6. Based upon the included table and CPM, which of the following tasks is not
critical?
A. 1
B. 2
C. 4
D. 10

7. Based upon the included table and CPM, which of the following tasks is not
critical?
A. 4
B. 9
C. 6
D. 10

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8. What is the critical path for the included table?

A. A, C, F, H, K, M
B. A, D, G, L, M
C. A, B, E, H, K, M
D. A, B, E, I, J, M

9. Using the included table what is the project duration using CPM?
A. 59
B. 63
C. 67
D. 61

10. Using CPM to evaluate the project represented by the included table, which
of the following tasks are not on the critical path?
A. A
B. B
C. C
D. J

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11. Using CPM to evaluate the project represented by the included table, which
of the following tasks are not on the critical path?
A. F
B. E
C. I
D. J

12. Using the included table what is the critical path for the project?
A. 1, 3, 6, 7, 9, 10
B. 1, 3, 6, 7, 8, 10
C. 1, 2, 5, 7, 8, 10
D. 1, 2, 5, 7, 9, 10

13. Using the included table what is the project duration using CPM?
A. 66
B. 51
C. 48
D. 62

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14. Using CPM to evaluate the project represented by the included table, which
of the following tasks are not on the critical path?
A. 2
B. 5
C. 3
D. 9

15. Using the included table what is the critical path for the project?
A. A, B, C, F, G, H
B. A, B, D, F, G, H
C. A, B, C, D, E, H
D. A, B, D, E, H

16. Using the included table what is the project duration using CPM?
A. 38
B. 36
C. 42
D. 40

17. Using the included table what is the critical path for the project?
A. 2, 4, 8, 9
B. 1, 3, 5, 6, 9
C. 2, 4, 8, 7, 9
D. 1, 3, 5, 7, 9

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18. Using the included table what is the project duration using CPM?
A. 45
B. 43
C. 44
D. 46

19. Using the included table what is the critical path for the project?
A. A, B, D, G, J, L, M
B. A, C, E, H, I, L, M
C. A, C, E, G, J, L, M
D. A, B, F, G, K, L, M

20. Using the included table what is the project duration using CPM?
A. 52
B. 49
C. 50
D. 54

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Exercise 9 — Critical Path Method Answers

1. Answer A. The critical path is the longest path of dependent tasks with no slack or float. It
requires you to first do a forward pass and then a backward pass. Any task where the late
start – early start or late finish – early finish equal zero is on the critical path. The Critical
Path for this model is B, C, D, F, G, H.

2. Answer B. Calculating the duration of the critical path is done by first building the
Precedence Diagram. Once that is done enter the task durations and complete the forward
and backward pass by evaluating the differences between the late and early start or the late
and early finish. The longest chain of dependent tasks with zero slack or float is the critical
path. The project duration for this model is 38.

3. Answer A. Task A has slack or float of 3. By definition, any task or deliverable with float
greater than zero is not on the critical path.

4. Answer D. Calculating the critical path is done by first building the Precedence Diagram.
Once that is done enter the task durations and complete the forward and backward pass by
evaluating the differences between the late and early start or the late and early finish. The
longest chain of dependent tasks with zero slack or float is the critical path. In this case the
Critical Path is 1, 4, 9, 10, 11.

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5. Answer C. Calculating the duration of the critical path is done by first building the
Precedence Diagram. Once that is done, enter the task durations and complete the forward
and backward pass by evaluating the differences between the late and early start or the late
and early finish. The longest chain of dependent tasks with zero slack or float is the critical
path. Summing this time provides the project duration. The correct project duration is 45.

6. Answer B. Task 2 has slack or float of 1. By definition, any task or deliverable with float
greater than zero is not on the critical path.

7. Answer C. Task 6 has slack or float of 1. By definition, any task or deliverable with float
greater than zero is not on the critical path.

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8. Answer D. Determining the critical path is done by first building the Precedence Diagram.
Once that is done, enter the task durations and complete the forward and backward pass. By
evaluating the differences between the late and early start or the late and early finish. The
longest chain of dependent tasks with zero slack or float is the critical path. The Critical
Path in this case is A, B, E, I, J, M.

9. Answer B. Calculating the duration of the critical path is done by first building the
Precedence Diagram. Once that is done, enter the task durations and complete the forward
and backward pass by evaluating the differences between the late and early start or the late
and early finish. The longest chain of dependent tasks with zero slack or float is the critical
path. This project duration is 63.

10. Answer C. Task C has slack or float of 1. By definition, any task or deliverable with float
greater than zero is not on the critical path.

11. Answer A. Task F has slack or float of 1. By definition, any task or deliverable with float
greater than zero is not on the critical path.

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12. Answer D. Calculating the critical path is done by first building the Precedence Diagram.
Once that is done, enter the task durations and complete the forward and backward pass by
evaluating the differences between the late and early start or the late and early finish. The
longest chain of dependent tasks with zero slack or float is the critical path. In this case the
Critical Path is 1, 2, 5, 7, 9, 10.

13. Answer A. Calculating the duration of the critical path is done by first building the
Precedence Diagram. Once that is done, enter the task durations and complete the forward
and backward pass by evaluating the differences between the late and early start or the late
and early finish. The longest chain of dependent tasks with zero slack or float is the critical
path. This project’s duration is 66.

14. Answer C. Task 3 has slack or float of 4. By definition, any task or deliverable with float
greater than zero is not on the critical path.

15. Answer D. Calculating the critical path is done by first building the Precedence Diagram.
Once that is done, enter the task durations and complete the forward and backward pass by
evaluating the differences between the late and early start or the late and early finish. The
longest chain of dependent tasks with zero slack or float is the critical path. The Critical
Path for this project is A, B, D, E, H.

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16. Answer A. Calculating the duration of the critical path is done by first building the
Precedence Diagram. Once that is done, enter the task durations and complete the forward
and backward pass by evaluating the differences between the late and early start or the late
and early finish. The longest chain of dependent tasks with zero slack or float is the critical
path. This project’s duration is 38.

17. Answer B. Calculating the critical path is done by first building the Precedence Diagram.
Once that is done, enter the task durations and complete the forward and backward pass by
evaluating the differences between the late and early start or the late and early finish. The
longest chain of dependent tasks with zero slack or float is the critical path. This project’s
Critical Path is 1, 3, 5, 6, 9.

18. Answer C. Calculating the duration of the critical path is done by first building the
Precedence Diagram. Once that is done, enter the task durations and complete the forward
and backward pass by evaluating the differences between the late and early start or the late
and early finish. The longest chain of dependent tasks with zero slack or float is the critical
path. This project’s duration is 44.

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19. Answer C. Calculating the critical path is done by first building the Precedence Diagram.
Once that is done, enter the task durations and complete the forward and backward pass by
evaluating the differences between the late and early start or the late and early finish. The
longest chain of dependent tasks with zero slack or float is the critical path. The diagram
shows the Critical Path for this model is A, C, E, G, J, L, M.

20. Answer A. Calculating the duration of the critical path is done by first building the
Precedence Diagram. Once that is done, enter the task durations and complete the forward
and backward pass by evaluating the differences between the late and early start or the late
and early finish. The longest chain of dependent tasks with zero slack or float is the critical
path. In this case the project duration is 52.

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Resource Leveling and Critical Chain Methodology Slide 172

Once the critical path has been

determined, the network can be laid on a
calendar to determine the start and end
dates for the project. Before these dates
are determined, however, it is important
that all resources are leveled. Optimizing
resources ensures that no resource is being
tasked with accomplishing more work
than can be reasonably completed. This
happens whenever a resource is tasked Image 54: An over allocated resource
with doing more than one task, activity or
deliverable at a time. Image 54 shows this situation for a two week period.
Each column represents a specific day. The two bar wide gap represents
weekend days, and the dark horizontal line that appears halfway up the graph is
the maximum efficiency for any day. Where there is a bar above the horizontal
line, the resource is over-allocated. Leveling the resource takes the work above
the horizontal bar and moves it to days where the resource has capacity.
Leveling a project’s resources will often extend the schedule, but it is an
important step to ensure the success of the project.
In the real world of project management, many project managers do not level
their resources as part of the planning process. This is probably OK for minor
overages, but it becomes a disaster when there are multiple projects using the
same resource pool or when it is for a very large project where each resource
might own a number of tasks, activities or deliverables.
In the late 1990’s a new scheduling methodology was introduced to address the
problem of resource constraints called critical chain project management or
CCPM. CCPM first appeared in 1997 in the business novel Critical Chain by
Eliyahu Goldratt. In the novel Goldratt applied his theory of constraints to
the field of project management. The PMBOK® Guide also mentions CCPM,
but does not cover the topic in a significant way. The limited coverage of the
topic by the PMBOK® Guide has created a great deal of confusion by the authors
of many PMP® exam prep books. Many do not understand the topic, so they
choose to ignore it. The best advice is to not take such a risk and instead study
the topic. Although it is unlikely that you will have to calculate a CCPM
network, do not be surprised if you see some questions about critical chain
methodology. You must be prepared.
To understand CCPM you need to begin by understanding Goldratt’s theory of
constraints. Goldratt argues that the business world is divided into two camps:
the cost world and the production world. The objective of those who live in the
cost world is to reduce costs. The objective of those who live in the production
world is to increase production. Unfortunately, these goals have an adverse
impact on each other. When you decrease costs you often decrease production.
On the other hand, when you increase production you often increase costs. The
real goal is to increase production while decreasing costs. To meet this goal,

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Goldratt argues that you must first understand what is preventing success. It is
here that Goldratt introduces his Theory of Constraints.
Goldratt contends that in any system there is only one constraint at a time. It is
the one thing that acts as a bottleneck. To resolve this bottleneck you must
follow a simple process:
 Identify the system constraint
 Exploit the constraint
 Subordinate everything to the constraint
 Elevate the systems’ constraints
 Repeat the process
When this process is applied to project management, the constraining factor
(according to Goldratt) is resources—specifically the tendency to have a single
resource assigned to multiple tasks, activities or deliverables at the same time.
This problem becomes compounded as the resource pool is shared across
projects. However, simply leveling the resources on a project largely fails to
resolve the issue of resource constraints because there are a number of other
issues tied to the problem. These issues include the following:
 Probability and not precision — Most people assume project estimates are
precise, but they are actually exercises in probability and not precision.
 Misplaced safety — In most cases, 50% of every existing duration estimate
is safety—yet we struggle to hit targets. One of the major causes for this is
that resources generally use the safety at the beginning of tasks, activities or
deliverables, instead of at the end when it might do some good.
 Delays accumulate and advances get wasted — The intent of project
management is to deliver the overall project within the schedule baseline. To
accomplish this, most people manage each task, activity or deliverable to its
deadline, assuming that perfection in the parts will result in the desired
whole. Unfortunately, it doesn’t work like that. In the real world, sometimes
people are early and sometimes they are late. To achieve success we have to
be able to pass safety between tasks, activities or deliverables—and that
can’t be done easily.
There are several other factors that Goldratt discusses, but what we have
discussed so far provides you with a general background to the CCPM. The
basic goal is to produce a scheduling system that takes these factors into
consideration and puts the project manager—rather than the individual
resources—in charge of the safety.
The critical chain is defined as the longest chain of dependent tasks, activities or
deliverables with zero slack or float (sound familiar?) that takes into Slide 173
consideration the resource constraints. Here are the steps to complete a critical
chain model:
 Complete the critical path model as discussed in the last section.

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 Cut all duration estimates in half, thereby leaving the project finish date as
defined in CPM. There will then be a large gap to the left of the project,
closer to the beginning.
 Level the resources so that no resource is ever doing more than one thing at a
time. In selecting which tasks, activities, or deliverables to move, always
select the ones which have the smallest impact on the schedule.
 Determine the critical chain by following the logical dependencies and by
only moving off of the logical path when a single resource is asked to do two
or more things in succession.
 Add the project buffer to the end of the critical chain using 30%, 25%, or the
sum of the squares methods. Allow the project to be pushed to the left
towards the start date.
 Add up the lengths of the non-critical chains and add feed buffers wherever
the non-critical chains feed into the critical chain. As before, allow items to
be pushed to the left.
 Add resource buffers in front of the first task, activity, or deliverable
whenever a single resource is asked to do a series of items in succession.
To measure progress on a project using critical chain project management
measure the percent of the project complete versus the burn rate of the project
buffer. They should be close to equal. Image 50 shows a critical chain diagram
with all its buffers.

Image 55: A CCPM Diagram

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Exercise 10 — Critical Chain Project Management Exercise

10—CCPM
1. When comparing the Critical Chain to the Critical Path which of the
following is true?
A. The Critical Path accounts for resource limitations
B. The Critical Chain accounts for resource limitations
C. The Critical Path uses aggressive estimates
D. The Critical Chain uses pessimistic estimates
2. The Critical Chain Methodology schedules each activity to:
A. Occur as late as possible
B. Occur as soon as possible
C. Occur with the middle schedule
D. Any of the above
3. The Critical Chain Method focuses on managing what?
A. Total project float
B. The Critical Path
C. Buffers
D. Specific network paths
4. What is the major difference between the Critical Path and the Critical
Chain?
A. The Critical Path takes into account resources
B. The Critical Path is always longer
C. The Critical Chain is always longer
D. The Critical Chain takes into account resources
5. Which of the following statements about the Critical Chain is true?
A. Critical Path management does not allow multi-tasking
B. Critical Chain management uses bar charts
C. Critical Chain management does not allow multi-tasking
D. All of the above are true
6. Which of the following statements about Critical Chain Management is true?
A. It is a methodology that creates an optimized project schedule that
considers resource limitations
B. It is a methodology that works best when resources are unlimited but
schedule milestones are restricted
C. It makes extensive use of PERT
D. It is used primarily with Agile Methodologies in information
technology projects.

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7. Which of the following is not a step in the Theory of Constraints (TOC)?

A. Identify the constraint
B. Identify the next systems’ constraint
C. Exploit the constraint
D. Subordinate everything to the constraint
8. According to the TOC most current management philosophies focus on
what?
A. Throughput management
B. Schedule management
C. Cost management
D. Balancing all of the above
9. According to the TOC, what is the only way to achieve good cost
performance?
A. Achieve good local performance everywhere
B. Manage costs throughout the system
C. Have visibility to all costs
D. Have all project team members know the project costs
10. Using the table below, what is the project's Critical Chain excluding feed
buffers and assuming 30% for all other buffers? Assume all estimates have
already been halved.
A. 1, 3, 5, 7, 10
B. 1, 2, 6, 8, 10
C. 1, 4, 8, 10
D. 1, 2, 5, 7, 10

11. Using the table below, what is the length of the project's critical chain
excluding feed buffers and assuming 30% for all other buffers?
A. 73
B. 62
C. 95
D. 52

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Exercise 10 — Critical Chain Project Management

Answers
1. Answer B. The Critical Chain is the longest chain of dependent tasks with
zero slack or float taking into consideration resource constraints. The
difference between the Critical Path and the Critical Chain is the resource
considerations. When using the Critical Chain Methodology it is important
that you use true, most likely case estimates without safety.
2. Answer A. The Critical Chain Method requires the creation of a PDM
Diagram and then scheduling from the late finish date for each activity asks
the project manager to add in resource, feeder and project buffers.
3. Answer C. Critical Chain Management focuses on managing the three
different types of project buffers: Project, feeder, and resource.
4. Answer D. While in most cases the Critical Chain will be longer, there is no
set rule guaranteeing it. However, it is true that the Critical Chain does take
into account resource limitations while the Critical Path does not.
5. Answer C. Because CCPM focuses on the longest chain of dependent tasks
that takes into account resource constraints, it specifically excludes multi-
tasking.
6. Answer A. The core argument of Critical Chain Management is that most
projects fail because they do not consider the limitations of the resources.
This means that one resource cannot be doing two tasks at the same time.
When this happens, the resource in question becomes the bottleneck and will
delay the project.
7. Answer B. The Theory of Constraints has five major steps:
A. Identify the system constraint
B. Exploit the constraint
C. Subordinate everything to the constraint
D. Elevate the systems’ constraints
E. Repeat the process
8. Answer C. According to the Theory of Constraints, most current
management philosophies focus on either cost or throughput management.
In reality, most are simply focused on cost management.
9. Answer A. According to the Theory of Constraints, the only way to achieve
good cost performance is to achieve it at each local or independent stage of
the process. This localizing factor becomes a major problem for overall
project performance because this can be very different from good overall
project cost performance. Sometimes a local step needs to be sacrificed to
ensure good overall performance.

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10. Answer B. 1, 2, 6, 8, 10. The Critical Chain is the longest chain of

dependent tasks with zero slack or float, taking into consideration resource
constraints. Tasks 2 and 5 as well as 6 and 8 are done by the same resource
and must be leveled to create the Critical Chain.

11. Answer A. 73. The project's Critical Chain is determined by first

determining the project's network using PDM. Then resources and durations
are assigned to each task. Tasks are then leveled to account for resource
limitations. The longest chain of dependent tasks (taking into consideration
resource limitations) is then determined. This path is summed to provide the
time of the project's Critical Chain which does not include buffers of any
kind.

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The Agile world does not typically use either the critical path or critical chain
method. Instead, Agilists use tools such as a story map to represent the timing of
a project. A story map is a two dimensional graphic. It arranges the project
features or user stories first on the horizontal axis to represent the item’s rough
priority with the highest priority items at the left and lowest on the right. The
vertical axis represents increasing sophistication of the implementation. What
this creates is a diagram where the first horizontal row represents what is called a
“walking skeleton”, or a barebones but usable version of the project’s product.
As the team works through successive rows they add features to the product with
additional functionality. Often distinct columns are used in the story map to
represent iterations or releases. Image 56 shows a sample story map.
Slide 174

Image 56: A Sample Story Map

We have reviewed most of the tools and techniques used in the develop schedule
process, but to ensure that you don’t miss anything let’s review the entire
develop schedule process formally.
The inputs to the develop schedule process include the following: Slide 175
 .1 Project management plan — Within the project management plan, the
schedule management plan and scope baseline are critical to develop the
schedule. This is because these two documents define what has to be
scheduled and how the schedule is to be developed and managed.
 .2 Project documents — The project documents represent a very big list.
Within that list, PMI® provides some more specific guidance. The team
needs to examine the activity list, and the activity attributes. These items
represent the work you are scheduling. You must also examine the
assumption log, the duration estimates and the basis of estimates as a big part
of this process is summing the estimates in the correct sequence to develop

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the schedule. As you go through this effort you must also learn from
previous projects through the lessons learned register and make sure you are
aware of any milestones that exist as they can significantly alter the schedule.
Knowing the correct sequence of activities comes from the schedule network
diagram. Understanding when that work can be completed requires the
resource requirements, the team assignments, and the resource calendars.
Finally, the team must always look at the risk register to understand any
potential risks on the project.
 .3 Agreements — Any contracts or agreements the organization has that may
impact how the work is done require careful examination.
 .4 Organizational process assets — Any time the project manager has
organizational process assets which could make their job easier or faster they
should be used.
 .5 Enterprise environmental factors — Like most of the processes,
enterprise environmental factors are at play in scheduling.
The tools and techniques for the develop schedule process include the following:
 .1 Schedule network analysis— Precedence diagramming is the primary
technique used to produce network diagrams. You must be very familiar
with PDM. However, you might also see questions requiring you to
recognize Conditional Diagramming and GERT. You must examine those
diagrams to determine the best way to get the project done.
®
 .2 Critical path method — CPM is the primary method used by PMI to
develop project schedules. You must be very good at working through CPM
models to pass the exam because there can be several questions that refer
back to one CPM model.
 .3 Resource optimization — Resource optimization is done in order to
ensure that no resource is ever assigned to more work than can reasonably be
done. There are two aspects of resource optimization: resource leveling and
resource smoothing. Be careful as these terms do NOT mean the same thing
and they are NOT interchangeable.
Linear methodologies use one of two types of scheduling, resource
constrained scheduling or RCS and time constrained scheduling or TCS.
In resource constrained scheduling the team is limited to a defined set of
resources. This means the project is limited by the number of hours those
resources can work in a day, and while they can work overtime, research has
shown that the more overtime a resource works the less efficient they
become. Often the initial project schedule shows the same resource working
on multiple activities at the same time even though common sense says this
is impossible. The assignment of a resource to more work than they have
available time is called over allocation. This over allocation can happen
because of the total amount of work assigned to a resource or because of a
calendar constraint (e.g. the resource is assigned too much work but only for
a short period of time).

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Resource leveling involves adjusting the start and finish dates of tasks to Slide176
prevent resources from becoming over allocated. Leveling often causes the
projects critical path to change, but the process begins by examining all
available float. Work is then moved until no resource has more work
assigned than they can handle. This process will often extend the project
completion date.
Resource smoothing adjust the project activities so they do not exceed
predefined resource limits. This is different from leveling in that smoothing
does not allow the project’s critical path to change and the project’s
completion date cannot be delayed. The goal in resource smoothing is to
maximize the utilization of all the resources on the team, but not at the
expense of the delivery date. Therefore, it is entirely possible that one or
more resources cannot be optimized because doing so would cause delays in
the project delivery date. The tables below compares and contrasts resource
smoothing with leveling.
Similarities
Resource Leveling Resource Smoothing
Slide 177
A schedule network analysis technique. A schedule network analysis technique.

A resource optimization technique. A resource optimization technique.

Improves resource utilization. Improves resource utilization.

Image 57: Taken from Satya Narayan Dash Nov.3 2015 MPUG

Differences
Resource Leveling Resource Smoothing Slide 178
Aim is to adjust start and end dates of a project Aim is to achieve optimal resource usage by
with resource constraints while balancing re- avoiding peaks and valleys in the resource
source requirements and resource availability usage profile. Hence the name smoothing.
Used in resource-constrained scheduling. Used in time-constrained scheduling.
Critical path of the project will be affected, and Critical path of the project won't change.
usually the length of critical path will increase.
Can be applied to resources on critical path. Doesn't apply to resources on critical path.
Free and total float (or slack) may be used. Free and total float (or slack) are used.
Will optimize all the resources and may change May not be able to optimize all the resources
the duration of the project. if sufficient slack (or float) isn't available, but
does not change the duration of the project.
Risk: May change the critical path and hence the Risk: Loss of flexibility due to reduction in
duration. slack. Hence chances of increase in number
of near-critical activities.
Image 58: Taken from Satya Narayan Dash Nov.3 2015 MPUG

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 .4 Data analysis — There are a number of data analysis techniques the team
can use, but PMI® calls out two specifically: what-if scenario analysis; and
simulations.
What-if scenario analysis is much older than you might expect. It is the
process of creating a range of unique conditions with definable variables and Slide 179
then evaluating them when changes are made to the specific drivers. It is
asking the question, “what is the result if this variable changes?” What-If
scenario analysis increases in popularity as the risk of the project rises, and
has been greatly impacted by advances in computer technology. This
technology allows project teams to quickly set up their basic model and then
move individual variables to determine the impact of one driver at a time.
Simulations allow the team to pretend to complete project work without
actually doing it or incurring the expense. This is done to evaluate area of
uncertainty to gain a better understanding of how specific aspects of the
project are impact the whole. The most common simulation technique is a
Monte Carlo analysis. Monte Carlo analysis is relatively new, and is a
result significant advances over the last ten years in computer processing
power. Monte Carlo analysis begins with the user establishing a basic
equation that describes the situation. This can be as simple as:
Activity A Duration + Activity B Duration + Activity C Duration = Total
The user then defines the curve of each variable. This is where the
distribution types discussed in the last process come into play. Imagine our
scenario with A having a normal distribution, B having a binomial
distribution and C having a triangular distribution. With each variable the
user also defines what are called the “tails” or the limits of the variable’s
potential values. Once that is complete the user initiates the analysis and the
program generates 1,000 instances of the model randomly selecting values
for each variable using the curve and defined range. Once complete, the user
can then determine the probability of achieving any result in seconds. At the
simplest level, a Monte Carlo analysis allows the team to determine the
likelihood of completing the project by a specific target date and what must
change to improve those chances.
 .5 Leads and lags — Leads and lags are used to allow dependent tasks,
activities or deliverables to begin either prior to their predecessor being
completed or after a delay, based upon the nature of the work or on other
conditions. Both leads and lags can significantly impact a schedule.
 .6 Schedule compression — Schedule compression is shrinking the
schedule to meet a specific target such as a deadline. A major assumption
with schedule compression is that the project scope is maintained. When
compressing a schedule there are only two choices:

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 Fast Tracking — Fast Tracking is doing dependent items in parallel. Slide 180
It amounts to changing a finish-to-start relationship to a start-to-start
or a finish-to-finish relationship. For the exam it is important that you
remember that the negative impact of Fast Tracking is the potential
for rework.
 Crashing — Crashing is increasing the number of hours worked.
This can be done by adding resources assigned to a task, activity or
deliverable or by simply working overtime. The negative impact of
Crashing that must be remembered is a likely increase in costs.
 .7 Project management information system — Throughout this process we
have described many situations making use of computer technology. The
PMIS is often the tool providing these capabilities and is therefore a critical
tool.
 .8 Agile release planning — In agile development a release is a group of
iterations put into production together to gain some advantage. In Scrum,
those iterations are called sprints and the team might choose to group three or
four sprints together because the organization has set production windows
that allow for the introduction of new functionality. The process of release
planning involves the team determining the number of small iterations in the
project and how they will be combined into sprints. Then the team places
this information on a calendar to provide a product roadmap that is typically
three to six months in length. This information allows the customer to
understand when they will receive the various components of functionality
based on the current information.
The outputs to the Develop Schedule Process include the following:
 .1 Schedule baseline — The schedule baseline represents what the project
manager and team have committed to the sponsor in terms of when the
various project tasks, activities and deliverables will be completed. It is the
basis of measuring progress on the project and is required for any time-based
variance analysis. For the exam, make sure that you can differentiate
between the schedule and the schedule baseline.
 .2 Project schedule — The project schedule is a living, breathing document.
It is constantly being reviewed and changed to reflect reality. It is the
document that shows when different project tasks, activities or deliverables
are to be completed. At a minimum, the schedule should include the planned
start and finish date for each activity although it is slightly different for an
agile project. PMI® also suggests three visual aids to help with the
presentation of the schedule.
A bar chart is perhaps the most common tool used in linear project
methodologies. It appears as a Gantt chart with the bars representing
project work over time represented horizontally. The Gantt chart also has the
advantage of showing precedence diagram dependencies, milestones, the
critical path, and resourcing which is why it is the most popular project
display used today. Image 59 shows a sample Gantt chart.
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Slide 181

Image 59: Sample Gantt Chart

Another common information radiator used to display a project schedule is

the milestone chart. A milestone chart is similar to bar charts but only
identifies the start and/or finish of phases or activities and does not make any
effort to represent the project work. Image 60 shows a sample milestone
chart.

Slide 182

Image 60: Sample Milestone Chart

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In some situations the team may not use any advanced technology to
represent their schedule. In these cases the team might simply present the
schedule using a schedule network diagram using the activity-on-node
format describe earlier in this section.
 .3 Schedule data — Schedule data includes any information about delayed
tasks, activities or deliverables with explanations and/or schedule forecasts.
 .4 Project calendars — The project calendars show the team and other
stakeholders when things are supposed to happen.
 .5 Change requests — Almost any of the defined process can generate a
requested change as the team and organization learn new information about
the project. It is always critical that you work to first understand the change
and then follow whatever change management process the team has defined.
 .6 Project management plan updates — Based on the schedule, it might be
necessary to update the various project plan with new information.
 .7 Project document updates — All of this information could have a
significant impact on the project’s documentation. It is important that you
update those documents.
6.6 Control Schedule
The last process in the schedule Monitoring & Controlling Process Group
management knowledge area is the Slide 183
control schedule process. This
process moves us out of the planning
process group and into the
monitoring and controlling process
group. The control schedule process
is part of the integrated change
control process that is defined in the Image 61: Sample Gantt Chart
integration management knowledge
area. The primary goal of the control schedule process is to determine the
current status of the project in terms of the schedule. However, it is also the
process that is used to manage changes to the schedule and to make sure that
only good changes occur.
The inputs to the control schedule process include the following:
 .1 Project management plan — The project management plan is a large set
of documents and PMI® specifies several components for controlling the Slide 184
schedule including: the schedule management plan, the schedule baseline,
the scope baseline, and the performance management baseline. The first
three of these defines the work to be completed and how long the team
thought it was going to take to complete the work. The last item, the
performance measurement baseline is used when the team is implementing
earned value analysis to compare forecasts to actuals and determine if a
change, corrective action, or preventive action is necessary.

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 .2 Project documents — The project documents adds a large list of

additional information to that already provided in the project management
plan. Within this set, PMI® specifies the lessons learned register, project
calendars, project schedule, resource calendars and schedule data. Most of
these items are common sense so stop and think to yourself, “What do I need
to know to manage a project schedule?” and you will likely have the project
documents list.
 .3 Work performance data — The work performance data includes
information about project progress—such as which tasks, activities or
deliverables have started, where they are in terms of progress, and which
items have been completed.
 .4 Organizational process assets — Many organizations have tools in place
to assist in the creation of duration estimates. These tools can be physical or
electronic.
The tools and techniques used in the control schedule process include the
following:
 .1 Data analysis — In this case we are looking at the measures and analysis
of schedule information. It is essential for the exam that you remember that
PMI® views earned value measures as central to this effort. Therefore, you
are going to examine the major values found in earned value such as the
schedule variance and the schedule performance index. If the project is
being managed using an agile methodology the team must look at its
iteration burndown chart. You might also need to examine the team’s
performance reviews, complete trend analysis, variance analysis and some
what-if scenario analysis.
 .2 Critical path method — Comparing the team’s progress along the critical
path can provide critical information about how the team is really doing on
the project. Remember, project progress is always measured against
delivering the items on the critical path.
 .3 Project management information system — The standards establish a
complex network of ideas and items that must be tracked as the project
progresses. The PMIS provides the primary tool to do this.
 .4 Resource optimization — To get the most out of your people, project
leaders must constantly consider the most efficient way of completing work.
This means looking a utilization, leveling, availability and other factors.
 .5 Leads and lags — As the project progresses the team may need to adjust
its leads and lags to get activities that are currently behind schedule back on
track.
 .6 Schedule compression — Earlier in this course we defined two
techniques for compressing a schedule. They are crashing and fast tracking.
The outputs to the control schedule process include the following:

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 .1 Work performance information — Work performance measurements

represent the calculated SPI and SV values for the deliverables on the
project. Specifically, the values for the control accounts are measured.
 .2 Schedule forecasts — This tells us when the work is expected to be
completed based on the current information.
 .3 Change requests — Often schedule adjustments can cause other areas to
change. You need to constantly be aware of this and track the change
requests.
 .4 Project Management Plan updates — Specific updates to the Project
Management Plan might include schedule baseline updates, Schedule
Management Plan updates, or updates to the cost baseline.
 .5 Project documents updates — Specific updates to other project
documents might include updates to the schedule data or to the schedule
itself.
Time Management Summary
Slide 185
To conclude the Time Management Knowledge Area, focus your studies on these
five areas:
 Six processes — Make sure you understand the six processes which make up
the Time Management Knowledge Area. Know their order and their
relationships in the planning process group. Take special note of the
relationship between the scope processes and time processes.
 PERT, GERT, PDM, CPM, CCPM — Each of these acronyms represent a
key modeling technique or calculation you need to know. The only one that
you only need to be able to recognize—and that you do not need to be
prepared to calculate—is GERT.
 Crashing, fast tracking — Make sure that you know these schedule
compression techniques and know what the negative impact is from each
one.
 Decomposition, baseline, float or slack — Make sure that you not only
know these terms, but that you also know how to effectively use them.
 Schedule development is iterative — Above all else, remember that the
process of building a project schedule is iterative. A schedule must be a
living, breathing document to ensure the project’s success. Therefore, you
must constantly revisit the schedule as new data presents itself.

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Exercise 11 — Schedule Management Exercise

11—Time
1. What is the variance of a project that has a best case estimate of 6, a most Management
likely case estimate of 7, and a worst case estimate of 10?
A. 2.08
B. 0.44
C. 0.67
D. 7.33
2. Your project is significantly over budget and behind schedule. It is critical
that you determine your projected duration. To gain a better understanding
of the project you analyze the sequence of deliverables, activities or tasks to
find the ones with the least amount of schedule flexibility. What technique
are you using?
A. GERT
B. CPM
C. PERT
D. PDM
3. A project manager is discussing her project with her boss. They are
concerned that the project might be falling behind schedule and decide they
must determine the project’s likely completion date and find out where any
flexibility exists. Which of the following tools would best provide this
information?
A. AOA
B. PDM
C. CPM
D. Network Diagramming
4. You are the project manager for a new product. You are in the planning
phase of your project and have just been told by one of your senior resources
that they require the completed schematics before they can begin to build the
product prototype. This is an example of what kind of dependency?
A. Mandatory
B. Discretionary
C. Internal
D. External
5. You are the project manager at a major pharmaceuticals company. You are
planning the release of a new drug and must wait for regulatory approval
before you can begin manufacture of the drug. This is an example of what
kind of dependency?
A. Discretionary
B. External
C. Internal
D. Mandatory

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6. Which of the following is a type of bar chart?

A. Gaussian distribution
B. Scatter plot
C. Gantt chart
D. Logit model
7. As a general rule, which of the following is better illustrated by network
diagrams than by bar charts?
A. Project progress
B. Logical relationships between activities
C. The project’s critical chain
D. Resource needs
8. Which of the following is not correct about PDM?
A. The critical path always has dummy tasks
B. Every network has at least one critical path
C. The network displays all task interdependencies
D. Tasks not on the critical path have slack or float
9. Which of the following terms represents a method of problem solving that
relies on inductive reasoning from past experience or expert judgment when
there is no relevant mathematical algorithm available?
A. A heuristic
B. A logit
C. GERT
D. Analogous estimating
10. Which of the following best describe the amount of time that one activity can
be delayed without impacting the early start of its succeeding task or
activity?
A. Lead time
B. Float
C. Lag time
D. None of the above
11. Which of the following terms best represents the amount of time one activity
can begin prior to the completion of its preceding dependent task?
A. Lag time
B. Lead time
C. Float
D. None of the above

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12. Which of the following statements is correct?

A. A network diagram allows you to determine the amount of time the
project will take.
B. A WBS allows you to determine the longest chain of dependent tasks.
C. Changing the end date of the project will cause the network diagram
to change.
D. The critical path will always contain dummy tasks.
13. Which of the follow statements about a milestone is true?
A. A milestone can have any duration
B. A milestone has the same duration as the task, activity or deliverable
it represents
C. A milestone always has zero duration
D. None of the above
14. Which of the following statements best describes the relationship between
standard deviation and risk?
A. Standard deviation provides the level of uncertainty about the
estimate
B. Standard deviation defines whether or not safety is in the estimate
C. Standard deviation defines the accuracy of the estimate
D. There is no relationship between risk and standard deviation
15. Your boss asks you to use Monte Carlo analysis to evaluate your project. For
what purpose was this request most likely made?
A. To create an activity’s estimated length
B. To gain an indication of the risk in the project
C. To define the order in which activities occur
D. Define project resource requirement
16. On Monday morning your boss comes into your office and asks about the
amount of slack you have on a specific activity in your project. This is
determined by which of the following:
A. Performing a PERT analysis.
B. Estimating the task or activity length.
C. Creating a PDM diagram.
D. Determining the total amount of time that a schedule activity may be
delayed without impacting the project delivery.
17. Your boss enters your office and is concerned that a particular activity will
delay the delivery of the project. What is the best thing to do?
A. Determine if the activity is on the critical path.
B. Explain why your boss should not worry.
C. Perform a GERT analysis.
D. Examine the activity’s risk triggers.

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18. You and your project team have obtained estimates for your project, assigned
resources, and developed a precedence diagram of the project. Several of
your resources are very concerned that two of the activities are not being
focused on enough and will end up delaying the project because they are
critical components of the project’s end product. What is the best thing to
do?
A. Sit down with the resources to discuss the project Gantt chart.
B. Determine if the activities in question are on the critical path.
C. Examine the project’s risk register.
D. Evaluate alternative project execution paths.
19. Which of the following best describes the impact of multiple critical paths on
a project?
A. The project takes longer to complete.
B. The project is more expensive.
C. The project takes more resources to manage.
D. The project risk increases.
20. You and your project team have just completed the development of your
PDM diagram. The current diagram shows there are three critical paths in
your project. What is the best thing to do next?
A. Re-evaluate the network for errors.
B. Develop the project schedule.
C. Examine the project risk register.
D. Discuss alternative networks with your team.
21. In discussing your project with management you determine that the project
schedule is the most flexible and the project scope is the least flexible. If the
allowable monthly project expenditures are fixed, then what is the best thing
to do?
A. Level the resources.
B. Examine the project’s critical path.
C. Analyze the project’s life cycle costs.
D. Crash the project.
22. Your manager asks you to produce a report on your project for management.
Which of the following would best meet the request?
A. Bar chart
B. PERT chart
C. Milestone chart
D. Gantt chart

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23. You and your project team have just completed the development of your
project schedule. Based on the constraints provided by the project sponsor,
the project is scheduled to be completed after the project deadline. Assuming
that costs are the least important constraint and scope is the most important
constraint, which of the following is the best thing to do?
A. Fast track the project.
B. Crash the project.
C. Reassess the critical path.
D. Develop a critical chain model for the project.
24. You and your project team have just completed the development of your
project schedule. Based on constraints provided by the project sponsor, the
project is scheduled to be completed after the project deadline. Assuming
that costs are the most important constraint and scope is the least important
constraint, which of the following is the best thing to do?
A. Crash the project.
B. Reassess the critical path.
C. Develop a new project schedule.
D. Fast track the project.
25. Your manager comes to you and demands that you complete your project
three weeks early. What is the best thing to do?
A. Meet with your project team to examine alternatives for crashing and
fast tracking.
B. Tell your boss the project critical path does not allow for a three week
early completion.
C. Ask the project to work overtime.
D. Ask your manager if you can reduce the scope of the project.
26. When evaluating the impact that crashing will have on your project, which of
the following should be included in the evaluation?
A. The project sponsor’s interest.
B. Risks associated with the schedule changes.
C. The amount of overtime to be worked.
D. The impact of a reduction in project scope.
27. Which of the following PM processes requires the project manager to reach
an agreement with the activity resources on the calendar date for each
activity?
A. Sequence activities.
B. Estimate activity durations.
C. Estimate resources.
D. Develop schedule.

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28. It is late Friday afternoon when your project sponsor informs you that the
project schedule has been reduced by two weeks. What is the best thing to
do?
A. Meet with your project team to determine options for schedule
compression.
B. Cut the project scope.
C. Crash the project.
D. Inform management that the date cannot be met.
29. As the project manager, you estimate the time that is needed for each activity,
assign tasks to specific resources and then add the estimates to create the
project estimate. You then use this value to establish the project delivery
date which you provide to the project sponsor. What is incorrect with this
process?
A. The project manager created the estimates without the team.
Additionally, summing the tasks will lead to a significantly longer
project duration.
B. Project duration estimates should be developed by the project
sponsor.
C. The project manager created the estimates without the project
resources and did not use a network diagram to define the critical
path.
D. The project completion date should be derived from an evaluation of
the triple constraints.
30. You are the project manager for a large construction project. It is early in the
project lifecycle and you have completed the activity definition. In
analyzing the activities you see a number of activities that are dependent on
each other but can start at the same time. Which methodology is the best one
to properly evaluate this project?
A. CPM
B. PDM
C. AOA
D. GERT
31. You are the project manager for a $250,000 software development project.
You are working with your project team and you determine that the project
has a number of project tasks that are dependent on each other. However,
one of your team members also points out that the tasks can finish at the
same time. Which of the following is the best technique to understand this
situation?
A. Critical path method
B. Activity on arrow method
C. Precedence diagramming method
D. Program evaluation and review technique

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32. You are the project manager for a large consulting company leading a
process improvement project for your organization’s largest client. The
project currently has a CPI of 1.04 and SPI of .98. Your customer has just
asked if you can produce a diagram that shows the probabilistic project path.
Which of the following tools would be best in this situation?
A. Graphical evaluation and review technique
B. Program evaluation and review technique
C. Critical path method
D. Precedence diagramming method
33. Which of the following is best suited to define a project network that has
potential looping of the activities, deliverables or tasks?
A. PERT
B. CPM
C. GERT
D. PDM
34. You are the project manager for a software development project with an
estimated budget of $650,000. You have just completed the duration
estimates, and activity sequencing for your project. Which of the following
do you still need to complete the initial project schedule?
A. Performance measurement baseline
B. Contingency reserves
C. Schedule data
D. Schedule management plan
35. You are just taking over for a project manager who was forced to take a
medical leave of absence. Your project has a CPI of .93 and an SPI of .89.
To gain a better understanding of how the previous project manager was
managing schedule changes, to which of the following would you turn?
A. The project plan
B. The project schedule
C. The schedule management plan
D. The project Gantt chart
36. You are taking over for a project manager who was terminated. The previous
project manager was using weighted average duration estimates to develop
the schedule network. What type of modeling are you using?
A. Monte Carlo analysis
B. Project evaluation and review technique analysis
C. Critical chain analysis
D. Critical path analysis

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37. You are the project manager for a large mechanical engineering project. You
have completed your scope statement, the WBS, the resource estimate,
duration estimates, and the network diagram. Which of the following is the
thing you should do next?
A. Create the schedule
B. Complete the cost estimates
C. Define the project budget
D. Solicit purchase
38. You work as a project manager and have completed the scope statement,
resource estimates, and the WBS. You’ve just received the activity duration
estimates. Which of the following is your best course of action?
A. Finalize the schedule
B. Compress the schedule
C. Complete the risk register
D. Develop RFPs
39. One of your resources comes into your office to discuss their task. The
project has a CPI of .89 and an SPI of .92. The resource’s task has an early
start of week 14 and a late start of week 17. What do you know about this
activity?
A. It is ahead of schedule
B. It is behind schedule
C. It is on the critical path
D. It is not on the critical path
40. You have an activity that has an ES of 12 weeks, an LS of 15 weeks, an EF
of 21 weeks, and an LF of 24 weeks. What do you know about this activity?
A. It is not on the critical path
B. It is ahead of schedule
C. It is behind schedule
D. It is on the critical path
41. You are leading a project that you have just learned is 3 weeks behind
schedule. The dependencies are discretionary. The project has an SPI of .81
and a CPI of .83. Due to cost overruns you cannot add more resources. What
is the best thing to do?
A. Move resources from tasks with discretionary dependencies
B. Complete activities in parallel where possible
C. Reduce resources
D. Reduce project scope

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42. You’ve been brought into the organization because senior management is
struggling to get a strong understanding of the state of their projects. You
only have a week to prepare a 30 minute presentation on the status of all the
projects. Which of the following would best help senior management
understand the current portfolio status?
A. Project management plan executive summaries
B. Detailed cost and schedule analysis
C. Milestone charts
D. Gantt charts
43. Sally is a brand new project manager within a company that manufactures
household products. She’s just taken over a project that is seriously over
budget and behind schedule. Originally, the project was slated to have spent
$135,000 and they have already spent $170,000. It appears that most of the
overage is because of flawed original estimates. This project is critical to the
organization’s success. Who has primary responsibility to solve these
issues?
A. The project sponsor
B. The project manager
C. The project team
D. Senior management
44. You are the project manager for a project that you have just learned is 30
days behind schedule. You do not have any additional resources that may be
engaged. The project has a CPI of .84 and an SPI of .79. The BCR is 1.45
and only a few of the project tasks have mandatory dependencies. What is
the best thing to do?
A. Meet with the project sponsor to inform them of the delay.
B. Reduce the project scope to meet the deadline.
C. Crash the project.
D. Make more activities concurrent.
45. Rearranging dependent tasks or activities so they are done in parallel is
called what?
A. Fast tracking
B. Leveling
C. Paralleling
D. Crashing
46. Rearranging resources and resource workloads so that the amount of work
done in each month or specified time period is constant is called what?
A. Fast tracking
B. Paralleling
C. Leveling
D. Crashing

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47. Adding additional resources to reduce the schedule time of a task or activity
is called what?
A. Fast tracking
B. Crashing
C. Paralleling
D. Leveling
48. Which of the following is a benefit of a three point project estimate?
A. It shows a better understanding of the task.
B. It allows the project manager to better manage stakeholder
expectations.
C. It helps determine if the project will meet the schedule.
D. It provides a probabilistic estimate.
49. Which of the following is a benefit of analogous project estimates?
A. It helps to raise questions about expectations.
B. The estimates will more accurately reflect actuals.
C. It helps the project resources understand their obligations.
D. It helps senior management feel better about the estimates.
50. Which of the following is an advantage of parametric estimating?
A. It accounts for estimating uncertainty.
B. It provides for improved communication.
C. It provides a quantifiable deterministic estimate.
D. It provides estimates at the lowest possible level.
51. You are the project manager for a very large and important project within
your organization. Your project has been progressing very well until the last
couple of weeks when you began to experience a large number of scope
changes. Your current CPI is 1.02 and your SPI is .98. As the project
manager, what should you do?
A. Maintain the baseline and make approved changes.
B. Maintain the baseline and resist all changes.
C. Make only the changes approved by the project sponsor.
D. Initiate a discussion with management about the level of changes.
52. Your boss asks you to change a presentation slide showing a network
diagram to one showing a bar chart. Which of the following best explain this
request?
A. Bar charts show logical relationships more effectively than network
diagrams.
B. Bar charts better display resource trade-offs than network diagrams.
C. Bar charts better show the critical path than network diagrams.
D. Bar charts better display progress or status.

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53. You are leading a large project for your organization. Early in the project the
sponsor informs you that neither time nor costs are as important as the
number of resources used each month. Which of the following is the best
thing for you to do?
A. Level the project resources
B. Crash the project
C. Fast track the project
D. Apply a heuristic
54. Upon presenting your plan to your sponsor you are informed that the
schedule exceeds the target completion date the sponsor desired. If the
project network diagram cannot change, but the sponsor offers extra
resources what is the best thing to do?
A. Crash the project
B. Fast track the project
C. Level the resources
D. Perform a Monte Carlo analysis
55. You’ve determined that crashing your project is the best option for reducing
your project schedule. The best approach to crashing would also include
looking at the:
A. Sponsor’s opinion of which activities to crash.
B. Risk impacts of crashing each activity.
C. Customer or end user’s opinion of which activities to crash.
D. When in the project timeline the activities occur.
56. You are assigned as the project manager for a manufacturing project within
your organization. During the planning phase of the project, you estimate
the time needed for each activity and then add the estimates to create the
project estimate. You then commit to delivering the project by the defined
date. What is wrong with this scenario?
A. The team did not create the estimate, and compilation was not used.
B. The estimate is too short and should be created by management.
C. The team did not create the estimate and a network diagram was not
used.
D. The estimate should be matched to the customer’s required
completion date.

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57. You have a project with the following activities: Activity A takes 40 hours
and is the first task. Activity B takes 25 hours and should happen after the
project starts. Activity C must happen after activity A and takes 35 hours.
Activity D must happen after activities B and C and takes 30 hours. Activity
E must take place after activity C and takes 10 hours. Activity F takes place
after activity E and takes 22 hours. Activities F and D are the last activities
of the project. Which of the following is true if activity B actually takes 37
hours?
A. The critical path is 67 hours.
B. The critical path changes to Start, B, D, End.
C. The critical path is Start, A, C, E, F, End.
D. The critical path increases by 12 hours.
58. The WBS, activity duration estimates, and the precedence diagram are
completed. Which of the following should you do next?
A. Validate project scope.
B. Identify project risks.
C. Sequence the activities.
D. Create a preliminary schedule and get the team’s approval.
59. You are leading an engineering project for your organization and have
developed a six level WBS that has been sequenced using PDM. The
activity duration estimates have been received. What should you do next?
A. Create an activity list.
B. Begin the work breakdown structure.
C. Finalize the schedule.
D. Compress the schedule.
60. You are the project manager for an information technology project within
your organization. A five-level work breakdown structure has been
developed for the project. The network diagram and duration estimates have
been created and the schedule has been developed and compressed. Which
of the following time management activities should you do next?
A. Gain approval.
B. Estimate activity resources.
C. Use parametric estimating.
D. Control the schedule.
61. The project is calculated to be completed two weeks after your sponsor’s
deadline. You have been told there are no additional resources. The project
is low risk, the benefit cost ratio is expected to be 1.71, and the project
dependencies are preferential. What is the best thing to do?
A. Remove non-critical activities from the project.
B. Make more activities concurrent.
C. Cut resources from non-critical activities.
D. Move resources from preferential dependencies to external
dependencies.
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Exercise 11—Time Management Answers

1. Answer B. PMBOK® Guide p. 201. The correct answer is 0.44. The PERT
variance is calculated by first calculating the PERT standard deviation for the
case using the formula of (pessimistic – optimistic) / 6. Once you have the
PERT standard deviation you must square that result to obtain the PERT
variance.
2. Answer B. Each of these methods provides an evaluation of the project in
some way. However, only the critical path method or CPM, focuses in on
the amount of slack or float contained by a task.
3. Answer C. Each of these methods provides an evaluation of the project in
some way. However, only the critical path method or CPM, focuses in on
the amount of slack or float contained by a task.
4. Answer B. PMBOK® Guide p. 191. Internal dependencies are not a type
defined by PMI®. This is an example of a discretionary dependency because
the question clearly states that the schematics are required to go the next
step.
5. Answer D. PMBOK® Guide p. 191. Internal dependencies are not a type
defined by PMI®. This is an example of a mandatory dependency. Neither
the manufacturing nor the project management processes require the
regulatory approval. However, governmental approval is required in order to
sell the completed product.
6. Answer C. PMBOK® Guide p. 217. A Gantt chart is a type of bar chart laid
on its side that also shows a project calendar. The lengths of the bars reflect
the length of time the task, deliverable, or activity take.
7. Answer B. PMBOK® Guide p. 209-212. Network diagrams are modeling
methods that display the relationships between task, deliverable and
activities. Since the bars in a bar chart are independent of each other, they
cannot provide this information.
8. Answer A. PMBOK® Guide p. 189-190. PDM or the precedence
diagramming method is a method of network diagram designed to display
task dependencies and relationships. One of its most valuable outputs is the
critical path which is the longest chain of dependent tasks where there is no
slack or float.
9. Answer A. A heuristic – is a method of problem solving that relies on
inductive reasoning from past (expert) judgment when there is no relevant
mathematical algorithm. It is also sometimes referred to as a “rule of
thumb”.
10. Answer C. PMBOK® Guide p. 193. Lag time represents the amount of time
a task or activity can be delayed without impacting the early start of the next
task or activity. Often lag is added to a chain to produce a gap between tasks
or activities.

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11. Answer B. PMBOK® Guide p. 192. Lead time represents the amount of
time one activity can begin prior to the completion of its preceding
dependent task. Lead time is used to compress a schedule and can run the
risk of rework.
12. Answer A. PMBOK® Guide p. 189-190. The network diagram is
specifically designed to allow you to determine all the potential project paths
and the longest time the project can take. A work breakdown structure is
used to show the project deliverables. Changing the end date of a project
does not necessarily change a network diagram and the critical path never
contains dummy tasks.
13. Answer C. PMBOK® Guide p.157. A milestone is a marker representing
the completion of a task, activity or deliverable. It never has duration of any
length.
14. Answer A. Standard deviation allows you to determine the amount of
dispersion from the mean that your estimates have. The more dispersed the
estimates, the more variance exists between the estimates — and therefore
the greater the risk is.
15. Answer B. PMBOK® Guide p. 213. Several of these answers are close, but
the correct answer is to gain an indication of the risk in the project. Monte
Carlo simulations will not tell you about specific risk. They reveal the
probabilistic nature of risk. A Monte Carlo simulation enables the user to
determine the probability that a result will occur within a given range. The
wider the range, the greater the uncertainty or risk.
16. Answer D. PMBOK® Guide p.210. Slack or float represents the amount of
time a specified activity may be delayed without impacting the project’s
critical path. Only items not on the Critical Path have slack or float. It is the
difference between the early finish and late finish or the early and late start.
17. Answer A. PMBOK® Guide p.210. Slack or float represents the amount of
time a specified activity may be delayed without impacting the project’s
Critical Path. Only items not on the Critical Path have slack or float. It is
the difference between the early finish and late finish or the early and late
start. In this case the best answer is to first determine if the task is on the
Critical Path and find out how much slack or float it has.
18. Answer B. PMBOK® Guide p.210. Slack or float represents the amount of
time a specified activity may be delayed without impacting the project’s
Critical Path. Only items not on the critical path have slack or float. It is the
difference between the early finish and late finish or the early and late start.
In this case the best answer is to first determine if the tasks are on the Critical
Path and find out how much slack or float it has.

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19. Answer D. PMBOK® Guide p.210. Multiple critical paths are not unusual
in the real world. This simply means that if any of the activities on any of
the Critical Paths are delayed, the entire project will be delayed. This
sometimes causes an increase in project resources or cost and it might cause
the project to take longer. However, it is a guarantee that the project has an
increase in risk because the project now has more chance for an activity
delay to impact the delivery of the project.
20. Answer B. PMBOK® Guide p.210. Multiple critical paths are not unusual
in the real world. This simply means that if any of the activities on any of
the critical paths are delayed the entire project will be delayed. Therefore,
the existence of multiple critical paths does not represent an error in your
process. The development of the PDM Diagram is part of activity
sequencing. The next step in the process is developing the project schedule.
21. Answer A. PMBOK® Guide p.211. This is a triple constraints question. If
the project schedule is the most flexible, this means the project could
continue for several months past the original forecast. This is especially true
because the project has an inflexible scope. Because the project cost is fixed
on a monthly basis — but not on a total basis — the best thing to do is level
the resources to ensure the monthly project costs do not exceed the allowable
amount.
22. Answer C. PMBOK® Guide p.218. The best tool for reporting to
management is a milestone chart. This provides the correct level of
information for management.
23. Answer B. PMBOK® Guide p.215. The best thing to do in this case is crash
the project. This usually entails adding resources to the project to get project
work done more quickly. This will cause a likely increase in project costs.
Fast tracking is doing tasks in parallel which decreases the schedule, but this
often causes rework which in this case is unacceptable.
24. Answer D. PMBOK® Guide p.215. The best thing to do in this case is fast
track the project. This is because you do not have the ability to increase the
cost by adding resources (crashing). Reassessing the critical path and
developing a new schedule are not preferred alternatives.
25. Answer A. PMBOK® Guide p.215. Whenever your due date is reduced, the
first thing to do evaluate the two alternatives you have. You can either crash
or fast track the project.
26. Answer B. PMBOK® Guide p.213. Whenever doing any type of evaluation
of a project it is always critical that you analyze the risks associated.
27. Answer D. PMBOK® Guide p. 205. Develop schedule is the process where
the basic schedule is applied to a calendar.
28. Answer A. This is a PMIism. The best option is always to determine
alternatives before you do anything else.

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29. Answer A. PMBOK® Guide p. 195-204, 210. Project estimates should

always be developed by the project team and not just the project manager.
Additionally, the project duration is never generated by simply summing the
activity estimates as many activities are completed concurrently. Simply
summing these values will cause an inflation of the estimate.
30. Answer B. PMBOK® Guide p. 189-190. Only the precedence diagramming
method or PDM allows for relationships other than finish to start. In this
case a start to start relationship is indicated by the fact that the tasks can
begin at the same time. Therefore PDM is the correct answer.
31. Answer C. PMBOK® Guide p. 189-190. Only the precedence diagramming
method or PDM allows for relationships other than finish to start. In this
case a finish to finish relationship is indicated by the fact that the tasks can
begin at the same time. Therefore PDM is the correct answer.
32. Answer A. GERT or graphical evaluation and review technique allows for
looping, alternative flows and probabilistic networks and is the only
diagramming technique that does so.
33. Answer C. GERT or graphical evaluation and review technique allows for
looping, alternative flows and probabilistic networks and is the only
diagramming technique that does so.
34. Answer B. PMBOK® Guide p. 222. To complete the project schedule you
also need to include your safety or contingency reserves. All the other
alternatives are used in schedule control as inputs or are not applicable.
35. Answer C. PMBOK® Guide p. 181-182. To understand how a project is
managing schedule change you first look at the schedule management plan.
PMI® is consistent on this point. You always examine the topic area’s
management plan first.
36. Answer B. PMBOK® Guide p. 201. A weighted average is created when
PERT or project evaluation and review technique is used.
37. Answer A. PMBOK® Guide p. 189-190. Once you have completed the
network diagram you need to create a schedule and get it approved by your
team.
38. Answer B. PMBOK® Guide p. 215. The only two answers that are close
include: compress the schedule and finalize the schedule. Compressing the
schedule is done before the schedule is finalized.
39. Answer D. PMBOK® Guide p. 210. The information concerning earned
value has nothing to do with this question. The only thing you can tell for
sure is that there are three weeks of slack or float because the early and late
start times are not the same. This means the task must not be on the Critical
Path.
40. Answer A. PMBOK® Guide p. 210. The only thing you can tell for sure is
that there are three weeks of slack or float because the early and late start

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times are not the same. This means the task must not be on the critical path.
In addition, this question tests whether or not you know that ES stands for
early start, LS stands for late start, EF stands for early finish and LS stands
for late finish.
41. Answer B. PMBOK® Guide p. 191-192; 215. Two pieces of knowledge are
important to this question. First, you must understand the different types of
dependencies (mandatory, discretionary, internal and external). Secondly,
you must know that whenever a schedule needs to be shortened you can
either crash the schedule or fast track it. Fast tracking is the correct answer
because you cannot add resources.
42. Answer C. PMBOK® Guide p. 218. Whenever it is a question about the
type of reporting for senior management the answer is always Milestone
Reports. You may provide a lot of other information, but the Milestone
Report always comes first.
43. Answer B. PMBOK® Guide p. 175. Hopefully, this was an easy one. The
project manager is always the first line. Although they can get help from
their project team, they are ultimately responsible.
44. Answer D. PMBOK® Guide p. 215. Making more activities concurrent is
another way of saying fast track the project. It is one of only two ways to
reduce a project schedule without reducing project scope. The other is
crashing — which is adding resources to the project. Crashing is not an
option in this case. Reducing the scope is not an option until you have first
tried the other alternatives.
45. Answer A. PMBOK® Guide p. 215. Fast tracking is the technique where
you change the scheduling of dependent tasks so they are done in parallel.
46. Answer C. PMBOK® Guide p. 211. The process of changing work
assignments or resourcing so that the amount of work done in each month or
specified time period is called resource leveling.
47. Answer B. PMBOK® Guide p. 215. Crashing is the schedule compression
technique that reduces the amount of time that specific activities take by
adding resources to those tasks. It runs the risk of increasing project costs.
48. Answer D. PMBOK® Guide p. 201. A three point estimate forces a normal
distribution when used with the PERT analysis technique. This is a
probabilistic technique. When using a PERT Standard Deviation you get the
probability that the real duration comes within a range.
49. Answer A. PMBOK® Guide p. 200. Analogous estimating is an inexact
estimating technique because it is a top down technique. It is best used early
in the project when inexact estimates are expected to raise concerns or
questions about expectations.
50. Answer C. PMBOK® Guide p. 200. Parametric estimating provides project
estimates based upon some form of mathematical model. It is quantitative
and deterministic.

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51. Answer A. PMBOK® Guide p. 189-190. Changes are a fact of life for a
project manager. The key is that you use your change control process, only
implement those changes approved by management, and always maintain the
project baseline. If you do not maintain the baseline you have nothing with
which to compare.
52. Answer D. PMBOK® Guide p. 209-210. Progress or status is not
effectively displayed with a network diagram. Network diagrams are very
good at displaying logical relationships and the critical path. Bar charts can
be used to display progress.
53. Answer A. PMBOK® Guide p. 215. Both fast tracking and crashing will get
the project done faster, but neither control the number of resources used in a
month. In fact, crashing will increase the number of hours worked. The only
answer that manages the hours worked by a resource is leveling.
54. Answer A. PMBOK® Guide p. 215. The definition of crashing is increasing
the number of hours worked. This is done by working overtime or by adding
people to the project.
55. Answer B. PMBOK® Guide p. 215. Project risks must always be
considered. It is said that risk management is simply project management for
adults. None of the other alternatives are common requirements for proper
crashing.
56. Answer C. PMBOK® Guide p. 189-190. In terms of process, this question
highlights the concept of compilation and summing. Just adding all the totals
together is summing. To correctly compile the schedule, a network diagram
must be built first.
57. Answer C. PMBOK® Guide p. 210-211. To correctly answer this question
you must weed through the long wording and build a precedence diagram.
The described network has three possible paths. If the duration of activity B
changes from 25 to 37, the activity will take 12 additional hours which
changes the duration of that path from 55 to 67 hours. Since the critical path
has a duration of 107 hours the delay of activity B has no impact on the
critical path.
58. Answer D. PMBOK® Guide p. 187-190; 205-221. Sequencing the activities
is the same as creating a network diagram, so that has already been done.
The verify scope process is done during the monitoring and controlling
process group and not during the planning process. Since a schedule is a
critical input to risk management you cannot do that yet. This leaves
creating the preliminary schedule and getting the team’s approval.
59. Answer D. PMBOK® Guide p. 195-204. If you read carefully, you will
notice that this question is really asking what you should do after the activity
duration estimating process. The WBS and activity list are created before the
estimate activity durations. The schedule is not finalized until after schedule
compression. Therefore compressing the schedule is done next.

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60. Answer A. PMBOK® Guide p. 205. This question is a bit tricky for two
reasons. First, it looks like the question above, and control the schedule is
the next step in the process. However, you have not yet completed the
develop schedule process because you still need to gain approval from the
stakeholders before proceeding.
61. Answer B. PMBOK® Guide p. 215. In this question you are being asked for
the best way to deliver the project when you are exceeding the deadline. The
first choice is to always maintain the scope and either fast track or crash the
project. Making more activities concurrent is a fancy way of saying fast
track and it is the only viable option.

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Cost Management
Overview
The sister process to schedule management is found Slide 187
in chapter seven of the PMBOK® Guide. It is the
cost management knowledge area. Cost management
shares many of the same tools and techniques with
time management. Cost management includes all the
processes involved in planning, estimating,
budgeting and controlling costs so the project is
completed within the approved budget. Image 61
shows the processes involved in cost management.
These processes are primarily concerned with the
cost of resources, although there are several other
factors which must be examined:
 Life-cycle costing — Life-
cycle costing is the process by Slide 185
which the product or service of
the project is examined to
determine not only the cost of
the project which will produce
it, but also the costs associated
with operating and disposing of Image 61: The Cost Management Processes
the product, service or result
when its useful life has ended. The project manager has responsibility to
determine the overall costs of both the product and the project.
 Opportunity cost — The opportunity cost is the determined by the value of
the next highest alternative. Imagine there are three potential projects (A, B,
and C). You can only choose to do one project and the criteria is selecting
the project with the highest payout. Project A has a payout of 100. Project B
has a payout of 75, and Project C has a payout of 50. Project A would be the
choice with the highest payout, but its opportunity cost would be 75, as the
next highest value is Project B. The concept here is based upon the
understanding of mutually exclusive options, meaning you cannot
simultaneously choose to do Projects A and B. Selecting A means you are
consciously choosing not to do Project B.
 Sunk costs — Sunk costs are monies that have already been spent. They
cannot be refunded or returned. It is important that a project manager never
makes future project decisions based on money that has already been spent.
A good project leader must always look to the future and use forecasts for
decisions.
 Value Analysis — Sometimes referred to as value engineering. Its goal is
to find a less costly way to do the same work. The required project functions
are systematically identified, and values are then assigned to those functions
and work to provide each function at the lowest possible cost.
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 Cost Risk — Cost risk is exactly what the name implies. It addresses the
question, “What are the cost-related risks?”
7.1 Plan Cost Management
The PMBOK Guide® is now very consistent. Every Slide 189
one of the knowledge areas begins with a process to
develop a management plan to direct that area. For
cost management, that process is called plan cost
management. Just like all the other “plan” processes,
this one has the goal of producing the “X”
management plan. In this case cost.
The inputs to the plan cost management process are Slide 190
as follows:
 .1 Project charter — This is used to provide the
limits of authority, business need, justification,
constraints and assumptions.
Image 62: 7.1 Plan Cost Management
 .2 Project management plan — The scope
baseline and other information such as cost, risk, and communication
information.
 .3 Enterprise environmental factors — Items such as organizational
culture and structure, resource availability and skills, as well as commercial
information all might be included.
 .4 Organizational process assets — This is a standard input to all processes
that can be fairly assumed.
There are three tools and techniques used the plan cost management process.
These include the following:
 .1 Expert judgment — As has been previously repeatedly stated, PMI
prefers expert judgment over any other technique. As a project manager,
your first inclination should always be to trust your subject-matter experts.
 .2 Data analysis — There are many different ways to analyze the costs of a
project to determine which techniques are best. You might choose a
statistical model, an examination of previous similar projects, or an Excel
spreadsheet.
 .3 Meetings — Communication is key to good project management. That
means getting your team together and talking about various issues.
The only output of the plan cost management process is the cost management
plan. The plan defines the rules and processes the project will use to manage
project costs. With cost there are several specific things the team must provide.
These include the units of measure, level of precision and level of accuracy.
Each of these is important in providing information about how the team is
supposed to report out and track project costs.

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7.2 Estimate Costs

The second process in the cost management Slide 191
knowledge area is estimate costs. This process
focuses on determining the estimated costs at the
most detailed level of the WBS, referred to as the
terminating node. It is an inquiry into how much it
will cost to have the specified resources complete the
desired tasks or activities necessary to produce the
specified work packages. Most exam candidates find
this concept relatively simple, but be careful: a
simple way to trick candidates is to ask questions that
use the term price instead of cost. They are not the
same thing! Remember, price is equal to the cost
plus profit.
Image 63: 7.2 Estimate Costs
The inputs to the estimate costs process include
the following:
 .1 Project management plan —Within the project management plan the Slide 192
team needs to examine the cost management plan, the quality management
plan, and the scope baseline
 .2 Project documents — Have figured out the trend yet? With most
processes PMI® calls out the project management plan and the project
documents and the highlights those items of particular importance for the
specific process. To estimate project costs the team needs to examine the
lessons learned register for information about previous projects, the project
schedule, resource requirements as resources are the most expensive
component of any project, and the risk register to understand the project’s
risks.
 .3 Enterprise environmental factors — The specific enterprise
environmental factors at play here include market conditions and published
commercial information, but these are not all that is possible.
 .4 Organizational process assets — As always: any policies, procedures,
and/or templates you might have that would aid in the costing of the project
should be used.
The tools and techniques used in the estimate costs process are very similar to
those used to create duration estimates. This makes it much easier to learn as
you can learn two sections at the same time. The tools and techniques used in
the estimate costs process include the following:
 .1 Expert judgment — As previously stated, this is a consistently
emphasized resource. It is much easier to memorize the few processes where
expert judgment is not used rather than trying to memorize all the processes
where it does appear.

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 .2 Analogous estimating — Analogous estimating is sometime referred to as

top-down estimating. It is the processes of determining a project’s costs by
assuming its costs will be similar to another project that it closely resembles.
Analogous estimating is often used in the initial phases of a project when
there is very little information and accuracy is less important. This occurs
because analogous estimating is only accurate if the two projects are actually
alike. If the details of the two projects are not alike, then the estimates will
not be accurate.
 .3 Parametric estimating — Parametric estimating is a form of
mathematical modeling. The major variables are used to develop an
equation to calculate the project cost estimate. Parametric estimating works
well so long as the major project variables have been captured in the
equation. A simple example of parametric estimate is the cost per square
foot of a house, or the cost per lane mile of a highway.
®
 .4 Bottom-up estimating — Bottom-up estimating is the PMBOK Guide’s
preferred estimating technique when used in combination with expert
judgment. In bottom-up estimating, cost estimates are created at the
terminating nodes of the WBS.
 .5 Three-point estimating — The most common type of three point
estimating is PERT Analysis. The calculations are the same as the PERT
Analysis calculations found in the last chapter (Time Management).
 .6 Data analysis — The specific kinds of analysis done to estimate project
costs include analyzing the alternatives, reserve analysis and the cost of
quality.
Reserve analysis is the process of analyzing the project’s required
contingency reserves. Management reserves are not analyzed at this point
because management reserves are generated only after the project budget is
created.
The cost of quality or COQ assumptions about the cost of quality are
analyzed to determine their accuracy. We will discuss this idea more in the
quality chapter of our course.
 .7 Project management information system — Project management
software can be a powerful tool in the process of determining project costs.
This is especially true because of the compilation process which occurs in
adding the project work packages.
 .8 Decision making — How does your team make decisions? There are lots
of options, spanning from consensus to directive decision-making. These
will be talked about in greater detail in the Human Resources Management
chapter.
The tools and techniques for the estimate costs process are used to generate three
outputs. The outputs for the estimating costs process are as follows:

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 .1 Cost estimates — The cost estimates are the detail cost estimates for the
individual project work packages.
 .2 Basis of estimates — The basis of estimates is the explanation and details
for how the estimates were generated. It also includes any constraints and
assumptions that were used to created the estimates. It is similar to the WBS
dictionary or activity attributes.
 .3 Project documents updates — The detailed costs estimates require many
project documents to be updated with the newly determined information.
Make sure to specifically examine the assumption log, the lessons learned
register and the risk register.
As the project team goes through the process of estimating costs, it is important
to remember there are two different types of project estimates that may be done.
 Rough Order of Magnitude — There is some disagreement in PMI’s Slide 193
resources concerning a ROM estimate. Earlier editions of the PMBOK®
Guide and many other resources suggest a ROM estimate is plus or minus
50% of the likely actual project costs. While the 6th edition of the PMBOK®
Guide says it is –25% to +75% [PMBOK® Guide 6th ed. p. 241]. A ROM
estimate is often used in the early stages of a project when the details are
very vague. A ROM estimate is often used to test the resolve and risk-
tolerance of the project sponsors.
 Budget Estimate — The budget estimate, or project budget, is the detailed
project budget. The budget estimate has a variance of +10% to –5%
[PMBOK® Guide 6th ed. p. 241].
7.3 Determine Budget
Slide 194
The next process in the cost management knowledge
area is the determine budget process. Notice the
process is not called the estimate budget process. This
is because estimating has already been completed.
Once the estimates are created the process continues
to determine what the estimates mean. Determine
budget is the process of aggregating the cost estimates
into a single project budget, and then spreading it over
time to generate the cost baseline. The cost baseline
is the basis of cost comparison for the rest of the
project. When graphically represented, the cost
baseline is often represented as an S-curve like what
is usually seen as the result of a logistic regression Image 64: 7.3 Determine Budget
equation. The curve represents the total or cumulative project costs to-date on
one axis and time on the other. Image 65 on the next page shows a sample cost
curve. In addition to understanding the cost curve, there are a number of
accounting terms you need to understand and be able to compare and contrast for
the exam. It is often easier to understand these terms if you imagine working at
the Acme widget factory where you are mass producing widgets, having to deal
with inventory, components, and paying rent.
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 Working capital — Working capital Slide 195

represents the amount of money the
organization has to invest in projects and
operations. It is calculated by taking the
current assets minus the current liabilities.
Assets include the liquid money,
properties, shares and any other financial
vehicle the organization can use.
Liabilities represent the actual debts of the
company, and can include leases or rental
fees, payments to suppliers and
contractors, and/or salaries.
 Accounts receivable — Accounts
receivable or AR represents money that is Image 65: A Cost Curve
owed to the organization, but not yet paid.
 Business intelligence — BI is the trends, insights and analysis obtained by
examining large amounts of data and achieving a wide range of reports with
a focus on understanding the underlying causes of business performance
which helps leaders make more informed decisions.
 Fixed consumption — Fixed consumption represents the assets the
organization exhausts during the course of a project or time period.
 Gross profit — The gross profit equals the total revenue coming in minus
the labor and expenses used to obtain that revenue.
 Gross profit margin — The gross profit margin is the gross profit expressed
as a percentage of total revenue. The gross profit margin is often simply
referred to as the margin. It is calculated using the following formula:
(Total Revenue — Total Costs) / Total Revenue
 Utilization rate — The utilization rate measures the amount of time an
employee spends on productive activities. There are two types of utilization:
total and billable. Total utilization measures the percent of time employees
spend on productive work, but this measure includes non-billable work such
as business development (BD) and proposal-writing. Billable utilization is
the percentage of time that can be billed to the client. Most consulting and
project-based organizations have what is called the target utilization.
 Variable vs. fixed — A variable expense is an expense that could be higher
or lower based on another activity. An example of a variable expense is the
material costs in our widget factory. If you choose to not make any widgets
you have no variable material costs, but if you make lots of widgets you have
a lot of variable material costs. A fixed expense would be the monthly rent
payment you must make, regardless of how many widgets you make.
 Direct vs. indirect — A direct expense is one that is specifically caused by
an action of the organization. Returning to the widget factory example, a

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direct expense would be the material cost of production. An indirect expense

is an expense which cannot be attributed to a specific action. In the widget
factory, the lease expense is an indirect expense of producing widgets. It
does not matter whether or not you choose to make widgets, you still have to
pay your rent.
 Recurring vs. non-recurring — A recurring expense is one that happens
multiple times, often at a specified interval. A non-recurring expense is one
that only happens once. Be careful to not say “reoccurring,” as this is both a
redundant and a non-existent term.
 Capital vs. expense — Capital and expense represent the two basic sides of
any business. Although not exactly the same, other closely linked terms
include assets and liabilities. Capital is an inflow to the business. It adds
positive value to the organization. Capital is one asset class. Expenses are
outflows of value from the organization. Expenses are a primary form of
liability to the business.
With the basic financial terms in hand we can turn our attention to the inputs for
the determine budget process which include the following:
Slide196
 .1 Project management plan — The project management plan is almost
always the first input into the process. Its components define the project. To
determine the project budget the team needs to look specifically at the cost
management plan, the resource management plan and the scope baseline as
these three documents define how the team plans to manage the project costs,
the work that has been defined and who is to do the work.
 .2 Project documents — The documents found in the project management
plan are not enough to successfully determine the project budget. The team
also needs to look at several additional documents including the cost
estimates and the basis of estimates, the project schedule and finally, the risk
register. The cost estimates provide the costing for each individual activity
on the project and the basis of estimates tells the team how those estimates
were derived. A big part of the determine budget process is about correctly
combining those numbers until there is a single number representing the total
estimated cost to execute the project. It then takes that number and uses the
project schedule to understand when the money is needed.
 .3 Business documents — The business case and the benefits management
plan are what is called out from the business documents. The business case
defines why the project is needed and provides the critical success factors the
needs to meet to achieve overall project success. The benefits management
plan describes the benefits the team hopes to deliver to the organization by
executing the project. Although these are also usually in the business case,
the benefits management plan also describes when the team plans to realize
the benefits and any metrics associated with them.

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 .4 Agreements — Any contracts or other agreements that exist for the

purpose of executing the project must also be examined to ensure the team
include their defined costs in the development of the overall project budget.
These agreements often also include payment schedules and/or other cost
implications that must be taken into consideration.
 .5 Enterprise environmental factors — What is going on around the
project team can greatly impact overall project success and therefore must be
considered for almost every process.
 .6 Organizational process assets — As always, organizational process
assets are in play. Templates, policies and procedures can often add value to
the budgeting process.
The determine budget process tools and techniques include the following:
 .1 Expert judgment — PMI’s preferred tool is always expert judgment. In
almost every case your subject matter experts are your best resource to
determine the output for a process
 .2 Cost aggregation — Cost aggregation is the process of adding the costs
from the individual activities together to develop the overall single number
for the project. This is a process of compilation and not summing. To
understand this statement, imagine you had a spreadsheet with each row
representing a different work package from the WBS, and you also had a
column for the cost for each work package, task and/or activity. Simply
adding every value found in the cost column together to produce a single
result would be summing. However, this would cause double counting.
Imagine a single deliverable has five tasks required to produce it within the
structure. The cost for that deliverable would be the sum of the five tasks.
However, if you counted both the costs of the five tasks and the summed cost
of the deliverable towards the project budget, the costs just doubled.
Compilation addresses this issue by taking into consideration the project
structure in the budgeting process.
 .3 Data analysis — The most important type of data analysis for determining
the project budget is reserve analysis. Reserve analysis is applicable with
costs just as with time. The project manager and team must determine the
required monies to be set aside for related response strategies. A difference
from time, however, is the fact that you have now reached a stage in the
planning process where management reserves—as well as contingency
reserves—may be planned.
 .4 Historical information review — In cases where parametric or analogous
estimates are used to produce mathematical models it can be important to
understand the various relationships that exist within the model, in order to
more clearly define the budget. Therefore, the team needs to examine any
past projects to considered similar factors that may impact costs.

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 .5 Funding limit reconciliation — It is important to examine any limits that

are placed on the use of project funds. It is expected that the project manager
will have to work within those limitations. These limits might cause project
work to be rescheduled or redefined.
 .6 Financing — Sometimes the organization lacks the internal financial
resources to execute the project. In these cases, completing the project may
require seeking outside financial resources. This process is called financing.
Borrowing money or selling shares of the organization represent the two
most common forms of financing and both add additional agreements to the
project sphere.
The outputs for the determine budget process include the following:
 .1 Cost baseline — The cost baseline is an authorized time-phased budget At
completion (BAC). It is used to measure, monitor, and control overall
project cost performance. A key earned value term often used to refer to this
baseline is the performance measurement baseline (PMB).
 .2 Project funding requirements — How much money does the project
need to be successfully completed, and when is the money required? These
are the key questions answered by the project funding requirements. Image
66 shows an example of a cost baseline (the top dark line). The lower and
lighter line shows the actual costs for the project. In many real-world
projects, the funding does not constantly flow in like water from a faucet.
Instead, money is distributed in normal intervals to set limits. These
distributions are represented by the dotted line and are the funding
requirements.

Slide 197

Image 66: Project funding requirements

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®
 .3 Project document updates — PMI specifically calls out the updating of
the cost estimates, project schedule and risk register as all three can be
significantly altered by the process of generating a project budget.
Depreciation
The next topic to review for the test is depreciation. Depreciation provides a
series of financial calculations to account for the wearing out of equipment
within the organization. This is important to an organization because of an
earlier topic: assets and liabilities. Two key elements are relevant to understand
this concept. First, you must consider yourself the project leader for an
American organization. Secondly, go back to the scenario of being a project
manager at the widget factory. Imagine purchasing a $100,000 widget stamping
machine. From the federal government’s perspective you still have a $100,000
worth of assets in the organization. However, as soon as you start using that
widget stamping machine, is anyone going to pay you the full $100,000 to take
that machine off your hands? The answer is, of course, “No!” The machine is
now used and worth less. So why should your company continue to pay taxes on
the asset as if it were brand new? It shouldn’t, and depreciation provides the
method to reduce this burden. As you can imagine, most organizations want to
reduce this burden as quickly as possible. The speed at which you can
depreciate an asset is defined by its depreciation schedule. For the PMP® exam,
it is not expected that you are a subject matter expert on depreciation. It is
enough for you to know the basic calculations, the differences between the types,
and that it is governed by the Generally accepted accounting principles
(GAAP). Remember, you always can rely on your team’s expert judgment.
Before discussing the specifics surrounding depreciation, there are a few terms
you need to know. These terms include the following:
 Useful life — The useful life represents how long it is until the asset cannot
be used for tax purposes. Most assets have supposed useful lives of five
years or less so this value has little to do with how long the asset is really
used.
 Residual value — Also referred to as the scrap or salvage value. The
residual value refers to the supposed value of an asset after its useful life has
been expended. It answers the question how much would the junk dealer pay
for the machine when all they were going to do is melt it down for the metal.
Again, this is a value obtained from your subject matter experts.
 Cost — An asset’s cost is how much was paid to obtain the asset.

Depreciation is largely broken into two groups, standard and accelerated. The
difference between these two is that accelerated depreciation makes the asset
worth less, more quickly. For the exam there are four types of depreciation you
must be able to solve. Two methods are standard and two methods are
accelerated.

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Straight Line Depreciation Slide 198

The first depreciation method is the oldest and easiest. It is called straight line
depreciation (SLD) and it is the first standard depreciation method. SLD is
defined using the formula:
Straight Line
cost – residual value Depreciation
Current Asset Value — useful life
Formula
Let’s go back to our widget factory to get a better understanding. Imagine your
team purchased a widget stamping machine that cost $100,0000. Your
accounting expert tells you the allowed depreciation schedule is five years, and
your machine expert says when the machine is all worn out you can sell it to the
scrap dealer for $25,000. The straight line depreciation formula would be as
follows:
 Year 1 = $100,000 — (($100,000—$25,000) / 5) = $85,000
 Year 2 = $85,000 — (($100,000—$25,000) / 5) = $70,000
 Year 3 = $70,000 — (($100,000—$25,000) / 5) = $55,000
 Year 4 = $55,000 — (($100,000—$25,000) / 5) = $40,000
 Year 5 = $40,000 — (($100,000—$25,000) / 5) = $25,000
There are three points with regard to this calculation and its results. First, notice
that each annual calculation is run at the end of its year. Second, notice that the
final result at the end of the useful life or schedule period is exactly equal to the
salvage value. This will be the case in all instances except when using the
double declining balance or the units of production method of calculating
depreciation. The final point is that you need to be careful in answering any
depreciation question, as they are unlikely to ask what the value of the asset
would be at the end of the useful life, as that will almost always be the salvage
value. More than likely you will be asked to solve for one of the interim periods.
Imagine being asked—in the case above—what the asset value would be at the
end of year three. The answer would be $55,000.
Production Method of Depreciation
The second standard depreciation method is the units of production (UOP)
method of depreciation. This method is commonly used in manufacturing
environments where the life expectancy of a piece of equipment is best defined
by the number of units it can produce. The formula to calculate the production
method of depreciation is as follows:

( ( ))
cost – residual value Units of
Current Asset Value — Units Produced * estimated units of useful life (production) Production
Formula
In the units of production method of depreciation, our subject matter experts
must provide two additional pieces of information before we can complete the
calculation. To successfully complete the calculation, we need to know how
many units the widget stamping machine can produce before wearing out, and
how many units have been produced. In this case, imagine our subject matter
expert informs us that the stamping machine can produce 10,000,000 widgets
before wearing out and it has produced 750,000 units. With this new piece of
data our calculation now is as follows:

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 Cost — Residual = $100,000 - $25,000 = $75,0000

 Depreciation per Unit Produced = $75,000 / 10,000,000 = 0.0075
 Depreciation for 750,000 Units = 750,000 * 0.0075 = $5,625
 Depreciated Value = $100,000 — $5625 = $94,375
Common questions using the production method would ask about what the
depreciated value was after X units are produced, without regard for the number
of time periods.
Accelerated Depreciation
Accelerated depreciation methods make an asset’s value decline at a faster rate,
sometimes significantly faster than standard depreciation allows. Remember, the
idea is that the organization must pay taxes on the assessed value, so the faster it
loses value, the less tax the organization pays. Don’t fret about knowing when
to use a standard versus accelerated method. You are only responsible for
knowing the basic calculations. You subject matter experts will define which
method is appropriate for your situation. There are potentially two accelerated
depreciation methods on the exam. These methods are: Double Declining
Balances and Sum of the Year Digits.
Double Declining Balances
Double declining balances or DDB is the fastest method for depreciating an
asset. It requires the project manager to take 100% and divide it by the term of Slide 199
the depreciation schedule. This result is doubled and the asset value is then
reduced by the doubled result until the value becomes equal to or less than the
salvage value. Here is an absolutely critical point, as an asset can NEVER be
worth less than its salvage value. Once that result is reached, you are done
calculating regardless of the term. Let’s go back to our widget factory and
machine example. Using the same $100,000 machine with a $25,000 salvage
value and a five year term the calculation would be:
 100% / 5 = 20%
 20% doubled = 40%
 Year 1 = $100,000 — 40% = $60,000
 Year 2 = $60,000 — 40% = $36,000
 Year 3 = $36,000 — 40% = $21,600
At the end of year three you would stop calculating because the result ($21,600)
is less than the salvage value of $25,000. At the end of year three, the salvage
value is then $25,000 because it can never be worth less than the salvage value.
Sum of the Year Digits
The last depreciation method is often the most difficult for exam candidates to
learn. It is the sum of the year digits method of depreciation or SYD. SYD
begins by adding all the values in the term. For example, if the term was three
years, you would add 1 + 2 + 3 = 6. Next, count the term backwards and divide
the value by the sum just created (6), and multiply the result by the purchase

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price minus the salvage value. Third, subtract this new result from the value. Slide 200
Let’s look at an example to better understand SYD. Returning to our widget
factory machine with a purchase price of $100,000, a salvage value of $25,000
and a term of five years, the process would be as follows:
 1 + 2 + 3 + 4 + 5 = 15 (the sum of the five year term)
 $100,000 — $25,000 = $75,000 (the purchase price—residual value)
 Year 1 = $100,000 – (5/15 * $75,000) = $75,000
 Year 2 = $75,000 – (4/15 * $75,000) = $55,000
 Year 3 = $55,000 – (3/15 * $75,000) = $40,000
 Year 4 = $40,000 – (2/15 * $75,000) = $30,000
 Year 5 = $30,000 – (1/15 * $75,000) = $25,000
Notice that the SYD method will always conclude at the end of the term exactly
at the salvage value. This is a good test to ensure you have not made a mistake
on the exam.
Take a few moments to complete the depreciation exercise on the following page
before continuing on to the next topic.

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Exercise 12—Depreciation Exercise 12—

Depreciation
 You are a project manager and have been asked to assess the value of an
asset on your project at the end of year four using straight line depreciation.
Assuming the asset costs $100,000 to purchase, has a residual value of
$25,000, and is depreciated based on a five year schedule what is the
assessed value?
A. $25,000
B. $40,000
C. $65,000
D. $85,000
2. You are a project manager and have been asked to assess the value of an
asset on your project at the end of year three using straight line depreciation.
Assuming the asset costs $225,000 to purchase, has a residual value of
$35,000, and is depreciated based on a five year schedule what is the
assessed value?
A. $187,000
B. $149,000
C. $111,000
D. $73,000
3. You are a project manager and have been asked to assess the value of an
asset on your project at the end of year one using straight line depreciation.
Assuming the asset costs $75,000 to purchase, has a residual value of
$12,500, and is depreciated based on a three year schedule what is the
assessed value?
A. $75,000
B. $12,500
C. $33,333
D. $54,167
4. You are a project manager and have been asked to assess the value of an
asset on your project at the end of year three (3) using straight line
depreciation. Assuming the asset costs $50,000 to purchase, has a residual
value of $10,000, and is depreciated based on a three (3) year schedule what
is the assessed value?
A. $10,000
B. $13,333
C. $23,333
D. $36,667

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5. You are a project manager and have been asked to assess the value of an
asset on your project at the end of year three using straight line depreciation.
Assuming the asset costs $250,000 to purchase, has a residual value of
$50,000, and is depreciated based on a five year schedule what is the
assessed value?
A. $210,000
B. $175,000
C. $130,000
D. $110,000
6. You are a project manager for a manufacturing company. You are asked to
determine the depreciated value for a piece of equipment using the UOP
method. If the piece of equipment initially cost $1,000,000, has a residual
value of $25,000, has a useful life of 10,000,000 units produced, and has
already produced 1,000,000 units what is its current value?
A. $900,000
B. $902,500
C. $875,000
D. $800,000
7. You are a project manager for a manufacturing company. You are asked to
determine the depreciated value for a piece of equipment using the UOP
method. If the piece of equipment initially cost $750,000, has a residual
value of $40,000, has a useful life of 8,000,000 units produced, and has
already produced 2,500,000 units what is its current value?
A. $375,500
B. $768,250
C. $625,500
D. $528,125
8. You are a project manager for a manufacturing company. You are asked to
determine the depreciated value for a piece of equipment using the UOP
method. If the piece of equipment initially cost $500,000, has a residual
value of $65,000, has a useful life of 7,500,000 units produced, and has
already produced 310,000 units what is its current value?
A. $365,500
B. $532,250
C. $482,020
D. $525,010

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9. You are a project manager for a manufacturing company. You are asked to
determine the depreciated value for a piece of equipment using the UOP
method. If the piece of equipment initially cost $250,000, has a residual
value of $15,000, has a useful life of 5,500,000 units produced, and has
already produced 4,100,000 units what is its current value?
A. $72,652
B. $74,818
C. $76,534
D. $81,225
10. You are a project manager for a manufacturing company. You are asked to
determine the depreciated value for a piece of equipment using the UOP
method. If the piece of equipment initially cost $2,000,000, has a residual
value of $68,000, has a useful life of 15,000,000 units produced, and has
already produced 7,200,000 units what is its current value?
A. $1,072,640
B. $1,528,860
C. $925,310
D. $875,687
11. You are a project manager and have been asked to assess the value of an
asset on your project at the end of year two using DDB. Assuming the asset
costs $100,000 to purchase, has a residual value of $25,000, and is
depreciated based on a five year schedule what is the assessed value?
A. $60,000
B. $36,000
C. $25,000
D. $21,400
12. You are a project manager and have been asked to assess the value of an
asset on your project at the end of year three using DDB. Assuming the asset
costs $250,000 to purchase, has a residual value of $35,000, and is
depreciated based on a five year schedule what is the assessed value?
A. $54,000
B. $64,000
C. $90,000
D. $150,000
13. You are a project manager and have been asked to assess the value of an
asset on your project at the end of year four using DDB. Assuming the asset
costs $650,000 to purchase, has a residual value of $52,000, and is
depreciated based on a five year schedule what is the assessed value?
A. $390,000
B. $234,512
C. $140,375
D. $84,240

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14. You are a project manager and have been asked to assess the value of an
asset on your project at the end of year two using DDB. Assuming the asset
costs $79,800 to purchase, has a residual value of $12,000, and is depreciated
based on a three year schedule what is the assessed value?
A. $26,600
B. $12,000
C. $6,500
D. $18,460
15. You are a project manager and have been asked to assess the value of an
asset on your project at the end of year two using DDB. Assuming the asset
costs $150,000 to purchase, has a residual value of $10,000, and is
depreciated based on a three year schedule what is the assessed value?
A. $50,000
B. $36,450
C. $16,667
D. $10,000
16. You are a project manager and have been asked to assess the value of an
asset on your project at the end of year three using SYD. Assuming the asset
costs $100,000 to purchase, has a residual value of $25,000, and is
depreciated based on a five year schedule what is the assessed value?
A. $55,000
B. $45,000
C. $40,000
D. $35,000
17. You are a project manager and have been asked to assess the value of an
asset on your project at the end of year two using SYD. Assuming the asset
costs $250,000 to purchase, has a residual value of $29,000, and is
depreciated based on a three year schedule what is the assessed value?
A. $65,833
B. $59,561
C. $55,610
D. $49,900
18. You are a project manager and have been asked to assess the value of an
asset on your project at the end of year three using SYD. Assuming the asset
costs $350,000 to purchase, has a residual value of $33,000, and is
depreciated based on a four year schedule what is the assessed value?
A. $48,750
B. $55,800
C. $61,900
D. $64,700

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19. You are a project manager and have been asked to assess the value of an
asset on your project at the end of year two using SYD. Assuming the asset
costs $450,000 to purchase, has a residual value of $41,000, and is
depreciated based on a four year schedule what is the assessed value?
A. $159,900
B. $163,700
C. $165,500
D. $169,200
20. You are a project manager and have been asked to assess the value of an
asset on your project at the end of year three using SYD. Assuming the asset
costs $550,000 to purchase, has a residual value of $62,500, and is
depreciated based on a four year schedule what is the assessed value?
A. $111,250
B. $118,500
C. $125,200
D. $130,500

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Exercise 12—Depreciation Answers

1. Answer B. This question requires you to calculate the depreciation using the
formula below then subtracting that result from the purchase price four
times. cost – residual value
Current Asset Value — useful life

2. Answer C. This question requires you to calculate the depreciation using the
formula below then subtracting that result from the purchase price three
times. cost – residual value
Current Asset Value — useful life

3. Answer D. This question requires you to calculate the depreciation using the
formula below then subtracting that result from the purchase price one time.
cost – residual value
Current Asset Value — useful life

4. Answer A. This question requires you to calculate the depreciation using the
formula below then subtracting that result from the purchase price three
times.
cost – residual value
Current Asset Value — useful life

5. Answer C. This question requires you to calculate the depreciation using the
formula below then subtracting that result from the purchase price three
times. cost – residual value
Current Asset Value — useful life

6. Answer B. The Unit of Production Method, or UOP is defined by first

calculating the amount of value the asset loses with each unit produced. This
is done with the formula below. This result is then multiplied by the number
of units produced giving you the lost value. By subtracting this number from
the original purchase price you obtain the result.

(
Current Asset Value — Units Produced * ( cost – residual value
))
estimated units of useful life (production)

7. Answer D. The Unit of Production Method, or UOP is defined by first

calculating the amount of value the asset loses with each unit produced. This
is done with the formula below. This result is then multiplied by the number
of units produced giving you the lost value. By subtracting this number from
the original purchase price you obtain the result.

(
Current Asset Value — Units Produced * ( cost – residual value
))
estimated units of useful life (production)

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8. Answer C. The Unit of Production Method, or UOP is defined by first

calculating the amount of value the asset loses with each unit produced. This
is done with the formula below. This result is the multiplied by the number
of units produced giving you the lost value. By subtracting this number from
the original purchase price you obtain the result.

(
Current Asset Value — Units Produced * ( cost – residual value
))
estimated units of useful life (production)

9. A: The Unit of Production Method, or UOP is defined by first calculating the

amount of value the asset loses with each unit produced. This is done with
the formula below. This result is the multiplied by the number of units
produced giving you the lost value. By subtracting this number from the
original purchase price you obtain the result.

(
Current Asset Value — Units Produced * ( cost – residual value
))
estimated units of useful life (production)

10. A: The Unit of Production Method, or UOP is defined by first calculating the
amount of value the asset loses with each unit produced. This is done with
the formula below. This result is the multiplied by the number of units
produced giving you the lost value. By subtracting this number from the
original purchase price you obtain the current value.

(
Current Asset Value — Units Produced * ( cost – residual value
))
estimated units of useful life (production)

11. Answer B. Double Declining Balances or DDB is an accelerated

depreciation method. Begin by calculating depreciation as if using the
straight line method. Then determine the total percentage of the asset that is
depreciated the first year and double it. Each subsequent year, that same
percentage is multiplied by the remaining balance to be depreciated.
12. Answer A. Double Declining Balances or DDB is an accelerated
depreciation method. Begin by calculating depreciation as if using the
straight line method. Then determine the total percentage of the asset that is
depreciated the first year and double it. Each subsequent year, that same
percentage is multiplied by the remaining balance to be depreciated.
13. Answer D. Double Declining Balances or DDB is an accelerated
depreciation method. Begin by calculating depreciation as if using the
straight line method. Then determine the total percentage of the asset that is
depreciated the first year and double it. Each subsequent year, that same
percentage is multiplied by the remaining balance to be depreciated.
14. Answer B. Double Declining Balances or DDB is an accelerated
depreciation method. Begin by calculating depreciation as if using the
straight line method. Then determine the total percentage of the asset that is
depreciated the first year and double it. Each subsequent year, that same
percentage is multiplied by the remaining balance to be depreciated.

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15. Answer C. Double Declining Balances or DDB is an accelerated

depreciation method. Begin by calculating depreciation as if using the
straight line method. Then determine the total percentage of the asset that is
depreciated the first year and double it. Each subsequent year, that same
percentage is multiplied by the remaining balance to be depreciated.
16. Answer C. SYD or Sum of the Year Digits is an accelerated depreciation
method. Begin by adding the number of years in the schedule. For example,
for a five year schedule add 1+2+3+4+5 = 15. Next, take the asset value
minus the residual value and divide it by this result (15). This creates the
amount you will use at the end of each year to reduce the value of the asset.
17. Answer A. SYD or Sum of the Year Digits is an accelerated depreciation
method. Begin by adding the number of years in the schedule. For example,
for a five year schedule add 1+2+3+4+5 = 15. Next, take the asset value
minus the residual value and divide it by this result (15). This creates the
amount you will use at the end of each year to reduce the value of the asset.
18. Answer D. SYD or Sum of the Year Digits is an accelerated depreciation
method. Begin by adding the number of years in the schedule. For example,
for a five year schedule add 1+2+3+4+5 = 15. Next, take the asset value
minus the residual value and divide it by this result (15). This creates the
amount you will use at the end of each year to reduce the value of the asset.
19. Answer B. SYD or Sum of the Year Digits is an accelerated depreciation
method. Begin by adding the number of years in the schedule. For example,
for a five year schedule add 1+2+3+4+5 = 15. Next, take the asset value
minus the residual value and divide it by this result (15). This creates the
amount you will use at the end of each year to reduce the value of the asset.
20. Answer A. SYD or Sum of the Year Digits is an accelerated depreciation
method. Begin by adding the number of years in the schedule. For example,
for a five year schedule add 1+2+3+4+5 = 15. Next, take the asset value
minus the residual value and divide it by this result (15). This creates the
amount you will use at the end of each year to reduce the value of the asset.

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7.4 Control Costs Slide 201

The third and final process found in the cost management knowledge area is the
control costs process. It is one of the most important processes to study for the
PMP® exam because it provides the primary focus on the earned value
technique (EVT) otherwise known as the earned value management system
(EVMS). There are a number of calculations and graphing skills that must be
mastered to successfully understand this process.
The control costs process is concerned with influencing the factors that create
changes to the cost baseline, ensuring requested changes are agreed upon,
managing the actual changes as they occur, and assuring that potential cost-
overruns do not exceed the authorized funding, periodically and in total for the
project. As with any of the processes which have the word “control” in them,
control costs is part of integrated change control.
Most of this section will focus on EVT, but let’s begin with the inputs, tools and
techniques, and outputs of the control costs process. The inputs to the control Slide 202
costs process include:
 .1 Project management plan — Within the project management plan there
are three components which are critical to controlling project costs. The first
is the cost management plan which describes how the project costs are
managed and controlled, and the second is the cost baseline, which provides
the primary point of comparison for the actual result. The third and final
component is the performance measurement baseline.
 .2 Project documents — Although you might need to examine a lot of
different project documents as you go through the process of controlling
costs, the one PMI® specifically calls out is the lessons learned register
because the team uses it to see where other projects have had trouble
controlling costs and how they solved specific cost problems.
 .3 Project funding requirements — The funding requirements define how
much money is needed to complete the project, and when the money is
required.
 .4 Work performance data — The work performance information explains
which deliverables have started, their progress, and which deliverables have
finished. It also includes information about incurred actual costs, authorized
costs, and estimates for both schedule and cost completion.
 .5 Organizational process assets — Many organizations have processes,
policies and templates that deal with project cost control. All of these should
be included if they are available.
The tools and techniques used in the control costs process include the following:
 .1 Expert judgment — To accurately control project costs, the team needs
to have real world experience. It is that expert judgment that PMI® calls on
to ensure the team has success.

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 Data analysis — There are a number of data analysis techniques the team
might use to control costs, but PMI® specifically calls out four that are
critical. For the exam it is absolutely critical that you know these cold. They
include:
 Earned value management — EVT or EVMS is PMI’s preferred
method for measuring progress on a project because of its
quantitative nature and focus on future predictability.
 Variance analysis — Variance analysis is largely tied to earned
value. It is the process of comparing your actual results to what you
promised and then understanding the difference.
 Trend analysis — Trend analysis involves understanding the
collective movement of the project costs, where they have been and
where they are going. A big part of this is forecasting the future
project costs.
 Reserve analysis — If you recall from earlier in our course, reserves
come in two forms: contingency and management reserves. Here we
are specifically looking to ensure we have set aside enough money to
complete the project should the unexpected occur.
 .3 To-complete performance index — The TCPI is the calculated projection
of cost performance that must be achieved on the remaining work to meet a
specified goal. The TCPI is an earned value calculation.
 .4 Project management information system— Because of the number of
calculated fields, often project management software makes the process of
controlling costs much easier.
The outputs to the control costs process include the following:
 .1 Work performance information — The primary work performance
measurements are all earned value measures such as CV, SV, CPI, and SPI
done at the control account level within the WBS.
 .2 Cost forecasts — The budget forecast is also an earned value calculation
using the EAC value.
 .3 Change requests — The ongoing analysis of project performance often
causes stakeholders to request changes in one or more aspect.
 Organizational process assets updates — Specific updates might include
causes of variances, corrective actions taken with explanations, or other
types of lessons learned.
 .4 Project management plan updates — Your measurements might cause
updates to the cost baseline, the cost management plan, and the performance
measurement baseline.

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 .5 Project document updates — Those same measurements might cause

updates to a number of other documents found outside the project
management plan but still important. Examples include: the assumption log,
the cost estimates and the basis of those estimates, the lessons learned
register, and the risk register.
Earned Value Management (EVM)
As was previously stated, the primary focus of the control costs process is
Earned value management (EVM). For many PMP® candidates, understanding
Earned value is the singularly most difficult concept to master. You must know
all the equations and the reasoning behind when and where to use the
calculations to pass the exam. To better understand EVM let’s begin by taking a
step back.
Many basic project management courses teach the importance of the triple
constraints in project management. These constraints are time, costs, and scope/
quality. It is often said that project management is largely about managing the
trade-offs between these three. However, the concept of a series of trade-offs
creates a significant problem. How does a project manager evaluate the trade-
offs between time and costs, or time and scope, or scope and costs? If you are
like many project managers the answer is easy, you simply ask your stakeholders
right? Wrong!
If you ask your stakeholders to provide the analysis of the trade-offs you are
trapped using highly subjective measures and will fail every time. A key goal of
successful project management is finding quantifiable, objective measures of
success and progress. Do you see the trap yet? Let’s take a look at a simple
example to make it more clear.
What is the most common measure of time? Hours, days, weeks or months
right? What is the most common measure of cost? Dollars or whatever is your
national currency. Finally, how do you measure scope/quality? Be careful as
this question often tricks people who go too quickly. The primary measure of
scope/quality is deliverables or features.
Now bring these three together. How would you evaluate the trade-off between
two weeks, five features and $10,000? Remember, the correct answer is not ask
your stakeholders. The correct answer is you can’t! Each person you ask would
likely give you a different answer. This simple example brings us to Earned
Value Management.
At its heart, earned value management is all about providing a quantitative,
objective method to measure the performance of variables which are naturally
disparate so the trade-offs can be easily understood. Earned value has become
increasingly popular because it focuses on using this information to provide
future predictability and can be very accurate, even early in a project.
Successfully learning Earned value management requires you to focus on those
three variables from the triangle: time, cost and scope/quality. EVM translates
these three variables so do not get confused. Remember to stay focused on what

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Slide 203

Image 67: A Cumulative Cost Curve

the variables really are. To explain, earned value and its calculations more fully
we will use a chart and table. We begin with a slightly more sophisticated
version of the cost baseline examined previously in this chapter. Image 67
shows the cumulative cost curve. The first thing you likely notice is the large
number of acronyms. Do not worry, with a little practice these will become
second nature. The horizontal axis of the chart represents time as a continuum.
The vertical axis represents the cumulative dollars for the project. Notice there
is also a vertical bar showing where the project is currently. Below the other
acronyms are defined.
 BAC — The budget at completion. This is the total budget for the project.
It is the single number used to answer the question how much money was
this project supposed to cost in total?
 Remaining work — This is exactly what it sounds like it is. It represents
the work than is still left to be accomplished. It is calculated with the
formula BAC-EV.
 ETC — The estimate to complete. This is the number that answers the
question how much MORE money do we think the project is really going to
cost. There are several different calculations which may be used to calculate
ETC.
 Critical ratio — The critical ratio is the CPI * SPI. It provides a quick,
single number review of project performance.
 PV — The planned value is the first of three major variables representing the
legs of the triangle in the triple constraints. The PV represents the time leg
of the triangle. The transition from days to dollars is made through the
budget. A key aspect of any budget is when the money is spent. We can
therefore argue that the $1,000 that was planned to be spent in a given week

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is equal to that week. This allows us to now go through the analysis using
the $1,000 instead of always referring back to the one week. The planned
value provides the baseline against which all comparisons are made. In a
perfectly run project, both the AC and EV lines appear exactly on top of the
PV line. Also notice that the BAC is at the end of the PV line at a point
where it has flattened out. This flattening occurs because the project reached
its total budget without being completed so time continues but the PV line
remains flat. The PV is another way of saying the cost baseline or budget. It
also can be used to represent the amount of work to be completed in any
period.
 AC — The actual costs is the easiest of the earned value variables. It
represent the actual money spent on the project.
 EV — The earned value is often the most difficult variable for exam
candidates to learn. However, it is also the most important of the three major
variables (AC, EV and PV) because all the major calculations begin with the
earned value. The earned value represents the scope leg of the triple
constraints. It is the amount of work product that has been produced by the
project. The trick is converting work into dollars. The major requirement to
accomplish this feat has already been achieved. The key element to
reporting progress using earned value is progress must be reported at the
work package level of the WBS. Once the initial budget for a work package
is established so is its value because they are the same thing. If you planned
on spending $1,000 in total on a work package then the work package is
worth $1,000. If you are 50% done with the work package you have earned
$500 in value. Finally, a work package can NEVER be worth more than you
planned on it costing to produce.
 EAC — The estimate at completion is one of three forecasts that is
calculated using the three base variables (AC, EV and PV). It answers the
question how much in TOTAL are we now expecting the project to cost. It
includes an estimate of the remaining work costs (ETC) and the already
accrued actual costs.
The discipline of earned value is rooted in four calculations which are found in
Image 68. This image is the best way of memorizing the basic earned value
Slide 204

Image 68: The Earned Value Exam Guide

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calculations. Begin by noticing the three major earned value variables discussed
above (AC, EV and PV) appear at the top of the graphic in alphabetical order.
All of the calculations begin in the middle with the Earned Value (the name of
the technique) and work outward. On the far left are two variables that begin
with the letter C. These variables measure cost performance. On the far right
side are two variables which begin with the letter S. These measure schedule
performance. The two letter calculations (CV and SV) are variances which show
the actual over or under performance in currency terms. The three letter
calculations (CPI and SPI) are performance indexes which measure the variances
as a percentage. As you will see, the performance indexes are usually more
valuable than the variances. The four basic earned value equations defined by
Image 68 are:
 CV = EV — AC
 CPI = EV / AC
 SV = EV — PV
 SPI = EV / PV
To read these calculations an exam candidate only needs to remember a few
simple rules. These rules are:
 If it is a two letter abbreviation the target is zero.

 CV or SV > 0 is under budget

 CV or SV = 0 is right on budget
 CV or SV < 0 is over budget
 If it is a three letter abbreviation the target is one.

 CPI or SPI > 1 is under budget

 CPI or SPI = 1 is right on budget
 CPI or SPI < 1 is over budget
Let’s take a more detailed look at these rules to better understand how they
work. If the project has a cost variance of –$12,345, this is bad as it is less than
zero and tells the project manager they are over budget. A CV of zero means the
project is right on budget, and a CV of greater than zero means the project is
under budget by the value of the CV. Replace the cost variance with the
schedule variance (SV) and the statements still hold true. A schedule variance
less than zero means the project is behind schedule, a value of exactly zero
means the project is on schedule, and a schedule variance greater than zero
means the project is ahead of schedule.
The CPI and SPI are usually more valuable to the project manager, and are read
using a target value of one, as any number divided by itself equals one. The CPI,
or cost performance index is calculated by taking the earned value and dividing
it by the actual costs. If a value of one is the result, the project is exactly on
budget. If the value is greater than one the project is under budget, and if the
result is less than one, the project is over budget. In the case of both indexes, the
proximity to one has great significance because the one is synonymous with
100%. Hence, a CPI of .91 means the project is 9% over budget (100% - 91% =

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9%), and a CPI of 1.06 means the project is 6% under budget. The same logic
works for the schedule performance index. An SPI of .88 means the project is
12% behind schedule and an SPI of 1.04 means the project is 4% ahead of
schedule. Both of these statistics are incredibly useful in telling the project
manager where the project is right now. However, neither tells the PM how the
project is going to end. To provide that information the PM must turn to the
earned value forecasting measures.
Earned Value Forecasting
There are three primary forecast values which a project manager might need to
calculate on any project, and with each value there are multiple methods to
obtain an answer. For the certification exam it is very important that you
understand each of these methods and when they should be used.
ETC — Estimate to complete answers the question how much MORE money is Estimate to
the project going to take to complete. There are four methods which may be used Complete
to calculate ETC. Each method is based upon a different assumption. These Formulas
include the following:
 ETC based on new estimate — There is no formula if the Estimate to Slide 205
Complete is being based upon an entirely new estimate. The project
manager and the team simply develop a new estimate. This method is used
whenever the original estimate is believed to be flawed beyond recovery.
This method is not often found on the exam beyond the term and explanation
because it is impossible to develop a mathematical question when the new
estimate is developed by an external process.
 ETC based on atypical variances — Atypical variances means the
variances are not commonly occurring. For the project manager, it means
whatever caused the variances is not expected to continue, and future
forecasts can be based on whatever the original budget was. The formula for
an ETC with atypical variances is ETC = BAC-EV. If you examine the
definitions provided a few pages earlier, you will notice this is the same
equation to define the remaining work. It is a fancy way of saying you will
produce the remaining work for exactly what you said it would cost. This
equation might be on the exam, but it is not the most likely. Watch for the
phase “atypical variances” on the exam to clue you in.
 ETC based on typical variances — An estimate to complete based upon
typical variances is the most common ETC seen on the exam. It assumes
that whatever has been the rate of progress will continue in the future. In
most cases it means whatever has been causing you problems will keep
causing you problems. The formula to calculate the ETC using typical
variances is ETC = (BAC-EV)/CPI. Notice this equation also makes use of
the mathematical expression for remaining work (BAC-EV), but it has been
factored by the actual performance rate.
 ETC based on both the CPI and SPI — The final method for calculating
the estimate to complete makes use of both the cost performance index and

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the schedule performance index. This method assumes both a negative cost
performance to-date and requirement to hit a specific target date. This
method is most commonly used when the project schedule is a driving force
impacting the ETC. The formula to calculate the ETC using both the CPI
and SPI is ETC = (BAC-EV)/(CPI*SPI). This formula makes use of the
mathematical expression for remaining work (BAC-EV) and the Critical
Ratio (CPI*SPI).
The next set of calculations used the underlying assumptions of the same four Estimate at
ETC calculations, and simply adds the actual costs to date to them. This creates Completion
the Estimate At completion or EAC. The EAC answers the question, “How Formulas
much in TOTAL will the project cost?”. The calculations for EAC are as
follows:
 EAC using a new estimate — As with the ETC, this calculation is unlikely Slide 206
to be on the exam past a definitional question because it is impossible to
develop a mathematical question when the formula is based outside the
question parameters. The formula for the EAC when an entirely new ETC is
developed is EAC = AC + ETC.
 EAC assuming atypical variances — The second possible calculation for
Estimate at completion takes the remaining current budget and adds it to the
actual costs to-date. It assumes that whatever has been causing problems on
the project will not continue to do so in the future. As with the ETC, this
method is assuming atypical variances. The formula for the atypical
variance EAC is EAC = AC + (BAC-EV).
 EAC Assuming typical variances — The EAC method that assumes typical
variances makes use of the cost performance index (CPI) to factor the
remaining work based on actual project cost performance and then adds the
costs to date. It assumes the rate of cost performance achieved to date will
remain consistent in the future. The formula for EAC assuming typical
variances is EAC = AC + ((BAC-EV)/CPI).
 EAC using both CPI & SPI — The EAC using the critical ratio (CPI*SPI)
makes the same assumption as the ETC using the critical ratio, that it is
critical to hit a specific schedule target previously defined. The formula for
the EAC using the critical ratio is EAC = AC + ((BAC-EV)/(CPI*SPI)).
The final cost forecast calculation you must learn for the PMP® exam is the to- To-Complete
complete performance index or TCPI. The TCPI is a calculated projection of Performance
the cost performance, which must be achieved on the remaining work to hit a Index
desired target. In the simplest terms, the TCPI is the remaining work divided by Formulas
the remaining funds . Typically, the EAC target is either the BAC or a new
EAC. The TCPI is often used when the original budget is recognized as
unrealistic and a new EAC is developed. The formula for the TCPI — when the
goal is to hit the original budget—is as follows:
TCPI = (BAC-EV) / (BAC-AC) Slide 207

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If the goal is to achieve a new target based upon a specified EAC, the formula
for TCPI is as follows:
TCPI = (BAC - EV) / (EAC - AC)
In addition to the earned value management calculations specified which target
project costs, earned value provides calculations that address forecasting the
project schedule. In the PMBOK® Guide these calculations are discussed in the
schedule management knowledge area, but we list them here to consolidate all
the earned value discussion to a single location. The two equations used to
forecast schedule in earned value management are as follows:
 Schedule Est. = Original Project Duration / SPI (This is often used as a
minimum schedule estimate)
 Schedule Est. = Original Project Duration / (CPI * SPI) (This is often
used as the maximum schedule estimate to allow for a range)
The next calculation and definition you must know for the exam is variance at Variance at
completion or VAC. VAC is defined as how much over or under budget the Completion
project will be at the end. The formula used to calculate VAC is as follows: Formula
BAC—EAC
With the 6 edition of the PMBOK® Guide introduces the concept of earned
th

schedule to earned value. The earned schedule replaces the schedule variance
used in earned value. The team still looks for zero as the break between being
behind and ahead of schedule. Earned schedule theory also provides formulas
for forecasting the project completion date, using the earned schedule, actual
time and estimated duration. However, it also introduces a number of new
variables. It is important that you understand these new variables.
Slide 208-
 Schedule at completion or SAC — This is the original planned completion 210
duration of the project.
 Earned schedule or ES — The earned schedule is the duration from the
beginning of the project to the date on which the planned value is supposed
to equal to the budget at completion.
 Actual time or AT — This is the duration from the beginning of the project
to status date.
 Time variance or TV — The TV is a measure of schedule performance in
time units rather than cost units and is defined by the formula:
Time
TV = ES – AT Variance
Formula
The time variance uses zero as its measurement mark. If this value is
negative the project is behind schedule, and if it is positive it is ahead of
schedule. This is exactly the same as the schedule variance time. However, it
is technically not the same as the schedule variance.
 Time estimate at completion or TEAC — The TEAC represents the
forecast of time at completion and is similar to EAC. It uses the same basic
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formulas as EAC but replaces cost with schedule.

 Time variance at completion or TVAC — The TVAC shows the estimated
amount of time either ahead or behind schedule the project is. It uses the
following formula: Time
Variance at
TVAC = SAC – TEAC Completion
Formula
The TVAC uses zero as its target for perfectly on schedule with a value greater
representing being ahead of schedule and a negative value representing being
behind schedule.
Cost Management Summary Slide 211
Although the cost management knowledge Area only contains three processes, it
is critical that you do well in this section to ensure success on the exam. Make
sure you are comfortable with the following:
 The four processes — The four processes found in the cost management
knowledge area include: plan cost management, estimate costs, determine
budget, and control costs. make sure you know them and their inputs, tools
and techniques, and outputs.
 Earned value management concepts and calculations — EVM makes up
the largest portion of the cost management knowledge area. You cannot
spend too much time studying EVM!
 Life cycle costing — It is a professional responsibility of every project
manager to make sure the organization understands the costs of both
executing the project, and owning the resultant product or service. A project
manager should never develop a product or service the organization cannot
afford to own.
 Cost baseline — The cost baseline usually appears as an S-curve and
represents the budget over time for the project. It is important because it
provides the target or comparison point as the project progresses.
 Estimating vs. budgeting — Estimating is the process of developing
expected costs at the lowest level of delivery. Budgeting is the process of
rolling those estimates up to obtain the overall project costs and then
determining when that money is expected to be spent.
 Types of estimates and estimating — The types of estimates include the
ROM and detailed or budget estimate. Types of estimating include
analogous, parametric, bottom-up and three point estimating.
 Contingency and management reserve — Make sure you understand the
differences between these two. Remember, contingency reserve is used to
respond to known unknowns, and is controlled by the project manager.
Management reserves are used to respond to unknown unknowns, and
controlled by senior management.

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Exercise 13 — Earned Value Management Exercise 13

— EVMS
1. Which of the following variables represents the budgeted cost for the work
scheduled to be completed up to a given point?
A. Actual cost
B. Planned value
C. Earned value
D. Estimate at completion
2. Which of the following variables represents the budgeted amount for the
work completed on the schedule activity up to a given point?
A. Planned value
B. Actual costs
C. Estimate to completion
D. Earned value
3. Which of the following variables represents the total cost incurred in
accomplishing work on the scheduled activity during a specific time period?
A. Actual costs
B. Summary costs
C. Earned value
D. Planned value
4. Which of the following variables represents the amount of additional money
that needs to be spent to complete the project?
A. EAC
B. ETC
C. CPI
D. SPI
5. Which of the following variables represents the total amount of money that is
estimated to be spent when the project is completed?
A. ETC
B. CPI
C. EAC
D. SPI
6. Which of the following variables represents the formula: Earned Value minus
Actual Costs?
A. CV
B. CPI
C. SV
D. SPI

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7. Which of the following variables represents the formula: Earned Value minus
Planned Value?
A. SPI
B. CV
C. CPI
D. SV
8. Your boss enters your office and asks for the cost variance on your project
that has an AC of $290, a PV of $300, and an EV of $270. What value do
you provide them?
A. -30
B. 0.95
C. 0.92
D. -20
9. Your boss enters your office and asks for the cost variance on your project
that has an AC of $400, a PV of $405, and an EV of $391. What value do
you provide them?
A. -5
B. 1.30
C. 1.08
D. -9
10. You are preparing your monthly status report for your project. Your project
had an original budget of $150,000 and an original schedule of 18 months.
You currently have spent $65,000 and had budgeted to spend $60,000. You
have produced $55,000 worth of product. Your Vice President is very eager
to review your report as your project is important to the company’s success.
What is the Cost Variance for the project?
A. -10,000
B. -5,000
C. 0.85
D. 0.92
11. You are preparing your monthly status report for your project. Your project
had an original budget of $950,000 and an original schedule of 11 months.
Your currently have spent $400,000 and had budgeted to spend $405,000.
You have produced $391,000 worth of product. Your Vice President is very
eager to review your report as your project is important to the company’s
success. What is the Schedule Variance for the project?
A. -9,000
B. 0.98
C. 14
D. -14,000

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12. You are leading a project that is a low profile project for the organization.
The project was originally scheduled to take 10 months at a total cost of
$70,000. Your title is that of a project coordinator, and you often have to
struggle to get the resources you need. You have already spent $40,000 even
though you were only scheduled to spend $37,500. If you have already
produced $37,500 worth of work what is your current SPI?
A. -2.50
B. 0
C. 1.00
D. It cannot be determined
13. You are the program manager for a large software development company.
You are currently leading a project that has an original budget of $35,000 and
an original schedule of seven months. Currently the project has delivered on
$27,500 of the project. It has also spent $29,000. If the project was forecast
to spend $30,000 to date, what is the project’s SPI?
A. 0.95
B. 0.92
C. 0.87
D. -1.5
14. What is the Critical Ratio for a project that had an original budget of
$25,000, an original schedule of ten months, actual costs of $10,000, has
produced $9,000 worth of work, and was scheduled to have spent $10,000?
A. 0.90
B. -1
C. 0.81
D. It cannot be determined
15. What is the Critical Ratio for a project that had an original budget of
$75,000, an original schedule of twelve months, actual costs of $45,000, and
has produced $50,000 worth of work?
A. 1.11
B. 1.25
C. 1.39
D. It cannot be determined
16. What is the Critical Ratio for a project that had an original budget of
$950,000, an original schedule of eleven months, actual costs of $400,000,
has produced $391,000 worth of work, and was scheduled to have spent
$405,000?
A. 0.94
B. 0.98
C. 0.97
D. It cannot be determined

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17. You are a project manager working on a project that had an original budget
of $30,000 and was forecast to take eight months. The project currently has
delivered on $18,000 worth of the project and has spent $22,500. If the
variances to date are believed to be atypical and the project had planned to
spend $20,000 what is the estimate at completion?
A. $34,500
B. $37,500
C. $42,670
D. It cannot be determined
18. You are a project manager working on a project that had an original budget
of $250,000 and was forecast to take 54 weeks. The project currently has
delivered on $90,000 worth of the project and has spent $100,000. If the
variances to date are believed to be atypical and the project had planned to
spend $80,000 what is the estimate at completion?
A. $277,780
B. $260,000
C. $246,910
D. It cannot be determined
19. You are a project manager working on a project that had an original budget
of $300,000 and was forecast to take seventy-two weeks. The project
currently has delivered on $65,000 worth of the project and has spent
$100,000. If the variances to date are believed to be atypical and the project
had planned to spend $75,000 what is the estimate at completion?
A. $461,540
B. $532,540
C. $335,000
D. $235,000
20. You are a project manager working on a project that had an original budget
of $300,000 and was forecast to take seventy-two weeks. The project
currently has delivered on $65,000 worth of the project and has spent
$100,000. If the variances to date are believed to be typical and the project
had planned to spend $75,000 what is the estimate at completion?
A. $335,000
B. $532,540
C. $235,000
D. $461,540

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21. You are a project manager working on a project that had an original budget
of $500,000 and was forecast to take eight months. The project currently has
delivered on $35,000 worth of the project and has spent $50,000. If the
variances to date are believed to be typical and the project had planned to
spend $40,000 what is the estimate at completion?
A. $515,000
B. $816,330
C. $465,000
D. $714,290
22. You are a project manager working on a project that had an original budget
of $150,000 and was forecast to take eighteen weeks. The project currently
has delivered on $53,000 worth of the project and has spent $61,000. If the
variances to date are believed to be typical and the project had planned to
spend $57,250 what is the estimate at completion?
A. $172,640
B. $158,000
C. $186,490
D. $150,000
23. You are working on a project that had an original budget of $200,000 and
was originally forecast to take sixty weeks. As the project coordinator, you
have been somewhat frustrated with your project’s performance. To date you
have delivered on $79,000 of the project’s deliverables while you had
budgeted $93,000 and actually spent $98,000. The project has been
progressing consistently and you expect the trends the project has shown to
continue. Based upon this information, what do you expect the project’s
estimate at completion to be?
A. $219,000
B. $248,000
C. $292,000
D. $256,000
24. You are currently leading a project that had an original budget of $300,000
and an original schedule of twenty-seven weeks. You currently have spent
$100,000 and are currently over budget by $15,000. Your boss comes into
your office and wants to discuss your project. Specifically, she wants to
know how much more money it is going to take to complete the project.
Assuming you have completed $ 78,000 of the deliverables and you expect
the performance trends to not continue what do you tell her?
A. $222,000
B. $285,000
C. $419,000
D. $322,000

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25. You are preparing your monthly status report for your project. Assuming the
variances to date are typical, what would the ETC be assuming your project
was budgeted to cost $125,000 and take twelve months and if you have
actually spent $42,000, have produced $37,500 worth of product and were
scheduled to have spent $39,000?
A. $87,500
B. $129,500
C. $140,000
D. $98,000
26. You are preparing your monthly status report for your project. Assuming the
variances to date are typical, what would the estimate to complete the project
be assuming your project was budgeted to cost $90,000 and take thirty-six
weeks if you have actually spent $50,000, have produced $65,000 worth of
product and were scheduled to have spent $60,000?
A. $25,000
B. $64,000
C. $69,000
D. $19,000
27. Which of the following is the calculated projection of cost performance that
must be achieved on the remaining work to meet a specified management
goal?
A. CPI
B. TCPI
C. EAC
D. ETC
28. You are asked to produce an estimate of the performance rate that must be
achieved to meet the targeted budget at completion. If the project currently
has an EV of 18, a PV of 20 and an AC of 22.5. If your original budget was
30 and you are using the EAC method, what estimate do you provide?
A. 0.80
B. 6.40
C. 0.81
D. 0.78
29. You are asked to produce an estimate of the performance rate that must be
achieved to meet the targeted budget at completion. The project currently
has an EV of 27.5, a PV of 30 and an AC of 29. If your original budget was
35 and you are using the EAC method, what estimate do you provide?
A. 0.21
B. 0.91
C. 0.95
D. 0.72

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30. You are asked to produce an estimate of the performance rate that must be
achieved to meet the targeted budget at completion. The project currently
has an EV of 18, a PV of 17.5 and an AC of 20. If your original budget was
55 and you are using the EAC method, what estimate do you provide?
A. 0.90
B. 1.03
C. 0.93
D. 1.50

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Exercise 13 — Earned Value Management Answers

1. Answer B. PMBOK® Guide p. 261-267 – The Planned Value is the
budgeted cost for the work scheduled to be completed on an activity or WBS
component up to a given point. This is sometimes referred to as the BCWS.
2. Answer D. PMBOK® Guide p. 261-267 – The Earned Value is the budgeted
amount for the work actually completed on the scheduled activity during a
specified time period. This is sometimes referred to as the BCWP.
3. Answer A. PMBOK® Guide p. 261-267 – The Actual Costs are the total
costs incurred in accomplishing work on the schedule activity during a
specified time period. The actual costs are sometimes referred to as ACWP or
actual costs of work performed.
4. Answer B. PMBOK® Guide p. 261-267 – The Estimate to Complete
provides a metric showing how much more money than has already been
spent is needed to complete the project. This is in addition to the money that
has already been spent. The ETC is correct.
5. Answer C. PMBOK® Guide p. 261-267 – As a project continues it is
important that you are constantly revising your estimates of how much
money you are going to have to spend. This total number is represented by
the Estimate At Completion or EAC.
6. Answer A. PMBOK® Guide p. 261-267 – The Cost Variance or CV,
represents an indicator of how far away from the original cost baseline the
project actually is. To calculate it, take the Earned Value (EV) and subtract
the Actual Costs. A project is on target if the CV is equal to 0.
7. Answer D. PMBOK® Guide p. 261-267 – The Schedule Variance or SV,
represents an indicator of how far off of the original schedule baseline the
project actually is. To calculate the SV take the Earned Value and subtract the
Planned Value. A project is on schedule if the SV is equal to 0.
8. Answer D. PMBOK® Guide p. 261-267 – The Cost Variance or CV,
represents an indicator of how far away from the original cost baseline the
project actually is. To calculate it take the Earned Value (EV) and subtract
the actual costs. A project is on target if the CV is equal to 0.
9. Answer D. PMBOK® Guide p. 261-267 – The Cost Variance or CV,
represents an indicator of how far away from the original cost baseline the
project actually is. To calculate it take the Earned Value (EV) and subtract
the actual costs. A project is on target if the CV is equal to 0.
10. Answer A. PMBOK® Guide p. 261-267 – The Cost Variance or CV,
represents an indicator of how far away from the original cost baseline the
project actually is. To calculate it take the Earned Value (EV) and subtract
the actual costs. A project is on target if the CV is equal to 0.

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11. Answer D. PMBOK® Guide p. 261-267 – The Schedule Variance or SV,

represents an indicator of how far away from the original schedule baseline
the project actually is. To calculate it take the Earned Value (EV) and
subtract the Planned Value (PV). A project is on target if the SV is equal to 0.
12. Answer C. PMBOK® Guide p. 261-267 – The Schedule Performance Index,
or SPI, is calculated by taking the Earned Value (EV or amount of work
produced) and dividing it by the Planned Value (PV, budget or planned
spending). A project is on schedule if the result is 1.
13. Answer B. PMBOK® Guide p. 261-267 – The Schedule Performance Index,
or SPI, is calculated by taking the Earned Value (EV or amount of work
produced) and dividing it by the Planned Value (PV, budget or planned
spending). A project is on schedule if the result is 1.
14. Answer C. PMBOK® Guide p. 261-267 - The critical ratio is calculated by
first determining both the Cost Performance Index, or CPI (EV / AC) and the
Schedule Performance Index or SPI (EV / PV). The Critical Ratio is then
equal to the CPI * SPI.
15. Answer D. PMBOK® Guide p. 261-267 - The critical ratio is calculated by
first determining both the Cost Performance Index, or CPI (EV / AC) and the
Schedule Performance Index or SPI (EV / PV). The Critical Ratio is then
equal to the CPI * SPI. In this case you are missing the planned value so the
critical ratio cannot be determined.
16. Answer A. PMBOK® Guide p. 261-267 - The critical ratio is calculated by
first determining both the Cost Performance Index, or CPI (EV / AC) and the
Schedule Performance Index or SPI (EV / PV). The Critical Ratio is then
equal to the CPI * SPI.
17. Answer A. PMBOK® Guide p. 261-267 – The key to this question is the fact
that the variances are believed to be atypical. With this piece of information,
you know the formula should be EAC = AC + BAC – EV.
18. Answer B. PMBOK® Guide p. 261-267 – The key to this question is the fact
that the variances are believed to be atypical. With this piece of information,
you know the formula should be EAC = AC + BAC – EV.
19. Answer C. PMBOK® Guide p. 261-267 – The key to this question is the
fact that the variances are believed to be atypical. With this piece of
information, you know the formula should be EAC = AC + BAC – EV.
20. Answer D. PMBOK® Guide p. 261-267 – The key to this question is the
fact that the variances are believed to be typical. This means whatever is
happening will continue to happen at approximately the same rate. With this
piece of information you should have known to use the following formula:
EAC = AC + ((BAC - EV)/CPI).

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21. Answer D. PMBOK® Guide p. 261-267 – The key to this question is the
fact that the variances are believed to be typical. This means whatever is
happening will continue to happen at approximately the same rate. With this
piece of information you should have known to use the following formula:
EAC = AC + ((BAC - EV)/CPI).
22. Answer A. PMBOK® Guide p. 261-267 - The key to this question is the fact
that the variances are believed to be typical. This means whatever is
happening will continue to happen at approximately the same rate. With this
piece of information you should have known to use the following formula:
EAC = AC + ((BAC - EV)/CPI).
23. Answer B. PMBOK® Guide p. 261-267 - The key to this question is the fact
that the variances are believed to be typical. This means whatever is
happening will continue to happen at approximately the same rate. With this
piece of information you should have known to use the following formula:
EAC = AC + ((BAC - EV)/CPI).
24. Answer A. PMBOK® Guide p. 261-267 - To correctly answer this question
you must first determine exactly what is being asked. In this question you are
being asked for an estimate to complete the project (ETC). In this case you
are told that the variances that have been seen to date are not typical.
Therefore, your correct formula is ETC = BAC – EV.
25. Answer D. PMBOK® Guide p. 261-267 - To correctly answer this question
you must first determine exactly what is being asked. In this question you are
being asked for an estimate to complete the project (ETC). In this case you
are told that the variances that have been seen to date are typical. Therefore,
your correct formula is ETC = (BAC – EV) / CPI.
26. Answer D. PMBOK® Guide p. 261-267 - To correctly answer this question
you must first determine exactly what is being asked. In this question you are
being asked for an estimate to complete the project (ETC). In this case you
are told that the variances that have been seen to date are typical. Therefore,
your correct formula is ETC = (BAC – EV) / CPI.
27. Answer B. PMBOK® Guide p. 261-267 – The To-Complete Performance
Index is the calculated projection of cost performance that must be achieved
on the remaining work to meet a specified management goal, such as the
BAC or the EAC.
28. Answer A. PMBOK® Guide p. 261-267 – This question requires you to
calculate the TCPI or the To-Complete Performance Index using the EAC
formula. This formula is: (BAC – EV) / (EAC – AC). The EAC is
calculated using the CPI method.
29. Answer C. PMBOK® Guide p. 261-267 – This question requires you to
calculate the TCPI or the To-Complete Performance Index using the EAC
formula. This formula is: (BAC – EV) / (EAC – AC). The EAC is
calculated using the CPI method.

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30. Answer A. PMBOK® Guide p. 261-267 – This question requires you to

calculate the TCPI or the To-Complete Performance Index using the EAC
formula. This formula is: (BAC – EV) / (EAC – AC). The EAC is
calculated using the CPI method.

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Exercise 14 — Cost Management Exercise 14

— Cost
1. One way to compute EAC is to take the cumulative actual costs and: Management

A. Add the BAC.

B. Add the cumulative earned value.
C. Add the BAC – cumulative earned value.
D. Divide by the CPI.
2. Your boss comes into your office and asks how much more money it is going
to take to complete your project. What do you provide her?
A. The most current EAC.
B. The project budget plus a variance.
C. The most current ETC.
D. The worst case scenario value.
3. You are six months into a year-long project when your boss comes into your
office and asks how much money in total your project is going to cost at
completion. What do you provide him?
A. The most current ETC.
B. The most current EAC.
C. The project budget / CPI.
D. The project budget plus the latest variance estimate.
4. One way to compute ETC is to:
A. Create an entirely new estimate.
B. Take the BAC and add the cumulative EV.
C. Take the BAC / CPI.
D. Take the BAC and add an entirely new estimate.
5. Which of the following is primarily concerned with examining the value of
the next highest alternative?
A. Sunk costs
B. Life cycle costs
C. Opportunity cost
D. Operational costs
6. At lunch one of your fellow project managers laments about the high sunk
costs on their project that is impacting key decisions. What are they likely
saying?
A. Money budgeted to be spent is impacting the project.
B. The unseen costs of the project are impacting decisions.
C. Their project should be cancelled.
D. Money already spent on the project is impacting the decisions.

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7. Which of the following falls under a project manager’s ethical

responsibility?
A. Opportunity costing
B. Life cycle costing
C. Sunk costing
D. Project costing
8. Which of the following is not typically part of the cost management plan?
A. Cost paradigms
B. Control thresholds
C. Earned value rules
D. Reporting formats
9. Considering the effect project decisions have on the cost of using,
maintaining, and supporting the product of the project is more commonly
referred to as what?
A. Project costing
B. Ethical cost management
C. Life cycle costing
D. Professional cost responsibility
10. Life cycle costing is often combined with what to improve decision making,
reduce cost and execution time, and to improve the quality of the project?
A. Earned value management
B. Opportunity costing
C. Professional project management
D. Value engineering
11. In which of the following processes is the project cost management plan
developed?
A. The develop project management plan process
B. The estimate costs process
C. The determine budget process
D. The control costs process
12. Which of the following describes the difference between costing and
pricing?
A. Costing includes profit and pricing does not
B. Pricing includes profit and costing does not
C. Pricing always includes a factor of cost
D. Cost is always a multiplier of price

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13. Which of the following best represents a ROM estimate?

A. +100% to –100%
B. +75% to –25%
C. +50% to 100%
D. +10% to –5%
14. Which of the following ranges best represents a definitive estimate?
A. +100% to –100%
B. +75% to –25%
C. +50% to 100%
D. +10% to –5%
15. A coworker comes into your office and asks about your project that is
currently in the execution phase. They specifically want to know what the
budget for your project is. If your team estimated the project at $275,000
what do you tell your coworker?
A. Approximately $302,500
B. $247,500 to $316,250
C. $261,250 to $302,500
D. Approximately $316,250
16. Your manager comes into your office and asks about your project that is
currently in the initiating phase. They specifically want to know what the
budget for your project is. If your team estimated the project at $500,000
what do you tell your boss?
A. Approximately $1,000,000
B. $500,000 to $1,000,000
C. $750,000 to $250,000
D. $875,000 to $375,000
17. Your manager comes into your office and asks about your project that is
currently in the execution phase. They specifically want to know what the
budget for your project is. If your team estimated the project at $250,000
what do you tell your boss?
A. $225,000 to $275,000
B. $237,500 to $275,000
C. $125,000 to $500,000
D. Approximately $275,000
18. Which of the following is a formally recognized enterprise environmental
factor that is an input to the cost estimating process?
A. Cost estimation policies
B. Historical information
C. Lessons learned
D. Published commercial information

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19. Which of the following is a formally recognized organizational process asset

used in the Cost Estimating Process?
A. Cost estimating policies
B. Commercial databases
C. Marketplace conditions
D. Project team knowledge
20. Which of the following cost estimating techniques involves using the actual
costs from previous, similar projects as its basis?
A. Bottom-up estimating
B. Parametric estimating
C. Analogous estimating
D. Monte Carlo estimating
21. Which of the following cost estimating techniques involves calculating the
costs of individual tasks or activities and then summarizing the costs?
A. Analogous estimating
B. Bottom-up estimating
C. Parametric estimating
D. Monte Carlo estimating
22. Which of the following cost estimating techniques involves calculating the
costs of individual tasks or activities or work packages by determining the
relationship between them, historical data and other variables?
A. Parametric estimating
B. Bottom-up estimating
C. Analogous estimating
D. Monte Carlo estimating
23. Reserve analysis is the process of looking at the estimated costs to deal with
what?
A. Unknown unknowns
B. Certain events
C. None of the above
D. Known unknowns
24. If your original estimate was 38 weeks and you provided your sponsor with
an estimate of 36 to 42 weeks what kind of estimate did you provide?
A. Rough order of magnitude estimate
B. Final estimate
C. Budget estimate
D. Definitive estimate

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25. If you have a burn rate of .92 which of the following is true?
A. The AC is 110 and the EV is 120
B. The AC is 120 and the EV is 110
C. The AC is 120 and the PV is 110
D. The EV is 110 and the PV is 120
26. If you have a burn rate of 1.21 which of the following is true?
A. The AC is $84,000 and the EV is $102,000
B. The AC is $102,000 and the EV is $84,000
C. The AC is $84,000 and the PV is $102,000
D. The EV is $102,000 and the PV is $84,000
27. Your manager comes into your office to discuss a project you are leading. In
your latest status report you indicated a burn rate of 0.86. If you have spent
$192,000 what else do you know to be true?
A. You had budgeted to spend $165,000
B. Your SPI is 0.86
C. You have produced $165,000 of work
D. Your cost variance is less than your schedule variance
28. You have been assigned a project to deploy new desktop computers
throughout your organization. Your assignment to the project has occurred
after the project estimates have been completed and baselines have been
established. You are concerned that the cost estimates are unrealistic based
upon your previous experience. Which of the following is the best thing to
do?
A. Determine if the contingency budget will cover the additional costs
B. Bring your project team together to determine the best solution
C. Meet with the project sponsor to examine possible solutions
D. Meet with the people who generated the cost estimate
29. In preparing your monthly status report you determine that your project is
behind schedule. You believe the variances are typical and using Earned
Value Analysis you determine the project is 16% behind schedule. Your boss
has offered to provide access to an additional six resources, but you are
concerned about the impacts of Brooke’s Law and also not providing
appropriate reward for the cost of the additional resources. Your concerns
are best expressed by which of the following?
A. Crashing
B. Parkinson’s law
C. Pareto principle
D. Law of diminishing returns

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30. You have been asked to take over a project that senior management feels is
critical to the organization, but has also determined to be failing. Originally,
the project had a budget of $550,000. The project has only produced 2/3 of
the required deliverables and has already spent $500,000. The $500,000
expenditure represents which of the following?
A. Capital expenditure
B. Sunk cost
C. Indirect expenditure
D. Direct cost
31. In which of the following steps would a project manager allocate overall cost
estimates to the individual activities, tasks, deliverables or work packages to
establish a performance measurement baseline?
A. Estimate costs
B. Determine budget
C. Cost baselining
D. Cost control
32. You are part of a project management office within a large organization. All
of the organization’s resources are currently allocated to projects. A new
project has just been brought to the PMO by senior management that must be
given priority. To complete this new project you will have to take resources
from the other projects which will cause them to be delayed. From which of
the following projects should you take the resources?
A. Project A with 17 resources, a NPV of $225,000, and no change
management plan.
B. Project B with nine resources, an IRR of 19%, BCR of 1.4, and no
project cost control plan.
C. Project C with seven resources, a benefit cost ratio of 1.2, and no
project charter.
D. Project D with 11 resources, capital expenses of US $195,000, a burn
rate of 1.25 and no schedule management plan.
33. Which of the following is not a tool or technique used in the control costs
process?
A. Forecasting
B. Variance analysis
C. Project management software
D. Reserve analysis
34. Which of the following is a tool or technique used in the control costs
process?
A. Forecasting
B. Funding limit reconciliation
C. Reserve analysis
D. Parametric analysis

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35. Which of the following is not an output of the Control Costs Process?
A. Work performance measurements
B. Budget forecasts
C. Approved changes
D. Change requests
36. Parametric estimating:
A. Uses project characteristics in a mathematical model
B. Uses an algorithm to calculate project costs
C. Uses top-down estimating
D. Represent the most common estimating technique
37. Analogous estimating:
A. Works best when done from the bottom up
B. Uses actual costs from previous projects
C. Can be done at any time in the project
D. Is frequently used in the late planning phase of a project
38. An executive is evaluating project A with BCR of 1.2 and project B with an
NPV of $380,000. The two projects are mutually exclusive. The cost of
choosing one of these projects and not obtaining the benefits of the other is
called:
A. Sunk cost
B. Lost cost
C. Opportunity cost
D. Portfolio cost
39. Jim and Sally are two project managers working for a large manufacturing
organization who are discussing Jim’s latest project. Sally comments that it
is important that Jim consider both the operational and maintenance costs of
the product being created in his project decisions. To what is Sally referring?
A. Jim’s professional responsibility
B. Total project costing
C. Parametric estimating
D. Life cycle costing
40. You are in the process of establishing the cost performance measurement
system you will be using for a software development project. Which of the
following methods would be best?
A. Ask each resource for a percent of the deliverables that are complete
and forecast future performance.
B. Use the physical percent complete of the work product to calculate
earned value and then forecast future performance.
C. Use a 0% / 100% rule of reporting deliverable completeness and
forecast future performance.
D. Focus on the amount of money budgeted and actually spent in each
period and then forecast future performance.
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41. You are the project manager on a project that has a CPI of 0.92. What do
you know?
A. The project is currently 8% behind schedule.
B. When the project is delivering 92% of the work product.
C. The project will end up being 92% over budget.
D. The project is currently 8% over budget.
42. You are the project manager on a project that has a cost performance index of
0.79. What does this mean?
A. The project is only producing 79 cents of value for every dollar
invested.
B. The project is 21% behind schedule.
C. The project is 79% over budget.
D. The project is likely to cost 79% more than planned.
43. Your project has a CPI of 0.87. What does this mean?
A. You are behind schedule.
B. You are 13% under budget.
C. It is costing you more to produce each deliverable than forecasted.
D. You are 87% over budget.
44. Your project has a SPI of 0.91 what does this tell you?
A. You will likely deliver the project 9% behind schedule.
B. You are currently 9% behind schedule.
C. Your project has achieved 91% of its objectives.
D. You are 9% over budget.
45. You are the project manager on a large road project that has a current CV of
$176,000. What does this mean?
A. The project is $176,000 over budget.
B. The project is $176,000 ahead of schedule.
C. The project is $176,000 behind schedule.
D. The project is $176,000 under budget.
46. You are leading a project that is using resources in four different locations.
Management has mandated that you use Earned Value Analysis. If the
project is a software development project which of the following would not
be necessary to determine the initial cost baseline?
A. WBS
B. Network diagram
C. Scope change management plan
D. Risk register

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47. You are the project manager for a major road project. You have been asked
to estimate the cost for your project using the formula of number of miles of
road multiplied by the number of lanes multiplied by the cost per lane mile
of road. What kind of estimate is this?
A. Parametric estimate
B. Analogous estimate
C. Rough order of magnitude estimate
D. Bottom up estimate
48. In which of the project management process groups would you make a ROM
estimate?
A. The planning process group
B. The executing process group
C. The monitoring and controlling process group
D. The initiating process group
49. You have been asked to choose between two different projects that your
organization might undertake. Which of the following would not be grounds
for comparison?
A. BCR
B. Marginal analysis
C. IRR
D. NPV
50. Which of the following is a tool for determining when investing any
additional money will not produce an equivalent return?
A. Marginal analysis
B. Benefit cost ratio analysis
C. Cost benefit ratio analysis
D. Internal rate of return analysis
51. You have been asked to choose one of three projects. Project A has an NPV
of $75,000. Project B has an NPV of $81,000. Project C has an NPV of
$62,500. What is the opportunity cost of selecting Project B?
A. $81,000
B. $62,500
C. $75,000
D. $6,000

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52. You are placed in charge of a software development project. As part of your
team building you determine that your resources do not have all the
necessary skills. To improve their skills you decide to send them to an
external class to obtain the required skills. Which of the following would
best categorize this expense?
A. Indirect cost
B. External cost
C. Fixed cost
D. Direct cost
53. You are meeting with the project sponsor. They voice concern about the
setup costs of the project escalating. You assure them that this is not an
issue. Why?
A. Because good project management will ensure the costs do not
escalate.
B. Because project setup represents an opportunity cost.
C. Because project setup represents an overhead cost.
D. Because project setup represents a fixed cost.
54. You have been asked to determine a less costly way to complete the same
work. Which of the following tools would you use?
A. Value analysis
B. Six sigma analysis
C. Marginal analysis
D. Benefit cost analysis
55. When working with earned value management which primary term
represents the actual output or work product?
A. Planned value
B. Earned value
C. Actual cost
D. CPI
56. You have been asked to select one of three projects for your organization
using NPV. Project A has an NPV of $23,000 and will take two years to
produce. Project B has an NPV of $41,000 and will take three years to
produce, and Project C has an NPV of $35,000 and will take three years to
produce. Which project would you select?
A. Project A
B. Project B
C. Project C
D. It cannot be determined

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57. You are leading a project for an external customer. The client representative
asks that you provide a written cost estimate that is 25% higher than your
estimate of the project’s cost. They justify the request by telling you their
company budgeting process requires managers to estimate pessimistically to
ensure enough money is allocated for projects. What is the best way to
handle this?
A. Add the 25% as a lump sum contingency to handle project risks.
B. Add the 25% to the cost estimate by spreading it evenly across all
project activities.
C. Create one cost baseline for budget allocation and a second one for
the actual project management plan.
D. Ask for information on risks that would cause your estimate to be too
low.
58. What type of cost is team development?
A. Direct
B. Indirect
C. Required
D. Fixed
59. Value analysis is performed to get:
A. The team to buy into the project.
B. More value from the cost analysis.
C. A less costly way of doing the same work.
D. Management to buy into the project.
60. You have been assigned as the project manager for a medium-sized
information technology project. Upon receiving your charter, the project
sponsor asks if the project can be completed within the target budget. Which
of the following is the best way to handle this?
A. Build an estimate in the form of a range of possible results.
B. Ask the team members to help estimate the cost based on the project
charter.
C. Based on the information you have, calculate a parametric estimate.
D. Provide an analogous estimate based on past history.
61. Early in the life of your project, you are having a discussion with the sponsor
about which estimating techniques should be used. You want a form of
expert judgment, but the sponsor argues for analogous estimating. It would
be best to:
A. Agree to analogous estimating, as it is a form of expert judgment.
B. Suggest life cycle costing as a compromise.
C. Determine why the sponsor wants such an accurate estimate.
D. Try to convince the sponsor to allow expert judgment because it is
typically more accurate.

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62. You have just completed the initiating processes of a small project and are
moving into project planning when a project stakeholder asks you for the
project’s budget and cost baseline. What should you tell her?
A. The project budget can be found in the project charter, which has just
been completed.
B. The project budget and baseline will not be finalized and accepted
until planning processes are completed.
C. The project management plan will not contain the project’s budget
and baseline; this is a small project.
D. It is impossible to complete an estimate before the project
management plan is created.

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Exercise 14—Cost Management Answers

1. Answer C. PMBOK® Guide p. 264-265. There are several ways to calculate
the Estimate At Completion or EAC. The most common of these include:
 Creating an entirely new estimate
 Cumulative actual costs + (Original Total Budget – Cumulative
Earned Value)
 Cumulative Actual Costs + ((Original Total Budget - Cumulative
Earned Value) / Cumulative CPI)
 Cumulative Actual Costs + ((Original Total Budget - Cumulative
Earned Value) / (Cumulative CPI * SPI))
2. Answer C. PMBOK® Guide p. 264-265. This question is asking how much
more money is required. This is money in addition to the money already
spent. This is the definition of the Estimate to Complete or ETC.
3. Answer B. PMBOK® Guide p. 264-265. This question is asking how much
money will you have spent when the project has been completed. This is the
Estimate at Completion or EAC.
4. Answer A. PMBOK® Guide p. 264-265. There are three ways to calculate
ETC or Estimate to Complete. They include:
 Create an entirely new estimate
 Assume the variances are atypical (BAC- Cumulative EV)
 Assume the variances are typical (BAC – cumulative EV) / (CPI*
SPI)
 Using the critical ratio (BAC – cumulative EV) / CPI

5. Answer C. PMBOK® Guide p. 712. Opportunity costs measure the value of

the next highest alternative. This provides a way of measuring what you
chose not to do.
6. Answer D. PMBOK® Guide p. 238. Sunk costs represent money that has
already been spent on the project. Often these costs become so great that
projects are forcibly continued to save face or for other reasons when they
should be cancelled.
7. Answer B. Although project costing is a responsibility of the project
manager, life cycle costing is an ethical responsibility. The project manager
has the responsibility to ensure the product of the project is within the
operating budget of the organization.
8. Answer A. Control thresholds, earned value rules and reporting formats are
all typically part of the cost management plan. “Cost paradigms” is a non-
existent term for the purposes of project management.
9. Answer C. Project cost management should consider the effect of project
decisions on the cost of using, maintaining, and supporting the project’s
product or service, more commonly referred to as life cycle costing.

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10. Answer D. Life cycle costing is often combined with value engineering to
improve decision making, reduce costs and execution time, and to improve
the quality of the project.
11. Answer A. PMBOK® Guide p. 235 – Although it is not formally called out
in the cost management processes, the PMBOK® Guide specifies that the
cost management plan is initially produced as part of the development of the
project management plan.
12. Answer B. Price is made up of the cost of the item plus the desired profit.
Cost simply represents what the item took to produce in monetary terms.
13. Answer B. PMBOK® Guide p. 241. Early in a project’s life cycle you are
not likely to have a lot of detailed information. Therefore, you need to
provide a wide ranging estimate. The Rough Order of Magnitude estimate
does just that. It is a range of +75% to –25% of the original estimate.
14. Answer D. PMBOK® Guide p. 241. The definitive estimate is the final
project estimate given to all management and resources. It is never a single
number and always represented by a range. The correct range for a definitive
estimate is +10% to –5%.
15. Answer C. PMBOK® Guide p. 241. Remember, according to PMI®, you
never give a single number. You always provide a range. In this case that
fact excludes two of the answers. Since you are in the execution phase of the
project you are using the definitive estimate which is +10% to –5%. That
provides a range of 261,250 to $302,500.
16. Answer D. PMBOK® Guide p. 241. Remember, according to PMI®, you
never give a single number. You always provide a range. In this case that
fact excludes two of the answers. Since you are in the initiation phase of the
project you are using the ROM estimate which is +75% to –25% . That
provides a range of 375,000 to $875,000.
17. Answer B. PMBOK® Guide p. 241. Remember, according to PMI®, you
never give a single number. You always provide a range. In this case that
fact excludes one of the answers. Since you are in the planning phase of the
project you are using the definitive estimate which is +10% to –5%. That
provides a range of $237,500 to $275,000.
18. Answer D. PMBOK® Guide p. 171 – Enterprise environmental factors are
factors or conditions that exist within the area that the project resides. When
discussing the factors for the estimate cost process, PMI® specifically calls
out two:
 Market conditions
 Published commercial information
 Exchange rates and inflation

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19. Answer B. PMBOK® Guide p. 171 – Organizational process assets

represent templates and information that help the project team complete the
project. When it comes to the cost estimating process these assets formally
include:
 Cost estimating policies
 Cost estimating templates
 Historical information

20. Answer C. PMBOK® Guide p. 244 – Analogous estimating represents a

technique used usually early in a project to develop cost and schedule
estimates. It makes use of comparative analysis and argues that if two
projects are similar their costs should be similar as well. This method runs a
significant accuracy risk because often the details of the projects are not that
similar.
21. Answer B. PMBOK® Guide p. 244. Bottom-up estimating involves
completing the estimates at the lowest possible level, the task or activity, and
then summing the work packages as you go higher up the WBS. PMI®
considers this the most accurate and detailed form of estimating.
22. Answer A. PMBOK® Guide p. 244. Relationships between historical data
and other variables to calculate a cost estimate represent parametric
estimating.
23. Answer D. PMBOK® Guide p. 245 – Reserve analysis is the technique of
looking for areas where there are known, potential risks, called known
unknowns because you know they are possible, but you do not know when
they are going to happen.
24. Answer D. PMBOK® Guide p. 241. The definitive estimate is the final
estimate provided in the project. It is the estimate used for baselines and
represents a range of +10% to –5%.
25. Answer B. PMBOK® Guide p. 263. The “Burn Rate” measures the rate you
are “burning” or spending your money versus how much work product you
are obtaining. It is another way to say CPI. It is expressed as a numerical
value with a target of one. It is defined by the formula of Earned Value /
Actual Costs.
26. Answer A. PMBOK® Guide p. 263. The “Burn Rate” measures the rate you
are “burning” or spending your money versus how much work product you
are obtaining. It is another way to say CPI. It is expressed as a numerical
value with a target of one. It is defined by the formula of Earned Value /
Actual Costs.
27. Answer C. PMBOK® Guide p. 263. The “burn rate” measures the rate you
are “burning” or spending your money versus how much work product you
are obtaining. It is another way to say CPI. It is expressed as a numerical
value with a target of one. It is defined by the formula of earned value /
actual costs.

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28. Answer B. Your best answer is to always work with your project team first
to determine alternatives. Remember, the PMI® standards are all about
examining alternatives and presenting recommendations. You would not
want to meet with anyone else until you have met with your team.
29. Answer D. The law of diminishing returns argues that in every scenario
there is a point where spending money will not get an equal amount of value
in return. The rest of the question is simply subterfuge and should be
ignored.
30. Answer B. Sunk costs represent monies that have already been spent. They
cannot be recovered. They are important to project managers because many
organizations make project decisions based upon the money that has already
been spent. This often leads to good money following bad.
31. Answer B. PMBOK® Guide p. 248-256 – Determine budget involves
aggregating the various estimated costs for all the tasks, activities,
deliverables, and/or work packages to establish a total cost baseline for the
project.
32. Answer C. Each of these projects is in trouble, but only one of them should
have never been started. That is project C. Project C does not have a project
charter and should have never been started. Therefore, it should be the first
place you go for resources. Remember, you never do a project without a
charter no matter what the numbers say.
33. Answer D. PMBOK® Guide p. 257 – The tools and techniques used in the
control costs process include:
 Expert judgment
 Data analysis
 To-complete performance index (TCPI)
 Project management information system
34. Answer A. PMBOK® Guide p. 167 – The tools and techniques used in the
control costs process include:
 Expert judgment
 Data analysis
 To-complete performance index (TCPI)
 Project management information system
35. Answer C. PMBOK® Guide p. 167 – The outputs from the cost control
process include:
 Work performance measurements
 Cost forecasts
 Change requests
 Project management plan updates
 Project document updates

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36. Answer A. PMBOK® Guide p. 244 – Parametric estimating involves using

project characteristics in a mathematical model to predict total project costs.
37. Answer B. PMBOK® Guide p. 243 – Analogous estimating means using
the actual cost of previous, similar projects as the basis for estimating the
cost of the current project.
38. Answer C. The opportunity cost for any selection is defined as the value of
the next highest alternative.
39. Answer D. Life cycle costing is the requirement that the project manager
take into consideration the cost of operation and the cost of maintenance for
the product or service being created. It is an ethical responsibility of the
project manager.
40. Answer B. PMBOK® Guide p. 261-267. In most cases, the best way to
report level of completeness is to use the actual level of physical
completeness as part of the earned value calculations. This is the actual
amount of work product produced. However, the real key to this question is
to remember that PMI® always wants you to use earned value reporting.
41. Answer D. PMBOK® Guide p. 261-267. The cost performance index or
CPI is defined as the Earned Value divided by the Actual Costs. It tells you
how close to the forecasted budget you actually are. If the CPI is 0.92 that
tells you the project is 1 - .92 or 0.08 over budget.
42. Answer A. PMBOK® Guide p. 261-267. The cost performance index or
CPI is defined as the Earned Value divided by the Actual Costs. It tells you
how close to the forecasted budget you actually are. If the CPI is 0.79 that
tells you the project is 1 - .79 or 0.21 over budget.
43. Answer C. PMBOK® Guide p. 261-267. The cost performance index or
CPI is defined as the Earned Value divided by the Actual Costs. It tells you
how close to the forecasted budget you actually are. If the CPI is 0.87 that
tells you the project is 1 - .87 or 0.13 over budget.
44. Answer B. PMBOK® Guide p. 261-267. The Schedule Performance Index
or SPI is defined as the Earned Value divided by the Planned Value. It tells
you how close to the forecasted schedule you actually are. If the SPI is 0.91
you know that your project is currently 1 – 0.91 or 0.09 behind schedule.
45. Answer D. PMBOK® Guide p. 261-267. The cost variance, or CV is
calculated using the formula Earned Value – Actual Cost. A project with a
negative value is over budget and a project with a positive value is currently
under budget.
46. Answer C. PMBOK® Guide p. 248 – The cost baseline is an output of the
determine budget process. In order to determine which it is, you would need
the WBS to see all the deliverables of the project, a network diagram to see
the dependencies between deliverables, and the listing of potential risks to
establish any contingency. However, you would not need your scope change
management plan to determine the cost baseline.

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47. Answer A. PMBOK® Guide p. 172 – Parametric estimating is a technique

that uses a statistical relationship between historical data and other variables
to calculate a cost estimate. In other words a mathematical model.
48. Answer D. PMBOK® Guide p. 168 – A Rough Order of Magnitude
estimate, or ROM, is done in the initiating phases of the project. This
estimate has a range of –25% to –75% the widest variance, and is therefore
used as the earliest estimate in the project, often in a project charter.
49. Answer B. Marginal analysis, which uses the law of diminishing returns is
an attempt to find the point investing $1 gets you exactly $1 in return and
investing any more gives you less. In those situations, it usually does not
make sense to invest more. This is an important measure, but does not help
you compare projects. The Benefit/Cost Ratio, Internal Rate of Return and
Net Present Value all can help compare projects.
50. Answer A. Marginal analysis, which uses the law of diminishing returns is
an attempt to find the point investing $1 gets you exactly $1 in return and
investing any more gives you less. In those situations, it usually does not
make sense to invest more.
51. Answer C. Opportunity cost is defined as the value of the next highest, not
selected alternative. In this case, the correct answer is $75,000.
52. Answer D. In this case the training is directly related to the project and is
therefore a direct cost of the project.
53. Answer D. The setup of a project does not have a direct tie to the amount or
number of products produced. It is generally done before any production
occurs and therefore is a fixed cost.
54. Answer A. This is a simple memorization question. You must remember
that value analysis is all about determining the least costly way to complete
work (e.g. obtain the most value).
55. Answer B. PMBOK® Guide p. 261-267. There are three key variables to
establish the earned value calculations:
 Earned value – the work product
 Planned value – the budget
 Actual costs – how much you really spent

56. Answer B. This is a trick question of sorts. The question provides both the
term of the project and the NPV. This would seem to indicate that you must
do something with the term. However, the NPV takes into account the
project term making this information unnecessary. All you have to do is
select the largest value.
57. Answer D. This is an ethics question. PMI’s standards are very clear in this
area. Although it is a largely western way of thinking about this topic you
should only present the actual estimate.

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58. Answer A. Team development or training is considered a direct cost to the

project as it represents paying for the skills required to complete the project.
59. Answer C. The primary purpose of value analysis is finding a less costly
way to do the same work.
60. Answer A. With such limited information, it is best to estimate in a range.
The range can be narrowed as planning progresses and risks are addressed.
61. Answer A. Determining why the sponsor wants such an accurate estimate
sounds like a good idea at first; however, analogous estimates are less
accurate than other forms of estimating, as they are prepared with a limited
amount of detailed information. You need to realize that analogous
estimating is a form of expert judgment.
62. Answer B. The overall project budget may be included in the project charter
but not the detailed costs. Even small projects should have a budget and a
schedule. It is not impossible to create a project budget before the project
management plan is created. However, it is not wise to do so, as the budget
will not be accurate. The project budget and baseline are not finalized and
accepted until the planning processes are completed.

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Quality Management
Overview
The next knowledge area found Slide 213
in the PMBOK® Guide is quality
management. According to the
PMBOK® Guide, quality
management is concerned with
“all the activities of the
performing organization that
determine quality policies,
objectives, and responsibilities,
so that the project will satisfy the
needs for which it was
undertaken”. This is another
relatively small knowledge area
in terms of the number of Image 69: The Quality Management Processes
processes it contains, and most candidates only have a moderate level of
difficulty with it. For many, the greatest area of difficulty is differentiating
between the perform quality assurance and perform quality control processes, so
make sure the differences are clear in your mind before proceeding to the next
knowledge area.
As with several knowledge areas, quality management places an emphasis on the
project manager understanding their role in managing the quality of both the
project and the product, or service of the project. To some extent, this is similar
to saying you must ensure the project delivers the right product or service and
the delivery is done well. Success with the quality management knowledge area
also requires memorization of a number of key terms and thought leaders. These
include the following:
 Gold plating — Giving the product extra functionality past the point of Slide 214-
worth adds no value to the project. PMI® argues against gold plating. 215
 Marginal analysis — Finding the point where the cost of the incremental
improvement in quality equals the value of the improvement.
 International organization for standardization (ISO) — The United
Nations of standards bodies. It is composed of national standards bodies,
one per economy and, is based on Geneva, Switzerland. It was founded in
1947. The PMBOK® Guide is the ANSI standard for project management
(American National Standards Institute).
 Total quality management (TQM) — The original continuous process
improvement methodology, TQM was created by Juran and provides the
starting point for more current methodologies such as Six Sigma and Lean.
 Six Sigma — A continuous process improvement framework or
methodology made famous by Jack Welch and General Electric.

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 Kaizen — A Japanese process improvement methodology which focuses on

making small, incremental improvements rather than a few large
improvements.
 Quality vs. Grade — Quality is “the degree to which a product, service, or
results fulfill its requirements.” Grade is a much more subjective measure.
“Grade is a category assigned to products or services having the same
functional use but different technical characteristics.” [PMBOK® Guide
p.274] In project management, the project manager and team either meet the
requirements or do not. They cannot sort-of meet the requirements.
Therefore, projects cannot have “some” quality. Grade, on the other hand,
can be debated. Compare a luxury car to a discount vehicle. Which one has
the higher quality? The answer in many cases is they have the same level of
quality, so long as they meet the requirements for which they were
developed. However, few would argue they are equally desirable. This is
the characteristic of grade.
 Precision vs. Accuracy — Both precision and accuracy are used in
determining issues such as quality and grade on a project. Precision
represents the level of detail used on a measure. A simple example would be
to what decimal value something is measured. Accuracy answers the
question, how well does a measure actually represent the value. Something
that is accurate is said to be true. Often computer monitors provide an
excellent example of accuracy. If you are using an older monitor, the screen
might be showing an off blue color when the computer told the monitor to
show purple. In this case the monitor is inaccurate.
 PDCA — The concept of PDCA is based on the scientific method, as
developed from the work of Francis Bacon (Novum Organum, 1620). The
scientific method can be written as: hypothesis, experiment, evaluation—or
plan, do, and check. Shewhart described it as a three step process of
specification, production, and inspection. He also specifically related this to
the scientific method of hypothesis, experiment, and evaluation. Shewhart
says that the statistician “must help to change the demand [for goods] by
showing how to close up the tolerance range and to improve the quality of
goods.”
 W.E. Deming — William Edward Deming is considered by many to be the
Slide 216
father of the modern quality management movement. Dr. Deming did much
of his work in post World War II Japan. He is best known for his definition
of quality: quality = results of work efforts / total costs; his 14 key principles
for management to transform a business; the PDCA cycle (plan, do, check,
act); and the idea that poor quality is 85% process and only 15% worker.
 Joseph Juran — Joseph Juran is best known for applying the Pareto
principle to quality management. He also developed “Juran’s trilogy,” an
approach to cross-functional management that is composed of three
managerial processes: quality planning, quality control, and quality
improvement. These functions all play a vital role when evaluating quality.
For Juran, human relations problems were the ones to isolate. Resistance to

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change — or, in his terms, cultural resistance — was the root cause of quality
issues. For Juran, quality is defined based on a product or service’s “fitness
for use” or ability to meet its intended purpose. The fitness for use concept
is key for the PMP® exam.
 Philip Crosby — Crosby became famous after initiating the zero defects
program at the Martin Company Orlando, Florida, plant. As the quality
control manager of the Pershing missile program, Crosby was credited with a
25% reduction in the overall rejection rate and a 30 percent reduction in
scrap costs. He developed the principle of “doing it right the first
time” (DIRFT). He would also include four major principles:
 the definition of quality is conformance to requirements
 the system of quality is prevention
 the performance standard is zero defects
 the measurement of quality is the price of nonconformance
 Kaoru Ishikawa — Ishikawa introduced the concept of quality circles in the
1960s. However, he is best known for developing cause-effect (fishbone)
diagrams and innovating design statistics.
 Genichi Taguchi — Taguchi is influential in industrial statistics. Key
elements of his quality philosophy, which became known as the Taguchi
method include the following:
 The Taguchi Loss Function, used to measure financial loss to society
resulting from poor quality;
 The philosophy of off-line quality control, designing products and
processes so that they are insensitive (“robust”) to parameters outside
the design engineer’s control
 Innovations in the statistical design of experiments, notably the use of
simulations for factors that are uncontrollable in real life, but are
systematically varied in the experiment.
To prepare for the PMP® exam, there are a few general concepts you must
understand. The concepts include the following:
 Project management and quality management are separate but
complementary disciplines that both place significant importance on
customer satisfaction.
®
 PMI focuses most of its attention on the prevention of quality problems
rather than inspection. Remember, you cannot inspect quality into a product.
You can only prevent the poor products from getting to your stakeholders.
®
 It has already been said, but it will be again and again: PMI emphasizes
continuous improvement. You must continue to get better.

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 For a project to succeed, all parties must engage. However, success is still a
central management responsibility.
Agile development uses the retrospective process to create frequent review steps
throughout the project. Whereas reviews examine the product of the project,
retrospectives examine the process. They allow the team to gather and evaluate
what is going well and not without interference from stakeholders.
8.1 Plan Quality Management
The plan quality management process is where
the project manager and team identify which Slide 217
quality standards are relevant to the project and
determine how to satisfy them. The plan quality
management process is performed in parallel with
the other planning processes. For the exam, it is
important to remember that quality is planned,
designed, and built-in, but cannot be inspected
into a product or service. The primary output of
Image 70: The Plan Quality Mgmt.
the plan quality management process is the
quality management plan, which defines which quality standards are relevant to
the project, how the team will meet those standards, the relevant quality metrics,
and how the project will continuously be improved. It is important to recognize
that quality management is one of the few knowledge areas with a formal
process designated to create its management plan.
Slide 218
The inputs to the plan quality management process include the following:
 .1 Project charter— The project charter provides the project five-line
including the business need, justification, success criteria, constraints and
assumptions, and project prioritization.
 .2 Project Management Plan — If managing quality is really about
delivering expected requirements, then it is important to know what those
requirements are, as well as all other rules the team has agreed to. The
specific documents called out by PMI® include: the requirements
management plan, the risk management plan, stakeholder engagement plan,
scope baseline.
 .3 Project documents — There are a number of documents that the team
needs to examine including the assumption log, requirements documentation,
requirements traceability matrix, risk register, stakeholder register.
 .4 Enterprise environmental factors — Like most of the 47 processes,
enterprise environmental factors can impact the planning of quality and are
thus are an important input.
 .6 Organizational process assets — Any policies, procedures, or existing
plans that might aid in planning quality should be used.
The tools and techniques used in the plan quality management process include
the following:
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 .1 Expert judgment — Project quality is an area is an area requiring a great

deal of specialized expert knowledge, much of which is industry specific.
 .2 Data gathering — Data gathering is an important aspect of establishing a
quality management plan. It requires the team to use tools such as
benchmarking, brainstorming, and interviews.
 Benchmarking — Benchmarking is the process of comparing the
project, or project practices to other projects or organizations to
identify best practices and generate ideas for continuous improvement.
Benchmarking can be done within the organization or with outside
organizations. However, the project team must be careful because
spending too much time and energy on benchmarking can be
dangerous and may cause the team to loose focus on delivering real
project results.
 Brainstorming — Brainstorming is a group information gathering
technique we have talked about earlier in the course.
 Interviews — Whereas brainstorming is a group technique, interviews
are conducted one on one.
 .3 Data analysis — Data analysis is all about examining the data just
collected it uses several different tools.
 Cost-benefit analysis — In many instances, cost-benefit analysis is
referred to as benefit-cost analysis. Either way, it is the same thing.
It is the process of evaluating the benefits of doing or not doing
something versus the costs of the activity. It is often expressed as the
benefits divided by the costs because it allows for anything greater
than 1 to be seen as good. Often the acronyms BCI or BCR (benefit
cost index or benefit cost ratio) are used to signify this term.
 Cost of quality — The cost of quality (COQ) includes all costs
incurred over the life of the product to meet the requirements or
failing to do so. The cost of quality is typically broken into two
categories: the cost of conformance and the cost of non-conformance.
The specific potential costs are shown below:
Conformance Non-Conformance Slide 219
Prevention Planning Scrap Failure
Appraisal Training Rework Expediting
Auditing Testing Warranty Service Recalls
Controlling
Image 71: The Costs of Quality
 .4 Decision making — Decision making simply provides a marker for the
team to make decisions about the best way to develop the quality
management plan.

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 .5 Data representation — Data representation techniques are all about

presenting information in a visual way so it can be more easily understood.
These tools are sometimes referred to as information radiators. PMI®
specifically calls out four tools in this category including: flowcharts, logical
data model, matrix diagrams, and mind mapping.
 Flowcharts — A flowchart is a graphical representation of a process
or an algorithm. It shows the relationships between steps and often
uses different shapes to represent specific components such as data,
decisions or termination points. Since the 1960s the American
National Standards Institute (ANSI) has set the standards for
flowcharts and the basic symbols used in them.
Shape Name Description
Slide 220-
221
Show the process order of operation. Arrowheads are add-
Flowline ed if the flow is not the standard top-to-bottom, or left-to-
right.

A terminal is the beginning or ending of a program or sub-

process. A terminal typically contains the word “Start” or
Terminal “End” to signify where it is.

A decision is a conditional operation where one of two

Decision paths is taken. The operation is typically a yes/no or true/
false question.

This is the input or output of data. For example, it can be

Input / Output entering data or displaying results.

An annotation provides additional information about a step

in the program. It is represented as an open rectangle with
Annotation a dashed or solid line connecting it to its corresponding
symbol on the flowchart.
A predefined process is one that is defined elsewhere. It is
Predefined represented by a rectangle with double-struck vertical edg-
Process es.
On-Page An on-page connector replaces long or confusing lines on a
Connector flowchart with a small circle with a letter inside.
An off-page connector is used when the target is on
Off-Page
another page. It is represented by a home plate shaped
Connector
pentagon.
Image 72: Flowchart Legend
Another form of flowchart is called SIPOC. SIPOC is an acronym Slide 222
that was used in total quality management (TQM) in the 1980s and is
still used in Six Sigma, lean manufacturing, and business process
management. SIPOC is often presented at the beginning of process
improvement efforts, such as Kaizen, or during the defining phase of
the DMAIC process. In most cases, it has three potential uses:

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 To give people who are unfamiliar with a process a high level

overview.
 To reacquaint people whose familiarity with a process has
faded or become out-of-date due to process changes.
 To help people in defining a new process.

SIPOC helps the team find or identify all the relevant elements of a
process improvement project before work actually begins.
The acronym SIPOC stands for Suppliers, Inputs, Process, Outputs,
and Customers, which each form columns in a table or diagram. The
steps used to create the diagram include the following:
 Create an area that will allow the team to post additions to the
SIPOC diagram. This could be a transparency (to be projected Slide 223
by an overhead) made of the provided template, flip charts
with headings (S-I-P-O-C) written on each, or headings
written on post-it notes posted to a wall.
 Begin with the process. Map it in four to five high level steps.
 Identify the outputs of this process.
 Identify the customers that will receive the outputs of this
process.
 Identify the inputs required for the process to function
properly.
 Identify the suppliers of the inputs that are required by the
process.
 Optional: Identify the preliminary requirements of the
customers. This will be verified during a later step of the Six
Sigma measurement phase.
 Discuss with project sponsor, Champion, and other involved
stakeholders for verification.
A SIPOC model can be especially useful when attempting to answer
questions like the following:
 Who supplies inputs to the process?
 What specifications are placed on the inputs?
 Who are the true customers of the process?
 What are the requirements of the customers?
Slide 224

Image 73: The SIPOC Model

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 Logical data model — A logical data model is also referred to as a Slides 225-
logical schema. It is a data model of a specific problem domain that 226
is expressed independently of any specific named database product or
storage technology. Instead, it focuses on the foundational data
structure and its elements such as relational tables, columns, object-
oriented classes and/or XML tags. It represents the abstract structure
of a domain of information. A logical data model is most often used
in business process seeking to capture the important aspects of the
organization and how they relate to one another. The logical data
model is the basis for the physical data model. It is sometimes used
as a synonym for a domain model, but the two are not the same. A
domain model is more focused on capturing the concepts in the
problem domain rather than the structure of the data associated with
that domain. Make sure you understand the differences between a
conceptual, logical, and a physical data model. Use the table below
to avoid confusion.
Conceptual Data Model Logical Data Model Physical Data Model Slide 227
Includes high-level data constructs Includes entities (table), attributes Includes tables, columns, keys data
(columns/fields) and relationships types, validation rules, database trig-
(keys) gers, stored procedures, domains, and
access constraints.
Non-technical names, so that exec- Uses business names for entities and Uses more defined and less generic
utives and managers at all levels attributes specific names for tables and columns,
can understand the data basis of such as abbreviated column names,
architectural description limited by the database management
system (DBMS) and any company
defined standards.
Uses general high-level data con- Is independent of technology Includes primary keys and indices for
structs from which architectural (platform, DBMS) fast data access.
descriptions are created in non-
technical terms.
May not be normalized. Is normalized to forth normal form May be de-normalized to meet perfor-
(4NF) mance requirements based on the nature
of the database. If the nature of the
database is online transaction pro-
cessing (OLTP) or operational data
store (ODS) it is usually not de-
normalized. De-normalization is com-
mon in data warehouses.
Represented in the DIV-1 view- Represented in the DIV-2 Viewpoint Represented in the DIV-3 Viewpoint
point (DoDAF V2.0) (DoDAF V2.0), and OV-7 View (DoDAF V2.0), and SV-11 View
(DoDAF V1.5) (DoDAF V1.5)

Image 74: Data Model Comparison

 Matrix diagrams — A matrix diagram, also called a matrix chart, is Slide 228
used to show the relationship between two, three or four groups of
information. The American Society for Quality (ASQ) offers
significant additional information about matrix diagrams. There are
six possible shapes to the matrix: L, T, Y, X, C, and roof-shaped
depending on how many variables or groups are being compared.
The table on the next page shows when to use the different shaped
matrices.

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Shape # of Groups What the Matrix Shows

L-Shaped 2 Groups A <—> B (or A <—> A)
T-Shaped 3 Groups B <—> A <—> C but NOT B <—> C
Y-Shaped 3 Groups A <—> B <—> C <—> A
C-Shaped 3 Groups All three simultaneously (3-D)
X-Shaped 4 Groups A <—> B <—> C <—> D <—> A but not

Roof-shaped 1 Group A <—> A when also A <—> B in L or T

Image 75: Types of Matrix Diagrams
Matrix diagrams also have a series of symbols in addition to numeric
values that are commonly used. These symbols include:
Strong relationship + Positive relationship Slide 229

Moderate relationship Neutral relationship

Weak or potential relationship - Negative relationship

S Supplier
Item on left influences item at top

C Customer Item at top influences item on left.

The arrows usually are placed next to
another symbol indicating the strength
D Doer
of the relationship
O Owner
Image 76: Matrix Diagram Symbols
Putting this information together, you end up with the basic L-shaped
matrix diagram.
Customer A Customer B Customer C Customer D Slide 230
Measure #1 15 22 19 12
Measure #2 95 105 125 97
Measure #3 29 36 27 56
Measure #4 41 58 36 61

Image 77: L-Shaped Matrix Diagram

Lastly, here is a Y-shaped matrix
diagram.
 Mind mapping — We have
previously described mind maps.
Please refer to that discussion for
questions.

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 .6 Test and inspection planning — Every industry is different, but Slide 231-239
regardless of the products, services or results being created by the project
team testing and inspection is critical. Although how you will test might be
different, there are some commonalities we can establish. The first is that
every project team must spend time during the planning phase of the project
to determine how they will test or inspect their results to ensure they meet
the defined project success criteria. This becomes increasing complex when
you factor in the various project methodologies. The software industry talks
about alpha, beta, red, green and refactoring as part of their testing and
inspection processes and this is just one industry. Engineering adds field
tests, load tests, and nondestructive tests. This is a lot of testing. The key is
that the team defines their testing process as part of planning.
 .7 Meetings — You have spent enough time in the field as a project manager
to qualify for the PMP® you know that you spend a huge amount of your
time in meetings collecting information and communicating with people.
The outputs of the plan quality process include the following:
.1 Quality management plan — The quality management plan defines how the
project manager and the team will implement the organization’s quality policy.
It becomes part of the project management plan. It specifically defines how the
organization will control quality, do quality assurance, and provide for
continuous process improvement on the project.
.2 Quality metrics — Quality metrics define how the project manager and the
team will measure the quality performance of the project. It also defines the
tolerances for those metrics. According to the PMBOK® Guide “specifically
describes a project or product attribute and how the control quality process will
verify compliance to it.” [6th ed. p. 287]
.3 Project management plan updates — We consistently see the planning
processes causing the team to revisit other plan documents with updates. This is
true here as well. Most likely to be impacted are the risk management plan and
the scope baseline.
.4 Project documents updates — Although any of the project documents might
need to be updated, the PMBOK® Guide lists the lessons learned register, the
requirements traceability matrix, the risk register, and the stakeholder register.
8.2 Manage Quality
With the 6th edition of the PMBOK® Guide changed Slide 240
the second process found in quality management
from perform quality assurance to manage quality.
This change dramatically reduced the amount of
confusion found in quality management and made
the knowledge area more consistent with the rest of
the Guide. The concept is you first plan the area,
then you manage the area before finally controlling Image 78: The Manage Quality
Process

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the area. The manage quality process is all about translating the quality
management plan into the activities that translate the quality policies into
positive outcomes for the project. One aspect of this process that did not change
with the name was the importance of quality assurance within its framework.
This means that the manage quality process includes all quality assurance
activities and also addresses product design and process improvements. It
provides an umbrella for continuous improvement. The plan quality process
answers the question: “How will the project team achieve quality?” The quality
management process answers the question: “Are we following our standards?”
This process focuses on determining if the various project activities comply with
organizational and project policies, procedures, and processes. It uses the
measurement information from the control quality. What makes it so confusing
is the fact that it is often going on at the same time and using information from
the control quality process.
The inputs to the manage quality process include the following:
 .1 Project management plan — Within the project management plan, the Slide 241
quality management plan is specifically called out. It defines how the team
intends to manage quality on the project.
 .2 Project documents — The project documents provide the team with the
lessons learned register, quality control measurement, quality metrics, and
risk reports. Quality control measurements are the results of quality control
activities. They are important to evaluate and analyze the quality standards
and processes of the performing organization. Quality metrics include things
such as on-time performance, failure rates, availability, defect frequency, and
other such measures.
 .3 Organizational process assets — Many organizations have policies,
procedures, and guidelines directing projects in the area of quality. Along
with these policies and procedures they often provide checklists, test plans
and other tools to give the team a jump start. If these items exist, the team
should take advantage of them.
Many of the tools and techniques found in the manage quality process are the
same as what was found in the plan quality management process. They include
things such as cost-benefit analysis, cost of quality, control charts,
benchmarking, and flowcharting. The tools and techniques used in the manage
quality process include the following:
 .1 Data gathering — As part of the data gathering process, it often makes a
lot of sense to make use of a checklist of some kind. Remember, a checklist
is used to verify that a set of required processes or steps have been performed
or to ensure a set of requirements have been completed. The risk with
checklists is that users believe they have covered everything and do not think
beyond the checklist. Therefore, you must use other data gathering
techniques as well.

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 .2 Data analysis — We have already repeatedly had to analyze our collected

data so this process should already be familiar to you. Generally, PMI® is
consistent with the individual tools called out when conducting this kind of
analysis so we will not delve to deeply into most. In this case you might
need to analyze potential alternatives, review documents, or examine your
processes. The examination of processes in agile development is done
through a retrospective. Retrospectives are quickly becoming best practice
across a wide range of industries regardless of development methodology
because they establish a cadence within the project team of regularly
examining the processes used by the team to deliver the project.
The team may also have to use root cause analysis. The goal of root cause Slide 242-
analysis is to determine the foundational reason for a specific error or 243
problem. The definition of a root cause is if removing the item from the
problem-fault sequence prevents the final undesirable outcome from
occurring then the item is considered a root cause. Compare a root cause to a
causal factor. A causal factor is one that affects the event’s outcome, but
does not meet the threshold of a root cause. At the end of the day, removing
a causal factor can benefit the outcome, but it does not prevent its recurrence
with certainty. Root cause analysis is based on four foundational principles.
 Define and properly describe the event or problem. This is done
through the data gathering process. There are a number of techniques
the team may use to complete this task. One is the five whys
technique. This technique is an iterative interrogative technique used
to specifically explore the cause and effect relationship of the issue
being discussed by the team. The goal of the technique is to
determine the root cause of the problem. The technique begins with
the team asking why the problem occurred. Upon receiving an
answer the team asks, “why is that?” This process continues until the
team has repeated the why question five times. The “5” in the name
is derived for anecdotal observation by the technique’s creator Taiichi
Ohno and Sakichi Toyoda that it took repeating the question five
times to get to the root cause.
 Establish a timeline from the normal situation until the failure.
This step is typically done on a whiteboard or flip chart and often
closely resembles a fishbone diagram. The goal is to find the linear,
time-based relationship with the steps in the problem.
 Distinguish between root causes and causal factors. This step
requires discernment as the team must examine each idea they
discovered and determine if it has core causality or is secondary to
the problem.
 The team then focuses on problem prediction to determine when the
problem will happen next and what must happen to prevent future
occurrence.
®
 .3 Decision making — The 6th edition of the PMBOK Guide places a

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much more overt focus on the decision making process. One of the most
common tools used in this process is multicriteria decision making or
MCDM. This process is actually a subdiscipline of operations research that
evaluated situations where there are multiple conflicting criteria in the
decision making process. A simple example of this concept is the
relationship between price and functionality.
 .4 Data representations — As the team progresses through this process,
they often need one or more ways of visually representing the information
they are collecting and analyzing. PMI® lists a number of possibilities
including:
 Affinity diagrams — An affinity diagram is one of the “Seven Slide 244
Management and Planning Tools”, and was originally devised by Jiro
Kawakita in the 1960s. It is also sometimes referred to as the KJ
Method. Affinity diagrams are commonly used in project
management to sort a large number of ideas created during
brainstorming based on their natural relationships for review and
analysis. To organize ideas using brainstorming the team uses the
following steps:
 Record each idea on card or PostIts™ Slide 245
 Look for ideas that seem related
 Sort the cards into groups until all the cards have been used.
 Once the cards are sorted create clusters or subgroups for
easier analysis.
Once completed, the affinity diagram can be transitioned to a cause
and effect diagram for further analysis and discussion. Image 79
below shows a simple affinity diagram.
Slide 246

Image 79: An Affinity Diagram

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 Another common tool used to define and describe an event or

problem is the cause and effect diagrams. A cause and effect
diagram is also called a fishbone or Ishikawa diagram, these diagrams
are group tools to help the project team visualize the potential causes
of a problem which require further investigation. A cause and effect
diagram is done in a team environment. The team begins by agreeing
on a problem statement. Once the team has a problem, the next step
is to brainstorm about the major causes of the problem. To help the
team, this process often uses the categories of methods, equipment or
hardware, people, materials, measurement, and environment. These
categories are used as the primary branches off of the problem spine
in the diagram. The team then creates branches off of the mains as
they continue to brainstorm and ask why for each item. When the
team runs out of ideas they focus their attention on the chart areas
where the ideas a the fewest. Image 80 shows an example of a cause
and effect diagram.
Slide 247

Image 80: A Cause and Effect Diagram

 Flowcharts — Earlier in this course we introduced the concept of
flowcharts as a tool to visually display a series of steps in a process.
They are equally useful here. They are a graphical representation of a
process or an algorithm, and use different shapes to represent specific
components such as data, decisions or termination points.
 Histogram — A histogram is a graphical representation of numerical
data. However, it does not just show any data. It displays an
estimate of the probability distribution of a continuous variable.
Histograms
appear as bar Slide 248
graphs and where
first introduced
by Karl Pearson.
Be careful to not
confuse
histograms with
simple bar charts.
A histogram is
used for
continuous data
Image 81: A Histogram

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where the bars represent ranges of data. A bar chart is a plot of

categorical data. That is why you often see gaps between the bars in
bar charts and there should be no gap between the bars in a
histogram. Histograms are one the seven basic tools of quality.
 Matrix diagram — We have previously discussed the matrix
diagrams, and they are a useful tool here as well.
 Scatter Diagram — A scatter plot or scatter graph is a type of
mathematical diagram using Cartesian coordinates to display values
for two variables for a set of data. The data is displayed as a
collection of points, each having the value of one variable
determining the position Slide 249
on the horizontal axis,
and the value of the
other variable
determining the position
on the vertical axis. This
kind of plot is also
called a scatter chart,
scatter diagram, and
scatter graph.
 Control charts are
visual tools used to Image 82: A Scatter Diagram
determine if a process is
stable, with predictable results. With the 6th edition of the PMBOK®
Guide, they are no longer specifically called out, but it is very
important you know them well for the test as they are one of the
Seven Quality Tools. A control chart is a line graph with time
appearing on the x axis and the defects found or other key measure on
the y axis. In addition to the line which shows the actual
performance, two threshold lines appear above and below the
tracking line. These lines are referred to as control limits. The limit
which appears above the line is the Upper Control Limit (UCL) and
the line which appears below the line is the Lower Control Limit
(LCL). As long as the tracking line is between these two control
limits, the process is said to be “in control.” For the PMP® exam it is
also important to remember something called the Rule of Sevens.
The Rule of Sevens states any time there are seven consecutive cases
above or below the Mean, the Mean has shifted. Image 83 shows an
example of a
control chart. Slide 250
Specification
Limits are an
additional
important concept
for understanding
control charts. Image 83: A Control Chart

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Specification limits represent the customer’s expectations or

contractual requirements for performance and quality on the project.
To ensure the project team meets the Þ customer’s expectations, the
project team must set the control limits inside the specification limits.
 Pareto chart — A Pareto chart or diagram, named after Vilfredo
Pareto, is a type of chart that contains both bars and a line graph,
where individual values are represented in descending order by bars,
and the cumulative total is represented by the line. Image 84 below
shows an example of a Pareto Chart.
Slide 251

Image 84: A Pareto Chart

 Run Chart — Also known as a run-sequence plot, a run chart is a

graph that displays observed data in a time sequence. Often, the data
displayed represent some aspect of the output or performance of a
manufacturing or other business process. Image 85 shows an example
of a run chart.

Slide 252

Image 85: A Run Chart

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 .5 Audits — Many people are familiar with the term audit, but most believe
it is something negative and only applies to the world of accounting. This is
not true. An audit is simply a structured process completed by someone
independent from the organization who examines processes, procedures and/
or records to ensure the team is complying with existing rules and standards.
A quality audit in project management is often conducted by members of the
PMO or an external auditor to ensure best practices are implemented,
offering assistance to improve productivity, or to identify nonconformity and
shortcomings. These audits can be scheduled or random.
 .6 Design for X — Design for X or design for excellence (DfX) are terms Slide 253
and expressions used interchangeably in the engineering world. The X can
have a number of potential meanings depending on the industry, but common
substitutes include: assembly (DfA), cost (DfC), logistics (DfL),
manufacturing (DfM), reliability (DfR), and serviceability (DfS). Each
design guideline addresses a specific issue that is caused by, or affects the
traits of, a product. The design guidelines usually propose an approach and
corresponding methods that may help to generate and apply technical
knowledge to control, improve, or even invent particular traits of a product.
A common part of the DfX concept is mistake proofing the various
processes. Mistake proofing is the idea that you make the process such that
it only can be done one way, the right way. In a manufacturing process,
imagine creating the parts so that some are square and others round. The
square parts only fit in the square hole and the round only in the round hole.
It is not physically possible to put the square peg in the round hole even if
the worker wants it to. Another common principle is simplifying the design
by minimizing the total number of parts, using logical labels on parts and
guides, and making spare parts readily available.
 .7 Problem solving — Thomas J. D'Zurilla in 1988 defined problem solving Slide 254
as a “cognitive–affective–behavioral process through which an individual (or
group) attempts to identify, discover, or invent effective means of coping
with problems encountered in every day living”. Problem solving is used in
when products or processes fail, so corrective action can be taken to prevent
further failures. It can also be applied to a product or process prior to an
actual fail event, i.e., when a potential problem can be predicted and
analyzed, and mitigation applied so the problem never actually occurs.
Techniques such as failure mode effects analysis can be used to proactively
reduce the likelihood of problems occurring. There are a wide range of
problem solving methods such as GROW model, How to Solve It, OODA
loop, PDCA, Rapid Problem Resolution and many others.
 .8 Quality improvement methods — There are a large number of quality
improvement methods available today. TQM, Six Sigma, PDCA, and Lean
are just some of the alternatives available to a project manager.
The outputs to the perform quality assurance process include the following:

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 .1 Quality reports — Quality reports provide both the team and leadership
with graphical, numerical or qualitative information about what is going on
within the quality processes. This information can include
recommendations, bug fixes, corrective action recommendations, quality
management issues, and a wide range of other quality information depending
on what is happening with the project.
 .2 Test and evaluation documents — Test and evaluation documents are not
used in every industry, but for some the represent important outputs to
evaluate the achievement of quality objectives. They can come in many
forms such as checklists or requirements traceability matrices.
®
 .3 Change requests — As with most of the processes found in the PMBOK
Guide, the manage quality process can generate change requests. In this
case, the changes are often focused on quality improvements that could be
made.
 .4 Project management plan updates — The manage quality process can
cause updates to several components of the project management plan, such
as the quality management plan, the scope baseline, the schedule baseline or
the cost baseline.
 .5 Project document updates — The manage quality process can also cause
updates to other project documents such as the issue log, lessons learned
register or the risk register
8.3 Control Quality
The final process found in the quality management knowledge area is the control
quality process. This process
occurs throughout the project and is Slide 254
focused on monitoring and
recording the results of executing
the various quality activities, as
defined in the quality management
plan and other components of the
project management plan. Specific
project results — such as Image 86: The Perform Quality Control Process
deliverable production, schedule and
cost performance — are often included in the analysis. PMI® assumes the
project team has at least a rudimentary working knowledge of statistics to
perform this function because several of the tools and techniques used involve
statistics. This is also the most lengthy process found in the quality management
knowledge area. Fortunately, most of the information follows basic common
sense so it is not difficult, so long as you are comfortable with the relationship
between this process and the manage quality process.
The inputs to the control quality process include the following:
 .1 Project management plan — The specific component of the project
Slide 255
management plan that is of the most interest is the quality management plan.

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®
 .2 Project documents — PMI calls out three documents that are part of the
project documents. These include the lessons learned register, quality
metrics, test and evaluation documents. The lessons learned register is
important because it provide insight from past projects on the topic of
quality. The quality metrics include things such as on-time performance,
failure rates, availability, defect frequency and other such measures. The test
and evaluation documents describe how the team plans on handling major
components of quality.
 .3 Approved change requests — Approved change requests can include
things such as defect repair, revised work methods, and a revised schedule.
It is important to implement any approved changes as quickly as possible.
 .4 Deliverables — Notice the input is not the final product, service or result
of the project. It is the deliverables defined in the WBS.
 .5 Work performance data — The work performance measurements of
concern here are all comparisons of actual results to the planned results in the
areas of cost, schedule and technical performance.
 .6 Enterprise environmental factors— The project management
information system, quality management software the team is using to track
errors and variances both could be powerful inputs to controlling quality.
Additionally, any applicable government regulations or rules, standards, or
guidelines that are specific to the industry also might be important to
controlling quality.
 .8 Organizational process assets — Quality standards and policies, work
guidelines, issue and defect reporting procedures, and communication
policies can all be organizational process assets that are inputs to the Control
Quality Control Process.
Most consider Kaoru Ishikawa, a professor of engineering at Tokyo University to
be the father of modern quality management techniques. He argued there are
seven basic tools of quality. The 5th edition of the PMBOK® Guide specifically
called out his seven tools of quality management. However, in the 6th edition of Slide 256
the Guide the tools are not called out as a set. Instead, most of Ishikawa’s Seven
Basic Tools of Quality appear specifically within the tools and technique
sections of either the manage quality or control quality processes. If you
struggle in understanding any of these research the Seven Basic Tools of Quality
for more information.
The tools and techniques used to control quality include:
 .1 Data gathering — Data gathering is a simple group heading, but don’t be
fooled. A number of these tools are used repeatedly throughout the project
management process. For the control quality process, the list includes:
checklists, check sheets, statistical sampling, and questionnaires and surveys.
We have already talked about checklists extensively in this course. However,
we have not visited check sheets, and the two are not the same. A check
sheet is also sometimes referred to as a tally sheet. They are simple grids

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used to record data about a potential quality problem. A simple example is

shown below:
Monday Tuesday Wednesday Thursday Friday
Color Blemish 4 6 3 4 5 Slides 260
Scratch 5 8 6 7 5
Dent 3 3 5 4 2
Poor Fit 1 2 5 4 3
Image 87: A Check or Tally Sheet

In many manufacturing environments it is impossible to test every product

created. Statistically sampling provides a way to ensure quality without
sampling each unit produced. There are a number of terms that must be
understood to manage quality using statistical sampling. There are a number
of terms which must be understood to manage quality using statistical
sampling. These terms include the following:
 Attribute – A quality, character, characteristic, or property a thing
might have.
 Variable – A quantity or function that may assume any given value, Slide 261
set of values, or attributes.
 Producer’s risk – (Alpha) chance of rejecting a good lot. Type I
error.
 Consumer’s risk – (Beta) chance of accepting a bad lot. Type II
error.
 Sampling plan – Sample size (n) and acceptance criteria.
 Mean – Sum of the values divided by the count.
 Median – the middle value.
 Mode – the most commonly occurring value.
 Standard deviation – This is the second time you have encountered
the term standard deviation. The first was in the time management
knowledge area during the discussion of PERT. Do not confuse the Slide 262-
two topics. This is the traditional calculation for Standard Deviation 263
and is defined as:
To better understand this equation, let’s walk through a simple

∑ = Sum of ...
X = the value of the case
X = Mean
N = Number of cases

example. Imagine you have a population with five values (1, 2, 3, 4,

and 5) . Here are the steps to determining the standard deviation:
1. Determine the mean by adding the cases together and diving by the
count or (1+2+3+4+5)/5 = 3
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2. Take each of the cases and subtract the mean. Then square the
result.
(1-3)2 , (2-3)2, (3-3)2, (4-3)2, (5-3)2
3. Next, add the results. = 4+1+0+1+4 = 10
Divide this result by the number of cases minus one or 10/(5-1) =
3. 2.5 This result is called the Variance of the population.
4. Finally, take the square root of the variance or the SQ. Root of 2.5
= 1.58 This is the Standard Deviation.
Questionnaires and surveys can be either formal or informal. Both collect
information from a group of individuals in a way that can be tabulated and
summarized for analysis.
®
 .2 Data analysis — There are two types of data analysis called out by PMI .
These are performance reviews and root cause analysis. Both tools have
been discussed previously in this course. The less technical is the
performance review which reviews measures before comparing and
analyzing the quality metrics defined in the quality management plan against
results.
 .3 Inspection — An inspection is the examination of a work product to
determine whether or not it conforms to documented standards.
®
 .4 Testing / product evaluation — PMI defines testing as an organized and
constructed investigation conducted to provide objective information about
the quality of the product or service under test in accordance with the project
requirements. The intent of testing is to find errors, defects, bugs, or other
nonconformance problems in the product or service [PMBOK® 6th Ed.
P.303]. Test techniques include the process of executing a program or
application with the intent of finding software bugs (errors or other defects),
and verifying that the software product is fit for use.
 .5 Data representation — How are you going to present information to the
team and stakeholders so they clearly understand what is happening in terms
of the quality of the project? Common tools include Ishikawa diagrams,
control charts, histograms, and scatter diagrams.
 .6 Meetings — Regardless of the other tools and techniques you might use,
meetings are still an important aspect of how the project leader delivers
results.
The outputs to the control quality process include the following:
 .1 Quality control measurements — The documented results of the various
quality control activities. It is important that they are presented in the format
defined in the quality management plan.
 .2 Verified deliverables — A key goal of quality control is to determine the
correctness of the deliverables defined in the WBS and WBS dictionary.
This is the big output from the control quality process.

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 .3 Work performance information — This is a description of how is the

work being done and what is being accomplished.
 .4 Change requests — If the recommended corrective actions, preventive
actions, or defect repairs require a change to the project management plan, a
change request should be initiated.
 .5 Project management plan updates — The control quality process can
result in updates to the quality management plan and/or the process
improvement plan.
 .6 Project documents updates — Often the control quality process can
cause updates to various project documents including the issue log, the
lessons learned register, the risk register and test or evaluation
documentation.
 .8 Organizational process assets updates — The performance of quality
control should also cause completed checklists to appear, and lessons learned
documentation to be provided.
Slide 264-
Quality Management Summary 265
To successfully answer the quality management questions on the PMP® exam,
make sure to spend time studying the following:
 Three processes — Make sure you know and understand the three
processes.
 Management vs. control — Pay special attention to the differences and
relationship between quality management and quality control.
 Principles advocated by Deming, Juran, Ishikawa, Crosby, Taguchi —
Know the thought leaders and their main ideas.
 Control chart and the rule of seven — Know how to read a Control chart
and what the rule of seven is, as well as how to use it.
 PM and team have primary responsibility for conformance to standards
— Remember the project manager’s role in terms of delivering quality on the
project.
 Importance of continuous improvement — Continuous improvement is a
huge idea to PMI®. Make sure you fully understand it and how it applies to
most areas of the project.
 Tools for controlling quality — Make sure you understand all the charting,
mathematical, and statistical tools a project manager may use to execute the
control quality process.
 Variable vs. attribute sampling — Know the differences between attribute
and variable sampling, and how they are used.
®
 Gold plating — Remember, PMI considers gold plating ineffective and it
should always be avoided.
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 Metrics — Make sure you understand the important role PMI believes
metrics has on the successful delivery of quality. Quantification is a key
element of success.

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Exercise 16 — Quality Management Exercise 16

— Quality
 A new software development project is in progress and the project manager Management
is working with the quality assurance department. They want to improve
everyone's confidence that the project will satisfy the quality standards.
Which of the following do they need to have before they start this process?
A. Completed checklists
B. Quality management plan
C. Rework
D. Results of quality control measurements
2. A project manager and team from a firm that designs railroad equipment are
tasked to design a machine to load stone onto railroad cars. The design
allows for 2% spillage, amounting to over two tons of spilled rock per day. In
which of the following does the project manager document quality control,
quality management, and quality improvements for this project?
A. Quality management plan
B. Quality policy
C. Control charts
D. Project management plan
3. The project has had a major defect, and the project manager has involved the
project team and process engineers in analyzing the situation. One of the
group says that the real fault is the age of the equipment. Another says it is
the lack of a material for the correct quality. To address the root of the
problem, the project manager decides to use an Ishikawa diagram. Which of
the following BEST describes the step of the quality management process in
which the group is involved in this situation?
A. Quality analysis
B. Control quality
C. Manage quality
D. Plan quality management
4. You are a project manager for a major information systems project when
someone from the quality department comes to see you about beginning a
quality audit of your project. The team, already under pressure to complete
the project as soon as possible, objects to the audit. You should explain to the
team that the purpose of a quality audit is:
A. Part of an ISO 9000 investigation.
B. To check if customer is following its quality process.
C. To identify lessons learned that can improve performance on the
project.
D. To check accuracy of costs submitted by the team.

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5. The project has had a major defect, and the project manager has involved the
project team in analyzing the situation. One of the group says that the real
fault is the technology being used. Another says it is the age of the material.
To address the root of the problem, the project manager decides to use a
Control Chart. Which of the following BEST describes the step of the quality
management process in which the group is involved in this situation?
A. Analyze quality
B. Control quality
C. Manage quality
D. Plan quality management

6. The project has had a major defect, and the project manager has involved the
project team and process engineers in analyzing the situation. One of the
group says that the real fault is using a new machine when an older machine
was specified. Another says it is a change in subcomponent suppliers. To
address the root of the problem, the project manager decides to use a cause
and effect diagram. Which of the following BEST describes the step of the
quality management process in which the group is involved in this situation?
A. Perform quality analysis
B. Control quality
C. Manage quality
D. Plan quality management
7. Which of the following is NOT a valid definition of project quality?
A. The degree to which the project team meets customer expectations
B. The degree to which a set of characteristics fulfill requirements
C. The degree to which a product has no obvious defects
D. Quality is something that both the project manager and project
management team are responsible for delivering
8. Which of the following is the first process in quality management?
A. Manage quality
B. Control quality
C. Plan quality management
D. Perform quality definition
9. In which of the following processes do you ensure that the quality standards
will allow the project to achieve its desired quality goals?
A. Control quality
B. Manage quality
C. Plan quality management
D. Perform quality definition

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10. Which of the following is not an input to the quality planning process?
A. Product scope baseline
B. Risk register
C. Enterprise environmental factors
D. Organizational quality metrics
11. Which of the following is a tool and technique used in the plan quality
management process?
A. Project charter
B. Process analysis
C. Cause and Effect Diagrams
D. Design of Experiments
12. What is the effect of a project product, service or result that meets customer
requirements while being ahead of schedule and over budget?
A. The project is successful.
B. The project is significantly over budget.
C. Project quality has been achieved.
D. The project is behind schedule.
13. Which of the following statements best describes marginal analysis?
A. The process of determining the point at which the value of
incremental quality improvements will not equal the cost to attain
them.
B. The process of determining the point at which the value of
incremental quality improvements equal the cost of those
improvements.
C. The process of determining the optimal quality standards for the
project.
D. The process for determining the optimal profitability based on the
differentiation of the cost and pricing.
14. Sally is talking to a coworker and states she believes her boss is being unfair
with her regarding her current project and the project’s level of quality. Who
is owns final responsibility for project quality?
A. Project resources
B. Project sponsor
C. Project manager
D. The entire project team
15. Your project team is currently using Cost-Benefit Analysis. In which of the
quality management processes are you in?
A. Plan quality management
B. Manage quality
C. Control quality
D. Integrated change control

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16. You are a project manager leading a team that is currently using the cost of
quality to evaluate the project. In which of the quality management processes
are you in?
A. Manage quality
B. Control quality
C. Develop project management plan
D. Plan quality management
17. You are leading an engineering project. Your team is completing a quality
audit. In which of the quality management processes are you in?
A. Manage quality
B. Quality planning
C. Control quality
D. Close project
18. Your project team is using control charts to determine the current quality
status of your project. In what part of the quality management process are
you in?
A. Plan quality
B. Control quality
C. Manage quality
D. Direct and manage project execution

19. You are the project manager on a project that has struggled with the quality
of the deliverables throughout the entire project. Your boss, the Senior Vice
President has come to you and stated that quality is the most important
project constraint. On Monday morning you come into the office and find
that another problem with quality has occurred. What is the best thing for
you to do?
A. Absorb a cost increase to fix the root cause of the problem.
B. Fix the problem immediately.
C. Cut project costs and allow the schedule to slip.
D. Allow project risks to increase by allowing the schedule to slip.

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20. You are a project manager leading a project that has an SPI 1.03 and a CPI
1.05. The ETC is $247,905. In a meeting you are conducting with your
team to discuss the quality of the project one of your team members
complains that the schedule is seriously compressed and you do not have
time for the meeting. You have consistently rewarded your team according
to the reward system you put in place and have a great team that has worked
well together. Which of the following best explains why the complaining
individual is wrong?
A. Improved quality leads to increase productivity, decreased cost
effectiveness, and increased technology risks.
B. Improved quality leads to increased productivity, increased cost
effectiveness, and decreased cost risk.
C. Improved quality leads to increased productivity, increased cost
effectiveness, and increased cost risk.
D. Improved quality leads to increased productivity, decreased cost
effectiveness, and decreased cost risk.
21. Quality attributes from the perspective of a project:
A. Provide the basis for judging the project’s success or failure.
B. Determine how effectively the team supports the project.
C. Are specified characteristics for which a product is designed and
tested.
D. Are objective criteria that must be met.
22. Which of the following best defines quality?
A. Meeting and exceeding the customer’s expectations.
B. Conformance to management’s objectives.
C. Adding extras to keep the customer happy.
D. The degree to which the project meets requirements.
23. You are a project manager working through some issues on your project. A
member of your team suggests you make use of a Pareto diagram. Why
might a Pareto diagram be helpful?
A. Focus on the most critical issues to improve quality.
B. Allow you to effectively brainstorm.
C. Examine potential future outcomes.
D. Determine if a process is out of control.
24. As a project manager which of the following will a Control chart help you
do?
A. Focus on the most critical issues to improve quality.
B. Determine if a process is functioning within set limits.
C. Allow you to effectively brainstorm.
D. Examine potential future outcomes.

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25. You are a project manager trying to decide the best way to evaluate the
quality of a manufactured product. Which of the following best explains
why you choose not to test the entire population?
A. It would create noise in the data.
B. It would exclude other testing methods.
C. It would take too long.
D. It would show type II errors.
26. All of the following are examples of the cost of conformance except:
A. Auditing
B. Controlling
C. Appraisal
D. Expediting
27. All of the following are examples of the cost of nonconformance except:
A. Expediting
B. Warranty service
C. Auditing
D. Recalls
28. You are a project manager working on a large, highly visible project. Your
most recent control chart shows seven consecutive points on one side of the
mean. What should you do next?
A. Find the cause of the change.
B. Nothing. The project is not necessarily in trouble.
C. Notify your sponsor that there is a problem.
D. Adjust the chart to reflect the new mean.
29. You are a project manager leading a large project within your organization.
Last week you were on vacation. Upon your return you discover the team
added several deliverables to the project because they determined it would
benefit the customer. What is wrong with this situation?
A. The project manager was not present when the decision was made.
B. Nothing, this is the best way to have a happy customer.
C. Nothing. The team needed to keep moving in your absence.
D. The team is gold plating.
30. You are working on creating a financial plan for your project. If you are
planning on using JIT, how much inventory should you plan on maintaining?
A. 0%
B. 15%
C. 25%
D. 40%

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31. When planning your project which would generally have the highest priority:
schedule, cost or quality?
A. Quality
B. Schedule
C. Cost
D. It should be determined for each project.

32. You are a project sponsor with several projects falling within your authority.
You are concerned about the accuracy of the performance reporting you have
recently been receiving. Which of the following would best allow you to
validate your concerns?
A. Control charts
B. Quality audits
C. Monte Carlo analysis
D. Logit analysis
33. You are leading a large manufacturing project for a new automobile. The
current design allows for a 1.3% defect rate and expects to produce 1.2
million units. In which of the following would you document quality
control, quality assurance, and quality improvements?
A. The quality policy
B. The project management plan
C. The quality management plan
D. Organizational processes and templates
34. You are a project manager leading a road construction project. The road is
almost 80% complete according to your most recent EVMS report when a
senior executive informs you that she is worried the project will not meet the
quality standards. What should you do in this situation?
A. Assure the executive that during the plan quality process it was
determined that the project would meet the quality standards.
B. Use EVMS to predict future results.
C. Check the results from previous projects’ quality management plans.
D. Form a quality assurance team.
35. You are a project manager leading a small information technology project.
You ask two members of your team to select tools and techniques to
implement a quality assurance program that will be combined with existing
quality control activities. Which of the following would you not expect to
see in the program?
A. Histograms
B. Focus groups
C. Quality audits
D. Statistical sampling

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36. You are the project manager on a major engineering project. You are
working with the quality assurance department to make sure everyone has
confidence that the project will satisfy the quality standards. Which of the
following must you have before starting the process?
A. Defined areas of concern
B. Requested quality improvements
C. Quality control measurements
D. Rework
37. You have just taken over a project from another project manager. The
project is currently in the execution process group. The previous project
manager created a project budget, determined communications requirements,
and went on to complete work packages. What should you do next?
A. Complete the WBS.
B. Complete the identify risk process.
C. Complete the project according to the plan.
D. Identify the quality standards.
38. You are a project coordinator leading an information technology project.
Your project is facing major changes to its deliverables. If you are involved
in determining which quality standards are relevant to the changes, you must
also be involved in:
A. Quality management
B. Manage quality
C. Plan quality management
D. Control quality
39. You are the project manager for a large manufacturing project in the
electronics industry. Your project has completed all of its deliverables. As
you examine the lessons learned you conclude that the project has added five
areas of performance and three areas of functionality. The customer has
signed off on the delivery of the product of the project and is very happy
with the results. What does this mean in terms of success of the project?
A. The project was unsuccessful because it was gold plated.
B. The project was successful because the team learned from the effort
and the customer was satisfied.
C. The project was an unqualified success.
D. The project was unsuccessful because making the customer happy
meant the team had to do more work.

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40. You are a project coordinator on an information technology project within

your organization. One of your team members comes to you and states that a
completed work package does not meet the specified quality metric and that
they do not believe it is possible to meet the metric. You gather the
appropriate team members together to discuss the situation. Which process
in the quality management knowledge area are you in?
A. Monitoring and control
B. Manage quality
C. Control quality
D. Project execution
41. Management assigns you to be the project manager of a project that crosses
functional lines and is designed to operate at 6-sigma levels. The sponsor has
given you cost and schedule requirements. Which of the following would not
be an appropriate action on your part?
A. Evaluating the project risks.
B. Accepting the requirements.
C. Creating a detailed estimate.
D. Working with the team to come up with a project plan.

42. The project has had a major defect, and the project manager has involved the
project team and process engineers in analyzing the situation. One of the
group says that the real fault is the age of the equipment. Another says it is
the lack of a material for the correct quality. To address the root of the
problem, the project manager decides to use an Ishikawa diagram. Which of
the following BEST describes the step of the quality management process in
which the group is involved in this situation?
A. Perform quality analysis
B. Manage quality
C. Control quality
D. Plan quality management
43. An external stakeholder suggests to the project manager that the team does
not have enough time to hold quality meetings when the schedule has been
significantly compressed. The current CPI is 1.12 and the team has
performed very well under adverse circumstances. Which of the following
best explains why the stakeholder is wrong?
A. Improved quality leads to increased productivity, increased cost
effectiveness, and decreased cost risk.
B. Improved quality leads to increased productivity, decreased cost
effectiveness and increased cost risk.
C. Increased quality leads to increased productivity, increased cost
effectiveness, and increased cost risk.
D. Improved quality leads to increased productivity, decreased cost
effectiveness, and decreased cost risk.

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44. You are leading a project to develop food packaging equipment. The current
specifications call for less than one percent spillage per container. In which
of the following do you document quality control, quality assurance, and
quality improvements for the project?
A. Quality management plan
B. Quality policy
C. Project documents
D. Project management plan
45. As the project manager, you have created a plan for how the team will
implement the quality policy. It addresses the organizational structure,
responsibilities, procedures, and other information about plans for quality. If
this plan changes during the project, which of the following plans will also
change?
A. Quality assurance plan
B. Quality management plan
C. Project management plan
D. Quality control plan
46. You are in the middle of a major new facility construction project. The
structural steel is in place and the heating conduits are going into place when
a senior manager informs you that he is worried the project will not meet the
quality standards. When should you do in this situation?
A. Assure senior management that during the plan quality process, it was
determined that the project would meet the quality standards.
B. Analogously estimate future results.
C. Form a quality assurance team.
D. Check the results from the last quality management plan.

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Exercise 16—Quality Management Answers

1. Answer D. To give the stakeholders confidence you first need to have
information about where you are at. Your quality control measurements
provide the information about where you are at in meeting the quality
standards.
2. Answer A. The Quality Management Plan contains all the information that
documents how quality will be managed throughout the project.
3. Answer B. At this point the team has already completed the planning steps
and ensured that the plan will deliver the desired level of quality. The issue
is making sure you are actually delivering against the plan.
4. Answer C. Lessons learned are always key elements of any project as they
allow continuous process improvement. Constantly getting better is key to
PMI®.
5. Answer B. This is not a situation where you are planning for quality or
making sure the plan would lead to the desired level of quality. You are in
execution and trying to determine why you are not achieving the desired
goals. This is control quality.
6. Answer B. Don’t be confused by the fact the project manager selected a
cause and effect diagram (a poor choice for this situation). The correct
answer is still control quality.
7. Answer A. PMBOK® Guide p. 274 – Quality should never be defined as
meeting customer expectations. Quality is best defined as the ability to fulfill
the project’s stated requirements. This definition explains why requirements
definition is so critical to project success.
8. Answer C. PMBOK® Guide p. 272 – Like most defined processes in the
PMBOK® Guide, the first step is define what quality means for the project
and the steps that will be used to achieve quality.
9. Answer B. PMBOK® Guide p. 288 – Manage quality is the process where
the project team uses systematic quality activities to ensure that the project
will employ all the processes needed to meet requirements.
10. Answer A. The scope baseline includes both the project and the product.
PMBOK® Guide p. 277 – The inputs to the plan quality management process
include:
 .1 Project charter
 .2 Project management plan
 .3 Project documents
 .4 Enterprise environmental factors
 .5 Organizational process assets

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11. Answer D. PMBOK® Guide p. 277 – The tools and techniques used in plan
quality management include:
 .1 Expert judgment
 .2 Data gathering
 .3 Data analysis
 .4 Decision making
 .5 Data representation
 .6 Test and inspection planning
 .7 Meetings
12. Answer C. The only thing that can be stated definitively is that the project’s
quality level has been achieved. With the information provided you cannot
be sure the project was successful as the project is over budget. However,
you also cannot tell if the project is significantly over budget. The project is
not behind schedule.
13. Answer B. Marginal analysis is an analytical process used in determining
the point at which spending any more money to improve the project quality
will exactly match the value of the improvements. It is a one for one
exchange.
14. Answer C. PMBOK® Guide p. 273-275 – The project management team
and not the entire project team is ultimately responsible for the level of
quality on a project. However, in this case the best answer is the project
manager.
15. Answer A. PMBOK® Guide p. 272 – Cost-benefit analysis is a tool and
technique used in the Plan Quality Management Process.
16. Answer D. PMBOK® Guide p. 272 – Benchmarking is a tool and technique
used in the plan quality management process.
17. Answer A. PMBOK® Guide p. 288 – A quality audit is a tool or technique
used in the perform quality assurance process.
18. Answer B. PMBOK® Guide p. 304 – Control charts are one of several tools
and techniques that make up the control quality process.
19. Answer A. The key phrase in the answers is “root cause”. Only A fixes the
root cause of the problem. B might only be a temporary solution. Neither C
nor D provide a solution to the quality problem.
20. Answer B. This is a very long winded question, but is typical for the exam.
Most of the question has little to do with coming up with the correct answer.
Just remember from PMI’s perspective improving the quality of the project
will lead to lot of good stuff including decreasing the long term cost of the
project, making the team more productive and reducing risks.
21. Answer C. PMBOK® Guide p. 273-274 – This question is almost a straight
definitional question. Quality is “the degree to which a set of inherent
characteristics fulfill requirements.”

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22. Answer D. PMBOK® Guide p. 273-274 – This question is almost a straight

definitional question. Quality is “the degree to which a set of inherent
characteristics fulfill requirements.”
23. Answer A. PMBOK® Guide p. 304 – A Pareto diagram is a type of
histogram an is conceptually related to Pareto’s law, which holds that a
relatively small number of causes will typically produce a majority of the
problems or defects.
24. Answer B. PMBOK® Guide p. 304 – Control Charts are used to determine
whether or not a process is stable or has predictable performance.
25. Answer C. PMBOK® Guide p. 303 – The primary reason for not testing an
entire population is that it can be extremely time consuming. For this reason
sampling is often used.
26. Answer D. PMBOK® Guide p. 283 – The costs of conformance include:
 Prevention
 Appraisal
 Planning
 Training
 Auditing
 Testing
 Controlling
27. Answer C. PMBOK® Guide p. 283 – The costs of nonconformance include:
 Scrap
 Rework
 Expediting
 Warranty service
 Recalls
 Failure
28. Answer A. PMBOK® Guide p. 304 – This is a trick question of sorts.
Hopefully, the first thing you would do is notice the Rule of Seven was in
play and you needed to determine why you had 7 consecutive cases on one
side of the mean.
29. Answer D. Be careful in reading the question. Nothing gives you an
indication that the customer actually approved the changes. Do not simply
assume they have. The correct answer is the team is gold plating.
30. Answer A. JIT refers to Just in Time inventory management. It is a
technique where you attempt to carry no inventory and only have material
arrive when needed. Therefore, 0% is the correct answer.
31. Answer D. PMBOK® Guide p. 294 – Don’t get trapped because this is a
quality question. The correct answer is always it depends and must be
determined for each project.

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32. Answer B. PMBOK® Guide p. 294 – This question reflects the definition of
a quality audit. It is a structured, independent review to determine whether
project activities comply with organizational and project policies, processes,
and procedures.
33. Answer C. PMBOK® Guide p. 277 – The quality management plan is where
all aspects for how quality will be managed on the project are defined.
34. Answer D. The real question here is which option helps ensure you meet the
appropriate quality standards. The only choice is forming a quality
assurance team.
35. Answer B. PMBOK® Guide p. 288 – This question is basically asking
which item from the list is not a tool or technique from manage quality and
control quality processes combined. The tools and techniques from control
quality and manage quality combined include:
 Data gathering
 Data analysis
 Data representation
 Decision making
 Audits
 Design for X
 Problem solving
 Quality improvement methods
 Inspection
 Testing / product evaluations
 Meetings
36. Answer C. The key word in this question is must. The only one of the four
items you must have is the quality control measurements. Everything else is
optional.
37. Answer D. For some this is an easy question because it appears in the
quality section. However, if you did not know which process group you
were in would you have gotten it correct? Identifying the quality standards is
the correct answer because no one has yet completed the planning process.
The next step in that process calls for the creation of the quality standards,
and then completing the identify risks process. The WBS is already done
and you cannot execute the project until the planning is complete.
38. Answer C. Although quality planning usually occurs during project
planning, sometimes you have to go back to planning from other processes to
re-evaluate or make another decision.
39. Answer A. This question might be considered a trick by some, but it is not.
The correct answer is the project was gold plated (you have no information
that the customer approved the changes prior to implementation). So even
though they were happy with the product of the project it was gold plated
and that is bad. This is a situation with a great product and a failed project.

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40. Answer C. Measuring is by definition part of the control quality process.

Be careful here as the question is about the quality management knowledge
area and not the project management process groups.
41. Answer B. As a project manager you should never simply accept
requirements or anything else without understanding the implications of
acceptance on the project.
42. Answer C. You have a standard you are trying to meet which takes both
plan quality and manage quality out of the mix. Perform quality analysis is a
made up process. Only control quality represents a process where you are
measuring against targets and trying to analyze the variances.
43. Answer A. Improving the quality of the project improves the processes
being used by the team. This will lead to improved productivity, increased
cost effectiveness and decreased cost risk.
44. Answer A. Be very careful with this question. Two answers are technically
correct. The quality management plan is part of the project management
plan so both are technically correct, but the quality management plan is the
best, most accurate answer.
45. Answer C. The plan described is the quality management plan. Since the
quality management plan is included in the project management plan,
changing the quality management plan will also change the project
management plan.
46. Answer C. Assuring management that it was determined in planning that
the project meet quality standards is not productive, since it does not solve
the problem. An analogous estimate looks at the past history of other
projects. This would not be appropriate to determine how the current project
is going. The quality management plan does not provide results. A quality
assurance team could help to determine whether the team is following the
correct process to satisfy the relevant quality standards.

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Project Resource Management

Overview Slide 267
Chapter Nine of the PMBOK®
Guide is dedicated to the
project resources management
knowledge area. Although it
is one of the easiest areas on
the exam for most test-takers,
some candidates struggle with
this section because PMI’s
perspective of the project
manager’s role is often very
different from the role they are
used to completing in the real
world. To be successful,
remember the project you are Image 88: The Project Resources Management Processes
leading for the exam, it is a
large, multi-million US dollar project with resources in multiple countries for a
manufacturing organization. As the project manager you have responsibility to
organize, attract, retain and train the team as well as lead them in the completion
of the project. The project team or staff are the people who have assigned roles
and responsibilities for completing the project. It is very important that they be
involved in planning as soon as possible. The project resources management
knowledge area is comprised of six processes with two in the planning process
group, three in the executing process group, and one in the monitoring and
controlling process group.
9.1 Plan Resource Management Slide 268

The first process found in the project resources

management knowledge area is the plan resource
management process. This is the process where the
team defines how to estimate, acquire, manage, and use
both team and physical resources. Its primary output —
as is apparent by the process title — is the resource
management plan. This is a relatively small area in
terms of content, so it does not require significant Image 89:Plan Resource Mgmt
study. It does require common sense. Agilists often struggle or argue with some
of the concepts presenting in this knowledge area because it argues the project
manager should be both leader and manager of the project team. This means
they hold primary responsibility for proactively developing the skills and
competencies of the team AND the team’s satisfaction and motivation. This
burden is an area that will continue to evolve over the next several years as the
profession continues to develop. For the exam, it is not important that you agree
with any particular perspective. However, it is important that you understand
these viewpoints and how they impact projects in the real world.

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The inputs to the plan resource management process are as follows: Slide 269
 .1 Project charter — The project charter provides the project team and
stakeholders with the project’s top level information, that which we have
called the five-line including the business need and justification, the success
criteria, any constraints and assumptions, and
 .2 Project management plan — The project management plan contains
most of the critical information about what the project includes and what the
resources are required to do. PMI® draws special attention to the quality
management plan and scope baseline because the quality management plan
informs the team about the level of resources required to achieve and
maintain the core metrics defined, and the scope baseline defines the
deliverables so the team understands the types and quantities of resources
required to generate the correct work product.
 .3 Project documents — The team may need to examine a lot of additional
documents that are part of the “other” project documents. These include the
all important project schedule, the requirements documentation, the risk
register, and the stakeholder register. Each of these informs the project team
about the work that must be accomplished and when it should be done.
 .4 Enterprise environmental factors — Key enterprise environmental
factors include the following:
 The organizational structure and culture
 Any existing resources
 Existing human resource policies
 Marketplace conditions
 .5 Organizational process assets — Items such as organizational standards,
policies, and standard role descriptions, as well as templates, organizational
charts, and position descriptions, can all impact the development of the
Human Resources Plan. Additionally, historical information can provide
important information.
The tools and techniques used in the plan resources management process include
the following:
 .1 Expert judgment — You have already seen that expert judgment is
almost always PMI’s preferred tool and technique. When dealing with
resource management planning team leaders must be able to negotiate for the
resources they need to successfully deliver the project. They also must have
the experience to manage and develop people. One of the biggest problems
real-world project managers face is either not understanding the
organizational culture or estimates being based upon having more
experienced resources than are actually assigned to the project. A true
project management professional knows to avoid this issue.
 .2 Data representation — Data representations represents visual methods
of providing information in a way that allows the team to make effective use

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of it. When done correctly, these tools ensure that each work package is
owned by someone who has not doubt they own the package and all the other
resources understand their
role with the package. PMI® Slide 271
lists three groups of tools
within this area hierarchical
charts, assignment matrices,
and text-oriented formats.
Hierarchical charts are used to
show each member of the
team how they fit into the
project organization.
Typically, these tools show a Image 90: A Sample Resource Breakdown Structure
top-down view of the
organization. Examples of this kind of image include work breakdown
structures (WBS), organizational breakdown structures (OBS) or a resource
breakdown structure (RBS). Image 90 shows resource breakdown structure.
Notice that is presents a simple hierarchy of boxes or positions.
The second group of visual tools are called assignment matrices. Assignment
matrices or RAMs bring together resources and work packages or activities
which is different from hierarchical charts that either show work packages or
resources but not typically both. A Responsibility Assignment Matrix
(RAM) such as the one shown in Image 91. A common form of a RAM is a
RACI diagram. The RACI acronym stands for Responsible, Accountable,
Consult and Inform. It defines the role each resource has for each
deliverable or activity.
Slide 272

Image 91: A Responsibility Assignment Matrix. Also, called a RACI diagram for Responsible,
Accountable, Consult, Inform

The third group of items within data representation are text-oriented formats.
These are typically verbal descriptions of the work to be done and the role
for each team member.

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 .2 Organizational theory — The area requiring the most study in the project
resources management knowledge area is that of organizational theory. As
you study these theories remember they are just theories. Many of them are
contradictory and you do not necessarily have to agree with any of them.
However, you must be able to compare and contrast the different theories.
 Maslow’s Hierarchy of Needs — The first theory is Maslow’s
Hierarchy of Needs. Abraham Maslow argued in 1943 that people do
not work for money or security. They work for something he called
self-actualization. However, Maslow contended that one could not
attain self-actualization until they had taken care of lesser needs. To
explain these needs Maslow created a hierarchy with self-
actualization at the top. Image 88 shows Maslow’s Hierarchy. At the
bottom of the pyramid are the physiological needs such as air, water,
food, housing and clothing. Once these needs are taken care of a
person progresses to the next level, safety, and they must address
those needs before continuing up the pyramid until reaching the top.
A project manager must address these issues because the best workers
are at the top of the pyramid.
Slide 273

Image 92: Maslow’s Hierarchy of Needs

 McGregor’s Theory of X and Y — Douglas McGregor proposed Slide 274-

this theory in the 1960s while at the Sloan School of Business at MIT. 275
McGregor argued people generally fall into one of two classes: X or
Y. Group X represents people that need to be
watched every minute and are incapable, avoid
responsibility and avoid work whenever
possible. These people you do not want as
resources on your team. The second group are
Y people. Y people represent the exact
opposite. They are willing to work without
supervision and want to achieve. Y people can
direct their own efforts. As a project manager
you want Y people as resources because they Image 93: X People You
will make your job easier. Don’t Want

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 Herzberg’s Theory — The next theory was proposed Slide 276

by Frederick Herzberg in 1959 and is also known as the
Two Factor Theory of Job Satisfaction. According to his
theory, people are influenced by two sets of factors:
hygiene factors and motivating agents. Poor hygiene
factors may destroy motivation but improving them, under
most circumstances, will not improve motivation. Image
91 shows examples of typical hygiene factors and
Image 94: Y People You motivating agents.
Do Want

Image 95: Hygiene Factors & Motivating Agents

 Theory Z — Theory Z was developed by William Ouchi in his 1981 Slide 277
book, Theory Z: How American Business Can Meet the Japanese
Challenge. Theory Z is often referred to as the 'Japanese'
management style. Theory Z essentially advocates a combination of
all that's best about McGregor's XY Theory and modern Japanese
management, which places a large amount of freedom and trust with
workers, and assumes that workers have a strong loyalty and interest
in teamwork and the organization. It also places more reliance on the
attitude and responsibilities of the workers, whereas McGregor's XY
Theory is mainly focused on management and motivation from the
manager's and organization's perspective. Theory Z focuses on
enabling workers to become generalists, rather than specialists to
increase their knowledge of the company and its processes through
job rotations and continual training.
 McClelland Theory of Needs — David McClelland proposed that an
individual's specific needs are acquired over time and are shaped by
one's life experiences. Most of these needs can be classed as either
achievement, affiliation, or power. A person's motivation and
effectiveness in certain job functions are influenced by these three
needs. McClelland's theory sometimes is referred to as the three need
theory or as the learned needs theory.
 .4 Meetings — In addition to all the specific tools, a project manager must
meet with the team and other stakeholders to ensure the human resource
management plan reflects the true resources needs.
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Knowing the organizational theories and being able to compare and contrast
them is critical to passing the exam. There are three outputs to this first resource
management process. They include:
 .1 Resource management plan — the resource management plan is the Slide 278
most important output from this process. It provide key guidance on how the
team plans to categorize, allocate, manage and release resources on the
project. When you think about the resource management plan it is important
that you think practically about the different things it is designed to do. Most
importantly, the resources management plan identifies the resources needed
to complete the project. It also defines how the team intends to obtain the
team and other physical resources necessary to complete the project. Many
of these plans define the role, level of authority, specific responsibilities and
required skills of the team members. Often the resource management plan
includes organization charts or other visual tools to help in this definition. It
also defines various strategies for training team members and developing the
team as a cohesive unit.
 .2 Team charter — Just as the project has a charter which defines the high
level of the project, so too does the team itself. The team charter establishes
the basic ground rules the team agrees to use to function as a collective unit.
It includes the team’s values, agreements, and operational guidelines in areas
such as communication, decision making, conflict resolution, and meetings.
 .3 Project document updates — As part of planning the project resource
management area, the team often discovers new information that requires
them to update their assumption log or risk register because often resourcing
a project involves making significant assumptions which are found to be
untrue later in the process. As soon as the new information is discovered,
regardless of area, the team must update the appropriate documents.
9.2 Estimate Activity Resources
The second process in the project resource management knowledge area is
estimate activity resources. If you are at all familiar with the PMBOK® Guide Slide 279
you recognize this as a new process in the 6th edition of the Guide. However, it
is not really new. The 5th edition of the Guide positioned the same process as the
4th process in the time management knowledge area
(now called schedule management). This change is a
nod to common sense organization as the process is all
about defining the number and types of people,
equipment and other supplies necessary to complete the
work of the project. Remember, many of these
processes are going on at the same time and/or directly
relate to one and other even though they cross
knowledge areas.
Image 96: Acquire Project Team
The estimate activity resources process begins by
examining the primary inputs defining the deliverables and work of the project
to ensure those defining resources clearly understand the stakeholders’
expectations. These inputs include:

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 .1 Project management plan — Within the project management plan, the Slide 280
team must examine the resource management plan and the scope baseline.
The first defines how the team plans to acquire, train and manage the project
resources. The second define the agreed upon project work at that moment
in time.
 .2 Project documents — Hopefully, the process of examining these
processes is beginning to sound repetitive. That is because it is! Many of
these processes look very much like one and other. With almost every
process the team considered the project management plan and other project
documents as key inputs. This process is no different. When working to
estimate the required activity resources to complete the project the team must
look at the list of activities, the activity attributes, assumption log, cost
estimates, resource calendars, and the risk register to gain a full picture of
project what is needed.
 .3 Enterprise environmental factors — If the team is using the tried and
true why stop with just the project management plan and project documents?
Enterprise environmental factors are always at play so they fit as an input
here.
 .4 Organizational process assets — Most organizations have tools in place
to assist the project leader in the definition and acquisition of resources.
These tools often provide valuable inputs as the team attempts to define the
required resources.
The tools and techniques used in this process are going to seem very familiar.
That is because you used most of them just a few chapters prior when we
discussed estimating costs. These include:
 .1 Expert judgment — Just as we have seen in most other processes, the
tool or technique is expert judgment. It is absolutely critical that project
leaders trust their team and surround themselves with individuals who
possess significant knowledge about the work of the project.
 Bottom-up estimating — When combined with expert judgment, bottom-up
estimating is PMI’s preferred way of generating estimates of anything. This
is because your subject matter experts have the most knowledge and are most
likely to be accurate at the lowest or smallest unit of delivery.
 .3 Analogous estimating — Early in the project’s life cycle the team often
lacks critical information to make a highly accurate estimate. In these
situations the team still needs to generate an estimate knowing it will be
refined later when more information becomes available. In these situations,
analogous estimates are often preferred. An analogous estimate uses the
actual results from a previous, similar project to estimate the current one in
question.
 .4 Parametric estimating — Parametric estimating involves generating an
estimate using a mathematical model. A simple example might involves
estimating the number of developers on a software project based on the total

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number of modules and an estimate of the total number of lines of code

assuming an average coding rate. These models can be highly accurate, but
at subject to the accuracy of the equation. If the equation fails to accurately
define the situation the estimate can vary wildly from actuals.
 .5 Data analysis — When examining the data the team must carefully
examine potential alternatives to find the optimal resourcing solution.
 .6 Project management information system — Many project management
software solutions offer advanced calculations for generating resource
estimates. These solutions often dramatically simplify the job of the project
leader.
 .7 Meetings — In addition to all the other tools and techniques described
here, the team will also have to conduct a number of meetings to obtain
accurate estimates. Like expert judgment, enterprise environmental factors,
organizational process assets, meetings are a constant for a good project
leader.
There are four basic outputs to the estimate activity resources process. Three of
these outputs are closely linked.
 .1 Resource requirements — This output is the big one. Hopefully, it is
also incredibly obvious. The biggest thing you get by estimating activity
resources is a list of your resource requirements. This list identifies the kinds
and quantities of resources needed to complete each work package. It might
also include any assumptions made to create the estimates.
 .2 Basis of estimates — The basis estimates provides the supporting detail
for the resource requirements. This information includes how the estimate
was derived, resources used to develop the estimate, any assumptions
associated with the estimation process, the estimate range and confidence
level, and any documentation of risks that influenced the estimate.
 .3 Resource breakdown structure — As has previously been discussed, the
resource breakdown structure is a hierarchical picture of the project team
organized by resource category and type. The most common categories seen
are labor, materials, equipment, and supplies, but these are not the only
allowed categories.
 .4 Project document updates — Like many of our earlier processes, the
process of estimating the activity resources will likely generate a lot of new
information requiring the team to update a number of project documents such
as the activity attributes, assumption log, and/or the lessons learned register.
9.3 Acquire Resources
The third process in the project resources knowledge area moves away from the
planning process group into the executing process group. This process focuses
on obtaining the people needed to complete the project. PMI® does not assume
the project manager has control over these resources. It assumes you are in some

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form of a matrix organization. To gain a better Slide 281

understanding let’s review the inputs for the acquire
resources process now. They include the following:
 .1 Project management plan — The project
management plan provides the team with the
just created resource management plan the cost
baseline, and the procurement management plan
which combine to inform the project team about
what they need in terms of resources to deliver
the project and the processes they must use to
obtain those resources.
 .2 Project documents — In addition to the
resource and procurement management plans,
the team needs to examine the project schedule, Image 97: Develop Project Team Slide 282
resource calendars, resource requirements, and
stakeholder register to fully understand the project needs.
 .3 Enterprise environmental factors — These are the factors outside the
actual team that can influence how the team is obtained, trained and
managed. It includes factors such as market conditions, culture, technology,
and many others.
 .4 Organizational process assets — A good project manager makes use of
every tool they have at their disposal to obtain the best possible team. This
includes every process, template, document, contract, or other item within
the organization’s cache of tools.
The tools and techniques used in the acquire resources process are as follows:
 .1 Decision making — In this process, the project leader is required to
examine all the data a make the best possible decision. A common type of
decision making tool is the multicriteria decision analysis we have discussed
earlier in this course.
 .2 Interpersonal and team skills — Successful project managers are
typically outstanding negotiators because rarely does a team get everything
they need. Often it is up to the project manager to barter, reduce the price, or
in some other way negotiate for necessary resources. Therefore, a leader’s
ability to engage others is critical to success.
 .3 Pre-assignment — Often project leaders begin a project with resources
already assigned to the team. These resources are said to be pre-assigned.
 .4 Virtual teams — Many projects are not capable of being completed with
a team that is co-located (meaning sitting at the same location). When this
happens the project must be done using communication techniques such as e-
mail, phone calls and webinars.

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When dealing with team members you must also be aware of the halo effect.
The halo effect is the tendency to rate team members high or low on all factors
due to the impression of a high or low rating on one particular factor.
The outputs to the acquire resources process include the following:
 .1 Physical resource assignments — Physical resources represent the
equipment, supplies and materials the team needs to deliver the project.
When appropriate, it can also represent the physical locations.
 .2 Project team assignments — The project is considered “staffed” when
appropriate people have been assigned to the project, which can include a
project team directory, memos to team members, and/or resource names
inserted into the project plan.
 .3 Resource calendars — Resource calendars document when each resource
is available to work on the project.
 .4 Change requests — As the team acquires the resources it needs to deliver
the project many factors surrounding the project can change. This output
allows the team to recognize the new information and run the change through
the change management process.
 .5 Project management plan updates — Specifically, acquiring the project
team might require the updating of the resource management plan or the cost
baseline.
 .6 Project documents updates — As resources are applied to the project a
lot can change. Therefore, teams might have to update the lessons learned
register, the project schedule, the resource breakdown structure, resource
requirements, risk register, and/or the stakeholder register to account for
those changes.
 .7 Enterprise environmental factors updates — This is the first time you
have seen updates to the enterprise environmental factors, but stop and think.
Your project could easily impact resource availability within the organization
and/or the amount of material resources the organization has on hand.
 .8 Organizational process assets updates — Just as your project likely
impacts the enterprise environmental factors, you also may impact
organizational process assets.
9.4 Develop Team
Once the team is acquired, the next step in the resource management knowledge Slide 283
area is to develop the team so they have the necessary skills to complete the
project successfully. A key goal of the project manager is to improve skills, team
interaction, and overall team environment. In any project, teamwork is a critical
factor for success. Team development is a project manager’s responsibility. The
develop team process is a relatively straightforward process focused on the
different ways to develop skills and teamwork.

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The inputs to the develop team process include the following: Slide 284
 .1 Project management plan — Within the
project management plan the resource management
plan defines all the rules and processes to obtain,
manage and train the team.
 .2 Project documents — Within the project
documents there are a number of documents to
help develop the team grow and develop. These
include the lessons learned register, the project
schedule, the project team assignments, resource
calendars, and the team’s charter. Each of these
documents help the project leader understand who
is on the team, their role, what they need to do, and
what they already know. Image 98: Develop Team
 .3 Enterprise environmental factors — The organization often has human
resources policies. Performance reviews and reward and recognition already
in place that will impact the team’s ability to develop.
 .4 Organizational process assets — The organizational process assets that
can quickly impact the team as it develops is any historical relationships and
the lessons learned repository.
The tools and techniques used in the develop team process include the following:
 .1 Colocation — This is the second time the term colocation has been used.
PMI® recognizes that teams are more effective when everyone is able to sit at
the same location. Unfortunately, this is not always realistic. Many of the
agile methods suggest colocation is an imperative, but again, it is not always
possible. In those situations, the team may need to look to the second tool on
the list.
 .2 Virtual teams — When it is not possible to have the team physically sit in
the same physical location modern technology makes virtual teams possible.
The use of virtual teams can often allow projects to bring additional
specialized resources to the team that would not be available if it was
required than all team members be collocated.
 .3 Communication technology — The ability to quickly use internet
technology to video conference in an entire team, share a presentation, team
board or other information radiator makes the demand that a team be
collocated less stringent than in the past.
 .4 Interpersonal and team skills — Interpersonal and team skills are those
skills used to relate with people and engage with them on a one-on-one basis
or in small groups. Remember, teamwork is critical to the success of the
project, and no tool is more important to developing good teamwork than
interpersonal skills. PMI® groups five specific tools and techniques in this
area:

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 Conflict management — A conflict represents a difference of Slides 285

opinion between two or more parties. Within a project conflicts are
common, and can occur between team members, stakeholders and
team members, or between the project manager and any of the above.
The fact that conflict exists does not in and of itself represent a
negative. However, how the people experiencing the conflict choose
to deal with the issue can dramatically impact the likelihood of
project success. Image 99 shows a table with the most common
conflict resolutions modes or methods. Each of them is described by
a style which addresses the interaction and two areas of concern.
Personal goals addresses how interested the individual selecting the
mode is toward their objective. The relationship addresses how much
the individual cares about the relationship with the other party
involved in the conflict.
Slide 286
Resolution Concern
Mode Style Personal Goals Relationship
Withdrawal Lose—Leave Low Low
Smoothing Yield—Lose Low High

Compromising Compromise Medium Medium

Forcing Win — Lose High Low
Problem Solving Integrative High High
(Confronting)
Image 99: The Conflict Resolution Modes & Their Impacts

As you review the table, keep in mind that a number of factors can
influence the resolution of the conflict including its importance, any
time pressure, and the relative power of the players.
 Influencing — PMI® does not ever assume that the project manager
has full or direct authority over the project. Without that level of
authority, a project leader must rely on the ability to influence
stakeholders at all levels of the organization to ensure project success.
 Motivation — Motivation represents providing a reason for someone
to act. Most teams are motivated by being empowered to plan and
manage their own work. This is a core aspect of agile methods.
 Negotiating — Negotiating has already been discussed extensively.
 Team building — Team building is the responsibility of the project
leader. It is the process of leading activities that enhance the team’s
social relations and build an environment where people want to work
together. It leads to higher degrees of cooperation and collaboration.
Every day, the successful project leader must do something to
increase the levels of team effectiveness.

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®
 .5 Recognition and rewards — PMI does not assume the project leader
has unlimited resources to develop rewards and recognition for the project
team, but it does suggest having them is critical to success and it is your
responsibility that they happen.
 .6 Training — Training refers to activities that lead the overall improvement
of skills for the team. Over the last several years how training is done has
changed dramatically. Now, a significant portion of training is done using
the internet as the delivery vehicle.
 .7 Individual and team assessments — Individual and team assessments or
evaluations represent methods used to determine what the team does well
and what it does not. There are a wide range of these tools available to the
team. Typically, these assessments are looking for major areas of
improvement often in topics dealing with social interaction. An example of a
team assessment is found in the Table Group’s Five Dysfunctions of a Team
Assessment based on Patrick Lencioni’s best selling book of the same title.
Best selling author
Patrick Lencioni is often Slide 288
cited by Agilists to
describe common
dysfunctions
experienced by even the
best team. Lencioni
identified five specific
but all too common
dysfunctions. All teams
have the potential to
become dysfunctional
because they are made
up of people whose
needs must be met.
Understanding what the
potential dysfunctions
are and how to
overcome them are Image 100: Lencioni’s Five Dysfunctions of a Team
critical to the success of any team.
Absence of Trust
Trust is the real foundation of team structure. Often team members don’t
feel comfortable enough with the other members to fully disclose or share
information that is needed for the team to succeed. Common indicators that
your team is struggling with an absence of trust include:
 Concealing weaknesses and/or mistakes Slide 289
 Not asking for help or providing constructive criticism
 Not offering to help other team members outside their own areas
 Quickly jumping to conclusions

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 Failing to recognize others’ capabilities

 Holding grudges from previous meetings/projects
 Dreading meetings and finding reasons to avoid each other
If you identify that you have an absence of trust within your team, here are
some tools for getting the team back on track:
 Personal Histories Exercise — Have each team member review Slide 290
what they did prior to becoming part of this team. This will allow
everyone to better understand the strengths of each member.
 Team Effectiveness Exercise — Use team building exercises to
allow each member to gain personal and team insight to how they act
in the team setting.
 Personality and Behavioral Preferences Profiles — Team
Dimensions Profile
 360 Degree Feedback — Reviews by team members, managers and
subordinates on your performance. This will provide team members
with valuable information about their performance.
These exercises and activities will not be the panacea for the problem, rather
the first step for the team to recognize problems and realize that they all need
to work toward resolving the team’s trust issue.
Absence of Conflict
Team members are surrounded by conflict from other team members and
stakeholders because of the varying points of view that naturally exist
throughout a project. Not all conflicts are bad. On the contrary, constructive
conflicts can allow the team to identify issues, solutions and potential
problems within the project. It is important that the entire team recognize
conflict as a potentially beneficial thing. If your team often suffers from any
of the following you likely have an absence of conflict:
 Boring meetings. Slide 291
 Back channel politics.
 Personal attacks.
 Ignoring controversial topics that are critical.
 Opinions and perspectives of all team members are not heard or are
silenced.
 Lots of posturing and interpersonal risk management.

To be able to deal with the fear of conflict try the following techniques:
 Conflict Mining — Create situations within the meeting to make the
conflicts come into the conversation and force people to talk about Slide 292
them.
 Real Time Permission — You must have a culture where it is
acceptable to have a difference of opinion and your people must be
willing to express those opinions.
 Thomas-Kilmann Conflict Mode Instrument (TKI) — This tool is
similar to a personality test but brings out conflict in a very thought-
provoking way for the team to discuss.
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Lack of Commitment
The third major dysfunction of a team is a lack of commitment. When an
organization suffers from a lack of commitment they rarely stick with
difficult decisions or find it impossible to make the decisions necessary to
ensure project success. Often these issues create exponentially increasing
problems as project resources become more and more frustrated. Each of the
following represent telltale signs of a lack of commitment within an
organization:
 Ambiguity about direction and priorities. Slide 293
 Paralysis by analysis.
 Lack of confidence and fear of failure.
 Revisiting discussions and decisions repeatedly.
 Second guessing amongst the team.
If you identify that you have a commitment issue within your team or
organization, implement the following:
 Cascading Messaging — Ensure messaging flows from the top of
Slide 294
the organization. Senior management must have belief in their ideas
and set a consistent direction for the organization.
 Deadlines — Set deadlines and make everyone live up to them.
 Contingency and Worst-case Analysis — Make sure you have
contingency plans in place and conduct a worst-case analysis of all
plans to ensure that you and the team can deal with it.
 Low-risk Exposure Therapy — Identify the risk exposure
tolerances within the organization and your team.
Avoidance of Accountability
Without committing to a clear plan of action, even the most focused and
driven team members will hesitate to call out actions and behaviors that seem
counterproductive to the good of the project and organization. Members will
hold deep seeded resentment for team members that fail to live up to their
standards, although they may say nothing. The avoidance of accountability
is exemplified by the following indicators:
 Resentment among team members of different performance Slide 295
standards.
 Encouraged mediocrity.
 Missed deadlines and key deliverables.
 Team leader is the sole source of discipline.

If you identify that you have an accountability issue within your team or
organization, implement the following:
 Publish goals and standards for all team members.
Slide 296
 Simple and regular progress reviews.
 Team rewards.

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Inattention to Results
Inattention to results occurs when team members put their individual needs
(such as ego, career development, or recognition) above the collective goals
of the team. This will cause the team to fail to meet most, if not all, of the
original objectives of the project. Inattention to results can be indicated by
any of the following:
 Team stagnates and fails to grow.
 The organization rarely defeats a competitor. Slide 297
 Loses achievement-oriented employees.
 Team members encouraged to focus on their own goals.
 Easily distracted.
If you identify that you have an inattention to results issue within your team
or organization, implement the following:
 Public declaration of results
 Results-based rewards Slide 298

 .8 Meetings — Meetings are still the constant tool of the project leader
regardless of how much things change. You must always consider them
something available as a core tool.
The outputs from the develop team process include the following:
 .1 Team performance assessments — The team performance assessments
include how well the team is doing on assigned work, where knowledge gaps
exist, and how the team is functioning as a unit. Specific measures might be
reduced staff-turnover rates or improvements in assessed skills.
 .2 Change requests — Going through the process of developing your team
often causes you to learn things about the project. When this happens the
team must follow its own change management process or no one else will
either.
 .3 Project management plan updates — Just as going through the process
of developing the team can cause changes, it can also cause updates to the
project management plan. Specifically, this process can change the resource
management plan.
 .4 Project document updates — The process of developing your team can
also cause updates to documents outside the project management plan.
These documents include: the lessons learned register, the project schedule,
project team assignments, resource calendars, and the team charter.
 .5 Enterprise environmental factors updates — As the project progresses,
the environment is likely to change. It is important the project manager
recognizes the changes and adapts the organization as required. Specific
environmental factors that might be updated include things such as employee
training records and/or skills assessments.

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 .6 Organizational process assets updates — This process can cause

updates to your teams training requirements and personnel assessments.
9.5 Manage Project Team
The manage team process is the last process found in Slide 299
the resources management knowledge area. It is
slightly more difficult than the last process because it
does have some theories and concepts which require
memorization. However, it is significantly easier than
many of the topics found in cost, time, or other areas
of the PMBOK® Guide. The manage team process is
all about tracking team member performance,
providing feedback, resolving issues, and coordinating
changes to enhance project performance.
The inputs to the manage team process include the
following:
Image 101: The Manage
 .1 Project management plan — Specifically Team Process Slide 300
within the project management plan is the resource
management plan which provides the core rules and processes used to obtain,
manage and develop members of the project team.
 .2 Project documents — The additional project documents the project
leader uses to manage the team include the issue log, the lessons learned
register, the project team assignments, and the team charter.
 .3 Work performance reports — The performance reports tell the project
manager what has been accomplished and how you are doing in terms of
schedule and cost performance.
 .4 Team performance assessments — How is the team doing in terms of
their cooperation? The team performance assessments provide this
information.
 .5 Enterprise environmental factors — The leader must consider the
human resource management policies of the organization which are outside
both the project management plan and project documents.
 .6 Organizational process assets — Many organizations have existing
certificates of appreciation, corporate apparel and other gifts. These are
often referred to as “swag”. The formal name for these items is perquisites,
but they are also called fringe benefits, or perks.
The tools and techniques provide most of the detail in this process. The tools
and techniques used in the manage team process include the following:
®
 .1 Conflict management — PMI uses a somewhat unique definition of
®
conflict. To PMI , a conflict is simply a disagreement between two parties.
The existence of a conflict is not seen as a negative. How the conflict is

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resolved defines whether it is positive or negative. There are five approaches

possible to resolving a conflict. These are referred to as conflict resolution
modes. They are as follows:
 Withdraw / avoid — Often referred to as the ostrich approach. This
approach only offers temporary resolution to the conflict because it
represents a situation where one party refuses to engage the other
about the conflict. Of course, this resolves nothing but the immediate
confrontation. This is only a temporary solution!
 Smoothing / accommodating — Smoothing, or the kumbaya
approach, is also a temporary solution to conflict. In this approach
both parties engage each other and make each other feel better, but
they refuse to discuss the issue which caused the conflict. In this
resolution mode, the person smoothing cares a lot about the other
party but does not care about the issue.
 Compromise / reconcile — Compromise is the first conflict
resolution mode that provides a permanent solution. However, it is
also considered suboptimal because compromise is all about both
parties finding the solution with which they can live. They are not
interested in finding the best solution. Therefore neither party is
totally satisfied. The two parties care a medium amount for the other
party and a medium amount about the issue.
 Force / direct — When someone uses forcing to resolve a conflict
they make the other party accept their solution to the issue. In this
mode the person doing the forcing has a high regard for the issue but
a low regard for the other party.
 Collaborate / problem solve — Problem solving is also referred to
as confronting and is the preferred mode to resolve any conflict.
When problem solving, both parties have a high regard for each other
and for the issue being discussed. The parties are more concerned
over finding the correct solution rather than just having their solution.
Each of these problem solving techniques is shown in the table represented in
Image 102. This is the same table shown earlier in this chapter.

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Resolution Concern
Mode Style Personal Goals Relationship
Withdrawal Lose—Leave Low Low
Smoothing Yield—Lose Low High

Compromising Compromise Medium Medium

Forcing Win — Lose High Low
Problem Solving Integrative High High
(Confronting)
Image 102: The Conflict Resolution Modes & Their Impacts
®
 Decision making — PMI never assumes the project leader has total control
over the project. In fact, PMI® actually makes the exact opposite assumption
that the project leader will lack the autonomy to make major decisions
without assistance from others. Therefore, PMI® suggests project leaders
must negotiate and influence the organization to deliver the desired project
results.
 Emotional intelligence — Emotional intelligence is the ability to identify Slide 301
and manage your own emotions and the emotions of others. Most scholars
however, take the definition further. They argue that it requires people to
discriminate between different emotions and label them appropriately and to
use emotional information to guide thinking and behavior. Further, it also
reflects the ability to combined intelligence, empathy, and emotions to
enhance one’s thought and understanding of interpersonal dynamics. It is
generally said to include three skills:
 Emotional awareness, including the ability to identify your own
emotions and those of others;
 The ability to harness emotions and apply them to tasks like thinking
and problems solving;
 he ability to manage emotions, including the ability to regulate your
own emotions, and the ability to cheer up or calm down another
person.
Although there is general agreement on this definition significant
disagreement exists with regard to EI terminology and operationalizations.
The term first gained prominence in 1995 when Daniel Goleman released his
book entitled Emotional Intelligence. However, this was not the first time
the term was used. In 1964, Michael Beldoch used the term in a scholarly
paper as did N. Leuner in 1966. The first significant use of the term came in
Wayne Payne’s 1985 doctoral thesis. Central to the themes we now consider
key to EI was Howard Gardner’s 1983 Frames of Mind: The Theory of
Multiple Intelligences that introduced the idea that traditional types of
intelligence, such as IQ, fail to fully explain cognitive ability. He introduced

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the idea of multiple intelligences which included both interpersonal

intelligence (the capacity to understand the intentions, motivations and
desires of other people) and intrapersonal intelligence (the capacity to
understand oneself, to appreciate one's feelings, fears and motivations). In
1989 Stanley Geenspan put forward another model to describe EI and was
followed by Peter Salovey and John Mayer later that year. All of this simply
points to the fact that significant scholarly research was done on the topic
before Goleman, but it was his work that became a best seller and hence
popularized the term.
All of this research has led to several models have appearing each with a
slightly different take on the basic themes. Repeated studies have shown that
people with high emotional intelligence have greater mental health,
exemplary job performance, and more potent leadership skills. For example,
Goleman’s research in his book, Working with Emotional Intelligence,
indicated that EI accounted for 67% of the abilities deemed necessary for
superior performance in leaders, and mattered twice as much as technical
expertise or IQ. Other research finds that the effect of EI on leadership and
managerial performance is non-significant when ability and personality are
controlled for, and that general intelligence correlates very closely with
leadership. Markers of EI and methods of developing it have become more
widely coveted in the past few decades. In addition, studies have begun to
provide evidence to help characterize the neural mechanisms of emotional
intelligence.
The different models of emotional intelligence has led to a significant
industry in the construction and application of EI assessments. Most
researchers who examine these different instruments agree that the
differences can be significant.
Criticism of emotional intelligence centers on whether EI is a
real intelligence and whether it has incremental validity over IQ and the Big
Five personality traits. Several scholarly reviews of the research supporting
emotional intelligence argue that, in most studies, poor research
methodology has exaggerated the significance of EI. This criticism has not
slowed the significant use of EI in the workplace as an attempt to created
higher functioning leaders.
For the exam, it is important that you understand the basic concepts of EI and
some of the fundamentals surrounding the three main models that exist.
 Ability Model
 Mixed Model
 Trait Model
Before describing the three models, it is important that you gain a solid
understanding of the underpinnings of the concept.
The easiest way to understand emotional intelligence for most people is to

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Slide 302

Image 103: Emotional Intelligence Four Square Grid

focus on the Goleman model and think about a four-square grid. At the top
of the grid are the two column headings, self and social. Self describes how
we manage ourselves while social describes how we handle relationships.
The two rows represent recognition or who the individual is, and regulation
or what the individual does with respect to both themselves and others. The
first quadrant is self-awareness. This quadrant represents a person’s ability
to recognize and understand your moods, emotions and drives as well as their
effect on others. Leaders who are self-aware display self-confidence as well
as a strong sense of emotional self-awareness. They also display the ability
to accurately assess themselves. Those around the self-aware leader has
significant personal power.
The other quadrant that appears in the top row of the image is the social or
other awareness. This is the ability to understand the emotional makeup of
other people, and represents a skill in treating others according to their
individual emotional reactions. It is highlighted by empathy and both a
situational awareness that is combined with a clear understanding of the
organization and a strong service orientation. These two quadrants define
who the individual truly is according to emotional intelligence believers.

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The bottom row of the grid represents regulation or management. It

combines with both the self and others to define how we choose to manage
ourselves and how we handle relationships. It begins with the quadrant Self-
Management. This quadrant is about the ability to control or redirect
disruptive impulses and moods. It is the propensity to suspend judgment and
think before acting. There are a number of characteristics that highlight the
exercise of self-management. They include, most importantly, self-control or
the ability to control one’s own actions and prevent disruptive impulses from
turning into action. Self-management also requires integrity, innovation and
creativity. Leaders who possess strong self-management tend to take the
initiative while displaying a bias towards action. Their achievement drive
and high level of realistic optimism combines with a high degree of
resilience and stress management.
The final quadrant is relationship management. Proficiency in managing
relationships and building networks is key to relationship management. It
requires the leader to possess the ability to find common group and build
rapport with their team and the rest of the organization. There are a large
number of characteristics that define a leader strong in relationship
management. Skills such as communication, effectiveness with interpersonal
relationships, the ability to influence others, manage conflicts, and inspire
others combine with the ability to catalyze the organization for change, build
bonds with others in the organization through trust while providing coaching
and mentoring in a team-based environment.
Salovey and Mayer created the ability-based emotional intelligence model.
This model attempts to define EI within the boundaries of the standard Slide 303
criteria for a new intelligence. Based on their research, they redefined EI as,
“The ability to perceive emotion, integrate emotion to facilitate thought,
understand emotions and to regulate emotions to promote personal growth.”
However, after pursuing further research, they again revised the definition to,
“the capacity to reason about emotions, and of emotions, to enhance
thinking. It includes the abilities to accurately perceive emotions, to access
and generate emotions so as to assist thought, to understand emotions and
emotional knowledge, and to reflectively regulate emotions so as to promote
emotional and intellectual growth.”
The ability-based model views emotions as useful sources of information that
help one to make sense of and navigate the social environment. The model
proposes that individuals vary in their ability to process information of an
emotional nature and in their ability to relate emotional processing to a wider
cognition. This ability is seen to manifest itself in certain adaptive behaviors.
The model claims that EI includes four types of abilities:
 Perceiving Emotions — the ability to detect and decipher emotions
in faces, pictures, voices, and cultural artifacts—including the ability
to identify one's own emotions. Perceiving emotions represents a
basic aspect of emotional intelligence, as it makes all other
processing of emotional information possible.

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 Using Emotions — the ability to harness emotions to facilitate

various cognitive activities, such as thinking and problem solving.
The emotionally intelligent person can capitalize fully upon his or her
changing moods in order to best fit the task at hand.
 Understanding Emotions — the ability to comprehend emotion
language and to appreciate complicated relationships among
emotions. For example, understanding emotions encompasses the
ability to be sensitive to slight variations between emotions, and the
ability to recognize and describe how emotions evolve over time.
 Managing Emotions — the ability to regulate emotions in both
ourselves and in others. Therefore, the emotionally intelligent person
can harness emotions, even negative ones, and manage them to
achieve intended goals.
The current measure of Mayer and Salovey's model of EI, the Mayer-
Salovey-Caruso Emotional Intelligence Test, or MSCEIT, is based on a
series of emotion-based problem-solving items. Consistent with the model's
claim of EI as a type of intelligence, the test is modeled on ability-based IQ
tests. By testing a person's abilities on each of the four branches of
emotional intelligence, it generates scores for each of the branches as well as
a total score.
Central to the four-branch model is the idea that EI requires attunement
to social norms. Therefore, the MSCEIT is scored in a consensus fashion,
with higher scores indicating higher overlap between an individual's answers
and those provided by a worldwide sample of respondents. The MSCEIT
can also be expert-scored, so that the amount of overlap is calculated
between an individual's answers and those provided by a group of
21 emotion researchers.
Although promoted as an ability test, the MSCEIT is unlike standard IQ tests
in that its items do not have objectively correct responses. Among other
challenges, the consensus scoring criterion means that it is impossible to
create items (questions) that only a minority of respondents can solve,
because, by definition, responses are deemed emotionally "intelligent" only
if the majority of the sample has endorsed them. This and other similar
problems have led some cognitive ability experts to question the definition of
EI as a genuine intelligence.
The model introduced by Daniel Goleman focuses on EI as a wide array of Slide 304
competencies and skills that drive leadership performance. This concept is
key to the Agilist, and is the model you should spend the most time coming
to know. Goleman's model outlines five main EI constructs. If after reading
through this discussion you still have questions refer to "What Makes A
Leader" by Daniel Goleman, best of Harvard Business Review, 1998. These
five areas include:
 Self-Awareness — the ability to know one's emotions, strengths,
weaknesses, drives, values and goals and recognize their impact on
others while using gut feelings to guide decisions.

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 Self-Regulation — involves controlling or redirecting one's

disruptive emotions and impulses and adapting to changing
circumstances.
 Social Skill — managing relationships to move people in the desired
direction.
 Empathy — considering other people's feelings especially when
making decision.
 Motivation — being driven to achieve for the sake of achievement.

Goleman includes a set of emotional competencies within each construct of

EI. Emotional competencies are not innate talents, but rather learned
capabilities that must be worked on and can be developed to achieve
outstanding performance. Goleman posits that individuals are born with a
general emotional intelligence that determines their potential for learning
emotional competencies.
Two measurement tools are based on the Goleman model:
 The Emotional Competency Inventory or ECI — The ECI was
created in 1999, and the Emotional and Social Competency Inventory
(ESCI), a newer edition of the ECI was developed in 2007. The
Emotional and Social Competency - University Edition (ESCI-U) is
also available. These tools developed by Goleman and Boyatzis
provide a behavioral measure of the Emotional and Social
competencies.
 The Emotional Intelligence Appraisal or EIA — The EIA created
in 2001 and can be taken as a self-report or 360-degree assessment.
The third model of Emotional Intelligence is the Trait Model. Konstantinos
Slide 305
Vasilis Petrides proposed a conceptual distinction between the ability based
model and a trait based model of EI and has been developing the latter over
many years in numerous publications. Trait EI is "a constellation of
emotional self-perceptions located at the lower levels of personality”. In lay
terms, Trait EI refers to an individual's self-perceptions of their emotional
abilities. This definition of EI encompasses behavioral dispositions and self-
perceived abilities and is measured by self reporting, as opposed to the
ability based model which refers to actual abilities, which have proven highly
resistant to scientific measurement. Trait EI should be investigated within a
personality framework. An alternative label for the same construct is trait
emotional self-efficacy. The trait EI model is general and subsumes the
Goleman model.
There are many self-report measures of Emotional Intelligence used for the
Trait Model, including the EQ-i, the Swinburne University Emotional
Intelligence Test (SUEIT), and the Schutte EI model. None of these assess
intelligence, abilities, or skills, but rather, they are limited measures of trait
emotional intelligence. One of the more comprehensive and widely
researched measures of this construct is the Trait Emotional Intelligence
Questionnaire (TEIQue), which was specifically designed to measure the
construct comprehensively and is available in many languages.

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Although Emotional Intelligence is extremely popular within the Agile

Community and several others not everyone supports its theories. Mayer,
Roberts and Barsade in 2008 criticized Goleman’s model as nothing more
than “pop Psychology”. The ability EI model has also been criticized in the
research for lacking face and predictive validity in the workplace. However,
in terms of construct validity, ability EI tests have great advantage over self-
report scales of EI because they compare individual maximal performance to
standard performance scales and do not rely on individuals' endorsement of
descriptive statements about themselves.
 Influencing — Influencing represents the ability to impact others with over
whom you have no power or authority. Influencing requires the ability to
persuade by articulating positions and ideas along with strong listening skills.
The successful project leader will be aware of and consider a wide range of
perspectives as they gather relevant information to address issues and reach
agreements. When successful, the influential leader will build a team based
on mutual trust.
 Leadership — Leadership represents the ability to drive and inspire a team
to do their jobs well. If is a skill that is often difficult to pinpoint, but most
know it when they see it. There are a wide range of leadership theories that Slide 306
you need to know for the exam, and this is an important skill to study.
There are several potential leadership styles including:
 Autocratic – They solicit little or no informational input from their
group and make managerial decisions solely by themselves.
 Consultative Autocratic – Intensive information input is solicited,
but these leaders keep all substantive decision-making authority to
themselves.
 Consensus Manager – They throw open the problem to the group
and encourage the entire team to make the relevant decision.
 Shareholder Manager – (Poor Management) Little or no
information input and exchange takes place within the group context,
yet the group is provided the authority for the final decision.
There are also conflicting ideas about which leadership style is best. PMI®
does not define a “best” style. However, two theories need to be reviewed
for the exam. The first theory is the leadership contingency model by
Fielder. Fiedler’s contingency model postulates that the leader’s Slide 307
effectiveness is based on ‘situational contingency’ which is a result of
interaction of two factors: leadership style and situational favorableness. It
argues leadership is a function of having the leader’s style aligned with the
situation because there is no perfect leader. In this model leadership is
dependent on several key variables including: the team leader versus team
member relations, the degree of task structure, and the position of power of
the leader. The second major theory is the situational leadership theory.
The situational leadership theory is a leadership theory developed by Paul

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Hersey and Ken Blanchard. The Theory was first introduced as "Life Cycle Slide 308
Theory of Leadership”. The theory holds there is no single “best” style of
leadership. Effective leadership is task-relevant and that the most successful
leaders are those that adapt their leadership style to the maturity of the
individual or group they are attempting to lead/influence, and that effective
leadership varies, not only with the person or group that is being influenced,
but it will also depend on the task, job or function that needs to be
accomplished. Within this theory there are four styles of leadership:
 Telling — is characterized by one-way communication in which the
leader defines the roles of the individual or group and provides the
what, how, why, when, and where to do the task.
 Selling — while the leader is still providing the direction, he or she is
now using two-way communication and providing the socio-
emotional support that will allow the individual or group being
influenced to buy into the process.
 Participating — this is now shared decision making about aspects of
how the task is accomplished and the leader is providing less task
behaviors while maintaining high relationship behavior.
 Delegating — the leader is still involved in decisions; however, the
process and responsibility has been passed to the individual or group.
The leader stays involved to monitor progress.
How a leader gets their power is also important. There are several sources of
power you must know to prepare for the exam. These sources are not
exclusive. Meaning the total power possessed by any leader is a combination
of the power provided and is defined by the equation below.

Total Power = Positional + Personal Power

The specific types of power include:
 Legitimate — Legitimate power is derived from the individual’s
position in the organization. It is sometimes referred to as formal
authority or power.
 Coercive — Coercive power is a based upon intimidation. It can be
physical, emotional or most commonly based on the ability to impact
one’s job security. It is predicated on fear.
 Reward — Involves positive reinforcement for desired behavior.
One of the simplest examples is Pavlov’s dog experiment. Every time
a bell was rung the dog got fed. Eventually the dog began salivating
at the ringing of the bell. People will often act the same way. You
can condition resources to respond in a desired fashion with positive
reinforcement.

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 Expert — When using expert power a leader will attempt to get

resources to act in a desired way because the leader has some special
skill or knowledge and the resource wants to impress the leader.
 Referent — When using referent power a leader gains authority
based upon who they know or with whom they are associated. A
simple example is when the project leader is friends with the
company president.
Slide 309
Power Power Team Team Team
Source Base Commitment Compliance Resistance Meaning
Position Legitimate Possible Likely Possible Formal authority to
direct, a boss
Position Reward Possible Likely Possible The ability to give value
such as a raise
Position Coercive Possible Possible Likely The right to reprimand or
terminate
Personal Informa- Possible Possible Possible Ability to give facts,
tional reasoning, or logic
Personal Expert Likely Possible Possible Seeming to have superior
knowledge or experience
Personal Referent Likely Possible Possible Goodwill, team members
admire the person
Image 104: Sources of Power and Their Impacts
Another key concept found in leadership is the idea of servant leadership.
Servant leadership is a philosophy and set of practices that is supposed to Slides 310
enrich the lives of individuals, builds better organizations, and ultimately
creates a more just and caring world. The phrase “servant leadership” was
coined by Robert K. Greenleaf in The Servant as Leader, an essay that he
first published in 1970. In that essay, Greenleaf said:
“The servant-leader is servant first… It begins with the natural feeling that
one wants to serve, to serve first. Then conscious choice brings one to aspire
to lead. That person is sharply different from one who is leader first, perhaps
because of the need to assuage an unusual power drive or to acquire material
possessions…The leader-first and the servant-first are two extreme types.
Between them there are shadings and blends that are part of the infinite
variety of human nature.”
“The difference manifests itself in the care taken by the servant-first to make
sure that other people’s highest priority needs are being served. The best test,
and difficult to administer, is: Do those served grow as persons? Do
they, while being served, become healthier, wiser, freer, more autonomous,
more likely themselves to become servants? And, what is the effect on the
least privileged in society? Will they benefit or at least not be further
deprived?”

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A servant-leader focuses primarily on the growth and well-being of people

and the communities to which they belong. While traditional leadership
generally involves the accumulation and exercise of power by one at the “top
of the pyramid,” servant leadership is different. The servant-leader shares
power, puts the needs of others first and helps people develop and perform as
highly as possible.
Robert Greenleaf recognized that organizations as well as individuals could
be servant-leaders. Indeed, he had great faith that servant-leader
organizations could change the world. In his second major essay, The
Institution as Servant, Greenleaf articulated what is often called the “credo.”
There he said:
“This is my thesis: caring for persons, the more able and the less able serving
each other, is the rock upon which a good society is built. Whereas, until
recently, caring was largely person to person, now most of it is mediated
through institutions – often large, complex, powerful, impersonal; not always
competent; sometimes corrupt. If a better society is to be built, one that is
more just and more loving, one that provides greater creative opportunity for
its people, then the most open course is to raise both the capacity to serve and
the very performance as servant of existing major institutions by new
regenerative forces operating within them.”
 .2 Project management information system — The PMIS often offers a
wide range of tools to help the project leader manage the project team.
The outputs to the manage project team include the following:
 .1 Change requests — The work done to manage the project team results in
discovering new information that requires changes to the project.
 .2 Project management plan updates — As the project progresses, nothing
will produce more information about what needs to change for success than
the team. These changes can have significant impacts to the project
management plan.
 .3 Project document updates — If the project management plan is going to
be updated, doesn’t it make sense to update the other documents that are part
of the project?
 .4 Enterprise environmental factor updates — This is yet again our old
friend. In this case, the focus is on updating those factors.
9.6 Control Resources Slide 313
The last process found in the project resources
management knowledge area is new in the 6th edition of
the PMBOK® Guide. It represents another move toward
standardizing the knowledge area. Control resources is
the process where the project leader works to
ensure the physical resources assigned and Image 105: Control Resources Process

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allocated to the project are actually available as planned. It is also the process
where the project leader works to monitor the team’s actual resource utilization
versus what was planned and take any required corrective action. Be very
careful with this process. Human resources are managed in the last process.
This process is focused on the physical resources such as equipment, materials,
facilities and infrastructure. Do not get confused on this point.
Slide 314
The inputs to the control resources process include:
 .1 Project management plan — The key component of the project
management plan included in this process is the resource management plan
created at the beginning of this knowledge area. It defines how resources are
to be managed within the project.
 .2 Project documents — The resource management plan found in the
project management plan. It is missing a lot of key information. Much of
that needed information is founded in the additional project documents.
Specifically, PMI® lists the issue log, any physical resource assignments, the
project schedule, the resource breakdown structure, the resource
requirements, and the risk register. Each of these documents is critical to the
leader understanding how the project is being resourced.
 .3 Work performance data — The work performance data for controlling
resources tells the project manager about the number and type of resources
used on the project.
 .4 Agreements — Often projects rely on the purchasing of equipment or sub-
systems from outside vendors to complete project work. This means there
are also often contracts or other agreements in place defining the way that
work is conducted. The project leader must have access to this information
to successfully control project resources.
 .5 Organizational process assets — Within the performing organization,
there is often organizational process assets such as escalation procedures for
handling issues within the performing organization, the lessons learned
repository for information about past projects, and any policies about
resource control and reassignment.
There are four primary tools and techniques used to control resources according
to PMI®
 .1 Data analysis — Controlling resources on a project requires a significant
amount of both time and energy analyzing information from the project to
ensure the resources are completing the necessary work. This is done using
alternatives analysis, cost-benefit analysis, performance reviews, and trend
analysis.
 .2 Problem solving — No project ever goes exactly as planned. When the
unexpected happens a good leader knows they must examine the current
information and solve problems. It is about finding solutions. Weak leaders
tend to throw up their arms in frustration.

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 .3 Interpersonal and team skills — The project leader must use

negotiations, influencing and a number of other soft skills to navigate the
management of resources on any project.
 .4 Project management information system — The PMIS provides many
tools the project manager can use to successfully control their resources.
These tools show the leader what is currently happening along with forecasts
and trends.
There are four primary outputs to the control resources process. Most, if not all
of these outputs are common sense. After eight other chapters they should be
relatively familiar to you. They include:
 .1 Work performance information — The work performance information
shows how the project is progressing against what was expected and any
gaps that require adjustments.
 .2 Change requests — Like most of the processes found in the PMBOK®
Guide, controlling resources can cause the team to recommend a change to
the change management process. Remember, in this case we are talking
about physical resources and not people.
 .3 Project management plan updates — Controlling project resources can
generate many updates to the resource management plan, the schedule
baseline, or the cost baseline.
 .4 Project document updates — The project documents likely to be updated
through this process are the assumption log, the issue log, the lessons learned
register, any physical resource assignments, the resource breakdown
structure, and the risk register.
Final Terms
There are several additional terms you must know to prepare for the exam.
These include the following:
 Expectancy theory — Employees who believe their efforts will lead to Slide 315
effective performance and who expect to be rewarded for their
accomplishments will remain productive as rewards meet the expectations.
 Arbitration — In arbitration, a neutral party hears and resolves a dispute.

 Perquisites — Often referred to as perks, occur when some employees

receive special rewards, such as assigned parking spaces, corner offices, and
executive dining.
 Fringe benefits — These are benefits formally given to all employees, such
as educational benefits, health insurance, 401Ks, and employee stock
ownership.

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 Motivation theory — This is a fancy way of talking about what people

really want. If most projects are operated in a matrix environment, then one
of the few things a project manager can do to gain cooperation of team
members is to understand how to motivate them.
Human Resources Management Summary
To summarize, the human resources knowledge area is one of the easiest on the
Slide 316
exam, but you cannot pass it without some studying. Make sure to focus on the
following:
 Six processes — Make sure it makes sense to you and you have a firm grasp
on most of the inputs, tools and techniques, and outputs for each of the six
processes.
 Sources of power — Study the sources of power and how each combine to
give the project manager the ability to deliver a successful project.
 Types of conflict and conflict resolution — Conflict resolution is a key
skill for successful project management. Remember, conflict is not
inherently bad. It is how we resolve the conflict that makes it good or bad.
 Purpose and value of team building — Team building is a constant
requirement to ensure good collaboration and efficient effort.
 Organizational theories — Make sure you can compare and contrast the
organizational theories proposed by Maslow, McGregor, and Ouchi.
 Theories of management style — Spend time studying the two different
theories of management styles and make sure you know these well.

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Exercise 17 — Resource Management Exercise 17 –

Resource
 Which of the following is the last process in the resources management Management
knowledge area?
A. Plan resource management
B. Acquire resources
C. Develop team
D. Manage team
2. Which of the following is not a process found in the resource management
knowledge area?
A. Plan resource management
B. Acquire team
C. Train team
D. Manage team
3. Which of the following is not an output of the manage team process?
A. Organizational process updates
B. Change requests
C. Enterprise environmental factors updates
D. Project management plan updates
4. Which of the following is not a form of positional power for a new project
manager?
A. Legitimate
B. Expert
C. Reward
D. Coercive
5. Which of the following sources of power would likely cause a project
resource to be committed to the effort?
A. Legitimate
B. Reward
C. Referent
D. Informational
6. Which of the following needs from Maslow’s Hierarchy of Needs must be
dealt with first?
A. Self-actualization
B. Social
C. Physiological
D. Safety

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7. You are a project manager managing a resource who has been an outstanding
performer in the past. On your project she has repeatedly missed deadlines.
You discover she is going through a difficult divorce. According to Maslow,
which of the following needs is most likely not being met for this resource?
A. Self-actualization
B. Physiological
C. Safety
D. Social
8. Which of the following is the ultimate goal in Maslow’s Hierarchy of Needs?
A. Self-actualization
B. Esteem
C. Social
D. Physiological
9. Sally has been a senior technical resource with her company. She is
considered the best technical resource in her organization. One day she is
told she is being promoted to be the project manager on a large complex
project. Which of the following best describes Sally’s situation?
A. Promoting within
B. The halo effect
C. Ensuring technical competence
D. A good general business practice is to move people from technical
fields to project management because they will best understand the
project needs.
10. Which of the following is not one of the terms represented by the acronym
RACI?
A. Responsible
B. Accountable
C. Consult
D. Initiates
11. Which of the following is not a primary need in McClelland’s Theory of
Needs or the Acquired Needs Theory?
A. Need for achievement
B. Need for affiliation
C. Need for esteem
D. Need for power
12. Which of the following is not a hygiene factor in Herzberg’s Theory?
A. Responsibility
B. Personal life
C. Relationships at work
D. Status

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13. Which of the following is not a motivating agent according to Herzberg’s

Theory?
A. Responsibility
B. Self-actualization
C. Status
D. Recognition
14. According to McClelland’s theory of needs, which of the following is not a
behavioral style associated with the primary need for affiliation?
A. People working best when cooperating with others
B. People seeking approval rather than recognition
C. People seeking to organize and influence others
D. All of the above
15. Which of the following is the lowest point on Maslow’s hierarchy of needs?
A. Safety
B. Physiological
C. Social
D. Physical
16. Which project role is best described as helping to prevent unnecessary
changes to project objectives?
A. Stakeholders
B. Customers
C. Sponsor
D. Project manager
17. Which of the following conflict resolution modes is most likely to be
permanent?
A. Confronting
B. Smoothing
C. Compromising
D. Forcing
18. The most common causes of conflict on a project are schedules, project
priorities and:
A. Personalities
B. Resources
C. Cost
D. Management

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19. You are a project manager leading a bridge construction project. One day
you are meeting with one of your resources when they exclaim, “I cannot
deal with this right now!” What conflict resolution technique are they using?
A. Confronting
B. Smoothing
C. Forcing
D. Withdrawal
20. What does a resource histogram show that a RAM does not?
A. Reporting relationships
B. The person responsible for each activity
C. Key activities
D. Time
21. It is the first day on your new job as a project manager at a large snack food
manufacturing facility. You are taking over a project for a PM that has gone
on maternity leave that is approximately 40% complete and is expected to
take another seven months to complete. There are 15 people working on the
project. You need to determine who is responsible for doing the specific
activities for the entire project. Where would you find this information?
A. Responsibility assignment matrix
B. Brakestone organization chart
C. Team board
D. Control chart
22. You are the new project manager on a project that is significantly behind
schedule. The organization uses a matrix structure. You determine that three
additional resources are required. From whom would you request these
resources?
A. Project team
B. Project manager
C. Functional manager
D. Project sponsor
23. You have just been brought into an organization as a project management
consultant to work with an inexperienced project manager. Upon examining
the project with the PM you discover several important tasks are expected to
get behind because the assigned resource lacks the specific experience to
perform the required work. After doing some research you find there isn’t
another resource available that is better qualified. What is the best solution
for this situation?
A. Provide the resource with greater time reserves to complete the work.
B. Hire a new resource to complete the work.
C. Provide the resource with additional incentives if they complete the
work on time.
D. Arrange for the team member to obtain the necessary training to
perform the task.

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24. You are leading one of five sub-teams for a large project. One of the sub-
teams is consistently late with their deliverables forcing your sub-team to
have to crash the critical path repeatedly. What should you do?
A. Meet with the project manager and the leader of the consistently tardy
team together
B. Meet with the project manager alone
C. Meet with the leader of the consistently tardy team alone
D. Meet with the leader of all the sub-teams together
25. You are leading your first project with a very experienced team. The team
has 25 resources fully dedicated to the effort. Approximately 35% through
the execution of the project one of the stakeholders requests a major change
to the scope of the project. Unfortunately, two of your most senior resources
have very different opinions on how the changes should be accomplished.
How should you deal with this conflict?
A. Listen to the different opinions, determine the best choice and
implement that choice.
B. Postpone further discussions, meet with each team member, and
determine the best approach.
C. Listen to the different opinions, encourage logical discussions, and
facilitate an agreement.
D. Help the team focus on the agreeable aspects of their opinions and
build unity by using team building exercises.
26. Today is your first day with XYZ Company. You have been hired to lead a
new project with 8 different departments, 45 different resources, and a single
project sponsor. You must maintain less than a 10% variance on both
schedule and cost. What type of management power will best help you gain
the cooperation of others?
A. Referent
B. Expert
C. Fear
D. Formal
27. Today is your first day with XYZ company. You have been hired to lead a
new project with 8 different departments, 45 different resources, and a single
project sponsor. Unfortunately, two of your most senior resources have very
different opinions on how the project testing should be accomplished. One
says the systems should be integrated before testing and the other maintains
each system should be tested before integration. The sponsor is demanding
the project is completed on time. What is the best thing to do to resolve the
conflict?
A. Force a solution on both parties.
B. Refocus the parties on the project goals.
C. Table the discussion until the next meeting.
D. Require the team to do limited testing before integration and finish
testing after integration.
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28. A two year project is coming to an end. It has been a difficult project to
complete due to three major overhauls, two of which involved replacing the
project manager. When you came in this morning one of your senior
resources was waiting in your office to inform you that one of the last key
deliverables did not pass its QA test and the resource working on the item
has been moved off the project by their direct supervisor. Additionally there
is an email in your in box requesting a major shift in scope. With whom
should you address these issues?
A. Senior management
B. Project sponsor
C. The customer
D. The team
29. You are eating lunch with a friend who is explaining why they love their
organization. The friend says, “The team really enjoys our leadership team.
The set clear goals for our performance and explain why those performance
goals are important for our mission. They also establish excellent rewards
for achieving those goals. The best part is, everyone can see the rewards
happening along with the achievement of our goals. Which of the following
theories best describes this scenario?

A. McGregor’s theory of X and Y

B. Conditional reinforcement
C. Expectancy theory
D. Maslow’s hierarchy of needs
30. The project you are leading has been going very well. You are more than
50% through the execution phase and have an SPI of 1.02 and a CPI of 0.99.
The customer has accepted all presented deliverables and your sponsor just
told you they were very pleased with the results to date. Unfortunately, you
have one team member who is not happy. They are always complaining
about how much time it takes to complete their deliverables. Which of the
following would be the best thing for the project manager to do?
A. Show the resource the formal, written acceptance from the customer.
B. Review the reward system for the project.
C. Show the resource the SPI performance.
D. Obtain a schedule exception from the sponsor.

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31. You are leading a project that contains a great deal of stress. The entire team
has been on edge due to a very tight deadline. This tension has grown to the
point that many team meetings end in shouting matches with little work
being accomplished. Several key stakeholders have asked that scope be
added to the project to better meet their needs. The sponsor has heard
rumors that the project might be having difficulties and wants to attend a
team meeting to get a better sense of how the project is doing and any issues
involved with achieving the desired targets. In this situation, it would be best
for the project manager to:
A. Hold a team-building session that involves all team members.
B. Meet with each resource individually to determine the real issues.
C. Create and implement new ground rules for the team.
D. Ask the sponsor if you can send a written report instead of wasting
their time in the meeting.
32. Which of the following describe how an individual team member is
performing on the project?
A. Project performance appraisals
B. Team performance appraisals
C. Annual performance reviews
D. Project performance plans
33. In January you make a decision as the project manager on a complex issue
facing your project. Everything goes smoothly until July when the same
issue reappears. What did you most likely not do?
A. Proper risk analysis
B. Quantify the risk
C. Have the project sponsor validate the solution
D. Confirm the solution solved the problem
34. The halo effect refers to the tendency to:
A. Promote from within
B. Hire the best
C. Move people into project management because they are good in their
technical fields
D. Move people into project management because they have had project
management training
35. You have just been assigned as a project manager for a large information
technology project. This one-year project is about halfway. The project
team consists of seven external resources and 30 internal resources. You
want to understand who is responsible for doing what on the project. Where
would you find such information?
A. Responsible assignment matrix
B. Resource histogram
C. Bar chart
D. Project organization chart
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36. During your regular status meetings you ask each resource to describe the
work they are doing and then you assign new activities to the resources as
required. The length of these meetings has increased because of the many
different activities requiring assignment. This could be happening for all the
following reasons except:
A. A lack of a WBS
B. A lack of a RAM
C. A lack of resource leveling
D. A lack of involvement in project planning
37. You are leading a large manufacturing project in a weak matrix organization.
Given that you lack the ability to reward your team, none of the resources
report to you, and the project is complicated and difficult, which of the
following types of project management power will likely be the most
effective?
A. Referent
B. Expert
C. Penalty
D. Formal
38. One of your team members is not performing well because they are
inexperienced in the particular technical skill. You do not have any other
resources available to complete the work. Which of the following is the best
thing to do?
A. Consult with the functional manager to determine project completion
incentives for the team member.
B. Obtain a new resource with more technical skills.
C. Arrange for the team member to get training.
D. Allocate some of the project schedule reserve.
39. You are leading your first project and have a very experienced team. The
product of your project is highly technical and represents something your
organization has never done. However, your team is very confident. There
are more than 30 resources on the project; 15 of these resources are
considered true subject matter experts. In one of your team meetings you are
reviewing a preliminary WBS when one of the experts argues a deliverable
should not be done at all. Another of the experts says the deliverable should
be broken into three distinct deliverables and a third expert agrees with both
of them. How should the project manager deal with this conflict?
A. Listen to the differences of opinion, determine the best choice, and
implement accordingly.
B. Postpone further discussions, meet with the experts individually, and
determine the best approach.
C. Listen to the differences of opinion, encourage logical discussions,
and facilitate an agreement.
D. Help the team focus on agreeable aspects of their opinions and build
unity by focusing on team building.
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40. You have just been hired as the project manager for a $2,000,000
manufacturing project that has been underway for six months. The project
draws on resources from more than a dozen different departments and has
three primary sponsors. The project has more than 50 major requirements
that must be met. During your first meeting with the primary sponsors you
are told the project must maintain an SPI of between .95 and 1.05.
Additionally, the project has a CPI of .97. Which of the following types of
project management power will best help the project manager gain the
cooperation of the team?
A. Formal
B. Referent
C. Penalty
D. Expert
41. The project manager is trying to settle a dispute between two subject matter
experts who are team members on their project. One says the systems should
be integrated before testing, and the other maintains each system should be
tested before integration. The project involves more than 50 people and 15
different systems must be integrated. The sponsor is demanding the project
be completed on time. What is the best statement the project manager can
make to resolve the conflict?
A. Do it my way.
B. Let’s calm down and get the job done.
C. Let’s deal with this again next week after we all calm down.
D. Let’s do limited testing before integration and finish testing after
integration.
42. The installation project has a CPI of 1.06 and an SPI .97. There are 21 team
members. The project manager was careful to ensure each resource had
input into the schedule and project management plan. The customer has
accepted the six deliverables completed so far and the RAM has not changed
since the project began. The project is being completed in a matrix
environment and there are no external resources being used on the project.
Although the sponsor is happy with the status of the project, one of the team
members is always complaining about how much time his deliverables are
taking. Which of the following would be the best thing for the project
manager to do?
A. Review the reward system for the project.
B. Try to improve the project schedule performance.
C. Meet with the customer to try and extend the schedule.
D. Gain formal acceptance in writing from customer.

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43. The project manager is looking at the project’s resource needs and lessons
learned from past projects. This information causes the project manager to
be concerned about the ability to acquire enough resources for the project in
six months. Which of the following would be the least effective preventive
action?
A. Make sure functional managers have a copy of the resource
histogram.
B. Show the sponsor the data and explain the project manager’s concern.
C. Determine metrics to use as an early warning sign that resources will
not be available.
D. Ask functional managers for their opinions.
44. A large project is underway when one of the team members reviews the
project status report. He sees the project is currently running late. As he
looks at the report further he notices the delay will cause one of his activities
to be scheduled during a time he will be out of the country and cannot work
on the activity. This is of great concern to the team member because he is
very committed to the success of the project and he does not want to be the
cause of the project being further delayed. What is the best thing for him to
do?
A. Contact the project manager immediately to provide the project
manager with his schedule.
B. Include the information in his next report.
C. Request the issue be added to the project issue log.
D. Recommend preventive action.
45. There have been many work packages completed successfully on the project,
and the sponsor has made some recommendations for improvements. The
project is on schedule to meet an aggressive deadline when the successor
activity to a critical path activity suffers a major setback. The activity has 14
days of float and is being completed by four people. There are two other
team members with the skill set to assist the troubled activity, if needed. The
project manager receives a call that three other team members are attempting
to be removed from the project because they do not feel the project can be
successful. When the project manager pursues this, he discovers that those
team members have issues that have not been addressed. Which of the
following is the best thing to do to improve the project?
A. Have the team members immediately assist the troubled activity.
B. Investigate why the project schedule is aggressive.
C. See who can replace the three team members.
D. Create an issue log.

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Exercise 17 — Resource Management Answers

1. Answer D. PMBOK® Guide p. 308 – The control resources process is the
last process found in the Human Resources Management Knowledge Area.
2. Answer C. PMBOK® Guide p. 308 – Train project team is a made up term.
The correct process is the develop team.
3. Answer A. PMBOK® Guide p. 308 – The outputs from the Manage Project
Team Process include:
 Change requests
 Project management plan updates
 Project document updates
 Enterprise environmental factor updates
4. Answer B. Expert power is not provided formally. It occurs when one
complies with instructions because they believe the person providing the
instruction is a subject matter expert.
5. Answer C. Referent power is the only of the choices to likely get
commitment as it focuses on the resource having goodwill towards the PM
because of who the PM knows or is associated with.
6. Answer C. Maslow’s hierarchy of needs goes from physiological, safety,
social, esteem, and ends with self actualization at the top as the ultimate goal.
However, one cannot achieve the top level until achieving the levels beneath
it.
7. Answer D. Maslow’s hierarchy of needs goes from physiological, safety,
social, esteem, and ends with self actualization at the top as the ultimate goal.
However, one cannot achieve the top level until achieving the levels beneath
it. In this case the social need is most likely not being met as it is the one
focused on love, affection, approval, friends and association.
8. Answer A. Maslow’s hierarchy of needs goes from physiological, safety,
social, esteem, and ends with self actualization at the top as the ultimate goal.
However, one cannot achieve the top level until achieving the levels beneath
it.
9. Answer B. The halo effect refers to tendency of moving technical people
into project management because of their technical successes. These people
might or might not be successful as project managers.
10. Answer D. The RACI diagram is a tool used to show the role each resource
will play on the project. The acronym stands for Responsible, Accountable,
Consult and Inform.
11. Answer C. McClelland’s theory of needs states that people are most
motivated by one of three needs:
 The need for achievement
 The need for affiliation
 The need for power

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12. Answer A. According to Herzberg’s theory the following are examples of

hygiene factors:
 Working conditions
 Salary
 Personal life
 Relationships at work
 Security
 Status

13. Answer C. According to Herzberg’s theory the following are examples of

motivating agents:
 Responsibility
 Self-actualization
 Professional growth
 Recognition
14. Answer C. According to McClelland’s theory of needs the following
behavioral styles are associated with primary need for affiliation:
 People working best when cooperating with others
 People seeking approval rather than recognition
15. Answer B. Maslow’s hierarchy of needs argues that people are not most
motivated to work by security or money. Instead, the highest motivation is to
contribute and use one’s skills or self-actualization. The hierarchy from top
to bottom is:
 Self-actualization
 Esteem
 Social
 Safety
 Physiological
16. Answer C. The sponsor is responsible for issuing the project charter and the
charter contains the project objectives. Therefore, it is the role of the sponsor
to help prevent unnecessary changes to project objectives.
17. Answer A. Confronting is the preferred conflict resolution method as it
requires the parties to both present their solutions and value the other party’s
ideas and is the method most focused on finding the right solution.
18. Answer B. This is a simple memorization question. The four most common
causes of conflict on a project are:
 Schedule
 Project priorities
 Resources
 Technical opinions
19. Answer D. The failure of the person to engage with the issue is a perfect
example of withdrawal.

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20. Answer D. Time is shown on a schedule or bar chart. The RAM or

responsibility assignment matrix explains the role each party will take
against the specific deliverables or activities. A resource histogram shows
the resources or groups of resources over time.
21. Answer A. The RAM or responsibility assignment matrix explains the role
each party will take against the specific deliverables or activities. A team
board does show who is responsible for different activities, but only for the
current iteration and the question asks specifically for the entire project.
22. Answer C. This might be viewed as a trick question. If the question asked
whom would you see to get permission for more resources, the answer would
be the project sponsor. However, in this case the question is asking from
whom do you have to get the resources? In a matrix organization the
functional manager controls the resources.
23. Answer D. One of the four processes in the human resources management
area is develop project team. This highlights the importance PMI® places on
training.
24. Answer A. The best way to resolve a problem is through problem solving or
confronting. This requires you to meet with all the interested parties.
Therefore, you should meet with the leader of the tardy team and the project
manager.
25. Answer C. This question is big, but don’t get lazy and not read all the
choices. The key to this question is remembering the best problem solving
technique, confronting. In this case, it is important that you act as the
facilitator allowing the team to resolve the issue in a timely manner.
26. Answer D. In most cases expert power is best. However, in this case you
have not had the time to establish yourself as a subject matter expert.
Therefore, formal authority is the best you can hope for.
27. Answer D. Confronting is not offered in this question as a potential answer.
This leaves you with the next best option which is compromise. Therefore,
D is the correct answer.
28. Answer B. It is the project sponsor’s job to prevent unnecessary changes
and set priorities for all the different projects.
29. Answer C. This is the definition of expectancy theory: employees who
believe that their efforts will lead to effective performance and who expect to
be rewarded for their accomplishments will stay productive as rewards meet
their expectations.
30. Answer B. This question is more about answers that are wrong than one that
is correct. First, it is important that you recognize there is nothing wrong
with this project. It is on time and under budget. The only real problem you
have is a resource that is always complaining. The only option that has a
chance of addressing that issue is the one attempting to deal with the reward
system.

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31. Answer C. This is an example of a question requiring you to remember to

ask yourself what would you do first. You might want to do several items on
the list, but you must first deal with the tension in the meeting requiring new
ground rules be established.
32. Answer A. Project performance appraisals examine how well a specific
resource is performing on the project. Team performance appraisals address
how well the team is functioning together. Annual performance reviews are
for individuals across all their projects and other work and project
performance plans represents a made up term.
33. Answer D. Sometimes we read too much into a question. In this case, it is
actually a very easy question. Often when a problem reappears it is because
we treated the symptoms and not the root cause. In this case it is best to
make sure the solution actually solved the problem.
34. Answer C. The halo effect refers to the tendency to move a person into
project management because they are good in their technical field. Just
because someone is good at a technical skill does not make them a good
manager.
35. Answer A. The responsibility assignment matrix (RAM) or a RACI diagram
show who is doing what on the project.
36. Answer C. Resource leveling refers to using the same number of resources
and reducing the work to the point where it does not exceed the available
hours for a time period without increasing the number of resources.
37. Answer B. Reward and expert are the best types of power to use in such a
circumstance. Reward is not listed as a choice, and the question says you do
not have the authority to reward team members.
38. Answer C. The question says you don’t have any other resources and
adding incentives will not help a resource who lacks skills. This leaves
reserves and training. Training should always be the first choice.
39. Answer C. The very best problem solving technique is confronting. When
that is not available compromise is the next best alternative. In this case you
should focus on getting the experts to confront their disagreement and
facilitate a resolution.
40. Answer A. Generally speaking, the best forms of power are reward or
expert. In this case the project manager is new and nothing in the question
indicates specific expert knowledge or proximity to senior leadership. The
only thing that makes any sense is to use your positional power.
41. Answer D. Doing limited testing before integration represents a form of
compromise and is the best option.
42. Answer A. The only choice that has any impact on the resources is
analyzing the reward system. Although it is not a great choice, it is the best
answer.

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43. Answer A. Sending data without pointing out the issue does not mean the
communication will be adequately decoded by the recipient. The other
choices describe more effective communication in this instance.
44. Answer D. Notice the question asks what the team member should do. It is
important for the project manager to understand the team member’s role and
possibly even instruct team members on how to work on projects and what is
expected of them. Providing the project manager with his schedule,
including the information in a report, and requesting that the issue be added
to the issue log have one thing in common. They all involve the team
member asking the project manager to do something. In reality, it may very
well be the team member who will come up with a solution. Therefore,
recommending preventive action is the best choice for the team member.
45. Answer D. Sometimes complex problems are caused by not doing simple
things. The data in the first part of the question, once you read the choices, is
completely extraneous. The troubled activity has float and so does not need
immediate attention. It may not be necessary for additional team members to
assist the troubled activity, but none of the choices suggest investigating
whether the amount of float is enough to cover any delay caused by the
trouble. Rather the choices take you in different directions. Investigating
why the schedule is so aggressive should have been done before the project
began. Replacing team members does not solve the root cause of the
problem. Wouldn’t it be more effective to discover the root cause of those
troubled team members’ concerns so the problem does not surface again?
The creation of an issue log will let the troubled team members know their
concerns have been heard, are noted, and will be resolved. This might be
enough to stop them from leaving and avoid the resultant project delays and
confusion if new team members must be added.

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Communications Management
Overview
Chapter ten of the PMBOK® Guide is dedicated to the Slide 318
communications management knowledge area. There
are three processes found in the communications
management knowledge area. These processes include
the following:
 Plan communications management
 Manage communications
 Monitor communications

Before we can examine these processes it is important

to understand some basic terminology and the basic
communications model. The key terms to study for the
PMP® exam include the following:
 Communication — The
exchange of information, intended
or involuntary. The exchange can
be in the form of ideas,
instructions, or emotions. This
exchange can make use of a
variety of mechanisms such as
written or verbal, formal or Image 106: The Communications Management
informal, gestures, media, or the Processes
choice of words.
®
 Communication dimensions — PMI uses a number of terms to describe Slide 319-
the dimensions of communication these include: 320
 Internal — Communications is said to be internal if the focus is on
the stakeholders within the project and within the organization.
 External — Communications is said to be external is the focus is on
stakeholders such as customers, vendors, other projects, other
organizations, the government, the public, or environmental
advocates.
 Formal — Formal communication uses reports, formal meetings
(both regular and ad hoc), meeting agendas and minutes, stakeholder
briefings, and presentations.
 Informal — Informal communication represents general
communication activities using emails, social media, websites, and
informal ad hoc discussions.

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 Hierarchical focus — When discussing communication, hierarchical

focus refers to the position of the stakeholder or group with respect to
the project team. This positioning affect the format and content of
the message in a number of ways. It is important that you think about
the direction of your communication.
 Upward — Communication to senior management
stakeholders tends to be more formal and structured.
 Downward — Downward communication represents
communication directed to the team and other resources who
contribute work to the project.
 Horizontal — Horizontal communication refers to
communication done to peers of the project manager or team.
 Official — Official communication typically uses a formal structure
and is exemplified by annual reports or reports to regulators or other
government bodies.
 Unofficial — Unofficial communication is focused on establishing
and maintaining the profile and recognition of the project and
building strong relationships between the project team and its
stakeholders using flexible and often informal means.
 Written and oral — The words and voice inflections we use (verbal)
and body language and actions (non-verbal) represent our oral
communication. Written communication is represented by anything
written on paper or with social media, websites and media releases or
any other print means.
Slide 321
 Response — The response is the reaction a receiver provides to a message
sent by the sender. It includes communications using both verbal and
nonverbal means.
 Channel — The channel represents the mechanism used to communicate.
E-mail, the telephone, and face-to-face are all examples of channels of
communication.
 Nonverbal — Nonverbal communication is the communication that happens
without spoken words. It can be in written form or can take the form of
facial expressions and gestures.
 Para Lingual — Para lingual describes the pitch, tone, and inflections in the
speaker's voice that affect the message.
 Active Listening — Active listening is a communication technique that
requires the listener to understand, interpret, and evaluate what he hears. The
ability to listen actively can improve personal relationships through reducing
conflicts, strengthening cooperation, and fostering understanding.

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 Effective Listening — Listening is difficult. There is an old saying, “we

have one mouth and two ears because one is twice as hard as the other.” To
be an effective listener, one must focus on the communication, provide
feedback, and work to interpret the message without preconceptions.
 Feedback — Feedback is the information provided by the receiver to the
sender of the communication about how the message was received and its
meaning.
The basic model of communication used by PMI® has four parts, as follows:
 The sender — The sender is the person who initiates the communication and
has information to transmit.
 The message — The message represents the information that needs to be
conveyed.
 The receiver — The receiver is the person or group for whom the message is
intended.
 The response — The response or feedback, is the information returned to
the sender and originated by the receiver which tells the sender how the
message was received and interpreted. Image 101 shows an example of this Know the PMI®
model. communications
model.

Slide 322

Image 107: The Basic Communication Model

An important element of the basic communication model is understanding the
number of channels or lines of communication on any project. Project managers
must determine the number of lines of communication that exist using the
Didactic
formula for Didactic (one-on-one) Communication. This formula is as follows: Communications
N(N-1) Slide 323-324
2
Where N = The Number of Participants

A common exam question asks you how many additional channels of

communication are there if the number of participants changes from one
number to another such as in a case where you start with five participants

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and add two more. To answer this question you must first determine the
channels for each population (7 and 9) and then determine the difference as
shown below.
(7(7-1))/2 = (7*6)/2 = 42/2 = 21
(9(9-1))/2 = (9*8)/2 = 72/2 = 36
36 – 21 = 15
The correct answer is 15.
For the exam it is also important that you learn the communication styles that
may be used to convey information. These styles are as much about how
stakeholders perceive the project manager as they are about how the project
manager is trying to sound. The styles may be combined to create an individual Slide 325
style. These styles include the following:
 Authoritarian — When using an authoritarian style the sender gives
expectations and specific guidance. The sender is the person in authority.
 Promotional — A sender using a promotional style attempts to cultivate
team spirit and excitement around the information being conveyed.
 Facilitating — A sender using a facilitating style gives guidance as required,
but acts only in a non-interfering manner. They are the keepers of the
process, but do not take a position on the issue.
 Conciliatory — A sender who uses a conciliatory style is friendly and
agreeable with the goal of building a compatible team.
 Judicial — A sender who uses a judicial style wants to be perceived as using
sound judgment or being logical.
 Ethical — A sender who is ethical is seen as being honest, fair, or “by the
book.”
 Secretive — A sender who is perceived as secretive is not open or outgoing.
They do not share information with the team or stakeholders. This is usually
to the project’s detriment.
 Disruptive — A sender who is disruptive works to break apart the unity of
the group, and is often perceived as an agitator. This is usually seen as a
negative impact on the group, but is not seen as threatening to anyone.
 Intimidating — A sender using an intimidating style is perceived as a
“tough guy,” who is attempting to influence the group through fear. This can
lower morale.
 Combative — A sender who is combative is seen as eager to fight or be
disagreeable with others. This is usually to the detriment of the team.
10.1 Plan Communications Management
The first process in the communications management knowledge area is plan
Slide 326
communications. This is the process of determining the project stakeholder

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communication needs and defining how the project

intends to meet those needs. The primary output of this
process is the communications management plan. Like
all the plans created in the 49 defined processes, this
one is to be updated throughout the project.
The inputs to the plan communications management
process include the following: Image 108: Plan Communications
Management Slide 327
 .1 Project charter — The project charter is
always an input to processes found in the planning process group. It is
important to this process because it informs the team about the business need
and reasoning for the project along with the success criteria, any constraints
and assumptions, and project prioritization.
 .2 Project management plan — The project management plan provides a
large amount of the information used to define the stakeholders as well as
what must be communicated. There are two specific components called out
by PMI® within the project management plan: The resource management
plan that describes how the team will categorize, allocate, manage and
release resources on the project; And the stakeholder engagement plan which
identifies the management strategies required to effectively engage
stakeholders.
 .3 Project documents — Although examining the project documents adds a
lot of potential paper to the inputs for planning communications
management, the important ones are your requirements documentation so the
team understands specifically what they are supposed to deliver, and the
stakeholder register which is the primary output from the identify
stakeholders process. It contains the details about the defined stakeholders
such as who they are, their positions, major concerns and desires for the
project and a classification. It is a critical input to the communications
management plan because it defines with whom you must communicate and
what they want.
 .4 Enterprise environmental factors — Although you may be used to
seeing enterprise environmental factors as an input to most processes, this
one is a little different in that the PMBOK® Guide does not specify any
factors. It simply says all environmental factors are in play.
 .5 Organizational process assets — Similar to the enterprise environmental
factors, the organizational process assets does not specify which ones and
simply says they all should be used.
The tools and techniques used in the plan communications management process
provide most of the ground that must be studied in the knowledge area and
include the following:
 .1 Expert judgment — Expert judgement is important when planning
communications management because the project leader must know about
the power and political structures within the organizations. Many

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organizations also have specific communication requirements because of

their industry or because of culture or geography. Expert judgment provides
that knowledge.
 .2 Communication requirements analysis — This is the process of
determining the information needs of the project stakeholders. This is done
by combining the type and format of information needed with an analysis of
the value of that information. This is a prioritization process to ensure the
things that add the most to project success are done first.
 .3 Communication technology — Communication technology deals with
the methods used to transfer information amongst the stakeholders. Several
factors can impact the decision on the best technology. These include
urgency of the information, availability of the technology, expected staffing
requirements to support the technology, duration of the project in conjunction
with the time required to use the technology, and the project environment.
 .4 Communication models — The communication model used on the exam
was described previously at the beginning of this chapter.
 .5 Communication methods — There are three primary classifications of
communication methods you need to know for the exam, as follows:
 Interactive communications — This is communication between two
or more parties using a multidirectional exchange of ideas. It is the
back and forth seen in a group or one-on-one setting. It allows for
confirmation of understanding.
 Push Communication — This is communication sent to a specific
recipient or group of recipients. However, this classification does not
confirm receipt of the message. It simply makes it available. Items
such as letters, memos or reports are examples.
 Pull Communication — This classification is used for very large
volumes of information; websites, data warehouses or e-learning are
examples.
 .6 Interpersonal and team skills — There are a lot of different skills and
techniques involved with communication. Discovery the best style of
communication for your team begins with a communication styles
assessment. This tool evaluates your preferred style, method, format and
content of communication. This tool often follows a stakeholder engagement
assessment to identify gaps in stakeholder engagement that require additional
communication tailoring. A big part of this tailoring is political and cultural
awareness.
 Political awareness is focused on being able to recognize the power
relationships, both formal and informal within a group and having a
willingness to operate within those structures. Such ability requires
an understanding of the strategies of the organization, knowing who
wields power and influence, and focuses on the development of
communication with these stakeholders.
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 Cultural awareness is an understanding of the differences between

individuals, groups, and organizations and adapting the project’s
communication strategy within a framework of those differences
 .7 Data representation — A core tool used to present data is the stakeholder
engagement assessment matrix such as the one below. In the table, the C
represents the stakeholder’s current level of support for the project and the D
represents the level of support the team believes they need from the
stakeholder for the project to succeed.

Stakeholder Unaware Resistant Neutral Supportive Leading Slide 328

Bob C D
Sally C D
Joan CD
Frank C D
Image 109: A Sample Stakeholder Engagement Assessment Matrix

 .8 Meetings — The plan communications management process requires the

project leader to hold discussions with the team about the most appropriate
way to update and communicate project information, and to respond to the
information requests from various stakeholders. We call those discussions
meetings.
The outputs from the plan communications management process include the
communications management plan, project management plan updates, and
project document updates. The primary output however is the communications
Slide 329
management plan. This plan is a subsidiary plan contained in the project
management plan and can be formal or informal, usually including the
following:
 Stakeholder communication requirements
 Format, content, and level of detail of the communication
 Person responsible for communicating
 Receivers of the communication
 Methods or technologies used to communicate
 Frequency of communication
 Escalation process if receivers have questions, concerns, or dissatisfaction
 Updating process
 Glossary
Slide 330
10.2 Manage Communications
The second process found in the communications
management knowledge area is manage
communications. This is the process of making all the
relevant information available to the project
stakeholders as defined in the communications Image 110: The Manage
Communication Process

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management plan. This process is performed throughout the entire project and
in all its management processes. This process also includes responding to
unplanned requests for information concerning the project.
The inputs to the manage communications process include the following:
 .1 Project management plan — The project management plan includes a lot
of information. To successfully manage communications the team must
examine the resource, communications, and stakeholder engagement plans to Slide 332
understand the communications needs and expectations.
 .2 Project documents — If the project management plan provides a lot of
documents, the project documents package provides a huge number.
Specific to the manage communication process is the change log, the issue
log, the lessons learned register, the quality report, risk report, and the
stakeholder register.
 .3 Work performance reports — Work performance reports are used to
show project performance and status information. According to the
PMBOK® Guide, these should be made available prior to project meetings.
A key element of any performance report is the forecasting information
indicating when the project is expected to finish. These reports are discussed
in more detail in the Report Performance Process section that follows.
 .4 Enterprise environmental factors— What is happening around the
project has a great deal to do with what is communicated.
 .5 Organizational process assets — Any policies, procedures or guidelines
held by the organization that may aid in the distribution of information.
The tools and techniques used in the manage communications process include
the following:
 .1 Communication technology — The 21st century has added a wealth of
technology-based tools for project managers to use towards improved
communication. Examples include SharePoint, VersionOne, or EPM.
 .2 Communications methods — Communication methods are generally
broken into two types and two categories: they are verbal and written, and
formal or informal.
 .2 Communication skills — There are a number of key skills that are used
in managing communication. These include:
 Communication competence — A combination of tailored
communication skills that considers factors such as clarity of
purpose in key messages, effective relationships and
information sharing and leadership behaviors.
 Feedback — Feedback represents the returned information
about communication in terms of a reaction, a deliverable, or
a situation. It is a key element of interactive communication.

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 Nonverbal — Nonverbal communication represents

communication that is provided with gestures, vocal tones,
and facial expression.
 Presentations — A presentation is the formal delivery of
information and/or documentation.
 .4 Project management information systems — How the team chooses to
manage all the information they intend to share with their stakeholders is
represented by the information management system.
 .5 Project reporting — Updating all parties on project progress is done
through performance reporting. These include the specific details about
resource accomplishments, hours worked, schedule and cost performance.
®
 .6 Interpersonal and team skills — PMI lists a large list of potential
interpersonal and team skills that can be used to manage communications.
This list includes active listening, conflict management, cultural awareness,
meeting management, networking and political awareness.
®
 .7 Meetings — Meetings are a tool used in most of the defined PMI
processes.
The outputs from the manage communications process are as follows:
 Project communications — Direct communication with people is the
objective of the manage communications process. It’s focus is to assure all
stakeholders have the necessary information to make decisions which benefit
the organization.
 Project management plan updates — As the team communicates with
stakeholders, changes might be required of the project.
 Project document updates — Almost every time the project management
plan is updated the project documents are as well. Don’t forget them.
 Organizational process assets updates — Every time the team produces
real outputs there is an opportunity to also need to update other tools,
techniques and processes throughout the organization.
10.3 Monitor Communications
The final process found in the communications management knowledge area is
the monitor communications process.
This process is where the project Slide 333
manager and team work to ensure the
right communications happens and
that any changes to the
communications processes result in
positive outcomes. This process is
part of integrated change control and
is there to ensure the information Image 111: The Monitor Communications Process

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needs of the project and its stakeholders are met.

The inputs to the monitor communications process include the following:
 .1 Project management plan — The project management plan includes the Slide 334
resource management plan, the communications management plan, and the
stakeholder engagement plan. These plans define how communications is
managed on the project and the expectations held by stakeholders.
 .2 Project documents — Project documents provide access to the issue log,
the lessons learned register, and project communications.
 .3 Work performance data — Work performance data includes the
deliverable status, schedule status and information about any costs incurred.
These are just raw numbers and qualitative information at this point.
 .4 Enterprise environmental factors — The organizations culture, political
climate, and governance can significantly impact project communications.
These factors along with any area trends or geography must be considered as
the team works to monitor the organization’s communications.
 .5 Organizational process assets — Many organizations have standardized
reporting templates, policies and procedures for reporting and predefining
variance limits. These should all be used as inputs to the Report
Performance Process.
The tools and techniques focus on several of our old friends, including the
following:
 .1 Expert judgment — Expert judgment is the single most important tool
available to any project manager.
 .2 Project management information system — The PMIS contain and
focus all the information that has been or will be communicated.
 .3 Data presentation — One of the methods used to present data is the
previously describe stakeholder engagement assessment matrix. This and
other tools provide information about the effectiveness of project
communications.
 .4 Interpersonal and team skills — Project leaders must engage in
observation and conversation to effectively monitor project communications.
The often leads to dialogue and discussions with the team and stakeholders.
 .5 Meeting — Meetings are another common tool used by the project
manager. Meetings are especially important for communications.
The last piece of the monitor communications process is to understand the
outputs of the process. They are as follows:

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 .1 Work performance information — For the exam it is important that you

understand what PMI® means when they talk about a performance report.
shows a sample performance report. Notice the columns are all values you
have seen before in the Cost Management Knowledge Area during the
EVMS discussion.
 .2 Change requests — As with many of the processes, the Report
Performance Process can bring about new learning in stakeholders, who then
request changes.
 .3 Project management plan updates — Controlling the communications
will often cause new information to be discovered requiring changes to the
Project Management Plan.
 .4 Project document updates — If you have to update the project
management plan you will likely have to update other documents as well.
Communications Management Summary
The communications management knowledge area is one of the easiest on the
Slide 335
PMP® exam. It is largely common sense with a small amount of memorization.
As you study for the exam make sure to focus on the following:
 Three processes — Make sure you can name the three processes, their
inputs, tools and techniques, and the outputs. Do not worry too much if you
cannot memorize the inputs, tools and techniques, and outputs. Just know
them in general terms.
 Performance reporting — Performance reporting often centers on earned
value and the variance analysis done by comparing the baselines to the actual
results. This is followed by determining why there are variances.
 Formula for channels of communication — Make sure you know and can
use the formula for didactic communication ((N(N-1)/2).
 Importance/role of project communication — Above all else, remember
no project succeeds without strong communication, and you cannot over-
communicate.

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Exercise 18 — Communications Management Exercise 18 —

Communications
 How many additional channels of communication are there if the number of Management
stakeholders increases from 11 to 13?
A. 55
B. 23
C. 78
D. 133
2. How many additional channels of communication are there if the number of
stakeholders increases from 7 to 9?
A. 15
B. 36
C. 21
D. 19
3. How many channels of communication exist if your project has 8
stakeholders?
A. 31
B. 56
C. 28
D. 48
4. How many channels of communication exist if your project has 15
stakeholders?
A. 125
B. 78
C. 64
D. 105
5. How many additional channels of communication are there if the number of
stakeholders increases from 15 to 17?
A. 31
B. 59
C. 105
D. 136
6. How many channels of communication exist if your project has 12
stakeholders?
A. 54
B. 66
C. 74
D. 90

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7. How many additional channels of communication are there if the number of

stakeholders increases from 9 to 12?
A. 24
B. 30
C. 36
D. 54
8. How many channels of communication exist if your project has 18
stakeholders?
A. 153
B. 94
C. 136
D. 86
9. Your project has run into a series of highly complex problems that must be
solved. Increasing the use of what type of communication is likely to
improve the odds of success?
A. Written
B. Formal
C. Informal
D. Verbal
10. You are taking over a project for a very senior project manager who is
retiring. As they leave they advise you to make extensive use of a work
breakdown structure to help ensure success. Which of the following would
likely explain this recommendation?
A. A WBS is a very effective tool within a project team
B. A WBS is a very effective tool within the organization
C. A WBS is a very effective tool with your external customer
D. A WBS is a very effective tool both internally and externally to the
project
11. Which of the following is the last process of the communications
management knowledge area?
A. Plan communications management
B. Manage communications
C. Monitor communications
D. Manage stakeholder expectations
12. Which of the following is not a process found in the communications
management knowledge area?
A. Plan communications management
B. Define communications requirements
C. Monitor communications
D. Manage communication

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13. Which of the following is the first process found in the communications
Management Knowledge Area?
A. Plan communications management
B. Identify stakeholders
C. Distribute information
D. Report performance
14. Your organization is having a difficult time managing all of its projects. You
have been asked to help senior management get a better understanding of the
problems. What do you do first?
A. Meet with individual project managers to get a better sense of what is
happening.
B. Send a formal memo to all project managers requesting their project
plans.
C. Meet with senior managers to help them develop a new tracking
system for managing projects.
D. Review the project charters and Gantt charts for all projects.
15. Project A has had poor project meetings since its inception. There have been
complaints that information does not get to the right people, some people are
talking too much during the meeting, and the right people are not there to
resolve issues. What is most likely missing from this project?
A. A scope management plan
B. A responsibility chart
C. A communications management plan
D. A resource matrix
16. A company asks one of the project managers to lead a project to create a
substantially improved version of one of the company's best selling products.
The project manager is given total freedom of decision and resources,
including whether to utilize contractor services and/or the company's
resource pool. Under these circumstances, which of the following would be
the best way for the project manager to build the team?
A. She should choose her team from the top developers and fabrication
workers in the company.
B. She should create a team of company line workers and contracts the
development services under a "cost reimbursable" contract with
provisions to protect confidentiality.
C. She should contract the entire team utilizing a "cost plus incentive
fee" type of contract.
D. She should contract selected team members on an ad hoc and as
needed basis utilizing a "time and materials" type of contract.

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17. While creating the agenda for a status meeting with the team, a project
manager receives input from one team member that an item should be added.
Another team member says the team is not ready to resolve the item during
the meeting. After much discussion, the project manager decides to put the
item on the agenda as an initial discussion item only. Which conflict
resolution technique is the project manager using?
A. Compromise
B. Smoothing
C. Forcing
D. Withdrawal
18. To a project manager, what is a disadvantage of progress reports over
watching what is going on in a project, asking questions, and assisting team
members?
A. Progress reports include information from all the team.
B. Progress reports include information from stakeholders.
C. Progress reports generally show problems after they have occurred.
D. Progress reports supply information about trends.
19. A resource assigned to your project contacts you, trying to get off the team.
He knows that an important project in his department is going to be approved
and will take place at the same time as yours. He wants to work on the other
project. Under the circumstances, what should you do?
A. Release him from the team.
B. Talk to the functional manager about releasing him from the team.
C. Release him after he finds a suitable replacement.
D. Speak with the project sponsor about releasing him from the team.
20. A large, one-year telecommunications project is about halfway done when
you take the place of the previous project manager. The project involves
three different sellers and a project team of 30 people. You would like to see
the project's communications requirements and what technology is being
used to aid in project communications. Where will you find this information?
A. Project management plan
B. Information distribution plan
C. Stakeholder management plan
D. Communications management plan
21. As a project manager you are dealing with a series of communication
blockers. The most likely result of communication blockers is that:
A. Conflicts will occur
B. The project sponsor will be unsatisfied
C. The project will fail to meet its schedule target
D. Trust will be improved

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22. One of the key issues when dealing with didactic communication is that the
sender ______ the receiver.
A. Uses more than one channel with
B. Shows concern for the perspective of
C. Enunciates clearly to
D. Talks more loudly to
23. When is it most likely that formal written communication with the customer
is required?
A. Quality audits fail
B. Stakeholders request additional features not specified in the contract
C. Changes to the critical path are required to meet the deadline
D. The project has cost overruns
24. You are managing a large textile project and have discovered one of your
resources is significantly underperforming. What is the best form of
communication for addressing this problem?
A. Informal verbal communication
B. Informal written communication
C. Formal verbal communication
D. Formal written communication
25. When communicating within the boundaries of a contract which
communication style tends to be most prevalent?
A. Informal verbal
B. Informal written
C. Formal verbal
D. Formal written
26. You are leading a U.S. $250,000 information technology project. Your SPI is
1.04 and your CPI is 0.99. You are 70% through the deliverables of the
project. When you do your weekly status updates, which type of
communication does it represent?
A. Informal verbal
B. Informal written
C. Formal verbal
D. Formal written
27. You are leading an effort to complete negotiations for a major new initiative
for your organization. In this situation how important are nonverbal
communication skills?
A. Not important
B. Very important
C. Important only when dealing with requirements
D. Important to ensure you win

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28. You are preparing to lead a large project within your organization that will
require over 40 resources and likely take more than 18 months. Where will
you likely define the communication requirements and technology used to
support good project communication?
A. The stakeholder management strategy
B. The communications management plan
C. The information distribution plan
D. The project management plan
29. You are leading a $300,000 manufacturing project. The project has been
going for six months and has another four months scheduled. Project
information has consistently been delivered in accordance with the
communications management plan, and all scope changes have followed the
appropriate change management guidelines. One day you are approached by
a key stakeholder who is very surprised to learn about a change that was
approved two months ago and received by all stakeholders. What should you
do?
A. Ask the sponsor why the stakeholder did not understand their
responsibilities.
B. Address the situation in the next steering committee meeting to
ensure no one else missed the change.
C. Review the communications management plan to see what revisions
are necessary.
D. Determine why the stakeholder did not receive the information and
let them know when it was published.
30. You are leading a manufacturing project for your organization that started
five months ago. In your latest status meeting two of your resources argue
about what needs to be done to complete a work package. To best
understand what is going on you should pay the most attention to what?
A. What is being said and when.
B. What is being said, who is saying it, and the time of day.
C. Physical mannerisms and what is being said.
D. The pitch and tone of the voices and the physical mannerisms.
31. You have been selected to lead a major project for a large petroleum
company. The project is critical to the organization’s success. The project is
going to consist of resources from three different continents. What type of
communication should be used?
A. Informal verbal
B. Informal written
C. Formal verbal
D. Formal written

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32. It is Friday afternoon and you are conducting your normal end-of-week
status meeting. Unfortunately, it is not going well. Everyone is talking over
each other, some team members are not participating, and topics are being
raised and discussed totally randomly. Which of the following rules for
effective meeting management is not being followed?
A. Every meeting must have a purpose and the correct participants in
attendance.
B. Meetings should be scheduled in advance.
C. Create and publish an agenda with a set of rules for controlling the
meeting.
D. Participants should demonstrate courtesy and take turns speaking.
33. You are on a business trip visiting a client site at a location that is in a time
zone two hours ahead of the client site. As the project manager you are
conducting your weekly status meeting with your team via telephone. Which
of the following is the most important to ensure good communication with
your team?
A. Review the list of attendees and deliverables
B. Ask team members to repeat back what you ask them to do
C. Ask the team members to discuss change requests
D. Review work status
34. Which of the following are always stakeholders?
A. A person who does not want the project completed
B. A union worker who will use the product or service
C. A functional manager from the finance department
D. A worker who might lose their job because of the project
35. Six months into a one-year project everything is going well. The project
currently has an SPI of 1.05 and a CPI of .99. The stakeholder management
strategy has worked well and the BCI has been steadily improving. The
sponsor just left your office after expressing their gratitude for you and your
team’s hard work. You get a call from one of your resources saying the
deliverable from the completion of their activity’s predecessor is three days
late. Which of the following reasons would best describe why this occurred?
A. The project manager was focusing on the sponsor’s needs.
B. The successor activities should have been watched, not the
predecessors.
C. Functional management was not included in the communications
management plan.
D. The right people were invited to the milestone party.

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36. You are leading a small information technology project which is scheduled to
take one year and is approximately halfway complete. You have just taken
over as the project manager. The project involves four different external
resources and a project team of 25 people. You would like to see the
project’s communications requirements and what technology is being used to
aid in project communications. Where will you find this information?
A. The project management plan
B. The information distribution plan
C. The bar chart
D. The communications management plan
37. Changes to some project deliverables have been documented in the project
management plan. These changes, and other project information, have been
distributed according to the communications management plan. One
stakeholder expressed surprise to the project manager upon hearing of a
documented change to a project deliverable. All stakeholders received the
communication containing notification of the change. What should the
project manager do?
A. Determine why the stakeholder did not receive the information and
let him know when it was published.
B. Ask the functional manager why the stakeholder did not understand
his responsibility.
C. Review the communications management plan and make revisions if
necessary.
D. Address the situation in the next steering committee meeting so
others do not miss published changes.
38. Two people are arguing about what needs to be done to complete a work
package. If the project manager wants to know what is going on, she should
pay most attention to:
A. What is being said and when
B. What is being said, who is saying it, and the time of day
C. Physical mannerisms and what is being said
D. The pitch and tone of the voices, and physical mannerisms
39. A project manager has a project team consisting of people in four countries.
The project is very important to the company, and the project manager is
concerned about its success. The length of the project schedule is
acceptable. What type of communication should he use?
A. Informal verbal communication
B. Formal written communication
C. Formal verbal communication
D. Informal written communication

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40. The project status meeting is not going well. Many attendees are talking at
the same time, there are people who are not participating, and any topics are
being discussed at random. Which of the following rules for effective
meetings is not being adhered to?
A. Demonstrate courtesy and consideration of each other, and control
who is allowed to speak.
B. Schedule meetings in advance.
C. Have a purpose for the meeting, with the right people in attendance.
D. Create and publish an agenda and a set of rules for controlling the
meeting.
41. A project manager overhears a conversation between two stakeholders who
are discussing how unhappy they are with the impacts of the project on their
own departments. Stakeholder A asks if the project is on time, and
stakeholder B replies that the SPI is 1.05. Stakeholder A asks if the project
manager for the project knows of stakeholder B’s concern. Stakeholder B
responds that he is not sure. What is the best thing for the project manager to
do?
A. Make sure the stakeholders see that the project manager overheard.
Then ask them to direct any questions in writing to the project
manager.
B. Make a presentation to all the stakeholders regarding the status of the
project.
C. Send both stakeholders a copy of the issue log and ask for additional
comments.
D. Arrange a meeting with both stakeholders to allow then to voice any
concerns they may have.
42. During the middle of the project, things have been going well. The work
authorization system has allowed people to know when to start work, and the
issue log has helped keep track of stakeholders’ needs. The sponsor has
expressed has appreciation for the team members’ efforts by hosting a
milestone party. The project manager gets a call from a team member saying
the results from the completion of her activity’s predecessor are two days
late. Which of the following reasons would best describe why this occurred?
A. The project manager was focusing on the sponsor’s needs.
B. Functional management was not included in the communications
management plan.
C. The successor activities should have been watched, not the
predecessors.
D. The right people were not invited to the milestone party.

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43. You are leading a project that has 20 team members and affects more than a
dozen departments in the organization. Your project has been going well and
you are approximately 1/3 complete and the project has been going so well
that you decide to hold a party to celebrate. You invite all the key
stakeholders to the party so the team can have the opportunity to
communicate informally with the stakeholders about their efforts. At the
party, you walk around to try to discover any relevant information that would
help you make the project even more successful. You happen to hear one of
the senior stakeholders talking about setting up more regular meetings on the
project. Which of the following would be the best thing to do?
A. Review the information distribution methods on the project.
B. Provide the executive a copy of the communications management
plan and remind them that all such concerns should be brought to
you, the project manager.
C. Record the effectiveness of the party in the lessons learned for future
events.
D. Arrange the requested meeting with the stakeholder and team.
44. The requirements from several of your stakeholders were not approved for
inclusion in your project, and you had a difficult time receiving formal
approval of the project management plan. The stakeholders argued and held
up the project with meeting after meeting about their requirements. The
project was finally approved and work began three months ago. All of the
following would be good preventive actions to implement except which:
A. Maintain an issue log.
B. Ensure the change control process is not used to reintroduce the
requirement back into the project.
C. Hold meetings with the stakeholders to go over the work that will not
be added to the project.
D. Keep a log of the not included requirements.
45. One of your project resources calls in to a normal status meeting. During
their update you cannot hear them well due to interference from their cell
phone. A few weeks later you call the resource to locate a past due
deliverable and the resource reminds you that they had told you previously
that the deliverable would be late. You do not remember being told and
question when the resource informed you of the delay. They tell you it was
during the meeting where they were on the phone. What could have been
done to avoid this problem?
A. Para-lingual communication
B. Feedback during the communication
C. Better attention to determining communication requirements
D. Adding to the issue log after the phone call

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Exercise 18 — Communications Management Answers

1. Answer B. To answer this question you must remember the formula for
Didactic Communication: (n * (n-1)) / 2 where n represents the number of
people in question. This question is asking the difference so you must
calculate the number of channels for each situation and then calculate the
difference between the two.
2. Answer A. To answer this question you must remember the formula for
Didactic Communication: (n * (n-1)) / 2 where n represents the number of
people in question. This question is asking the difference so you must
calculate the number of channels for each situation and then calculate the
difference between the two.
3. Answer C. To answer this question you must remember the formula for
Didactic Communication: (n * (n-1)) / 2 where n represents the number of
people in question.
4. Answer D. To answer this question you must remember the formula for
Didactic Communication: (n * (n-1)) / 2 where n represents the number of
people in question.
5. Answer A. To answer this question you must remember the formula for
Didactic Communication: (n * (n-1)) / 2 where n represents the number of
people in question. This question is asking the difference so you must
calculate the number of channels for each situation and then calculate the
difference between the two.
6. Answer B. To answer this question you must remember the formula for
Didactic Communication: (n * (n-1)) / 2 where n represents the number of
people in question.
7. Answer B. To answer this question you must remember the formula for
Didactic Communication: (n * (n-1)) / 2 where n represents the number of
people in question. This question is asking the difference so you must
calculate the number of channels for each situation and then calculate the
difference between the two.
8. Answer A. To answer this question you must remember the formula for
Didactic Communication: (n * (n-1)) / 2 where n represents the number of
people in question.
9. Answer A. PMI® breaks down the types of communication as formal vs.
informal and verbal vs. written. The more complex the situation the more
written, formal communication is beneficial.
10. Answer D. According to PMI®, the WBS is one of the most effective tools
possible for communicating what deliverables must be produced to anyone
involved in the project. Remember, according to PMI® WBSs rule!

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11. Answer C. PMBOK® Guide p. 360 – The processes found in the

communication management knowledge area include:
 Plan communications management
 Manage communications
 Monitor communications

12. Answer B. PMBOK® Guide p. 360 – The processes found in the

communication management knowledge area include:
 Plan communications management
 Manage communications
 Monitor communications

13. Answer A. PMBOK® Guide p. 360 – The processes found in the

communication management knowledge area include:
 Plan communications management
 Manage communications
 Monitor communications

14. Answer A. Always remember, the first step is to analyze the situation to see
what is happening. If this is a choice take it!
15. Answer C. A common cause of project failure is not having a
communication management plan. It is a simple document that provides
significant help managing expectations.
16. Answer A. Hopefully, this was an easy one. The key here is remembering
to always take the best resources you can. Most of the question is a ruse
designed to distract you.
17. Answer A. This question moves back into the resource management
knowledge area. Of the choices given, compromise is the lesser of four
evils.
18. Answer C. This question is driving at the important distinction between
being reactive and proactive. As a project manager your goal is to always be
proactive.
19. Answer B. There are two issues here. First, a resource that does not want to
be on your project is likely not going to be that committed to the effort.
Secondly, if you are willing to try to help the resource out you can build trust
with them for the next project.
20. Answer D. This is a simple definitional question. The communication
management plan defines all aspects of communication for the project.
21. Answer A. The single most common result of blocked or poor
communication is conflict. Remember, conflict is not necessarily bad. How
we choose to handle it will define whether it is good or bad.
22. Answer B. Didactic communication, or one-on-one communication, is most
successful when the sender displays empathy for the receiver’s perspective.

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23. Answer B. The introduction of the word contract creates a level of formality
that does not exist in the other options. It is therefore the best option.
24. Answer A. This question is about communication between two parties. The
first thing you need to do is let the resource know you are not happy with
their performance and only when that does not work go to more formal styles
of communication. Note that this does not mean you do not keep a record of
the communication.
25. Answer D. Whenever a contract becomes involved communication tends
toward the formal and written style.
26. Answer D. Weekly status reports are assumed to be a formal written part of
the project management process unless specifically defined otherwise.
27. Answer B. Remember that nonverbal communication accounts for 55% of
understanding in any communication scenario.
28. Answer B. Although the communications management plan is part of the
project management plan, the communications management plan is the best
answer as it directly answers the question.
29. Answer C. This is a trick question of sorts. The question states that all
stakeholders received the information about the change so option D is out.
The next best option is reviewing the communications management plan and
determining what changes need to be made.
30. Answer D. The question amounts to asking you where do we get most of
our understanding. We get 55% from nonverbal communication. We get
38% from tone and the remaining 7% from the actual words being said.
31. Answer D. Distance, the potential for language barriers, time barriers and
cultural barriers make formal written communication the best choice.
32. Answer C. This is a problem where the meeting participants lack any
structure and are therefore not achieving the desired results. Meetings
should always have an agenda, and the team needs to have a standard set of
rules by which it will operate.
33. Answer B. This question is taking you back to the didactic communication
model. That model describes the importance of two loops. The initial
communication loop goes from the sender to the receiver and the second
loop (required to ensure good communication) goes from the receiver back to
the sender.
34. Answer B. The user of the result of a project is always a stakeholder. The
others might or might not be stakeholders.

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35. Answer C. Since the question does not provide any information about the
sponsor, focusing on their needs cannot be the answer. A good project
manager watches both predecessors and successors, and notifying different
people about the achievement of milestones would not impact the call you
received. Often we forget the bosses of team members in the communication
management plan. If the functional manager of the team member assigned to
the predecessor activity had been included, he or she would have known
when the team member was needed to do work and the impact of any delay.
36. Answer D. Although the information is found within the project
management plan, the communications management plan is the best answer
because it directly answers the question.
37. Answer C. The question states that all stakeholders received the
information, so the issue is not that this stakeholder did not receive it. The
problem presented here illustrates that there is something missing in the
communications management plan. The best answer is to review the
communications management plan in order to prevent future problems and
find any instances of similar problems.
38. Answer D. Remember that nonverbal communication represents 55%,of all
communication. The choice including para-lingual communication (pitch
and tone), as well as physical mannerisms, is the best choice.
39. Answer B. Because of the differences in culture and the distance between
team members, formal written communication is needed.
40. Answer D. Courtesy and consideration is not a “rule” for effective meetings.
Since there is no indication that the meeting was not scheduled in advance or
that there isn’t a purpose, these cannot be the best answers. “Discussed at
random” implies no agenda. If an agenda is issued beforehand, people will
follow the outline and should not need random discussions.
41. Answer D. This is another question with more than one right answer.
Would asking for something in writing be the best way to communicate? In
this particular situation, asking for the concern to be in writing might alienate
the stakeholders. The issue log is where the issue should be listed, but the
situation does not say if the project manager knows what the stakeholders’
concern is. Therefore, using the issue log cannot be the best choice. This
problem would likely require informal verbal communication to discover the
real problem. Arranging a meeting with the concerned stakeholders is
therefore the best choice.

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42. Answer B. Since there is no information about the sponsor or his needs in
this situation, focusing on his needs cannot be best. The statement that
successor activities should have been watched, rather than predecessors, is
not a correct statement. A good project manager always watches both. Often
forgotten in communications management plans are the bosses of team
members. In addition, it helps the functional managers to manage their
resources effectively. If the functional manager of the team member
assigned to the predecessor activity had been included in the project planning
processes, he would have known when the team member was needed to do
the work for the project and the impact of any delay. They communications
management plan should have also included a method to communicate
potential delays.
43. Answer A. This is another example of a question where you might want to
do several of the items listed. The real question is what would you do first?
In this case you must realize that the fact that one of your key stakeholders is
asking for more meetings means they are not getting the information they
need. Adding more meetings will not solve the problem and often too many
meetings is a key problem for project managers. The correct answer is figure
out why the stakeholder is not getting the information they require which
requires a review of the information distribution methods of the project.
44. Answer C. You have already held a lot of meetings which added little value.
Holding more meetings will not help to convince the stakeholders about
something they feel passionate about. The best you can hope for is
establishing parameters to protect the project.
45. Answer B. Giving and requesting feedback is always the best way to ensure
understanding. Para-lingual is simply dealing with the pitch and tone of
communication and adds no value. The issue log would not have prevented
the problem as the project manager did not know what to write.

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Risk Management
Overview
Chapter eleven of the
PMBOK® Guide is Slide 337
dedicated to the risk
management knowledge
area. There are seven
processes found in the risk
management knowledge
area. These processes
include:
 11.1 Plan risk management
 11.2 Identify risks
 11.3 Perform qualitative risk Risk
analysis Management
 11.4 Perform quantitative risk is the most
analysis difficult
 11.5 Plan risk responses knowledge area on
 11.6 Implement risk responses the exam.
 11.7 Monitor risks Dedicate extra
Image 112: Plan Risk Management time to learning it.
The risk management knowledge area includes the processes concerned with
conducting risk management planning, identification, analysis, responses and
monitoring and control on a project. It is typically one of the most difficult
knowledge areas on the exam for three reasons. First, risk management requires
you to memorize and understand the six processes exactly in order without
variation. This includes having a very strong understanding of the inputs, tools
and techniques, and the outputs of each process. Second, PMI’s understanding
of risk is likely very different from the one you are used to. Finally, the risk
management knowledge area provides the last major set of calculation and
modeling techniques that must be learned in this course. As we progress through
this chapter, several techniques will be provided to help you memorize the
processes involved in risk management.
So what is risk? Risks are simply unknown events which might happen. Slide 338
According to PMI®, risks exist at two levels for every project. The first level is
the individual project risk. This level addresses an uncertain event or condition
that, if it occurs, has a positive or negative effect on one or more project Risks can be
objectives. The second level of project risk is overall project risk. This is the positive or
effect of uncertainty on the project as a whole, arising from all sources of negative.
uncertainty including individual risks, representing the exposure of stakeholders
to the implications of variations in project outcome, both positive and negative.
[PMBOK® Guide 6th Ed. p. 397]
The goal of risk management is to increase the probability and impact of positive
risks and decrease the probability and impact of negative risks, realizing that

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Slide 339

Image 113: Risks impact all other knowledge areas

risks often have more than one cause and more than one impact. Project risk
management is absolutely critical to project success because it impacts every
other knowledge area. Risks can occur any where at any time and successful
project managers know they must effectively manage the risks to deliver results.
The definition of a risk gets more complicated. Not only are there two types of
risks, good and bad risk, there are also two further categories within each of
these: known unknowns and unknown unknowns. Are you confused yet?
An unknown is just something that might happen. Its result could be good or
Slide 340
bad. The real question is do you know whether it is a possibility or not? If the
possible future event is visible to you, i.e. you know it might happen, we say that
is a known unknown. If the risk is something which is not visible to you or you
do not know about it, we call it an unknown unknown. Why the distinction?
Known unknowns can be planned for and become the responsibility of the
project manager. Unknown unknowns cannot be planned for and require
management reserves or general contingency. Unknown unknowns can only be
recognized once they have occurred. Up to 90% of the risks on a project fall into
the known unknown category and can be identified, investigated, and planned
for.
Before discussing the processes involved with the risk management knowledge
area, a few terms must be defined.
 Risk Tolerance — Risk tolerance is the amount of risk a person or group of Slide 341
people is willing to accept. It is the project manager’s responsibility to
ensure that the project operates within the risk tolerance of the sponsor and
key stakeholders.

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 Risk Averse — Someone who is risk adverse has a low risk tolerance. A
sponsor or key stakeholder who is risk adverse can significantly impact the
delivery of a project by limiting the choices the project manager and team
may make to achieve desired project results.
 Risk Factors — Risk factors are drivers or descriptors of a project risk. The
key risk factors are largely common sense and are listed below.
 Probability & Impact — Probability defines how likely the risk is to
occur. Impact defines the result of the risk. Typically, project risks
are scored using a probability and impact (or PI) score which will be
described later in this chapter.
 The range of possible outcomes — Many risks have more than one
possible outcome. Understanding that range can be an important
element in successfully managing the project risk and delivering the
project.
 Expected timing in the project life-cycle — When a risks occurs, it
can have a significant impact on the overall success of the project.
For example, many risks that occur early in the project are easier to
overcome than those which occur late in the timeline.
 Variability risk — This is a non-event risk. Uncertainty exists about some
Slide 342
key characteristics of a planned event, activity, or decision. Variability risks
include things such as productivity being above or below a target, the error
count found during testing being higher or lower than expected, or weather
conditions impacting construction.
 Ambiguity risk — Uncertainty exists about what might happen in the future.
This risk deals with the fact that there are areas of imperfect knowledge that
might impact the team’s ability to achieve the project’s objective. Examples
changes in regulation or law, or inherent systemic complexity.
 Project resilience — Resilience is the ability to overcome unknown risks
when they occur. Resilient projects have a much higher probability of
success.
 Integrated risk management — Integrated risk management provides a
coordinated approach to enterprise-wide risk management to ensure
alignment and coherence to ensure risks are managed across all levels of the
organization. Using an integrated approach to risk management build risk
efficiency into the structure of the performing organization.
11.1 Plan Risk Management
The first process in the risk management knowledge area is plan risk Slide 343
management. The plan risk management process is focused on deciding how to
approach and conduct risk management activities for a project. Like the other
planning processes within the PMBOK® Guide, the primary output of the plan
risk management process is the risk management plan. As the project manager

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and team develop this plan, it is important that

they ensure the level, type, and visibility of risk
management activities are commensurate with
both the risk and importance of the project. The
objective is to maximize the return while
minimizing required costs. It is important that
the Project Management Plan provides sufficient
resources and time for risk management
activities. In other words, don’t short-change
risk management! As part of this plan it is
important to establish an agreed-upon basis for
evaluating risks and clearly document this basis.
Image 114: Plan Risk Management
The inputs to the plan risk management process
include the following:
 .1 Project charter — The project charter defines the overall business need Slide 344
and justification, along with the constraints, assumptions, and success criteria
used on the project.
 .2 Project management plan — The project management plan provides the
team with all the subsidiary plans and baselines necessary to gain a basic
understanding of which risks are likely to be experienced during the project.
 .3 Project documents — For most projects the greatest single risk is people.
They have a tendency to do the darnedest things! Understanding your
stakeholders, their expectations, and how they fit into the organization, can
provide critical information to successfully managing project risks. To
provide this information, the project leader must look at the stakeholder
register.
 .4 Enterprise environmental factors — The environment can have a
significant impact on project risks. Items like the labor market, technology,
the economy or other factors specific to the organization can greatly
influence project risks and must be considered.
 .5 Organizational process assets — Many organizations have standardized
risk management practices, templates, policies and/or tools which must be
used or that may aid the team.
The tool and technique used in the plan risk management process are the
following:
 .1 Expert judgment — Nowhere is expert judgment more valuable than in
the management of risks. Sometimes, you just have to have been there and
done that.
 .2 Data analysis — In this first risk process, the most important type of data
analysis is stakeholder analysis.
 .3 Meetings — In many situations it is important to get the expert judgment

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of others. This requires getting together and actually talking to each other.
The most important meeting is the project kick-off meeting because it is the
first meeting of the project.
The entire purpose of this process is to develop a single output, the risk Slide 345
management plan. This plan has a number of components that you must know
for the exam. These include the following:
 Methodology — Methodology defines the processes and practices the team
intends to use to manage the project risks. It answers the question how?
Make sure to
 Roles and Responsibilities — The roles and responsibilities define who will know what is
do what to manage the various project risks using the defined methodology. included in a
Risk
 Budgeting — Budgeting defines how much money is available for the Management Plan.
various risk management activities and when that money will be available.
 Timing — A key question in risk management is: when do the various risk
management activities need to occur? We are not referring here to the risks
themselves, which will later be defined.
 Risk Categories (RBS) — Establishing the categories which will be used
can be an important tool to manage project risks. The most common form of
categorization is a risk breakdown structure, or RBS. This is one of two
definitions for the acronym RBS. The other is a resource breakdown
structure, which is used in project resources management to define the
organization of the project team. A risk breakdown structure shows the risks
organized into groups or categories without any prioritization or other
measure. It is a visual representation of the statement, these risks go
together. Image 115 shows a sample risk breakdown structure.
Slide 346

Image 115: A sample Risk Breakdown Structure (RBS)

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 Revised stakeholder tolerances — The tolerance data tells the team how
much risk the various stakeholders feel comfortable accepting. Keeping this
information updated is critical to managing stakeholder expectations.
 Reporting formats — Reporting formats define how the outcomes of the
risk management processes will be documented, analyzed and
communicated. It defines both the content and format of the risk register.
 Tracking — Tracking documents are how the various risk activities will be
recorded for both the current project and lessons learned.
 Definitions of probability and impact — Risks are typically prioritized
according to their potential implications for having an effect on project
objectives. There are a number of scales which may be used to represent
both the probability and impact of a project risk. The most common
measures use linear, non-linear, or relative scales to represent the data. The
most common risk categories to be represented using these scales are cost,
time, scope, and/or quality.
 Linear Scale — A linear scale increments a consistent amount as Slide 347
values climb the scale. The most common example of a linear scale
occurs in measuring the probability of a project risk occurring and
often uses values of 1, .3, .5, .7, .9.
 Non-linear Scale — A non-linear scale climbs the scale using some
factor that is not linear. A common example is an impact scale where
the scores double at each interval such as with the values .05, .10, .20,
.40, .80.
 Relative — A relative scale is one where the distance between one
measure and the next may not be measured or interpreted. A simple
example is seen with the values very low, low, medium, high, very
high.
Matrices — The purpose of the matrices during planning is to define impact and
probability ratings. These will be used to evaluate risks that will be identified
later. Image 116 shows a sample impact matrix which could be used to score
potential project risks. Think of it as the rules for scoring project risks.
Slide 348

Image 116: A Sample Impact Matrix

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11.2 Identify Risks

The second process found in the risk management knowledge area is identify
Risks. This process is concerned with determining which risks might affect the Slide 349
project and documenting their characteristics. This process is managed by the
project manager and project team but may
involve any project stakeholders or designated
resources necessary for success. The identify
risks process produces one of the largest
processes found in the PMBOK® Guide in terms
of the number of inputs, tools and techniques,
and outputs. Do not be intimidated by the list. It
is largely common sense. Recognize the standard
PMI® process model and it becomes very easy.
The first step is always to plan. The second step
is to always do what the plan says. The third step
is to examine the work to ensure the appropriate
results, and the final step is to make corrections
Image 117: Identify Risks Process
where necessary. This is a fancy way to say the
PDCA process!
The inputs to the identify risks process include:
Slide 350
 .1 Project management plan — The project management plan provides the
primary project documents. In this case you need to examine the
requirements management plan, the schedule management plan, the cost
management plan, the quality management plan, the resource management
plan, the risk management plan, the scope baseline, schedule baseline, and
the cost baseline. Risks can come from anywhere so each of the primary
plans is an important potential risk source.
 .2 Project documents — In addition to looking at the primary documents for
potential risks, the team also needs to examine the secondary project
documents for potential risks. This list includes: the assumption log, the cost
and duration estimates, the issues log, lessons learned register, requirements
documentation, resource requirements, and the stakeholder register.
 .3 Agreements — If the team must procure resources outside the project
team, and remember this is often things other than people, they need to look
at information within these agreements for information such as milestone
dates, contract types, acceptance criteria, and awards and penalties that can
present threats and/or opportunities to the team.
 .4 Procurement documentation — The team already has the contracts and
other agreements for the items being purchased outside the organization, so
why is there a need for this input? It represents the original procurement
documents where the team defined the need to purchase goods and services
outside the team. This decision and the reasoning behind it can increase or
decrease the risks to the project and therefore must be examined.

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 .5 Enterprise environmental factors — The enterprise environmental

factors which can influence the identification of risks include published
information, academic databases, published checklists, benchmarking,
industry studies, or risk attitudes.
 .6 Organizational process assets — The organizational process assets that
can influence the identification of risks include project files, including actual
data, organizational and project process controls, and risk statement
templates.
The tools and techniques used in the identify risks process are as follows:
 .1 Expert judgment — The most powerful tool at any project manager’s
disposal is his or her team. Trusting the knowledge of the team is critical to
project success. Agile development makes this point by establishing a rule,
“take it to the team,” as a core mindset. Every project manager needs to
learn to trust this rule.
 .2 Data gathering — There are a number of information gathering
techniques that may be used. However, three techniques are dominant.
These techniques include the following:
 Brainstorming — There are many situations that require the team to Slide 351
discuss various ideas or options for addressing issues within the
project. Many of these situations warrant the use of some form of
brain storming. The term brain storming was first popularized by
Faickney Osborn in the 1953 book Applied Imagination. This book
defines brainstorming as a group creativity technique by which
efforts are made to find a conclusion for a specific problem by
gathering a list of ideas spontaneously contributed by its members.
For the PMI-ACP Exam, there are a number of these techniques with
which you must be familiar.
 Quiet Writing — This is a brain storming technique where
the individual team members are given time to generate an
individual list of ideas before sharing them with the team.
This technique has the advantage of limiting peer influence in
the initial creation of ideas which often results in a larger
initial list.
 Round-Robin Brainstorming — This brain storming
technique requires the team to take turns suggesting one or
more ideas to address specific project needs. It is often used
in conjunction with the Quiet Writing technique and it
continues to the bias towards ensuring each team member
actively participates in the process.

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 Free-For-All — This is the most common brain storming Slide 352

technique. However, many do not even think about it when
deciding how to conducted a brain storming session it just
happens. A free-for-all occurs whenever team members shout
out ideas without any rules or constructs. In many cases team
members shout out over each other making it difficult for
team members to hear each other.
 Green Zone / Red Zone — This is a model first described by
Lyssa Adkins. It represents more than a simple brain
storming technique, but a way of establishing organizational
guidelines for positive performance. In the model, Atkins
describes two states of being in which we all exist, a red zone
and a green zone. The red zone is a space where we become
defensive and act in a rigid way. When we become rigid, we
typically stop thinking and turn to using most of our abilities
to protect ourselves from the others members of our team.
Our need for self preservation is important, but we must learn
to control it and turn it towards a positive direction. To do
this we must learn to recognize when we are entering the Red
Zone. The defensive response pattern can take many forms
but it most commonly highlighted by a response to fight, flee,
or freeze. Physically, emotionally, and intellectually team
members are in a heightened state that focuses on self-
protection and defending. When in the Red Zone there are a
number of possible tendencies:
 Blaming others for the circumstances of their life.
 Feeling threatened or wronged.
 Our actions trigger defensiveness in others.
 We do not seek or value feedback from others.
 We regularly communicate a high level of disapproval
and contempt for our teammates.
The Red Zone is not likely to be a place of collaboration, trust
building, mutual problem solving, or deeper self-reflection
and shared accountability. According to the most Agile
thought leaders, each of these are critical for project and team
success.
The alternative to the Red Zone is the Green Zone. When we
are in the Green Zone we feel relaxed, safe, alive, and
emotionally significant, competent and likable. Being in the
Green Zone allows team members to be intellectually open
and honest. They can consciously operate in a non-defensive,
cooperative, problem-solving, accountable state. When we
are in the Green Zone we do not see conflict situations as a
threatening. When a team member is in the Green Zone the
exhibit the following qualities:

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 They take responsibility for the circumstances of their

life.
 They seek to respond to the actions and words of
others in a non-defensive manner.
 Team members seek solutions rather than blame.
 They welcome feedback.
 They communicate a caring attitude to the other
members and to stakeholders.
 Checklists — Checklists are often used as reminders of things the
team needs to examine or consider. Most, are based on historical
information. The team begins with a list of items they believe needs
to be considered. As other projects are completed the team gains
experience and finds things they believe the checklist missed. These
items are then added to the checklist for future use. Additionally,
many industries have standardized checklists that provide an
excellent starting point for the team. However, be careful. The
danger of a checklist is that often users believe it to be a complete
list. It is important that the team looks beyond the checklist for
potential risks.
 Delphi Technique — The Delphi Technique is a survey methodology Slide 353
that targets subject matter experts in a three step process.
1. Survey the subject matter experts about the subject in
question.
2. Aggregate the survey results and feed them back to the
experts for review.
3. Have the experts consolidate the responses to a consensus
opinion.
When using the Delphi Technique, this process is repeated until a
single position is established. This technique is useful because it
reduces bias.
 Interviews — Interviewing is a less structured process than the
Delphi Technique, but is more structured than the brainstorming
techniques.
 .3 Data analysis — Once the team has collected data about potential risks
they must sit down and decide what the information means for the project.
There are a number tools the team can use to aid this process.
 Root cause analysis — Root cause analysis is often completed using
a fishbone or Ishikawa diagram as part of a brainstorming session.
We have discussed this process at length earlier in our course.
 Assumption and constraint analysis — Every project uses a large
number of assumptions. Many risks can be discovered by examining
these assumptions and testing them against reality.

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 SWOT analysis — SWOT stands for Strengths, Weaknesses, Slide 354

Opportunities, and Threats. This is a brainstorming technique that
makes use of a four square grid to direct the group discussion. The
group discusses each area in order before moving to the next area,
noting key phrases or elements for each quadrant.
 Document analysis — In addition to generating ideas about potential
risks as a group, the team should also spend time examining the
various project documents for potential risks.
 .4 Interpersonal and team skills — This process places a heavy emphasis
on collaborative work. Therefore, there is a strong need for the project
leader to engage as a facilitator to help the team identify potential project
risks.
 .5 Prompt lists — Prompt lists are predetermined lists of risk categories.
Slide 355
They provide the team with a head start on the process of brainstorming as
they generate ideas about potential risks. Usually, the lists are based on
lessons learned from previous projects, but other are more generic such as:
 PESTLE — Political, economic, social, technological, legal,
environmental.
 TECOP — Technical, environmental, commercial, operational,
political.
 VUCA — Volatility, uncertainty, complexity, ambiguity.

 Meetings — If expert judgment is the project manager’s primary tool, then

meetings are his or her primary technique. Meetings allow the team to make
use of many of the practices discussed in this section. By getting the team
and stakeholders together the group becomes stronger and can share
information.
There are three outputs to the identify risks process, and there definitely is an
order of importance to them.
 .1 Risk register — The primary output of the identify risks process is the list Slide 356
of identified risks. This list appears in a document called the risk register.
In addition to the list of risks, the Risk Register includes the following:
 A description of the risks.
 Potential responses for each risk, if known.
 Owners for each risk.
 Root causes of each risk.
 Categories for each risk.
 .2 Risk report — The risk report is a new document added in the 6th edition
of the PMBOK® Guide. It is a report that presents information on sources of
overall project risks, and it is developed progressively throughout the entire
project. The results from each of the risk processes are included in this
report. Many people look at this report as redundant with the risk register,
but a better way to think about it is similar to the relationship between the
WBS and WBS dictionary.
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 .3 Project document updates — As the team goes through the process of

identifying potential project risks they likely acquired additional
understanding and information about other aspects of the project. This might
require them to update the assumption log, the issue log or the lessons
learned register.
11.3 Perform Qualitative Risk Analysis
The perform qualitative risk analysis process is Slide 357
where most exam candidates begin to have
problems. As has been stated before, and will be
stated again, it is very important you get these
risk processes in order. Additionally, the
qualitative and quantitative risk analysis
processes are very close together. You cannot
confuse them. The perform qualitative risk
analysis process is about prioritizing the
identified risks for further action. It uses the
probability and impact scoring defined earlier in
the plan risk management process. This process
only analyzes the defined risks enough to Image 118: Perform Qualitative
produce an ordered list of risks. The people Risk Analysis
completing this process only need to know the
subject matter enough to compare the risks to order the list.
The inputs to the perform qualitative risk analysis process are as follows:
 .1 Project management plan — Within the project management plan the
team specifically needs to know about project risks this means looking at the
risk management plan defines the processes used to prioritize the project Slide 358
risks and is therefore an input.
 .2 Project documents — The project documents outside the project
management plan the team must examine include the assumption log, the
risk register, and the stakeholder register. The assumption log provide
information about why the team thought what they did. The risk register
defines the known risks, and the stakeholder register informs the team on
who the players are on the project.
 .3 Enterprise environmental factors—What is going on around the project
and team can significantly influence the prioritization of project risks.
 .4 Organizational process assets — Information from similar or prior
projects or risk databases can inform the team of important qualitative risk
information.
The tools and techniques used in the perform qualitative risk analysis process
include the following:
 .1 Expert judgment — Often the most common and powerful qualitative
risk assessment tool is expert judgment because subject matter experts have
the best understanding of potential risks.
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 .2 Data gathering — There are a lot of different data gathering techniques

we have already discussed in this course. All of those techniques are
available here.
 .3 Data analysis — After the data is collected, it must be examined and there
are a lot of different ways to do it. Potential methods for qualitative data
analysis.
 Risk data quality assessment — The risk data quality assessment
answers the question: how accurate and credible is the data? If the
data does not represent the real situation or cannot be trusted for
some reason, acting upon the conclusions drawn from it could cause
significant harm to the project. Therefore, it is important the project
team examine the data’s accuracy and credibility.
 Risk probability and impact assessment — The risk probability
and impact assessment is done for each identified risk. These
assessments examine the likelihood of the risk occurring and how
significant the risk would be should it occur.
 Assessment of other risk parameters — There are a lot of other
characteristics of project risk that the team must consider when
prioritizing project risks. PMI® lists a number of factors in this
category. Make sure you spend some time examining these factors.
[PMBOK® Guide 6th ed. p. 424]
 Urgency — The period of time within which a response to the
risk is to be implemented in order to be effective. A short
period of time indicates high urgency.
 Proximity — The period of time before the risk might have Slide 359
an impact on one or more project objectives. A short period
indicates high proximity.
 Dormancy — The period of time that may elapse after a risk
has occurred before its impact is discovered. A short period
indicates low dormancy.
 Manageability — The ease with which the risk owner (or
owning organization) can manage the occurrence or impact of
a risk. Where management is easy, manageability is high.
 Controllability — The degree to which the risk owner (or
owning organization) is able to control the risk’s outcome.
Where the outcome can be easily controlled, controllability is
high.
 Detectability — The ease with which the results of the risk
occurring, or being about to occur, can be detected and
recognized. Where the risk occurrence can be detected easily,
detectability is high.

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 Connectivity — The extent to which the risk is related to Slide 360

other individual project risks. Where a risk is connected to
many other risks, connectivity is high.
 Strategic impact — The potential for the risk to have a
positive or negative effect on the organization’s strategic
goals. Where the risk has a major effect on strategic goals,
strategic impact is high.
 Propinquity — The degree to which a risk is perceived to
matter by one or more stakeholders. Where a risk is
perceived as very significant, propinquity is high.
 .4 Interpersonal and team skills — Great project managers know they must
engage with both their stakeholders and the team. Nowhere is this more
important than with the management of project risks.
 .5 Risk categorization — Risk categorization is the process of examining
the potential risks to break them into groupings or categories. Like risks
often have like responses. A visual tool often used for this process is the risk
breakdown structure shown earlier in the course.
 .6 Data representation — Once the team has collected all that information
about the various project risks they must somehow present that information
in a way that can quickly and easily be interpreted and used. There are a
number of techniques possible here including:
 Probability and impact matrix — A probability and impact matrix
is a two axis grid using the probability of the risk occurring as the y
axis and the impact should the risk occur as the x axis. Each axis has
score values associated with it based upon the previously defined
scales. Image 119 shows a probability and impact matrix.
A Risk Score Defined By Formula P x I
Impact
Probability 0.05 0.10 0.20 0.40 0.80
0.90 0.045 0.09 0.18 0.36 0.72 Slide 361
0.70 0.035 0.07 0.14 0.28 0.56
0.50 0.025 0.05 0.10 0.20 0.40
0.30 0.015 0.03 0.06 0.12 0.24
0.10 0.005 0.01 0.02 0.04 0.08
Image 119: A Probability & Impact Matrix

 Hierarchical charts — In situations where risks are categorized or

grouped using more that just two parameters such as probability and
impact, some other visual representation must be used. That is where

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hierarchical charts come into play. Bubble charts are one example of
this multi-dimensional visual tool.
 .7 Meetings — Most of the processes you have seen have involved meetings
because they involve the project leader using their facilitation skills to gain
information from stakeholders to benefit the project. Meetings are used here
as well.
The only output from the perform risk qualitative analysis process are project
document updates, primarily in the form of updates to the risk register and risk
report. Think back for a moment to the beginning of the risk management
knowledge area. The first step was to create the risk management plan. Then
the risk register was created based upon the rules and processes established in
the plan. The risk register at this point contains an unordered listing of all the
potential risks for the project. In the third step we took that list and ordered the
list so the most significant risk was at the top and the least significant risk is at
the bottom. The best way to accomplish this ordering is to add a column to the
risk register — called the PI score — for probability and impact. Now you have
an ordered risk register and are ready to move onto the next step. You also may
have updates to the assumption and issue logs.
11.4 Perform Quantitative Risk Analysis
In the perform quantitative risk analysis process the risks found in the newly
ordered risk register are more carefully examined to understand in detail the
significance of each risk. This is done starting at the top of the list with the
highest scoring risk and working down. At some point the team reaches a risk Slide 362
that requires more effort and expense to analyze than the risk is worth in terms of
its potential impact. At this point analysis is
ended.
The inputs to the perform quantitative risk
analysis process include the following:
 .1 Project Management Plan — The project
management plan establishes the rules, tools,
and processes that are used to manage the
project. To understand the significance of
each risk the team needs to exam the risk
management plan, the scope baseline, the Slide 363
schedule baseline, and the cost baseline.
 .2 Project documents — To understand the Image 120: The Quantitative
significance of the defined project risks the Risk Analysis Process
team also must examine a large number of the documents defined outside the
project management plan. These include the assumption log, the basis of
estimates, the cost estimates and forecasts, the duration estimates, the
milestone list, the resource requirements, the risk register and risk report, and
the schedule forecast. Remember the goal of this process is to understand
each risk enough to answer the question, how significant is the risk really?

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This analysis is much more robust that the one done for qualitative analysis.
 .3 Enterprise environmental factors — Often the organization has access
to industry studies from similar projects or other published commercial
information that can aid in the quantitative analytical process.
 .4 Organizational process assets — The organizational process assets that
apply to the perform quantitative risk analysis process include any
information from prior, similar projects.
The tools and techniques used in the perform quantitative risk analysis process
include the following:
 .1 Expert judgment — The use of expert judgment has been consistent
throughout the course. It is used here because the team hopefully has
experience with similar projects and can evaluate the significance of the
identified risks.
 .2 Data gathering — Data gathering can represent a wide range of
techniques and tools. They can be as simple as interviewing and analyzing
historical data from past projects.
 .3 Interpersonal and team skills — The team must come together to discuss
the information collected about the types and impacts of project risks
discovered. The project leader must add their facilitation skills to this
process for success.
 .4 Representations of uncertainty — How likely is any risk to occur, and
how confident is the team in both that likelihood and the analysis of the
project impact? Until the risk actually occurs, the answers to these questions
is some form of a guess, often based on some kind of a belief in an
understanding of the type of data. Teams regularly use curves to represent
this data such as the various distributions we discussed earlier in this course
(normal, triangular, beta, etc.)
 .5 Data analysis — There are a number of data analysis techniques used in
this process that are important for test takers to understand. These include:
 Sensitivity Analysis — Sensitivity Analysis examines the extent to
which uncertainty affects the objective being examined when all else
is equal. A common display for sensitivity analysis is a tornado
diagram.
 Simulations — The common form of simulations are Monte Carlo
simulations. Monte Carlo simulations are advanced computer models
that have only been available for the last five to ten years. They
allow the project team to pretend to execute the project 1,000
different times to determine the likelihood of a particular outcome or
risk. For the exam you must remember that Monte Carlo simulations
require a significant amount of expertise and also provide the greatest
accuracy. The most common Monte Carlo simulations use the WBS

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or similar breakdowns to examine costs, or PDM to examine the

schedule.
 Influence diagrams — Influence diagrams are also called relevance
diagrams, decision diagrams, or decision networks. They represent
project decisions using compact graphical and mathematical
representations. They are actually generalizations of a Bayesian
network that are specifically designed to solve decision making and
probabilistic inference problems. Influence diagrams were first Slide 364-
developed in the 1970s and are widely accepted as an alternative to 365
decision trees which have problems from the exponential growth of
branches as variables are added to the model.

Image 121: Sample Influence Diagram

 Expected Monetary Value (EMV) — EMV provides a modeling
technique to forecast future events that are uncertain based upon
probabilities. EMV is often associated with decision trees, which
provide a visual representation of the probabilities for the purpose of
decision making. To better understand EMV, let’s examine a simple
scenario. Imagine you have a project that based upon your subject
matter expert’s judgment has a pessimistic cost of $300,000, a likely
cost of $225,000, and an optimistic cost of $150,000. Your subject
matter expert also informs you that they believe the project has a 30%
chance of achieving the pessimistic result, a 50% chance of achieving
the likely cost, and a 20% chance of achieving the optimistic cost
result. How must should you plan on the project costing? The
answer is $232,500, as the table in Image 122 shows. But, how did
we come up with that answer?
First, the probabilities for a series of mutually exclusive options must
sum to 100%. What does this mean? In our example, it is impossible
to have both the optimistic and pessimistic options at the same time.
It is a case of one or the other, and if you add the probabilities you

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Slide 366
Outcome Cost Probability Product
Optimistic Outcome $150,000 .20 $30,000
Likely Outcome $225,000 .50 $112,500
Pessimistic Outcome $300,000 .30 $90,000
$232,500
Image 122: An Expected Monetary Value Example

will see they sum to 100%. To illustrate further, imagine having three
tasks on a project (A, B, and C). A has a 36% chance of costing X. B
has a 49% chance of costing Y, and C has a 68% chance of costing Z.
Why don’t the percentages sum to 100%? The answer is that A, B,
and C are not mutually exclusive options. You have to do all three
tasks on the project. To calculate the EMV for each row, simply
multiply the variable—in this case cost—by the probability to
achieve the product column, then add the results together. This
provides the cumulative result.
 Decision Trees — Decision trees provide a visual methodology to
calculate outcomes that involve a chance event and the implications
of each of the available choices. Decision Trees incorporate cost,
probability, and results. Imagine that you are leading a project and
have a choice to make. In the choice you can either be conservative
or aggressive, but regardless of your decision there is some chance
event which might impact the project. Image 123 shows this simple
example.

Slide 367

Image 123: A Sample Decision Tree

If you choose to be aggressive and the chance event happens, there is

a 60% chance you will profit significantly from the decision and
make $250,000. However, if you are aggressive and the chance event
happens, there is a 40% chance you will loose $100,000.

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Alternatively, if you choose to be conservative and the chance event

happens, there is an 80% chance you will gain $20,000 and a 20%
chance you will loose $45,000. What should you do? The answer is
found by calculating the expected monetary value exactly as before.
The only difference here is the fact that you have two trees—or sets
of options—that each sum to 100%. Notice how the two branches
within the aggressive choice sum to 100%, and the two options
within the conservative choice also sum to 100%. Each branch is
complete. Therefore you must multiply the rows as before but only
add the results within each choice. This causes you to get a result of
$110,000 for the aggressive choice and $7,000 for the conservative
choice. The concept of decision trees can be extended one step
further by including the costs of the initiative as when examining a
build-versus-buy decision.
Imagine you have been asked to lead a project to give your
organization a new capability. To deliver the project you must either
build a new software application or buy an existing one. If you build
it internally it is significantly more likely to meet the organization’s
needs. If you buy an off-the-shelf (OTS) package it will cost less.
No matter what decision you make there is a chance people will love
it and there is a chance people will hate it. What do you do?
A great way to solve this problem is to use Decision Tree Modeling in
conjunction with Expected Monetary Value. Examine Image 124 to
see a scenario using these techniques.

Slide 368

Image 124: A Sample Decision Tree with Costs

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The image is broken into columns. The first column is the pre-
decision point and should be ignored. Column A shows the costs of
the two choices. Because they are expenses, or outflows of capital
for the organization, the values are both negative ($-250K and $-
350K). Column B shows the probability of getting the outcome
should the choice (either OTS or Develop) be made and the result, or
payout, from making that choice. Column C shows the net outcome
which is the outcome from column B minus the cost of making that
choice (Column A). Column D takes the net outcome from Column
C and multiplies it by the probability to have that outcome found in
Column B. The final outcome for each choice is derived by summing
the two possible outcomes for each branch. In Image 124 the best
choice is the OTS Option because it has a payout of $72.5K versus
the Develop Option which only has a value of $66K.

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Exercise 19 — Expected Monetary Value Exercise 19

— EMV
 You have been asked to establish an estimated project cost using Expected
Monetary Value (EMV). If the project has a best case estimate of $10,000
with a probability of 20%, a most likely case estimate of $12,000 with a
probability of 50%, and a worst case estimate of $14,400 with a probability
of 30% what is the EMV for the project?
A. $12,320
B. $12,400
C. $13,010
D. $13,260
2. You have been asked to establish an estimated project cost using Expected
Monetary Value (EMV). If the project has a best case estimate of $15,000
with a probability of 30%, a most likely case estimate of $19,500 with a
probability of 50%, and a worst case estimate of $26,325 with a probability
of 20% what is the EMV for the project?
A. $19.190
B. $19,515
C. $20,110
D. $20,350
3. You have been asked to establish an estimated project cost using Expected
Monetary Value (EMV). If the project has a best case estimate of $25,000
with a probability of 22%, a most likely case estimate of $31,250 with a
probability of 53%, and a worst case estimate of $40,625 with a probability
of 25% what is the EMV for the project?
A. $30.190
B. $31,560
C. $32,219
D. $33,350
4. You have been asked to establish an estimated project cost using Expected
Monetary Value (EMV). If the project has a best case estimate of $50,000
with a probability of 25%, a most likely case estimate of $55,000 with a
probability of 45%, and a worst case estimate of $68,750 with a probability
of 30% what is the EMV for the project?
A. $55,975
B. $56,550
C. $57,125
D. $57,875

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5. You have been asked to establish an estimated project cost using Expected
Monetary Value (EMV). If the project has a best case estimate of $75,000
with a probability of 30%, a most likely case estimate of $86,250 with a
probability of 40%, and a worst case estimate of $99,188 with a probability
of 30% what is the EMV for the project?
A. $86.756
B. $87,247
C. $87,691
D. $88,121
6. You have been asked to establish an estimated project cost using Expected
Monetary Value (EMV). If the project has a best case estimate of $30,000
with a probability of 24%, a most likely case estimate of $34,500 with a
probability of 56%, and a worst case estimate of $45,540 with a probability
of 20% what is the EMV for the project?
A. $35,121
B. $35,628
C. $36,222
D. $36,92
7. You have been asked to establish an estimated project cost using Expected
Monetary Value (EMV). If the project has a best case estimate of $35,000
with a probability of 15%, a most likely case estimate of $40,250 with a
probability of 60%, and a worst case estimate of $54,338 with a probability
of 25% what is the EMV for the project?
A. $41,652
B. $42,111
C. $42,984
D. $43,596
8. You have been asked to establish an estimated project cost using Expected
Monetary Value (EMV). If the project has a best case estimate of $20,000
with a probability of 10%, a most likely case estimate of $23,200 with a
probability of 65%, and a worst case estimate of $32,480 with a probability
of 25% what is the EMV for the project?
A. $23,950
B. $24,220
C. $24,880
D. $25,200

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9. You have been asked to establish an estimated project cost using Expected
Monetary Value (EMV). If the project has a best case estimate of $5,000
with a probability of 30%, a most likely case estimate of $5,900 with a
probability of 45%, and a worst case estimate of $8,024 with a probability of
25% what is the EMV for the project?
A. $6,161
B. $6,437
C. $6,918
D. $7,020
10. You have been asked to establish an estimated project cost using Expected
Monetary Value (EMV). If the project has a best case estimate of $7,500
with a probability of 20%, a most likely case estimate of $9,150 with a
probability of 55%, and a worst case estimate of $11,529 with a probability
of 25% what is the EMV for the project?
A. $8,919
B. $9,126
C. $9,415
D. $9,783

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Exercise 19 — Expected Monetary Value Answers

1. Answer A. The formula to get the correct answer is:
($10,000 * 20%) + ($12,000 * 50%) + ($14,400 * 30%) = $12,320

2. Answer B. The formula to get the correct answer is:

($25,000 * 22%) + ($31,250 * 53%) + ($40,625 * 25%) = $19,515

3. Answer C. The formula to get the correct answer is:

($15,000 * 30%) + ($19,500 * 50%) + ($26,325 * 20%) = $32,219

4. Answer D. The formula to get the correct answer is:

($50,000 * 25%) + ($55,000 * 45%) + ($68,750 * 30%) = $57,875

5. Answer A. The formula to get the correct answer is:

($75,000 * 30%) + ($86,250 * 40%) + ($99,188 * 30%) = $86,756

6. Answer B. The formula to get the correct answer is:

($30,000 * 24%) + ($34,500 * 56%) + ($45,540 * 20%) = $35,628

7. Answer C. The formula to get the correct answer is:

($35,000 * 15%) + ($40,250 * 60%) + ($54,338 * 25%) = $42,984

8. Answer D. The formula to get the correct answer is:

($20,000 * 10%) + ($23,200 * 65%) + ($32,480 * 25%) = $25,200

9. Answer A. The formula to get the correct answer is:

($5,000 * 30%) + ($5,900 * 45%) + ($8,024 * 25%) = $6,161

10. Answer C. The formula to get the correct answer is:

($7,500 * 20%) + ($9,150 * 55%) + ($11,529 * 25%) = $9,415

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Exercise 20 — Decision Trees Exercise 20

— Decision
1. You are asked to choose between two projects, A or B, based on the highest Trees
gain (or the lowest loss). Project A will cost $650,000 and B will cost
$467,000. There is a 56% chance that project A will be successful, which
will result in a gain of $1,800,000. If project A fails there will be a loss of
$900,000. There is a 67% chance project B will be successful, and that will
result in a $950,000 gain. If Project B fails there will be a loss of $670,000.
Based on this information, what is the value of the best alternative?
A. $-38,000
B. $38,000
C. $-51,600
D. $51,600
2. You are asked to choose between two projects, A or B, based on the highest
gain (or the lowest loss). Project A will cost $300,000 and B will cost
$255,000. There is a 67% chance that project A will be successful, which
will result in a gain of $650,000. If project A fails there will be a loss of
$310,000. There is a 58% chance project B will be successful, and that will
result in a $650,000 gain. If Project B fails there will be a loss of $225,000.
Based on this information, what is the value of the best alternative?
A. $60,700
B. $27,500
C. $33,200
D. $51,600
3. You are asked to choose between two projects, A or B, based on the highest
gain (or the lowest loss). Project A will cost $288,000 and B will cost
$225,500. There is a 61% chance that project A will be successful, which
will result in a gain of $650,000. If project A fails there will be a loss of
$287,000. There is a 57% chance project B will be successful, and that will
result in a $560,000 gain. If Project B fails there will be a loss of $225,000.
Based on this information, what is the value of the best alternative?
A. $6,480
B. $-3,050
C. $3,200
D. $-3,430

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4. You are asked to choose between two projects, A or B, based on the highest
gain (or the lowest loss). Project A will cost $663,500 and B will cost
$589,000. There is a 66% chance that project A will be successful, which
will result in a gain of $1,399,000. If project A fails there will be a loss of
$663,500. There is a 69% chance project B will be successful, and that will
result in a $1,005,000 gain. If Project B fails there will be a loss of $225,000.
Based on this information, what is the value of the best alternative?
A. $34,250
B. $34,700
C. $68,950
D. $68,525
5. You are asked to choose between two projects, A or B, based on the highest
gain (or the lowest loss). Project A will cost $79,250 and B will cost $75,500.
There is a 71% chance that project A will be successful, which will result in a
gain of $690,000. If project A fails there will be a loss of $309,500. There is
a 75% chance project B will be successful, and that will result in a $570,500
gain. If Project B fails there will be a loss of $219,500. Based on this
information, what is the value of the best alternative?
A. $320,895
B. $618,395
C. $297,500
D. $648,716
6. You are asked to choose between two projects, A or B, based on the highest
gain (or the lowest loss). Project A will cost $40,000 and B will cost $55,000.
There is a 59% chance that project A will be successful, which will result in a
gain of $151,000. If project A fails there will be a loss of $94,000. There is a
55% chance project B will be successful, and that will result in a $168,500
gain. If Project B fails there will be a loss of $72,500. Based on this
information, what is the value of the best alternative?
A. $5,500
B. $15,600
C. $10,550
D. $21,525

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7. You are asked to choose between two projects, A or B, based on the highest
gain (or the lowest loss). Project A will cost $77,230 and B will cost $91,980.
There is a 63% chance that project A will be successful, which will result in a
gain of $740,000. If project A fails there will be a loss of $300,000. There is
a 77% chance project B will be successful, and that will result in a $500,000
gain. If Project B fails there will be a loss of $225,000. Based on this
information, what is the value of the best alternative?
A. $703,200
B. $425,230
C. $277,970
D. $256,990
8. You are asked to choose between two projects, A or B, based on the highest
gain (or the lowest loss). Project A will cost $210,000 and B will cost
$255,000. There is a 60% chance that project A will be successful, which
will result in a gain of $650,000. If project A fails there will be a loss of
$325,000. There is a 65% chance project B will be successful, and that will
result in a $550,000 gain. If Project B fails there will be a loss of $207,750.
Based on this information, what is the value of the best alternative?
A. $79,788
B. $29,788
C. $27,970
D. $50,000
9. You are asked to choose between two projects, A or B, based on the highest
gain (or the lowest loss). Project A will cost $12,500 and B will cost $15,250.
There is a 72% chance that project A will be successful, which will result in a
gain of $65,000. If project A fails there will be a loss of $31,000. There is a
66% chance project B will be successful, and that will result in a $56,500
gain. If Project B fails there will be a loss of $22,500. Based on this
information, what is the value of the best alternative?
A. $14,390
B. $19,780
C. $25,620
D. $40,010
10. You are asked to choose between two projects, A or B, based on the highest
gain (or the lowest loss). Project A will cost $241,250 and B will cost
$225,500. There is a 65% chance that project A will be successful, which
will result in a gain of $550,500. If project A fails there will be a loss of
$310,000. There is a 60% chance project B will be successful, and that will
result in a $568,000 gain. If Project B fails there will be a loss of $270,000.
Based on this information, what is the value of the best alternative?
A. $7,300
B. $8,075
C. $11,650
D. $15,375
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11. You are asked to choose between two projects, A or B, based on the highest
gain (or the lowest loss). Project A will cost $500 and B will cost $750.
There is a 65% chance that project A will be successful, which will result in a
gain of $2,500. If project A fails there will be a loss of $1,650. There is a
59% chance project B will be successful, and that will result in a $3,000
gain. If Project B fails there will be a loss of $1,750. Based on this
information, what is the value of the best alternative?
A. $303
B. $548
C. $641
D. $850
12. You are asked to choose between two projects, A or B, based on the highest
gain (or the lowest loss). Project A will cost $194,500 and B will cost
$175,000. There is a 66% chance that project A will be successful, which
will result in a gain of $645,000. If project A fails there will be a loss of
$315,500. There is a 55% chance project B will be successful, and that will
result in a $715,500 gain. If Project B fails there will be a loss of $220,500.
Based on this information, what is the value of the best alternative?
A. $115,960
B. $119,300
C. $123,930
D. $243,230

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Exercise 20 — Decision Trees Answers

 Answer A. To answer this question you must calculate the expected
monetary value of each choice using the decision tree model found in your
LGd training guide and then compare the options. Whichever option has the
greatest value is the one you should choose.

 Answer C. To answer this question you must calculate the expected
monetary value of each choice using the decision tree model found in your
LGd training guide and then compare the options. Whichever option has the
greatest value is the one you should choose.

 Answer B. To answer this question you must calculate the expected
monetary value of each choice using the decision tree model found in your
LGd training guide and then compare the options. Whichever option has the
greatest value is the one you should choose.

 Answer B. To answer this question you must calculate the expected
monetary value of each choice using the decision tree model found in your
LGd training guide and then compare the options. Whichever option has the
greatest value is the one you should choose.

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5. Answer A. To answer this question you must calculate the expected

monetary value of each choice using the decision tree model found in your
LGd training guide and then compare the options. Whichever option has the
greatest value is the one you should choose.

6. Answer C. To answer this question you must calculate the expected

monetary value of each choice using the decision tree model found in your
LGd training guide and then compare the options. Whichever option has the
greatest value is the one you should choose.

7. Answer B. To answer this question you must calculate the expected

monetary value of each choice using the decision tree model found in your
LGd training guide and then compare the options. Whichever option has the
greatest value is the one you should choose.

8. Answer D. To answer this question you must calculate the expected

monetary value of each choice using the decision tree model found in your
LGd training guide and then compare the options. Whichever option has the
greatest value is the one you should choose.

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9. Answer C. To answer this question you must calculate the expected

monetary value of each choice using the decision tree model found in your
LGd training guide and then compare the options. Whichever option has the
greatest value is the one you should choose.

10. Answer B. To answer this question you must calculate the expected
monetary value of each choice using the decision tree model found in your
LGd training guide and then compare the options. Whichever option has the
greatest value is the one you should choose.

11. Answer B. To answer this question you must calculate the expected
monetary value of each choice using the decision tree model found in your
LGd training guide and then compare the options. Whichever option has the
greatest value is the one you should choose.

12. Answer C. To answer this question you must calculate the expected
monetary value of each choice using the decision tree model found in your
LGd training guide and then compare the options. Whichever option has the
greatest value is the one you should choose.

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The only output from the perform quantitative risk analysis process are updates
to project documents, again primarily in the form of information being added to
the risk register. These updates add a number of columns to the register such as:
 An assessment of overall project risk exposure — This assessment looks
at two key areas. First, it looks at the chances of overall project success.
Second, it looks at the degree of inherent variability remaining within the
project at the time the analysis was conducted, or in other words, how much
confidence do we have in the analysis.
 Probabilistic analysis of the project — This analysis answers the question
how likely is the project to hit its product targets which allow for the
development of contingency reserves.
 Probability of achieving cost and time objectives — These probabilities
also aid in the development of contingency reserves.
 A prioritized list of quantified risks — This is a listing of the risks which
pose the greatest threat or opportunity. A tornado diagram can be an
effective tool to visualize the prioritized list.
 Trends — Any trends noticed through the analysis process should be
documented in the Risk Register.
For the exam it is important you can compare and contrast the qualitative and
quantitative risk analysis processes on four different levels. In each of these the
amount of effort, accuracy, expertise and precision is greater when doing the
quantitative analysis than when doing the qualitative analysis. The four
categories are as follows:
 Level of detail
 Time for analysis
 Cost and schedule implications
 Expertise of analysis
11.5 Plan Risk Responses
The next risk process is found in the planning process group for the risk
management knowledge area is plan risk Slide 370
responses. The plan risk responses process is
about developing options and determining
actions to enhance opportunities and reduce
threats to the project’s objectives. It also
addresses the risks by their priority, inserting
resources and activities into the budget, schedule,
and project management plan, as needed.
The inputs to the plan risk responses process
include the following:
 .1 Project management plan — There are
Slide 367
Image 125: Plan Risk Responses

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three key components the team must examine within the project management
plan. The first is the risk management plan that defines the roles,
responsibilities, processes, and procedures used to plan and manage the
project risks. The team must also examine the resource management plan so
they understand the resources available to them to build their risk responses
and finally, they must look to the cost baseline so they understand the cost
expectations for the project.
 .2 Project documents — If the task is determining the best way to respond
to various project risks then the team needs to examine all the documents that
could potentially influence how the team intends to respond to the risks.
Within the project documents, the team must examine the lessons learned
register, the project schedule, the project team assignments, resource
calendars, the risk register, the risk report, and the stakeholder register.
 .3 Enterprise environmental factors — The biggest enterprise
environmental factor is the organization’s willingness to accept risks. This is
called the organization’s risk tolerance.
 .4 Organizational process assets — Often organizations have standardized
processes, templates and responses in place for project risks.
The tools and techniques for the plan risk responses process are the most
important part of this process for the exam. They include the following:
 .1 Expert judgment — Expert judgment is a critical input to planning risk
responses as the subject matter experts know the risks best.
 .2 Data gathering — The project leader must go to the team to determine
the best response to various project risks. This is the process of conducting
interviews.
 .3 Interpersonal and team skills — This is another situation where the
leader must draw on basic skills to succeed. Here we are talking about your
facilitation skills as you bring team members and stakeholders together to
discuss the best way to respond to project risks.
 .4 Strategies for negative risk or threats — There are three strategies Slide 372
which are exclusive to negative risks or the potential bad things which might
happen on the project. These include the following:
 Avoid — Risk avoidance involves changing the project to make the STOP! You
risk impossible. must know
the risk
 Transfer — Risk transference occurs when the risk is moved from response
the project to make it someone else’s problem. The most common strategies.
form of risk transfer is insurance.
 Mitigate — Mitigation is the process of reducing the probability and/
or the impact of the risk occurring.

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 .5 Strategies of positive risks or opportunities — There are also three

strategies specifically for positive risks or the good things that are unknown
on the project. These include:
 Exploit — This strategy attempts to ensure the risk happens. A
common example of exploitation is assigning the organization’s best
resources to a project to ensure it gets done.
 Share — Sharing a risk involves bringing in a third party who is best
able to capture the opportunity for the benefit of the project. A
simple example would be a special consultant.
 Enhance — Enhancing a risk increases the probability and/or
positive impacts of an opportunity. An example is adding more
resources to a task to have it completed early.
There are two strategies that applies to both positive and negative risks.
They are acceptance and escalation.
 Escalate — Escalation is the process of taking the issue to a leader
above the project sponsor, manager, and team. Escalation is
considered appropriate when the team and sponsor agree that the
threat is outside the scope of the project or that the proposed response
would exceed the project manager’s authority.
 The most common form of acceptance is simply ignoring a risk.
 .6 Contingent response strategy — Contingent response strategies are the
plans which are used should a risk occur. Often called contingencies, they
are under the control of the project manager.
 .7 Strategies for overall project risk — There are also situations that
require the team to address project-wide risks rather than risks that are single
drivers. PMI® lists the same responses we have already discussed:
avoidance, exploitation, transference, mitigation or enhancement, and
acceptance.
 .8 Data analysis — The team often needs to consider a number of potential
responses to risks and therefore needs to conduct an analysis of the data to
decide the best potential response.
 .9 Decision making — The team must make decisions about various aspects
of project risks. Multi-criteria decision analysis is a big part of this tool.
The outputs to the plan risk responses process include the following:
 .1 Change requests — Planned risk responses may result in change requests
to almost any other area in the project.
 .2 Project management plan updates — Risk responses can cause updates
to any of the Project Management Plan’s subsidiary plans as risks can occur
anywhere on the project. However, most important in this section are
updates to the risk register. These updates include the following:

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 Impacts to the project Slide 373

 Owner
 Analysis data
 Selected strategy
 Action items
 Fallback plans—What to do if the contingency plan doesn’t work.
 Symptoms/warning signs (triggers)
 Budget and schedule updates to be made
 Contingency requests, requirements, plans
 .3 Project document updates — Documents such as assumption logs or
technical documents may require updating based upon the specific responses
selected by the project team. Additionally, many potential risk responses
require the project manager to enter the organization into contractual
relationships to deliver the desired results. These relationships might include
purchasing insurance, or acquiring consultants with specialized skills.
11.6 Implement Risk Responses
The only risk process found in executing process group is implement risk Slide 374
responses. This process takes the strategies defined in the last process and puts
them into action with its major output being change requests that are run through
the integrated change control process.
The inputs to the implement risk responses process
include”
 .1 Project management plan—Within the project Slide 375
management plan the team needs to focus on the
risk management plan which provide the core
information about how the team intends to manage Image 126: Implement
project risks. Risk Responses
 .2 Project documents — The key project documents used as inputs to the
implementation of risk responses are the lessons learned register, the risk
register and the risk reports.
 .3 Organizational process assets — The team needs to pay particular
attention to the lessons learned register to successfully implement their risk
responses.
The tools and techniques used to implement risk responses include:
 .1 Expert judgment — This has been the first tool or technique is almost
every process defined in the PMBOK® Guide. Remember, take it to the
team!
 .2 Interpersonal and team skills — Right after expert judgment, the most
common tool you have seen is the use of team and interpersonal skills. In
most cases, we have talked about a project leader’s facilitation skills.

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 .3 Project management information system — The PMIS is a great tool

for the team to use to track, monitor and maintain risk information.
There are two primary outputs to the implement risk responses process. These
include changes requests focused on the cost or schedule baseline, but possibly
impacting any other aspect of the project management plan and project
document updates. These updates can apply to the issue log, lessons learned
register, project team assignments, risk register, the risk report or any other
document contained in the project.
11.7 Monitor Risks
The last process found in the risk management knowledge area is the monitor Slide 376
risks process. The primary purpose of this process is to watch the project for
trigger events so appropriate risk
response strategies are employed in a
timely fashion, and monitor the project
for previously undefined risks as they
occur so that appropriate plans may be
put into place. Other functions of the
monitor risks process include the
following: Image 127: Monitor Risks

 Keeping track of identified risks and those on the watch list — This is a
simple monitoring process to see if the risks still matter to the project.
 Reviewing the execution of risk responses while evaluating their
effectiveness — This process answers the question, did our risk response
have the desired affect?
 Reanalyzing existing risks — Project risks must constantly be reviewed to
ensure they are still appropriate.
 Monitoring residual risks — Residual risks are those risks which remain
after the risk response strategy is employed. Think of these as the crumbs in
a meal that must be cleaned up.
The inputs to the monitor risks process include the following:
 .1 Project management plan — The specific document of concern from the Slide 377
project management plan is the risk management plan which defines the
processes and procedures being used throughout risk management.
 .2 Project documents — There are a number of project documents
important to the monitoring of project risks. This includes, the issue log,
lessons learned register, risk register and the risk reports.
 .3 Work performance data — The work performance information defines
what is happening on the project such as cost, schedule and deliverable
performance.

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 .4 Work performance reports — Whenever a reference is made to

performance reports remember it means Earned Value data, variance analysis
and project forecasts.
The tools and techniques used in the monitor risks process include the following:
 .1 Data analysis — This is the process of looking for new risks, examining
current ones, and closing outdated risks as the project progresses. This can
take the form of examining the technical aspects of project performance such
as when using earned value, and/or it can be in the form of reserve analysis
to ensure the project has enough safety in place to meet expectations.
 .2 Audits — Risk audits examine the effectiveness of the risk responses and
the overall risk management process.
 .3 Meetings — Regular status meetings are a critical tool for project success.
They provide the face-to-face opportunity for the team to capture
information about where the project currently stands.
The outputs from the monitor risks process include the following:
 .1 Work performance information — These updates can include things
such as the results from risk reassessments, risk audits, or periodic risk
reviews as well as the work results, hours completed, or scheduling
information.
 .2 Change requests — When various risk management strategies or
workarounds are implemented they can cause significant changes to the
project. A workaround is an unplanned response used to deal with
unanticipated events or problems on a project.
 .3 Project management plan updates — If the approved change requests
have an effect on the risk management processes, the corresponding
component documents of the project management plan are revised and
reissued to reflect the approved changes.
 .4 Project document updates — The updates seen here are the same items
from the plan risk responses process.
 .5 Organizational process assets updates — The various risk processes
produce a huge amount of lessons learned that may be used on future
projects.
Risk Management Summary Slides 378-
®
To prepare for the risk management knowledge area for the PMP exam make 379
sure to study the following:
 Seven (7) processes — The risk management knowledge area is the single
most important knowledge area for learning the processes in exactly the
correct order. Pay special attention to the qualitative and quantitative
processes.

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 Activities of monitoring risks — Study the tools and techniques which

create the activities in the monitor risks process.
 Seven types of risk responses — Memorize the eight risk response
strategies and what impacts they have.
 Risk register — This is a critical document for any project. Make sure you
understand all its components and how it is used and updated throughout the
risk management processes.
 Definition of risk, positive and negative — Many test candidates struggle
with the PMI® definition of risk. Remember, a risk is just an unknown event.
It can have either positive or negative impacts.
 Solving and interpreting decision trees and EMV — Spend time studying
and practicing decision tree models and expected monetary value.
 Delphi technique — You do not need to know how to implement the Delphi
technique, but you should know what it is and its three basic steps.
 SWOT analysis — Make sure you are comfortable with the brainstorming
technique SWOT analysis (strengths, weaknesses, opportunities and threats).
 Risk data quality assessment — Memorize the value and purpose of a risk
data quality assessment.
 Sensitivity analysis — Memorize the value and purpose of a sensitivity
analysis.
 Qualitative vs. quantitative analysis — Know the differences and roles of
both the perform qualitative risk analysis and perform quantitative risk
analysis processes. This is absolutely key for the exam.
 Interpret quantitative probability and outcome data chart — Know the
different scales, how to calculate a PI score, and how to use the score table,
matrix, or data chart.

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Exercise 21 — Risk Management Exercise 21

— Risk
 Which of the following is an input to the identify risks process? Management

A. Project management plan

B. SWOT analysis
C. Risk related contracts
D. Technical performance measurements
2. Which of the following is NOT a tool or technique used in the identify risks
process?
A. Data gathering
B. Data analysis
C. Risk categorization
D. Prompt list
3. Which of the following is a tool or technique used in the perform qualitative
risk analysis process?
A. Risk response analysis
B. Risk prioritization
C. Project management information system
D. Risk categorization
4. Which of the following is NOT an input to the perform quantitative risk
analysis process?
A. Organizational process assets
B. Agreements
C. Project management plan
D. Project documents
5. Which of the following is NOT a tool or technique used in the perform
quantitative risk analysis process?
A. Prompt lists
B. Representations of uncertainty
C. Interpersonal and team skills
D. Expert judgment
6. Which of the following is a tool or technique used in the perform quantitative
risk analysis process?
A. Representations of uncertainty
B. Risk categorization
C. Meetings
D. Project management information system

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7. Which of the following is a tool or technique used in the plan risk responses
process?
A. Risk response analysis
B. Risk response planning
C. Contingent response strategies
D. Strategic risk response planning
8. Which of the following is NOT a tool or technique used in the plan risk
response process?
A. Strategies for negative risks or threats
B. Strategies for positive risks or opportunities
C. Expert judgment
D. Contingency reserve analysis
9. Which of the following is NOT an tool and technique to the monitor risks
process?
A. Risk urgency assessment
B. Risk audits
C. Status meetings
D. Technical performance measurement
10. Which of the following is a tool or technique used in the monitor risks
process?
A. audits
B. Interpersonal and team skills
C. Expert judgment
D. Decision making
11. Which of the following is NOT a tool or technique used in the implement
risk responses process?
A. Expert judgment
B. Interpersonal and team skills
C. Technical performance measurements
D. Project management information system
12. Which of the following is a tool or technique used in the implement risk
responses process?
A. Data gathering and representation techniques
B. Project management information systems
C. Risk data quality assessment
D. Planning meetings and analysis

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13. You are acting as the portfolio manager and must select a project to execute
from a pool of three choices. Each of the choices has an expected payout of
$20,000 and an equal 75% chance of succeeding. In this situation what does
$15,000 represent?
A. Net present value
B. Risk value
C. Expected monetary value
D. Simple interest
14. You are leading a large complex project within your organization that is
forecast to continue for ten more months. The project has an 18% chance of
being impacted in a given month by a particular risk. What is the probability
that the project will be impacted by the risk in the 3rd month?
A. 18%
B. 36%
C. 54%
D. 72%
15. You are acting as an outside project management expert consultant for a
struggling project. The project is important to the chief executive officer
who is concerned the project is not going to hit its schedule date. Which of
the following is most likely to impact achieving the schedule target?
A. Significant increases in component costs.
B. Delays in obtaining required sponsor approvals.
C. Date slippages as stakeholders fail to attend sprint reviews.
D. Disputes with contractors over increase costs.
16. You have been asked to select one of four projects for your organization to
execute. The organization is very risk adverse. If you assume the ends of a
range of estimates are +/- 3 sigma from the mean, which of the following
range estimates involves the least risk?
A. Mean of 33 days.
B. 40 days plus or minus 8 days.
C. 32 – 46 days.
D. Optimistic = 33 days, most likely 40 days, pessimistic 46 days.
17. You have been asked to select one of four projects for your organization to
execute. The organization is very risk adverse. If you assume the ends of a
range of estimates are +/- 3 sigma from the mean, which of the following
range estimates involves the least risk?
A. Optimistic = 21 days, most likely 27 days, pessimistic = 32 days.
B. 26 days plus or minus 5 days.
C. 20 – 33 days.
D. Mean of 26 days.

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18. Which of the following is not a factor in the assessment of project risk?
A. Transference costs
B. Risk probability
C. Value at stake
D. Risk event
19. You take over a project from a previous project manager. As part of the turn
over process they hand you a risk watch list. What should be done with the
risks on the watch list?
A. Add the information to your takeover report.
B. Add them to the lessons learned for future projects.
C. Read over the watch list as they are already covered in the properly
completed contingency plans.
D. Read over the watch list then revisit during monitoring and
controlling.
20. Which of the following is not always an input to the risk management
process?
A. Work breakdown structure
B. Lessons learned
C. Project status reports
D. Historical information
21. It is very important that the project manager determine risk tolerances in
order to help:
A. The sponsor understand how the resource managers will act.
B. Schedule the project.
C. Rank the project risks.
D. Estimate the project duration.
22. Which of the following is not a common result of risk management?
A. The communications management plan is changed.
B. The project charter is changed.
C. The schedule management plan is changed.
D. The project management plan is changed.
23. Which of the following risk strategies is represented by insurance?
A. Avoidance
B. Acceptance
C. Transfer
D. Mitigation

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24. It is your first day at a new job and you are asked to evaluate the risks on a
large project managed by the PMO. Unfortunately, you cannot evaluate the
exact cost impacts of the risks you are analyzing. Based on this situation you
should evaluate the risks on a:
A. Statistical basis
B. Qualitative basis
C. Quantitative basis
D. Mathematical basis
25. In which of the following risk management processes are you most likely to
be required to find workarounds?
A. Monitor risks
B. Plan risk responses
C. Identify risks
D. Quantitative risk analysis
26. You have just determined that you need to transfer a risk. In which of the
following risk management processes are you?
A. Identify risks
B. Plan risk responses
C. Monitor and control risks
D. Perform quantitative risk analysis
27. You are acting as the project manager for a large project $1,500,000 within
your organization. You have just finished the risk response plan for your
project. Which of the following should you probably do next?
A. Begin a project risk reassessment.
B. Begin to analyze the risks that appear in major project documents.
C. Complete the work breakdown structure.
D. Determine the overall risk rating for the project.
28. You are in the process of quantifying risks on a project you are leading.
Several of your key resources are non-collocated and have needed input.
How can this be done?
A. Make use of the Delphi technique.
B. Make use of Monte Carlo analysis.
C. Make use collaboration software.
D. Apply critical chain modeling.

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29. During the plan risk management process the project team you are leading
discovers 387 risks and 32 major causes of those risks. The project is part of
a major program within the organization and must be completed. Your team
is very experienced and has worked together for several years. You have also
worked with the sponsor for several years as well, and they are very
supportive of your efforts. Significant time has been spent to ensure the
project scope and WBS is complete and it has been signed off by all the key
stakeholders. Unfortunately, your team has not been able to determine an
effective way to mitigate or insure against the one of those major risks. It is
something that must be done by the internal team and cannot be outsourced.
It also cannot be deleted from the project. What would be the best solution?
A. Determine a way to transfer the risk
B. Determine a way to avoid the risk
C. Continue to investigate ways to mitigate the risk
D. Accept the risk
30. You are the project manager on a large IT project. You have assembled your
team, identified the major risks on the project, determined what would
trigger those risks, rated the risks on a rating matrix, tested the major risk
assumptions, and assessed the quality of the data used. The team is
continuing to move through the risk management process. What have you
forgotten to do?
A. Involve other stakeholders.
B. Use a Monte Carlo simulation.
C. Mitigate the risks.
D. The overall risk ranking for the project.
31. You have worked with different stakeholders to determine the probability
and impact of a project’s risks. You have also analyzed the assumptions.
Before you move on to the next step in the risk management process, what
do you need to do?
A. Identify and evaluate triggers.
B. Develop your risk rating matrix.
C. Evaluate the trends in risk analysis.
D. Create a contingency plan.
32. You apply for a job with a large consulting company. As part of the
interview process you are provided with a sample project charter and asked
to provide an analysis of the project risks. Which of the following would
best help you complete the exercise?
A. The PMBOK® Guide.
B. A discussion with several team members within the organization from
a similar project that failed in the past.
C. The scope statement from the project planning process.
D. The resource plan from the project planning process.

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33. You are working as a project manager on a large new product development
project. While preparing your risk responses your team identifies additional
risks. What should you do?
A. Get management to allocate another 5% to the project budget to cover
the risks.
B. Determine the risk events and the associated cost, then add the cost to
the project budget as a reserve.
C. Document the risks, and calculate the expected monetary value based
on the PI score that result from the risk occurrence.
D. Add reserves to the project to accommodate the new risks and notify
management.
34. You are leading a project that has an SPI of 0.69 and a CPI of .71. The
project has more than 1,000 work packages, and it is being completed over
three years. The team has not worked together before, and the project has
not been well supported. Which of the following is the best thing to do?
A. Update the risk register with any new risks and analysis.
B. Examine the WBS for unnecessary work packages.
C. Examine the RAM for necessary changes.
D. Examine the budget for necessary changes.
35. Your project is very close to completion when an unidentified risk occurs.
This risk could affect the project’s overall ability to deliver. What should
you do first?
A. Develop a risk response plan.
B. Develop a workaround.
C. Alert the project sponsor to the potential impacts to the schedule,
costs, and scope of the project.
D. Qualify the risk.
36. You are the project manager on a multi-year facilities development project.
Significant spring rains caused major flooding that caused power outages and
the loss of all project records not stored on your laptop. What should have
been done to prevent this problem?
A. Approve a larger contingency reserve.
B. Plan for a larger management reserve.
C. Maintain the records outside a flood plain.
D. Monitor the weather and have a contingency plan.

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37. You have been asked to lead a mission-critical project for your organization.
The project is very large, will take approximately 3 years, and will be highly
visible to the senior leadership of the organization. Unfortunately, your
company does not have a very good track record at handling risks and rarely
seems to follow its risk management policies and procedures. You have less
than a month until your first major milestone. If senior management is
expecting to see an analysis of the project’s risks and response strategies
which of the following groups or individuals is least important?
A. The sponsor.
B. The project team members.
C. The individuals responsible for the risk policies and procedures.
D. Key stakeholders.
38. You are leading a high technology product development project that was
originally scheduled to take 18 months. The project has faced significant
problems and has had to use all its reserves. You currently have an SPI of
0.68 and a CPI of 0.73. There are only six deliverables left and three of them
are on the critical path. The project sponsor has just told you that you only
have four weeks to finish the project or risk losing all funding and support.
This is three weeks faster than your current ETC. In response, you send out
an RFP to four vendors for some of the work that the internal team was going
to perform hoping an external organization could get the work done faster.
This can best be described as an effort on the part of the project manager to
work with:
A. Contingencies
B. Threats
C. Opportunities
D. Reserves
39. Which of the following is a primary characteristic of the Delphi Technique?
A. Expert opinion.
B. Simulation modeling in a hierarchical process.
C. Use of heuristic analysis.
D. Extrapolation from historical documents.
40. You are leading a large IT project that is nearing completion. Your sponsor
requests a change to the project that would increase the project risk. What
should you do first?
A. Update the risk register.
B. Gain an understanding of why the sponsor wants the change.
C. Analyze the impacts of making the change with the project team.
D. Calculated the EMV of the risk and create a new cost estimate.

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41. You are leading a major construction project. During project execution a
major problem occurs that does not appear in the risk register. What should
you do first?
A. Inform the project stakeholders.
B. Look for secondary risks.
C. Exam the identify risks process for flaws.
D. Create a workaround.
42. You are leading a research and development project. You are in the
executing process group when one of your senior resources identifies a risk
that is not listed in the risk register. What should you do?
A. Determine how the team member identified the risk.
B. Analyze the risk.
C. Inform the sponsor and key stakeholders of the risk.
D. Place the risk in the risk register.
43. You are taking over a $50,000 IT project for your organization. The project
is entering its third phase. Although there appear to be many risks on the
project, no one has evaluated them to assess the range of possible impacts.
What needs to be done?
A. Perform qualitative risk analysis
B. Plan risk management
C. Plan risk responses
D. Monitor risks
44. Which of the following best describes a heuristic?
A. An advanced statistical calculation used to model risks.
B. A simulation used to model risks.
C. A rule of thumb.
D. A calculation used to produce a weighted measure of risk.
45. Monte Carlo analysis is used to:
A. Get an indication of the risk involved in a project.
B. Simulate the order in which activities occur.
C. Estimate an activity’s length.
D. Measure project risk level.
46. You are working with your team to complete the risk response plan.
However, every time the team develops a risk response, another risk is
identified as being caused by the suggested response. Which of the
following is the best thing for the project manager to do?
A. Return to the identify risks process as something is amiss.
B. Document the new risks and continue the plan risk responses process.
C. Return to the define scope process to determine what is missing.
D. Get more stakeholders involved in the identify risks process as so
many were missed.

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47. From which of the following processes would you expect to generate a watch
list?
A. Plan risk management
B. Identify risks
C. Perform qualitative risk analysis
D. Plan risk responses
48. Which of the following must be an agenda item at all team meetings?
A. Review of project issues
B. Identification of new assignments
C. Status of all activities
D. Discussion of project risks
49. Which of the following is not always an input to the risk management
process?
A. Project status reports
B. Historical information
C. Lessons learned
D. The work breakdown structure
50. You are struggling to evaluate the exact cost impact of risks on your project.
You would be advised to evaluate on a:
A. Qualitative basis
B. Quantitative basis
C. Numeric basis
D. Cost basis
51. You have just finished the risk response plan for your US $250,000
information technology project. Which of the following should you probably
do next?
A. Determine the overall risk rating for the project.
B. Add needed work packages to the work breakdown structure.
C. Hold a project risk reassessment.
D. Begin to analyze the risks that appeared in the technical design.
52. You have just completed the determination of probability and impact of your
defined project risks. You have also analyzed the assumptions and are ready
to move on to the next step of risk management, but based upon the
information what have you forgotten to do?
A. Identify triggers.
B. Evaluate trends in the risk analysis.
C. Create a fallback plan.
D. Provide a standardized risk rating matrix.

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53. As the project manager you have assembled your team and identified more
than 100 risks on your project. You and the team have rated them on a risk
rating matrix, tested their assumptions, and assessed the quality of the data
used. The team is continuing to move through the risk management process,
but what have you forgotten to do?
A. Risk mitigation.
B. Overall risk ranking for the project.
C. Involve other stakeholders.
D. Monte Carlo analysis.
54. Your team has come up with 521 risks and 42 major causes of those risks.
Your team has worked on several projects together and your project sponsor
is both influential and supportive. You and your team have invested
significant time to make sure the project work was completed and signed off
by all key stakeholders. However, during the planning phase, the team was
unable to come up with an effective way to mitigate or ensure against a
particular risk. The work cannot be outsourced or deleted from the project.
Which of the following represents the best solution?
A. Accept the risk.
B. Look for ways to transfer the risk.
C. Look for ways to avoid the risk.
D. Continue to look for ways to mitigate the risk.
55. You are leading a large, multi-year engineering project designed to impact
multiple locations within your company. A tornado destroys the
headquarters location and all the project records including all project
reporting and historical information with no way of recovering the
information. What should have been done to prevent this problem?
A. Purchase insurance.
B. Monitor the weather and have a contingency plan.
C. Plan a reserve fund.
D. Schedule the installation outside of tornado season.
56. During the project execution phase of a project you are leading one of your
subject matter experts identifies a risk that is not in the risk register. What
should you do?
A. Disregard the risk because it was not identified in risk identification.
B. Inform the sponsor of the risk.
C. Analyze the risk.
D. Discuss with the resource how they identified the risk to ensure
others were not missed.

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57. Which of the following is a chief characteristic of the Delphi Technique?

A. A bottoms up approach
B. Analytical heuristic analysis
C. Expert opinion
D. Extrapolation from historical records of previous projects
58. You are leading a multi-year project that is almost complete. You have five
deliverables left and have used up almost all the reserves. You sponsor
informs you that the project must be completed two weeks earlier than
previously forecasted. In response you send out an RFP to several potential
vendors to outsource three of the remaining deliverables. This is an example
of the project manager attempting to work with what?
A. Reserves
B. Opportunities
C. Threats
D. Strengths
59. During the identify risks process, a project manager made a long list of risks
identified by all the stakeholders using various methods. She then made sure
all the risks were understood and that triggers had been identified. Later, in
the plan risk responses process, she took all the risks that had been identified
and determined ways to mitigate them. What has she done wrong?
A. The project manager should have waited until the perform qualitative
risk analysis process to get the stakeholders involved.
B. The project manager should have created workarounds.
C. More people should be involved in the plan risk response process.
D. Triggers are not identified until the identify risks process.

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Exercise 21 — Risk Management Answers

1. Answer A. PMBOK® Guide p. 396 – The inputs to the identify risks process
includes:
 Project management plan
 Project documents
 Agreements
 Procurement documentation
 Enterprise environmental factors
 Organizational process assets
2. Answer C. PMBOK® Guide p. 396 – The tools and techniques of the
identify risks process include:
 Expert judgment
 Data gathering
 Data analysis
 Interpersonal and team skills
 Prompt lists
 Meetings
3. Answer D. PMBOK® Guide p. 396 – The tools and techniques used in the
perform qualitative risk analysis include:
 Expert judgment
 Data gathering
 Data analysis
 Interpersonal and team skills
 Risk categorization
 Data representation
 Meetings
4. Answer B. PMBOK® Guide p. 396 – The inputs to the perform quantitative
risk analysis process include:
 Risk management plan
 Cost management plan
 Schedule Management Plan
 Risk register
 Enterprise environmental factors
 Organizational process assets
5. Answer A. PMBOK® Guide p. 396 – The tools and techniques used in the
perform quantitative risk analysis process include:
 Expert judgment
 Data gathering
 Interpersonal and team skills
 Representations of uncertainty
 Data analysis

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6. Answer A. PMBOK® Guide p. 396 – The tools and techniques used in the
perform quantitative risk analysis process include:
 Expert judgment
 Data gathering
 Interpersonal and team skills
 Representations of uncertainty
 Data analysis
7. Answer C. PMBOK® Guide p. 396 – The tools and techniques used in the
plan risk responses process include:
 Expert judgment
 Data gathering
 Interpersonal and team skills
 Strategies for negative risks or threats
 Strategies for positive risks or opportunities
 Contingent response strategies
 Strategies for overall project risks
 Data analysis
 Decision making
8. Answer D. PMBOK® Guide p. 396 – The tools and techniques used in the
plan risk responses process include:
 Expert judgment
 Data gathering
 Interpersonal and team skills
 Strategies for negative risks or threats
 Strategies for positive risks or opportunities
 Contingent response strategies
 Strategies for overall project risks
 Data analysis
 Decision making
9. Answer A. PMBOK® Guide p. 396 – The tools and techniques used in the
monitor risks process include:
 Data analysis
 Audits
 Meetings

10. Answer B. PMBOK® Guide p. 396 – The tools and techniques used in the
monitor risks process include:
 Data analysis
 Audits
 Meetings

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11. Answer C. PMBOK® Guide p. 396 – The tools and techniques used in the
implement risk responses process include:
 Expert judgment
 Interpersonal and team skills
 Project management information system

12. Answer B. PMBOK® Guide – The tools and techniques used in the
implement risk responses process include:
 Expert judgment
 Interpersonal and team skills
 Project management information system

13. Answer C. The expected monetary value is calculated by multiplying the

probability times the impact of any event.
14. Answer A. Many people miss this question. Remember, each month in the
scenario is independent. So if the probability is 18% in one month and the
probability is equal, it is 18% in all months.
15. Answer B. Only delays in obtaining sponsor approvals are guaranteed to
cause delays. The other alternatives might cause a delay (except the post-
implementation review meeting).
16. Answer D. This question is actually much easier than it first appears.
Because we are assuming a range of estimates that is +/- 3 sigma, meaning it
is a normal distribution, all you have to do is determine which range estimate
has the smallest difference or variance. The 3 point estimate has a range of
13, the 33-46 days is a range of 13, and 40 +/- 8 days is 16.
17. Answer B. This question is actually much easier than it first appears.
Because we are assuming a range of estimates that is +/- 3 sigma, meaning it
is a normal distribution, all you have to do is determine which range estimate
has the smallest difference or variance. The 3 point estimate has a range of
11 days. The plus or minus 5 days is a range of 10 and 20-33 days is 13.
18. Answer A. “Transference costs” is a fancy way of saying insurance
premiums. These do not come into play until you are evaluating the risk
responses.
19. Answer B. A good project manager is constantly monitoring the identified
risks on a project. In this question you do not know where the watch list
came from.
20. Answer C. Although project status reports can be a vital input to the risk
management process, they are usually not available during the risk planning
process and are therefore not always an input to the risk management
process.

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21. Answer C. Risk tolerances, or how much risk various stakeholders are
willing to accept. This is a critical piece of information used to rank the
project risks.
22. Answer B. Of the choices the project charter is the least likely to be
changed because of the risk management process. Remember, the charter
authorizes the project.
23. Answer C. Insurance is the most common type of risk transfer. It is making
the risk someone else’s problem.
24. Answer B. The question tells you that you cannot find the exact impacts.
This excludes statistical, quantitative and mathematical basis of measure.
You are left with qualitative such as high, medium and low.
25. Answer A. Workarounds—by definition—are responses created for risks not
included in the risk register.
26. Answer B. Be careful here. The question states you have just determined
that you NEED to transfer a risk. This is done in the plan risk response
process.
27. Answer C. Finishing the risk response plan is done in the planning process
group. The only of the options that is also in the planning process group is
the completion of the work breakdown structure.
28. Answer A. The Delphi Technique is specifically designed to survey your
experts, aggregate their responses and then feed the aggregated result back to
them for confirmation. This is the best option in a situation where the
resources are not all together.
29. Answer D. There are two important aspects to this question. Firstly, did you
notice that everything but the last four sentences is unnecessary? Secondly,
this question really reflects the real world. The question excludes everything
but acceptance. Sometimes in the real world all you can do is accept a risk.
30. Answer A. There is nothing wrong with this process. It simply needs to be
continued. The best answer in this case is to involve other stakeholders
31. Answer B. Before you can move on to the next step in the process you need
a definition for how you will be rating the risks.
32. Answer B This question centers on imagining where you are in the project.
The question gives you a charter and nothing else. Therefore, you must
assume you are in the initiating process. Two of the other choices say they
are from the planning process and therefore not available. The PMBOK®
Guide is a nice framework, bur remember PMI® suggests the situation is
critical.

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33. Answer C. Before you can determine the appropriate response you have to
determine the value or cost of the risk as well as the impacts. Only then can
you determine if you or management needs to add reserves or another
response is needed.
34. Answer A. To answer this question correctly you had to notice the project is
already significantly over budget and behind schedule. Changing the WBS,
RAM, or budget should only happen in response to risks that occur. So you
should start there.
35. Answer D. The first thing you always do is analyze the situation and
develop alternatives. Only then do you proceed.
36. Answer D. With the information provided you do not know what the best
solution would have been. The only thing you can say for sure is that you
should have had a contingency plan—oh, and watching the weather probably
wasn’t a bad idea either…
37. Answer A. Although sponsors are often involved in the identification of
risks, they are usually not as involved in the development of response plans.
All the other answers are key resources in the development of response
plans.
38. Answer C. This is a bad situation, but that does not impact the answer.
Only the last three sentences matter. You are trying to gain an opportunity to
do the project more quickly.
39. Answer A. The Delphi Technique is a process where you survey your
subject matter expert, aggregate their responses, and then feed back the
aggregation for confirmation.
40. Answer C. According to PMI®, the first thing you must do in any situation
is understand the impacts. Only then can you devise the correct response.
41. Answer D. This is a risk that has already happened. The first thing you
need to do is deal with the problem and then take the workaround to the
sponsor and key stakeholders.
42. Answer B. The first thing you always do is analyze the risk. Only then can
you determine what should be done next.
43. Answer B. The project has started, and it should complete the risk
management process. That process begins by planning risk management.
Since that step has not already occurred it needs to be completed first.
44. Answer C. A heuristic is simply a rule of thumb. There is no calculations
involved.

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45. Answer A. Several of these answers are partially correct. The Monte Carlo
Analysis could help you know that an activity needs to change, but not what
the estimate should be. The Monte Carlo analysis is a simulation tool, but it
typically is used to simulate time or cost and not ordering of the activities. It
can also be used to measure the probabilities of risk or the likelihood of
being on the critical path. However, the best answer is getting an overall
analysis of the project risk.
46. Answer B. Don’t get misled by the fact that the process generated so many
new risks. The key is that you follow your process. In this case it is working
as it should. You should expect the identify risk responses process to
generate new risks.
47. Answer C. A watch list is made up of low priority risks that, in the perform
qualitative risk analysis process, were determined to be too low priority or
low impact to move further in the risk process.
48. Answer D. According to PMI®, risks are a critical area that impacts all other
areas of project management. It is so important it should be discussed at
every meeting.
49. Answer A. Although project status reports can be an important input to the
risk management process, when you are first completing the process you
likely will not have any status reports yet.
50. Answer A. If you cannot determine the exact costs of a risk you should use
qualitative estimates such as low, medium and high.
51. Answer B. Based upon the description, this situation is in the planning
process group. You must complete the planning before moving on. The only
process in planning is adding work packages to the WBS.
52. Answer D. In this case you are in the Perform Qualitative Risk Analysis
process. There are two key activities in this process: assumption testing and
probability and impact matrix development. The matrix is missing. All the
other options will occur later in risk management.
53. Answer C. You might look at this question as a trick of sorts. The process
described is fine. The only issue is you have not involved other stakeholders
to identify more risks.
54. Answer A. Most of this question is useless. You cannot remove the work nor
can you insure or outsource it to transfer the risk. The only option left is
acceptance.
55. Answer B. The risk is the loss of the data due to the weather. Purchasing
insurance does nothing to mitigate the problem. Creating a reserve fund is a
form of risk acceptance. Avoiding the tornado by scheduling the project
when it wasn’t tornado season could negatively impact the project. The best
choice is to monitor the weather and know when to implement the
contingency plan.

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56. Answer C. This is another example of those “what would you do first?”
questions. As always, the right answer is analyze the situation.
57. Answer C. The Delphi Technique uses expert judgment to build a consensus
opinion. The expert judgment is its key feature.
58. Answer B. The ability to potentially outsource some of the deliverables is
an example of taking advantage of an opportunity.
59. Answer C. The plan risk responses processes should include the
involvement of all the risk response owners and possibly other stakeholders.

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Procurement Management
Overview
Chapter 12 of the
PMBOK® Guide is Slide 381
dedicated to the
procurement management
knowledge area. There
are three processes found
in the procurement
management knowledge
area. These processes include the
following:
 12.1 Plan procurement
management
 12.2 Conduct procurements
 12.3 Control procurements
Image 128: The Procurement Management Processes
The procurement management
knowledge area includes the processes necessary to purchase or acquire the
products, services, or results needed from outside the project team to perform
project work. A few exam prep writers believe the procurement management
knowledge area is difficult. I do not. Compared to areas such as risk,
scheduling or cost, procurement is relatively simple. However, there are three
important aspects of procurement management you must remember for the
PMP® exam.
First, PMI’s view of procurement management is likely much more inclusive
than what you are used to. For the exam, it is important to remember the type of
project you are leading (a large, multi-national project for a manufacturing or
engineering concern, involving millions of dollars and hundreds of resources,
across multiple time zones). As part of this project you are responsible for the
selection criteria of the sellers, managing them, and managing their payments.
Secondly, unless an exam question says something to the contrary, and we have
never heard of one, you are always the BUYER in a procurement situation.
Remember, for the exam you are always acting in the role of the project manager
trying to get your project completed. In this situation you might need to You are
purchase goods, services or consultants to help you complete the project. always the
However, there are a lot of different terms questions can use to reference you in BUYER!
the role of the buyer. You might be called the client, customer, requestor or
purchaser. When PMI® references the seller the exam could use terms such as
seller, contractor, prime contractor, sub-contractor, bidder, selected source, or
vendor. Do not be fooled by the term used. Always remember your role.
The third key to passing the procurement management portion of the exam is to
learn the type of contracts which may be used by the project manager. These
contract types are discussed in detail in the first process below.

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It is also a good idea to learn several PMIisms which can be used to prepare for
the exam. These PMIisms include the following:
Slide 382
 All product and project management requirements for the procurement work
should be specifically stated in the contract.
 If it is not in the contract, it can only be done if a formal change order to the
contract is issued.
 If it is in the contract, it must be done or a formal change order to the
contract must be issued cancelling it.
 Changes must be submitted and approved in writing.

 Contracts are legally binding; both parties are obligated to perform per the
terms of the contract.
 Contracts should diminish project risks.

There are also a number terms you must know to be successful with the exam.
Many of these terms deal with the legalities of procurement management which
are another difference from other knowledge areas. PMI® does NOT expect the
project manager to be a trained expert in all the laws and regulations dealing
with procurement management, but does expect you to have enough familiarity
with the topics to make intelligent decisions regarding contracts and contractual
relationships [PMBOK® Guide 6th ed. p. 460]. PMI® also does NOT assume
the PM has authority to sign any legal agreements binding the organization.
Remember, PMI® is trying to reflect what is generally happening in the real
world. The terms you should still know include:
 Force majeure — This is a situation which may be considered an act of Slides 383-
God, and is an allowable excuse for either party not meeting contractual 386
requirements. Usually the risk is covered by the seller for which they will
often carry insurance.
 Liquidated damages — These are estimated damages for specific defaults,
described in advance.
 Retainage — This is an amount of money—usually 5% to 10%—withheld
from each payment. This money is paid when all the final work is complete.
Its purpose is to help ensure proper completion.
 Time is of the essence — This phase means delivery dates are strictly
binding and will be stringently enforced. The seller is placed on immediate
notice that any delay is considered a material breach.
 Material breach — The breach is so large that it may not be possible to
complete the work under contract.
 Work for hire — The work provided will be owned by the buyer.

 Privity — Simply means a contractual relationship.

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 Price — The amount charged to the customer. It is defined as the cost plus
profit.
 Profit — The amount of money given to the seller above and beyond the
costs incurred to produce a product. Typically, the seller has a target margin
desired to sell a product.
 Cost — This is how much an item costs the seller to create, develop, or
purchase a product. A buyer’s cost includes both the seller’s cost plus profit
and is the same as the price.
 Target price — This is another way of saying planned or expected price. It
is used as a point of comparison with the final actual price paid.
 Sharing ratio —The sharing ratio describes how cost overruns will be split
between the buyer and seller.
 Ceiling price — This is the highest price the buyer will pay for a product or
service.
 Master services agreement — An MSA is a governing agreement that is
used for the overall engagement. MSAs are often used on large projects
where parts of the project is managed using an agile method and other parts
use a more traditional method. Any adaptive work is placed in an appendix
or supplement which allows changes to occur on any adaptive scope without
impacting the overall contract.
 Point of Total Assumption — This only relates to fixed price incentive fee
contracts and refers to the amount above which the seller bears all the loss of
a cost overrun. Costs that go above the PTA are assumed to be due to
mismanagement. Sellers will sometimes monitor their actual costs against
the PTA to make sure they are still receiving a profit for completing the
project. It is defined with the following formula:
(Ceiling Price—Target Price) PTA
PTA = + Total Cost Formula
Buyer’s Share Ratio

12.1 Plan Procurement Management

The first process found in the procurement management knowledge area is the
plan procurements process. This process is about
identifying which project needs can best be met by Slide 387
purchasing or acquiring products, services or
results from outside the project organization. To
accomplish this goal the project manager must
consider potential sellers, permits, and licenses in
addition to the project needs. The plan
procurements process also requires the project
manager to have a strong understanding of the
Image 129: Plan Procurements

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contracting process (not a formal process in the PMBOK® Guide) and the
contract types.
The inputs to the plan procurements process include the following: Slide 388
 .1 Project charter — The project charter provides the overview of the
project. Keep in mind the previously discussed project five-line.
 .2 Business documents — The two specific documents described are the
business case which describes why the organization needs the project, and
the benefits management plan which explains the benefits the organization
expects to receive by completing the project.
 .3 Project Management Plan — The project management plan contains all
the other plans that are a big part of procurements. The scope, quality and
resource management plans along with the scope baseline each describe key
aspects of the project that may need to be purchased from outside the
organization.
 .4 Project documents — Information not contained in the project
management plan, but still critical to determining what the team intends to
obtain from outside the organization are found in the project documents such
as the milestone list, project team assignments, requirements documentation,
requirements traceability matrix, resource requirements, risk register, and
stakeholder register. Remember, when looking at procurements we might
also be talking about bringing contractors in to complete work which the
team lacks the expertise to complete.
 .5 Enterprise environmental factors — The key enterprise factors that can
influence the plan procurements process include items such as marketplace
conditions, the items that are available in the market, supplier information
such as past performance or reputation, typical terms and conditions for
products, services and results, and unique local conditions.
 .6 Organizational process assets — The organizational process assets
which can influence the plan procurements process include things such as:
formal processes, procedures and templates concerning procurement,
standard organizational contracts, non-disclosure agreements, or prequalified
seller lists.
The tools and techniques used in the plan procurements process are as follows:
 .1 Expert judgment — A project’s subject matter experts can, and should,
be a critical resource in determining which items on the project should be
procured externally and which processes should be used. Examples of
applicable subject matter experts include lawyers, contracting officers, or
industry experts.
 .2 Data gathering — The process of data gathering when planning
procurements largely centers on market research to understand industries
and specific seller capabilities.

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 .3 Data analysis — The specific analysis done in planning procurements is

what is called a make-or-buy analysis. The make-or-buy analysis is a critical
tool for any project. However, it does not have to be complicated. This is
simply the process of determining whether it is in the best interest of the
project and the organization to do the work internally or have an external
resource complete the task or provide the deliverable. A common tool to
complete this process was seen in the risk management chapter when
decision trees were discussed. Make sure you are comfortable with decision
trees and their use in the plan procurements process.
 .4 Source selection analysis — The source selection analysis process Slide 389
involves the team determining how they will pick a provider for those items
or resources needed from outside the team. Common methods include least
cost, qualifications only, quality-based/highest technical proposal score,
quality and cost-based, sole source and/or fixed budget.
 In least cost, the lowest cost provider wins. While this often leads to
lower initial costs, often these providers fail to provide what the team
really needed. Lowest cost criteria is typically only recommended in
situations where the team is dealing with a commoditized product.
 Qualifications only looks for the provider who best meets the
defined need regardless of cost. This criteria often leads to providers
who can truly meet the business need, but often runs the risk of
exceeding the project budget.
 Quality-based/highest technical proposal score asks the providers
to submit a proposal with both technical and cost details. Each
proposal is then evaluated against a predefined weighted scoring
mechanism. The highest scored provider is then invited to negotiate
the contract.
 Quality and cost-based selection allows cost to be included as a
factor or variable in the process. It is often similar to the a scored
proposal, but cost is one of the variables.
 In a sole source selection the buyer asks a specific seller to prepare
technical and financial proposals which are then negotiated. This
process involves only one buyer and one seller.
 The fixed budget method requires the purchasing organization (you)
to disclose your available budget to the sellers who are then invited to
provide proposals that meet that budget. Selection is based on the
RFP that provide the best value for the limit cost. This can be based
on most scope, quality or other defined criteria. This method is best
when the scope is precisely defined.
 .5 Meetings — Meetings are a very powerful tool for every area where
planning is required.
The outputs from the plan procurements process include the following:

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 .1 Procurement management plan — The procurement management plan Slide 390

describes how the project team intends to manage the procurement process.
It includes things such as the following:
 Descriptions of managing procurement from developing procurement
documentation through contract closure
 Types of contracts
 Roles and responsibilities, authority
 Coordination
 Constraints and assumptions
 Timeframes
 Pre-qualified sellers
 Metrics
 .2 Procurement strategy — The procurement strategy is defined once the
make-or-buy decision has been made using the data analysis technique
defined in this process. The procurement strategy defines the project
delivery method, the type of legally binding agreement(s), and how the
procurement will advance through the procurement phases [PMBOK® Guide
6th ed. 476].
 .3 Bid documents — Bid documents are used to solicit proposals from
prospective sellers. You might see terms such as bid, tender, or quotation Slide 391
used. Make sure you also know:
 Request for information — An RFI is used when more information
on the goods and services to be acquired is needed from the sellers. It
does not commit the buyer or seller in any way, and will typically be
followed by an RFQ or RFP.
 Request for quotation — An RFQ is used when more information is
needed from the vendor about how the seller would satisfy the
requirements and how much it would cost. An RFQ can commit the
seller to a price in many situations.
 .Request for proposal — An RFP is the most open ended of the
choices. It simply states the buyer has a problem or need and asks the
potential seller to provide information about how they would solve
this problem, typically with included cost information. This is also
the most formal of the “request for” documents. It often contains
specific procurement rules for content, timeliness and response form.
 .4 Procurement statement of work — The SOW for each procurement Slide 392
comes from the project scope baseline. Recognize that a single project could
have multiple SOWs with each defining only their limited portion of the
project scope that is included within their specific related contract. Be aware
that sometimes the term “terms of reference” or TOR is included. A TOR
typically includes tasks the contractor is required to perform as well as any
required coordination requirements, standards with which the contractor will
have to comply, any data the contractor must submit for approval, a detailed
list of all data and services that will be provided to the contractor by the
buyer and the schedule for the procurement. There are three primary types of

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procurement statements of work including the following:

 Performance — This type conveys what the final product should be Slide 393
able to do rather than how it is built or what the design characteristics
are.
 Functional — This type conveys the end purpose or result, rather
than the specific procedures or approach. Functional procurement
statements of work may include a statement of the minimum essential
characteristics of the product.
 Design — This type conveys precisely what work is to be done.

 .5 Source selection criteria — The source selection criteria is an evaluation

criteria for choosing a seller. It is important that this criteria be created
before the sellers are selected and the potential sellers are notified of how
they are to be selected. This is an ethics issue for PMI®.
 .6 Make-or-buy decision — Is the team going to do it themselves or rely on
outside resources? This is the critical decision in procurement.
 .7 Independent cost estimates — It is not unusual for extremely large and/
or government funded projects to require an independent estimate of the
potential costs of a specific procurement. These estimates serve as a
benchmark as the organization examines the received proposals.
 .8 Change requests — The process of examining potential external sourcing
of goods and services on the project can often cause the team to rethink their
methods. This leads to potential changes that must go through the approved
change management process.
 .9 Project document updates — In addition to causing changes to the
project, going through the procurement planning process can cause a number
of project documents to be updated. This includes the lessons learned
register, milestone lists, requirements documentation, the requirements
traceability matrix, the risk register, and the stakeholder register. Stop and
think about it for a moment and imagine managing that project at the Acme
Widget Factory. You have just gone through a process of deciding what
things you are going to do in-house and the things you need to purchase from
others. As you have talked to your suppliers you have learned about their
timelines and processes. Doesn’t it seem reasonable that that process could
change a lot of other documents as well?
 .10 Organizational process assets updates — Your team likely used the
knowledge from past projects to establish a potential sellers list and gain a
basic understanding of those sellers capabilities. The information you gained
from going through the process should be added to the repository of
knowledge for future projects as well.
So far in this process we have thrown a lot of terms and legalistic documents at
you. If you feel a little bewildered don’t You are really only dealing with four
groups of items here and PMI® provides a great comparison of them within the
Guide. Examine the table below for help on understanding the major
components of planning procurements:
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Procurement Procurement Statement of Bid Slide 394

Management Plan Strategy Work Documents
How procurement work will Procurement delivery Description of the Request for information (RFI)
be coordinated and integrated methods procurement item Request for quote (RFQ)
with other project work, Request for proposal
particularly with resources,
schedule, and budget

Timetable for key Type of agreements Specifications, quality

procurement activities requirements and
performance metrics

Procurement metrics to Procurement phases Description of collateral

manage the contract services required

Responsibilities of all Acceptance methods and

stakeholders criteria

Procurement assumptions Performance data and other

and constraints reports required

Legal jurisdiction and Quality

currency used for payment
Information on independent Period and place of
estimates performance
Risk management issues Currency; payment schedule

Prequalified sellers, if Warranty

applicable

Image 130: Comparison of Procurement Documents PMBOK® Guide 6th ed. p.481
As you prepare for the PMP® exam there are a number of processes presented
that are likely very different from what you are used to. PMI’s view of the
project manager’s role in contracting is of much greater influence than many real
-world PM’s experience. To prepare for the exam you must understand what
PMI® means by a contract: a contract is a legally binding agreement between
two parties for the exchange of value. One party agrees to provide a product,
service or result in exchange for some form of remuneration. A contract is
usually written, but does not have to be. They can be simple or complex. A
contract is subject to remedy in the courts. Contracts are typically subject to an
approval process. Contracts also have their own life cycle. In addition to
understanding the basic definition of a contract you must also be familiar with
the types of contracts.
The best way to understand the various types of contracts is to think of a
continuum that begins with cost plus percentage of cost contracts and ends with
a firm fixed price or lump sum contract. Setting the continuum is the risk
relationship between the buyer and the seller. As the risk for one goes up the risk
for the other goes down. This relationship defines the major decision criteria for
selecting a contract type. Selecting a contract type is about dealing with
unknowns. The more well understood a need, the more the project aligns to a
firm-fixed price contract. The more risk involved with the need, the more a cost
plus percentage of costs contract makes sense. Image 131 shows the contract
type continuum. The types of contracts are as follows:

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Slide 395

Image 131: Contract Types

 Cost Plus Percentage of Cost — In a cost plus percentage of cost contract

the buyer has the greatest risk because there is no incentive for the seller to
keep costs low. In fact, the incentive is for the seller to spend as much as
possible because they will also receive a percentage of the costs in addition
to the real costs as their profit. This contract type is most common when the
project scope is not well understood.
 Cost Plus Fixed Fee — A cost plus fixed fee contract is similar to a cost
plus percentage of cost contract in that the buyer must pay the seller for all
the costs plus a pre-negotiated set fee which represents the seller’s profit.
This contract does not directly incent the seller to spend more, but it also
does not provide any incentive to reduce costs.
 Cost Plus Incentive Fee — A cost plus incentive fee contract requires the
buyer to pay the seller all their expenses, but also allows the buyer to
establish criteria for the seller to receive a bonus or extra fee. These
incentives can be things such as hitting specific cost, quality, functional or
schedule targets.
 Fixed Price Plus Incentive — In a fixed price plus incentive contract the
buyer pays the seller a set price regardless of the actual expenses plus the
buyer establishes a criteria for the seller to receive a bonus or extra fee.
 Firm Fixed Price or Lump Sum — In a firm fixed price contract the buyer
pays the seller a set, pre-negotiated fee without any incentive to hit specific
performance targets. This type of contract is most common when the project
scope is well understood. In a fixed price contract the seller absorbs the most
risk.
12.2 Conduct Procurements
The second process found in the procurement management knowledge area is the Slide 396
conduct procurements process. This process is part of the executing process
group. The conduct procurements process focuses on obtaining seller responses,
selecting a seller, and awarding a contract. In going through this process it is
important to consider the following:
 Project risks and contractual agreements

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 Activities’ resource requirements

 Activity cost estimates
 Cost and schedule baselines

This process may be done once or in an iterative

fashion and there is no requirement that only one
seller be selected. It is up to the project manager
and the team to determine what is appropriate
based upon the project needs. Image 132: Conduct Procurements

The inputs to the conduct procurements process include the following: Slide 397

 .1 Project management plan — The project management plan is the lead

document throughout the entire project. There are seven critical documents
critical to the successful conducting of procurements within the plan. They
include: the scope management plan, the requirements management plan, the
communications management plan, the risk management plan, the
procurement management plan, the configuration management plan and the
cost baseline. Each of these documents has a significant role in defining
what the team might need to purchase and how much money they have to get
it done.
 .2 Project documents — The additional project documents add key
information to those found in the project management plan and include the
lessons learned register, the project schedule, requirements documentation,
the risk register, and the stakeholder register. These documents specifically
define any pre-approved sellers, when things are needed, specific project
risks and who the players are on the project.
 .3 Procurement documentation — The procurement documents we defined
in the plan procurements process. Remember, they include any bid
documents, the procurement statement of work, any independent cost
estimates that will be used as a reasonableness check against the proposals
submitted and the source selection criteria that will be used to select a
winning bid.
 .4 Seller proposals — The seller proposals represent the seller’s explanation
for how they intend to deliver the desired product, service, or result.
 .5 Enterprise environmental factors — When dealing with procurements a
lot more legal issues come into play. Therefore, your environmental factors
often deal with applicable laws or regulations with which the organization
must comply. Market conditions may also drive availability and pricing or
resources or deliverables. The team should also be evaluating information
on past relevant experiences with the particular sellers and any existing
agreements with those sellers.
 .6 Organizational process assets — The particular organizational process
assets of concern include listings of prospective and previously qualified
sellers, and information on relevant past experience with sellers.

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The tools and techniques used in the conduct procurements process include the
following:
®
 .2 Expert judgment — Like most of the processes found in the PMBOK
Guide, expert judgment may be used to evaluate seller proposals.
Commonly used expertise includes: contracting, legal finance, accounting,
engineering, and specific technical disciplines for the project.
 .2 Advertising — To increase the number of potential sellers, advertisements
may be placed in newspapers, trade publications or on the internet.
 .3 Bidder conferences — Bidder conferences have many different names.
You might see contractor conferences or pre-bid conferences in addition to
bidder conferences. These are meetings with all the perspective sellers, prior
to the submission of bids or proposals, that allow the sellers to ask questions
and receive information so all the sellers have the same information.
 .4 Data analysis — Many of the processes already discussed have made
extensive use of data analysis to examine key elements of process. Here, you
are evaluating the proposals received by the team.
 .5 Interpersonal and team skills — The key kind of interpersonal and team
skill is negotiation. Negotiations are used to clarify the structure,
requirements, and other terms of the purchases so that both the seller and the
buyer can come to an agreement. This facilitates signing a contract so that
the buyer can obtain the products or services required to complete the
project. There are a number of negotiation tactics that you should know for
the exam. These are as follows:
 Attacks — To criticize or condemn another person or organization. Slides 398-
400
 Personal insults — Making derogatory comments about another to
distract from the issue or objective.
 Good Guy / Bad Guy — One person is helpful to the other side and
the other is difficult.
 Deadline — Setting a hard deadline to complete the negotiations.
 Lying — Not telling the truth to the other party.
 Limited Authority — Claiming the power to negotiate only within
certain boundaries.
 Missing Man — Being unable to make the decision because the
appropriate party is not present.
 Fair and Reasonable — Asking the other party to accept the current
offer as it is a fair offer to all parties.
 Delay — This is a stall tactic used to push the decision to the last
minute.

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 Extreme Demands — Using unreasonable standards to get the other

party to agree to more reasonable standards.
 Withdrawal — This is a removal from the negotiation either
physically or emotionally.
 Fait Accompli — It’s a done deal, or assuming something is
included.
The outputs from the conduct procurements process include the following:
 .1 Select sellers — The listed tools and techniques will produce one or more
selected sellers who have been judged to provide the best option for the
project in producing the product or services required. For large, complex, or
high value contracts, senior management approval might still be required.
 .2 Agreements — Agreements can include contracts, statements of work or
other documents. They often also include things such as the statement of
work or deliverables, schedule baseline, performance reporting, period of
performance, roles and responsibilities, seller’s place of performance,
pricing, payment terms, penalties, incentives, etc.
 .3 Change requests — The conduct procurements process can generate
change requests to any component of the project management plan and/or its
subsidiary plans.
 .4 Project management plan updates — Items which may be updated
include things such as the cost baseline, scope baseline, schedule baseline,
and the procurement management plan.
 .5 Project document updates — Other documents which might be updated
by the conduct procurements process include requirements documentation,
the risk register, and/or the requirements traceability documentation.
 .6 Organizational process assets updates — Because of the conduct
procurement process the team may gain new information about prospective
and prequalified sellers and what experience the team had with the seller.
12.3 Control Procurements
The third process found in procurement management is the control procurements
process. This process is about managing the procurement relationships, Slide 401
monitoring contract performance, and making changes and corrections as
needed. According to the
PMBOK® Guide both the buyer
and seller administer the contract,
and both parties must meet their
obligations. On some larger
projects it is important that the
project manager manages the
interfaces among providers.
Image 133: Administer Procurements Process

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The inputs to the control procurements process include the following: Slide 402
 .1 Project Management Plan — The project management plan has been the
dominant document collection throughout the entire project and it isn’t about
to change this late in the course. Within the project management plan, the
team must use the requirements management plan, the risk management
plan, the procurement management plan, the change management plan, and
the schedule management plan.
 .2 Procurement documents — The procurement documents contain all the
supporting records for administration of the procurement processes.
Therefore, you need to consider the assumption log, the lessons learned
register, the milestone list the quality reports showing the quality of the
vendor’s delivery, requirements documentation showing what was to be
delivered, the requirements traceability matrix so you know where
requirements came from, the risk register, and the stakeholder register.
 .3 Agreements — If any agreements have been negotiated and signed, these
provide the basis of understanding of performance.
 .4 Procurement documentation — Your procurement documentation
contains all the records of the administration of the procurement agreements.
Whatever you purchased for the project will have some kind of
documentation here. Think of the SOWs, payment information, contractor
work performance reports, plan or drawings just to name a few.
 .5 Approved change requests — Notice these are not simply change
requests. They are approved change requests. Items such as changes to the
terms and conditions of the contract could be placed here or any changes to
the work itself. The key here is that all the changes are approved.
 .6 Work performance data — The work performance information in
question includes any information concerning the extent to which quality
standards are being met, the incurred costs, and paid seller invoices.
 .7 Enterprise environmental factors — The specific enterprise
environmental factors at play are your contract change control system,
marketplace conditions, financial management and accounts payable system
and the buying organization’s code of ethics. You should also consider
PMI’s code of conduct as well.
 .8 Organizational process assets — The team needs to specifically consider
the organization’s procurement policies.
The tools and techniques used in the control procurements process include the
following:
 .1 Expert judgment — Project teams must make use of subject matter
expertise in all relevant functional areas to effectively control procurements.
 .2 Claims administration — Claims administration deals with contested
claims. A contested claim occurs any time the buyer and seller cannot agree Slide 403

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about perspective changes or results on the project. On the exam a number

of different terms can be used to reference items requiring claims
administration that include: claims, disputes, appeals, conflicts or
disagreements. The key is to remember that you must follow the terms of the
contract which might require the buyer to pay the seller before any disputed
claims are resolved.
 .3 Data analysis — Monitoring and controlling project procurements
requires the project team to examine and analyze a lot of information. PMI®
focuses on three specific types of data analysis:
 Performance reviews — A procurement performance review is a
structured review of the seller’s performance in delivering the desired
product or service. It should examine the quality, scope, time and
cost components of delivery and can also include any inspection or
audit information.
 Earned value analysis — EVA provides excellent tool, even for
agile projects to compare actuals to forecasts and determine
variances.
 Trend analysis — Most of the trend analysis is done as part of
earned value so make sure you are comfortable with the EAC and
other forecasting variables defined in the cost chapter of this course.
 .4 & .5 Inspections and audits — Inspections and audits represent
examinations of the work provided by the seller and completed by the buyer.
Inspections and audits may be scheduled or unscheduled and are done to
ensure the seller is complying with the terms of the contract.
There are seven outputs to the control procurements process. They are as
follows:
®
 .1 Closed procurements — In the 5th edition of the PMBOK Guide closed
procurements were a process unto themselves that appeared in the closing
process group. Now, PMI® has combined the process with controlling
procurements and make it the first output. This is typically a formal written
notice that the contract is complete. The requirements for this procedure are
usually spelled out in the contract. All the deliverable should be completed
and there should be no claims outstanding.
 .2 Work performance information — The primary information provided in
this update process is whether or not the seller performed as expected. This
is a comparison of the agreed upon work with what was actually produced,
the costs incurred and a comparison of the SOW budget.
 .3 Procurement documentation updates — The team must update all
contract information along supporting schedules, unapproved and approved
change requests, technical documentation, warranties, and other financial
information.

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 .4 Change requests — Change requests can occur because of procurements

to almost any area of the project.
 .5 Project management plan updates — Going through the process of
controlling procurements can generate a lot of changes to the project
management plan including changes to the risk management plan, the
procurement management plan, the schedule baseline, and the cost baseline.
 .6 Project document updates — Just as controlling procurements can
change the core project management plan, it can also change other project
documents including the lessons learned register, resource requirements, the
requirements traceability matrix, the risk register, and the stakeholder
register.
 .7 Organizational process assets updates — Specific process assets which
may be updated include standard communications and other correspondence,
payment schedules and requests, seller performance evaluation
documentation, prequalified seller list updates, the lessons learned repository,
and the procurement file. The procurement file is new here. It represents a
complete set of indexed contract documentation, including the closed
contract for inclusion with the final project files.
Procurements Summary
As you study the procurement knowledge area for the exam make sure to study Slide 404
the three processes. However, this knowledge area is less important than some
others in terms of pure memorization. You should be able to use common sense
to determine the components in each process. Above all else remember you are
always the BUYER unless otherwise stated. You should be able to recognize the
scenarios for when to use each type of contract and the buyer/seller risk
relationships for various types of contracts. Also, focus on the use and
importance of evaluation criteria in selecting one or more seller.

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Exercise 22 — Procurement Management Exercise 22 —

Procurement
 Once signed, a contract is legally binding unless: Management

A. It is declared void by appropriate legal counsel.

B. One party fails to meet its financial obligation.
C. One party fails to deliver the contracted good or service.
D. It is in violation of applicable law.
2. You are leading a project that requires you to purchase goods and services
from a third party. You negotiate and sign a contract and the contractor
provides the desired product. However, you feel the product does not meet
specifications. The contract is considered to be which of the following:
A. Closed
B. Null and void
C. Incomplete
D. Complete
3. Which of the following represents the primary purpose of contract
negotiations?
A. To define objectives and stick to them.
B. Provide protection for the relationship.
C. Gain the greatest financial return.
D. Gain the most from the other side.
4. You are leading a large IT project for your organization. The head of the
accounting department has just come to you with a problem. A routine audit
of your project has found a complaint that has being made against it. The
contract does not specify how to correct this situation, but you are being held
accountable to do so. Which of the following would be the best course of
action?
A. Stop payments until the problem is corrected.
B. Initiate legal proceedings to recover the overpayments and void the
contract.
C. Work with the seller to alter the contract to require improved payment
oversight.
D. Continue to make the payments.
5. Which of the following statements about change control is true and correct?
A. Changes rarely benefit the project.
B. A firm fixed price contract minimizes the need for change control.
C. The contract should include procedures to accommodate changes.
D. More detailed specifications eliminate the causes of changes.

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6. Which of the following best explain the purpose of incentive clauses in

contracts?
A. Reduce risks for the buyer by shifting them to the seller.
B. Synchronize objectives.
C. Help the seller control costs.
D. Help the buyer control costs.
7. Which of the following activities is the best thing for a project manager to do
when completing the conduct procurements process found in the
procurement management knowledge area?
A. Update and evaluate risks.
B. Update the budget and schedule.
C. Answer the sellers’ questions about bid documents.
D. Select a contract type.
8. Which of the following activities occurs during the plan procurements
process?
A. Advertising
B. Answering sellers’ questions about the bid documents
C. Make or buy decisions
D. Proposal evaluation
9. Which of the following is a key objective during contract negotiations?
A. Negotiate a price that meets or exceeds the buyers expectations.
B. Obtain a fair and reasonable price.
C. Ensure that an effective procurement management process is
established.
D. Ensure that all project risks are thoroughly delineated.
10. Which of the following best describes the role of the project manager during
the procurement process?
A. The project manager is secondary to the contracting manager.
B. The project manager is the primary negotiator.
C. The project manager tells the contract manager how the contracting
process should be handled.
D. The project manager supplies an understanding of the risks of the
project.
11. Which of the following is not required in a contract?
A. Acceptance
B. Procurement statement of work
C. Address of the buyer
D. Buyer’s signature

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12. In which of the following processes would you find bidder conferences?
A. Plan procurement management
B. Conduct procurements
C. Administer procurements
D. Monitor procurements
13. You are leading a project that has a number of work packages that are being
completed by external resources. One work package is being completed by a
contractor working on a cost reimbursable contract. You have determined
that the scope of the project must be expanded for this contractor.
Additionally, you are concerned about cost control and would like to change
the contract to a firm fixed price contract. All of the following are the
seller’s options except:
A. Starting over with a new contract.
B. Negotiating a fixed price contract that includes all the desired work.
C. Completing the original work and rejecting the additional scope.
D. Completing the original work using the original cost reimbursable
contract and then negotiating a new firm fixed price contract for the
additional work.
14. Which of the following is a reason for centralized contracting?
A. Deeping expertise.
B. No single location.
C. Increased loyalty to the project.
D. Easier access to expertise.
15. You are leading a large project and are attempting to negotiate a complex
contract. In the middle of the meeting the selected seller informs you that
“they need to finish up in the next 90 minutes so they can catch an airplane.”
What kind of negotiating strategy is this?
A. Extreme demands
B. Delay
C. Good cop, bad cop
D. Deadline
16. You have been tasked with establishing a records management system for a
large project. You are trying to make sure all the records from the
procurements are properly documented and indexed. Which of the following
are you not concerned about?
A. Negotiation process
B. Proposal
C. Procurement statement of work
D. Terms and conditions

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17. You have been asked to lead a mid-sized project for your organization. Your
sponsor is very concerned about one particular seller that must be used on the
project and wants to make sure you are minimizing the risk to your
organization. You suggest using a firm fixed price contract. Which of the
following explains the recommendation?
A. Schedule risk will be fixed.
B. Cost risk will be lower.
C. The buyer owns most of the risk.
D. Risk is shared equally by all parties.
18. You are leading a project that has been in process for 13 months. You are
nearing the completion of a major deliverable that was completed by an
external resource using a cost reimbursable contract. You have entered the
close procurements process. Which of the following must you remember to
do?
A. Make sure the seller is not adding work to the contract.
B. Make sure the seller is not adding resources.
C. Audit the seller’s cost submittals.
D. Decrease the risk rating of the project.
19. You have been asked to lead a mid-sized project for your organization. Your
sponsor is very concerned about one particular seller that must be used on the
project and wants to make sure you are minimizing the risk to your
organization. You suggest using a firm fixed price contract. In a firm fixed
price contract, the fee or profit is:
A. Specifically stated as a line item in each invoice.
B. Determine through negotiation at the end of the contract.
C. Unknown.
D. Part of the negotiation involved in paying every invoice.
20. You are leading a large engineering project for your organization. As part of
the standard reporting process you are required to submit earned value
calculations such as SPI, CPI and TCPI. One day your sponsor comes into
your office concerned about your largest contractor gaining extra profit on
the CPFF contract. You explain that they should not be worried about this
issue. Which of the following best justifies this statement?
A. All cost invoices are being audited.
B. The seller only receives their fee once the project is completed.
C. You are making sure the seller does not cut scope.
D. There can only be a maximum 10% increase if there is an unexpected
overrun.

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21. You are the project manager on a project that is part of a large space
program. Another project manager on the program has just come to you for
advice. Their project currently has limited scope definition and she is very
concerned about protecting the organization from financial risks. Which is
the best contract type to choose?
A. Firm fixed price
B. Cost plus fixed fee
C. Cost plus percentage of cost
D. Cost plus incentive fee
22. You are leading an especially difficult team attempting to complete a large
project that has significant risk to the organization. You are in the middle of
your standard Monday morning meeting where you are attempting to
determine whether the team should produce a particular deliverable
themselves or outsource it to an external party. In what part of the
procurement process are you currently?
A. Plan procurement management
B. Conduct procurements
C. Control procurements
D. Close procurements
23. Your team is meeting and discussing the proposals received to produce a
large required deliverable. The team is about equally split on which provider
they prefer. In what part of the procurement process are you currently?
A. Plan procurement management
B. Conduct procurements
C. Control procurements
D. Close procurements
24. In what part of the procurement process are you in if you are attempting to
complete procurement negotiations?
A. Plan procurement management
B. Conduct procurements
C. Control procurements
D. Close procurements
25. You are leading a project and have just lost a critical internal resource due to
illness and long-term disability. The work is very important and cannot be
done by an internal resource. You have decided to make use of an external
contractor to complete the deliverable. Time is of the essence and the
deliverable must be completed quickly. Under these circumstances, which of
the following would be the most helpful to add to the contract?
A. A force majeure clause
B. Schedule targets
C. A clear procurement statement of work
D. Incentives

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26. With which type of contract is the seller to be most likely concerned about
project scope?
A. Cost plus fixed fee
B. Cost plus incentive fee
C. Fixed price plus incentive fee
D. Firm fixed price
27. You are leading a very complex project. Part of your job required you to
negotiate the contract with a large reseller. Throughout the negotiations you
required minutes to be kept which you also required the reseller to sign as
true and accurate. Now, several months later the seller is claiming they are
not required to complete certain components of work because they appear in
your notes and not the contract. In this case the seller is:
A. Generally incorrect, because all signed agreements must be upheld.
B. Correct because there was a tender and agreement.
C. Generally correct, because both parties are only required to perform
what is in the contract.
D. Incorrect, because both parties are required to comply with what they
agreed upon.
28. You are the project manager on a large petrochemical project. You have
awarded the primary contract to build the required facility to a large
European engineering firm. Within the contract is specific language that
requires the contract to submit a work plan to you for approval prior to
initiating work. However, the seller has failed to provide one prior to
commencing work. Which is the best thing for you to do?
A. Develop the work plan and provide it to the contractor.
B. File a letter of intent.
C. Issue a default letter.
D. Stop the project until the contractor develops a work plan.
29. Which type of contract is best if you do not have the manpower to audit the
submitted contractor invoices?
A. Firm fixed price
B. Fixed price plus incentive fee
C. Cost plus incentive fee
D. Cost plus fixed fee

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30. You are leading a contracting team for a project making use of three external
contractors. You submit a deliverable that the project manager believes is
substandard. The project manager refuses to accept the deliverable and
refers you to the technical specifications section of the contract that
specifically addresses the deliverable in question. You examine the
specification and agree the deliverable failed to meet the specification. What
is the best thing to do?
A. Call your team together to review the contract.
B. Work with the project manager to issue a change order.
C. Enter into negotiations with the project manager to change the
contract.
D. Review the requirements and the WBS with your team.
31. Once signed, a contract is legally binding unless:
A. One party is unable to perform.
B. Both parties are unable to perform.
C. It is declared null and void by counsel.
D. It is in violation of applicable law.
32. All of the following statements concerning procurement documents are
incorrect except which one:
A. Well-designed procurement documents can simplify comparison of
responses.
B. Procurement documents must be rigorous with no flexibility to allow
consideration of seller suggestions.
C. In general, procurement documents should not include selection
criteria.
D. Well-designed procurement documents do not include a procurement
statement of work.
33. A seller is working on a cost reimbursable contract when the buyer decides
they would like to expand the scope of services and change to a fixed price
contract. All of the following are the seller’s options except which one:
A. Completing the original work on a cost reimbursable basis and then
negotiating a fixed price for the additional work.
B. Completing the original work and rejecting the additional work.
C. Starting over with a new contract.
D. Negotiating a fixed price contract that includes the work.

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34. The sponsor is worried about the seller deriving extra profit on the cost plus
fixed fee contract. Each month he requires the project manager to submit
CPI calculations and an analysis of the cost to complete. The project
manager explains to the sponsor that extra profits should not be a worry on
this project because:
A. The team is making sure the seller does not cut scope.
B. All costs invoiced are being audited.
C. There can only be a maximum 10% increase if there is an unexpected
cost overrun.
D. The fee is only received by the seller when project is completed.
35. The sponsor and the project manager are discussing what type of contract the
project manager plans to use on the project. The sponsor points out that the
performing organization spent a lot of money hiring a design team to come
up with the design. The project manager is concerned that the risk for the
buyer be as small as possible. An advantage of a fixed price contract for the
buyer is:
A. Cost risk is lower.
B. Cost risk is higher.
C. There is little risk.
D. Risk is shared by all parties.
36. You are in the middle of a complex negotiation when the other party says,
‘We need to finish in one hour because I have to catch my plane.” That
person is using which of the following negotiation strategies?
A. Good guy, bad guy
B. Delay
C. Deadline
D. Extreme demands
37. Your company has an emergency and needs contracted work done as soon as
possible. Under these circumstances, which of the following would be the
most helpful to add to the contract?
A. A clear procurement statement of work.
B. Requirements as to which subcontractors can be used.
C. Incentives.
D. A force majeure clause.

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38. The project team seems to like to argue; they have argued about everything.
Luckily the project set in place a reward system and team-building sessions
that will help and encourage the team to cooperate more. The latest thing
they are arguing about is whether they should complete a work package
themselves or outsource the work to someone else. What part of the
procurement process must they be in?
A. Conduct procurements
B. Plan procurement management
C. Administer procurements
D. Claims administration
39. Your program manager has come to you, the project manager, for help with a
bid for her newest project. You want to protect your company from financial
risk, and you have limited scope definition.
A. Firm fixed price
B. Cost plus percentage of cost
C. Time and material
D. Cost plus fixed fee
40. Negotiations between two parties are becoming complex, so Party A makes
some notes that both parties sign. However, when the work is being done,
Party B claims they are not required to provide an item they both agreed to
during negotiations because it was not included in the subsequent contract.
In this case, Party B is:
A. Incorrect, because both parties must comply with what they agreed
on.
B. Correct, because there was an offer.
C. Generally correct, because both parties are only required to perform
what is in the contract.
D. Generally incorrect, because all agreements must be upheld.
41. Your project has just been fast-tracked and you are looking to quickly bring
in a subcontractor to complete networking. There is no time to issue a
request for proposal, so you choose to use a company you have used many
times before for software development. A primary concern in this situation
is:
A. Collusion between subcontractors.
B. The subcontractor’s qualifications.
C. The subcontractor’s evaluation criteria.
D. Holding a bidder conference.

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Exercise 22 — Procurement Management Answers

1. Answer D. A contract is not legally binding if it violates applicable law.
However, contract terms typically spell out what will happen if other
conditions are not met.
2. Answer D. If the seller completes the work specified in the procurement
statement of work the contract is considered complete. That does not mean
the same thing as closed. The close procurements process still must occur.
3. Answer B. According to PMI® you are always looking for the win/win
situation. You are also want to have the relationship last through the entire
project. A contract will not force anyone to stick to objectives. It can only
spell out the penalties if the objectives are not met.
4. Answer D. Remember, the question is really asking what would you do
first. In this case, you would first continue the payments otherwise you
would be in violation of the terms of the contract. You cannot simply void a
contract. While altering the contract might be a good idea, it is not what you
would do first.
5. Answer C. Changes will occur no matter what. It is therefore critically
important that any contract outline how changes are to be made so you can
best handle them. All of the other choices are myths!
6. Answer B. Incentives are specifically intended to help the seller and buyer
synchronize objectives. Sellers are typically motivated by financial means.
By providing special gains, typically financial to the seller, the buyer can
motivate the seller towards specific important targets.
7. Answer C. During the conduct procurements process, you normally answer
questions submitted by the sellers. The risk analysis processes are done
before the procurement process begins, as procurement is a form of risk
mitigation and transference. Selecting a particular contract type is part of
plan procurements. Changes to the schedule and budget may be an output of
the administer procurements process.
8. Answer C. PMBOK® Guide p. 466-481 – Everything other than the make or
buy decision where you actually choose to procure a good or service occur in
the plan procurement management process.
9. Answer B. Contract negotiations are about managing expectations and
ensuring the relationship can be maintained throughout the project. They are
also about getting a win-win situation in terms of price. This means the
buyer gets a fair and reasonable price.
10. Answer D. This is a question where all of the options are less than perfect.
However, the best or closest option is that the project manager supplies an
understanding of the risks of the project.

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11. Answer C. The options in this question make it difficult. Acceptance is a

fancy way of saying a signature from both parties, the procurement statement
of work is simply what you will be purchasing. The buyer’s signature is
required, but not enough. The address of the buyer is not necessarily
required.
12. Answer B. PMBOK® p. 460 – Conduct procurements where you would find
bidder conferences. Expect a number of questions where you have to know
which process a tool or technique is from.
13. Answer A. The seller does not have the choice to simply start over. The
existing contract is binding and cannot be nullified by a single party.
14. Answer C. Remember, the objective is to select the answer that is best. The
best answer in this case is increase loyalty to the project. A common
problem with contracting is that when it is not centralized there is very little
loyalty to the project.
15. Answer D. This is an example of setting a deadline where the negotiations
would end.
16. Answer A. To answer this question you need to know what a records
management system is and that it would not be used to keep track of
negotiations. The negotiations process is not a document.
17. Answer B. Remember, unless otherwise specified you are always the buyer.
In a firm fixed price contract the costs will theoretically be lower unless there
is significant scope change.
18. Answer C. There is no guarantee that the risk rating for the project has
changed because of the closed project. You should have already ensured the
seller is only delivering against the contract, so no additional work or
resources are valid. The only thing that makes sense is that you need to audit
the cost submittals because this is a cost reimbursable contract.
19. Answer C. Unlike a cost plus contract, in a firm fixed price contract you
have no idea how much of the firm fixed price is profit.
20. Answer A. Cutting scope on a cost plus fixed fee contract will decrease
profits. A CPFF contract also does not tend to limit fee increases. The fee in
a CPFF contract is usually paid out on a continuous basis throughout the
contract. However, one way to change the profits in a CPFF contract is to
invoice for things chargeable to the project.
21. Answer B. Of all the choices given only a cost plus fixed fee contract limit
financial risk. A cost plus incentive fee might, but the incentives are not the
best guarantee.
22. Answer A. PMBOK® Guide p. 473 – This is a basic make versus buy
question. Therefore you are in the plan procurement management process.
23. Answer B. PMBOK® Guide p. 488 – Selected sellers is an output of the
conduct procurements process.

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24. Answer B. PMBOK® Guide p. 488 – Procurement negotiations are part of

interpersonal and team skills an a tool and technique used in the conduct
procurements process.
25. Answer D. PMBOK® Guide p. 477 – A clear procurement statement of
work is always required but that does not ensure it will be done quickly.
Incentives are best for aligning the objectives of the buyer and the seller.
26. Answer D. PMBOK® Guide p. 471 – In a firm fixed price contract the
seller has all the cost risk. The only way they can make a profit is if they are
able to clearly define and maintain the project scope.
27. Answer C. PMBOK® Guide p. 460-462 – In most situations the seller is
only required to comply with what is described in the contract.
28. Answer C. Any time a seller does not perform according the contract the
project manager must take action. The best action would be to simply
contact the seller and find out what is happening, but that is not one of the
choices.
29. Answer A. PMBOK® Guide p. 471 – A firm fixed price contract does not
require detailed review of invoices. Your primary concern is the deliverables
as you are paying a fixed rate.
30. Answer D. Calling your team together to review the contract is close, but it
is not correct. The best answer is to review the requirements and the WBS as
the WBS, with its included WBS dictionary, clearly describe the
deliverables.
31. Answer D. PMBOK® Guide p. 461 – A contract is always binding unless
both sides agree to terminate it or it violates applicable law.
32. Answer A. PMBOK® Guide p. 461 – Often the seller is required to inform
the buyer of anything that is missing or unclear in the procurement
documents. It is in the buyer’s best interest to discover missing items, since
it will save the buyer money and trouble to correct the problem early.
Procurement documents must contain terms and conditions and selection
criteria, as well as documentation of all the work that is to be done. This is
so the seller can price the project and know what is most important to the
buyer. Well-designed procurement documents can simplify comparison of
responses. This is an important point for the real world and the best answer.
33. Answer C. PMBOK® Guide p. 461 – The seller can try to negotiate
changes or simply continue the original contract and refuse the request to
complete additional work, but the seller cannot unilaterally decide to start
over with a new contract. Both parties have to agree to this option through
negotiations.

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34. Answer B. PMBOK® Guide p. 472 – Cutting scope decreases profits on

this type of contract, so that would not be a way for the seller to generate
extra profits. CPFF contracts generally do not limit fee increases and the fee
in a CPFF contract is usually paid out on a continuous basis during the life of
the project. One of the ways to change the profit in a cost plus fixed fee
contract is to invoice for items not chargeable to the project. Therefore, all
invoiced costs should be audited.
35. Answer A. PMBOK® Guide p. 471-472 – If you had trouble with this one,
you need to remember that the questions are asked from the buyer’s
perspective unless otherwise noted. The seller has the most cost risk in a
fixed price contract, and the buyer’s risk is lower.
36. Answer C. Putting a time limit on the negotiation is an example of a
deadline negotiation strategy.
37. Answer C. If you follow the proper project management process, you
always have good definition of scope. In this situation, you are in a time
crunch. Both good scope definition and incentives are required to make it
happen. Which provides the better answer? Along with good scope
definition, you need the seller to share your need for speed. Incentives bring
the seller’s objectives in line with the buyer’s and thus would be the most
helpful. Good scope definition alone does not ensure speed.
38. Answer B. PMBOK® Guide p. 479 – Did you notice that much of this
question is irrelevant? Did you also notice that the words “make-or-buy
decision” were not used in the question? Instead, the question used the
definition of make-or-buy. Watch out for this on the exam. A make-or-buy
decision is needed before the rest of the procurement process can occur.
Therefore, the situation must be taking place in one of the early steps of the
procurement process. Plan procurements is the correct choice.
39. Answer D. PMBOK® Guide p. 471-472 – Of those given, the only contract
that limits fees for large projects with limited scope definition is the cost plus
fixed fee.
40. Answer C. Party B is only required to deliver what is defined in the
contract.
41. Answer B. Although you have used this contractor before, how can you be
sure the company is qualified to do the new work since it is not exactly like
the previous work? This is the risk you are taking.

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Stakeholder Management
Overview Slide 406
Chapter 13 of the PMBOK®
Guide is dedicated to the
stakeholder management
knowledge area. There are
four processes found in the
stakeholder management
knowledge area, which include the following
processes:
 13.1 Identify stakeholders
 13.2 Plan stakeholder engagement
 13.3 Manage stakeholder engagement
 13.4 Monitor stakeholder engagement
The stakeholder management
knowledge area first appeared in the
2012 5th edition of the PMBOK®
Guide. In previous editions, most
of the exact same information was
found in the communications
management knowledge area. In
the 6th edition of the Guide it is Image 133: The Stakeholder Management Processes
still a short knowledge area that
does not typically cause problems for students.
13.1 Identify Stakeholders
The first process found in the stakeholder management
knowledge area is the identify stakeholders process. Slide 407
This process is one of the two processes found in the
initiating process group and occurs prior to what most
project managers consider the “real-world” beginning
of project management. The identify stakeholder
process is somewhat different than the other processes
defined in the PMBOK® Guide in that it is
both a defined process that happens at a Image 134: 13.1 Identify Stakeholders
specific time in the project timeline, and it is
also a process that goes on constantly throughout the project. Don’t be surprised
if you see questions which seem to contradict each other. One question might
ask in which specific process are you to examine the stakeholders and their
needs while another might ask when should you examine the needs of the
stakeholders. The answer to the first question is the identify stakeholders
process while the answer to the second question is “all the time.”
The inputs to the identify stakeholders process include the following:

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 .1 Project charter — The project charter may be used to obtain information Slide 408
about people—both internal and external to the project — who may be
affected by the project.
 .2 Business documents — This is one of the first two processes in any
project. As such, the business documents are very important to the process.
These documents include the business case and benefits management plan.
These two documents explain the business need and the expected business
benefits from the project.
 .3 Project management plan — Don’t be confused by the fact that the
project management plan is listed as an input. PMI® recognizes the project
management plan is not available to this process when it is first initiated.
However, it is intended to be an iterative process and in later efforts the
information contained in the communications management plan and the
stakeholder engagement plan.
 .4 Project documents — It is also unlikely that any of the additional project
documents will be available when the team begins to identify stakeholders,
but the change log, the issue log, and the requirements documentation will be
available for future iterations of the process.
 .5 Agreements — Various types of agreements might be in place before the
project begins. The signors of those agreements are stakeholders for the
project
 .6 Enterprise environmental factors — Items such as organizational
structure or governmental and industry standards can be key inputs to
understand a project’s stakeholders.
 .7 Organizational process assets — Items such as stakeholder register
templates, lessons learned from previous projects, and/or stakeholder
registers from previous projects can help determine the players for your
project.
The tools and techniques used in the identify stakeholders process include the
following:
®
 .1 Expert judgment — Like most of the processes found in the PMBOK
Guide, expert judgment is used in the identify stakeholder process.
 .2 Data gathering— Data gathering is something we have talked about
extensively in this course. Now that we are in our 13th chapter, it should be
readily familiar to you. To identify stakeholders it is common to use Slide 409-
questionnaires and surveys as well as various brainstorming techniques. On 410
specific technique that you should add to your library is brain writing. Brain
writing is a refinement of brainstorming that allows individual participants
time to consider the question(s) individual before the group creativity session
is held. The information can be gathered in face-to-face groups or using
virtual environments supported by technology. [PMBOK® Guide 6th ed. p.
511].

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 .3 Data analysis — A big part of data analysis is stakeholder analysis. Slide 411
Stakeholder analysis is the process of systematically gathering and analyzing
both qualitative and quantitative data to determine what is driving the various
stakeholders’ participation in the project. Drivers can include interest, rights
such as legal or moral, ownership, knowledge and contribution. The team
should also consider document analysis.
 .4 Data representation — When identifying stakeholders, the team may find
need to represent the gathered information visually. These methods provide
way to visually categorize stakeholders. If your project is small these models
are less important that a project with many stakeholders. As you study the
listed tools remember to think about the Acme Widget Factory team and how
they would need to look at stakeholders. Remember, it is important that you
recognize the real-world problem of your limited time, and your
stakeholders’ differing levels of influence within the organization. This
means you cannot treat all your stakeholders the same. You are going to be
required to spend more time with some and less with others. So how are you
going to ensure you correctly allocate your time to the “right” stakeholders?
Potential techniques include:
 Grids — Grids are two axis representations of stakeholder
characteristics. In most cases, these are tools used in brainstorming
where the team is sitting together, whether in person or via
technology, discussing who the stakeholders are and how the team
views them. The process begins with each member of the team
brainstorming about who they think potential stakeholders are. As
they come up with names they write them on stickies that are then
placed on the poster paper or Slide 412-
the whiteboard. The facilitator 413
then draws a large four square
grid on the whiteboard or
poster paper. The grid is
defined by two axis such as
power and influence, power
and interest or support and
power. The team then places
each stakeholder in one of the
four quadrants. Image 135
shows a sample support/
influence grid. Image 135: Power vs. Influence Grid
 Stakeholder cube — A stakeholder cube is built on the previously
discussed grids. It simply adds a third dimension or variable to the
grid.
 Salience model — A salience model describes classes of
stakeholders based on assessments of their power (level of authority
or ability to influence the outcomes of the project), urgency (need for
immediate attention, either time-constrained or relating to the

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stakeholders’ high stake in the outcome), and legitimacy (their

involvement is appropriate). There is an adaptation of the salience
model that substitutes proximity for legitimacy (applying to the team
and measuring their level of involvement with the work of the
project). The salience model is useful for large complex communities
of stakeholders or where there are complex networks of relationships
within the community. It is also useful in determining the relative
importance of the identified stakeholder [PMBOK® Guide 6th ed. p.
513].
To get a better understanding of this model, let’s begin with a simple
definition for the term salience. Salience is the degree to which
managers give priority to competing stakeholders’ claims in their
decision-making process. The term was first coined in the field of
project management by Mitchell, Agle, and Wood in 1997 when they
proposed a Theory of Stakeholder Identification and Salience in
response to what they saw as confusion over the definition of
stakeholders and a general failure to reach a consensus over “who and
what really counts” in stakeholder management [Mitchell et al. 1997,
p. 853-854]
In the salience model, you assign each stakeholder values for three
attributes:
 Power — This is the authority or influence the stakeholder
Slide 414
has on your project and/or its objectives. It is determined by
focusing on the stakeholder’s potential impact on your project
or outcome. This power can be incentive, coercive, or
utilitarian.
 Legitimacy — This is the appropriateness of the
stakeholder’s involvement in your project. It answers the
question, should they be there? It is generally a bad idea if
you are spending a significant amount of time dealing with
issues from a stakeholder who should not have a voice in the
project. You also will spend more attention on a stakeholder
the more their voice is legitimate.
 Urgency — Does the stakeholders’ needs require immediate
attention. How time sensitive are the requirements from the
stakeholder, or how critical are the requirements.
Each stakeholder becomes represented by assessments of these three
values, and those values change over time. The most common
representation of this model is a Venn diagram using three
intersecting circles. Each circle represents one of three drivers, and
the key to the model becomes understanding those stakeholders in the
intersections. The intersection of the three attributes within the
diagram creates several stakeholder groupings and seven
classifications of stakeholders for the project leader to track.

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Slide 415

Image 136: The Salience Model

Slide 416-
 Latent stakeholders — These stakeholders have only a single 417
attribute. This attribute can be any of the three power,
legitimacy or urgency. Typically, these stakeholders are not
given a majority of the team’s attention. Consider this a class
of stakeholder and not one of the seven.
 Dormant stakeholders — These stakeholders have high
organizational power, but low legitimacy and low urgency.
Their high power means they can significantly impact the
project so they must be managed prudently.
 Discretionary stakeholders — These stakeholders have high
legitimacy but low power and urgency. Because of their
legitimacy the team will work to fulfill their requirements even
though they don’t have significant power or urgency. You must
communicate with them regularly to ensure the team has the
information they need to succeed.
 Demanding stakeholders — These stakeholders have high
urgency but low power and legitimacy. This is usually a very
vocal group that can significantly influence other stakeholders
if their requirements are not met. This group always wants the
team’s attention and must be managed carefully.
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 Expectant stakeholders — These stakeholders have two

attributes. The group of expectant of stakeholders are active
and expect something from the project. The next three
stakeholder groups fall into the group of expectant
stakeholders.
 Dominant stakeholder — These stakeholders have both high
power and high legitimacy. They also have low urgency.
This causes them to rank below the core group, but still be
very important.
 Dangerous stakeholders — These stakeholders have high
power and urgency but low legitimacy. This combination is
very dangerous. They can aggressive and unpredictable often
creating trouble for the project. It is important that the team is
cautious with these stakeholders so they do not jeopardize the
project.
 Dependent stakeholders — These stakeholders have high
urgency and high legitimacy but low power. The fact that
they have low power means you do not have to manage them
closely.
 Definitive stakeholders — These are your core stakeholders.
They score high in all three measured attributes. You must
manage these stakeholders very closely.
 Direction of influence — This tool is used to classify stakeholders
according to their influence on the work of the project. This model
typically uses the following variables:
Slide 418
 Upward — Senior management, the sponsor or
steering committee.
 Downward —The team or specialists contributing
knowledge or skills in a temporary capacity.
 Outward — Stakeholders outside the project team
such as suppliers, government, the public end users or
regulators.
 Sideward — The peers of the project manager who
are in competition for scarce project resources or who
collaborate with the project manager in sharing
resources or information.
 Prioritization — Prioritizing stakeholders is a common practice,
especially with a large number of stakeholders or where the
community of stakeholders is constantly changing. Just like
requirements, stakeholders should be prioritized to ensure the team
spends the most time with the most impactful stakeholders.

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 .5 Meetings — Determining who the stakeholders are on a project can

require a significant number of meetings.
The outputs from the identify stakeholders process are:
 1 Stakeholder register — The stakeholder register is the primary output
from the analyze stakeholders process. It contains the details about the
defined stakeholders such as who they are, their positions, major concerns
and desires for the project and a classification.
 .2 Change requests — This is very early in a project process so you are not
going to see changes from things that haven’t even been created. Instead,
remember that this is an iterative process and the team must constantly be
examining the project to identify new stakeholders or changes to
stakeholders’ position, opinions or role.
 .3 Project management plan updates — When this process is first done
there isn’t a project management yet, but because of the iterative nature of
the process, there could be updates to the project management plan at a later
date.
 .4 Project document updates — This is yet another case where there are no
updates initially, but as the project progresses updates are often created.
10.2 Plan Stakeholder Management
The plan stakeholder management process follows much the same design as the
plan processes found in other knowledge areas. The purpose of the plan
stakeholder management is to define the rules and standards that will be used Slide 420
throughout the project. What is different about
the plan stakeholder management process is that
it is not the first process in the knowledge area.
In this knowledge area the team must first spend
time understanding who the primary
stakeholders are and what their key needs are.
Once those are defined the team can define
which processes will best manage the
stakeholders and their needs, and how the team
will continue to work with its
Image 137: Monitor Stakeholder Engagement
stakeholders.
The inputs to the plan stakeholder management process include the following:
 .1 Project charter — The charter explains why the team is doing the project
and what its success criteria is. Slide 421

 .2 Project management plan — The project management plan defines many

of the core aspects of the project that are used to ensure the team understands
what the team expects from the project. The team should specifically look at
the resource management plan, communications management plan and the
risk management plan. Each of these can have a big influence on what is
communicated and how with stakeholders.
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 .3 Project documents — The project documents can have a big impact on

how and what is communicated to stakeholders. Of particular interest is the
assumption log, the change log, issues log, the project schedule, risk register,
and the stakeholder register.
 .4 Agreements — Any existing agreements define potential communication
requirements and stakeholders for the project.
 .5 Enterprise environmental factors — Items such as organizational
structure or governmental and industry standards can be key inputs to
understand a project’s stakeholders.
 .6 Organizational process assets — Common organizational process assets
include any organizational communication requirements, issue management
procedures, change control procedures, or historical information from past
projects.
There are six key tools and techniques used in the plan stakeholder management
process. These are all old friends you have seen many, many times before. They
include the following:
®
 .1 Expert judgment — Like most of the processes found in the PMBOK
Guide, expert judgment is used in the identify stakeholder process.
 .2 Data gathering — Benchmarking is the primary data gathering tool used
to plan stakeholder management. We have previously defined benchmarking
as a comparison process used to compare the project or organization to
something outside. The goal of benchmarking is to prevent the team from
possessing tunnel vision.
 .3 Data analysis — leaders may make use of assumption and constraint
analysis and root cause analysis to determine their stakeholder management
plan.
 .4 Decision making — The major decision the team must make in the plan
stakeholder management process is prioritizing or ranking the project’s
stakeholders.
 .5 Data representation — The team uses tools such as mind mapping and a
stakeholder engagement assessment matrix to display the level of
engagement and interest the stakeholders have in the project.
 .6 Meetings — Determining the stakeholders on a project can require a
significant number of meetings.
There is just one output to the plan stakeholder management. It is the
stakeholder engagement plan. The stakeholder engagement plan defines all the
rules, processes and other necessary information for management stakeholders.

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10.3 Manage Stakeholder Engagement Slide 422

The fourth process in the stakeholder

management knowledge area is manage
stakeholder expectations. This process is one of
the more important processes to a project’s
success, but it is also one of the easier processes
to learn because it is mostly common sense. The
manage stakeholder engagement process is about
managing communications to satisfy the needs of
project stakeholders, resolving issues with project Image 138: Manage Stakeholder
stakeholders, and actively managing stakeholders Engagement
to increase the likelihood of project success.
The inputs to the manage stakeholder engagement process are as follows:
Slide 423
 .1 Project management plan— The project management plan provides the
communications management plan, risk management plan, the stakeholder
engagement plan, and the change management plan specifically to help the
team manage stakeholder engagement.
 .2 Project documents — The change log, issue log, lessons learned register,
and stakeholder register provide important information for effectively
managing stakeholder engagement.
 .3 Enterprise environmental factors — Everything from your
organization’s culture to the stakeholders individual risk threshold must be
considered when managing the level of engagement for your stakeholders.
 .4 Organizational process assets — Common organizational process assets
include any organizational communication requirements, issue management
procedures, change control procedures, or historical information from past
projects.
The tools and techniques used in the manage stakeholder expectations process
are very straightforward and common sense. Before reading through them, stop
and think for a moment: what tools and techniques would you use on a project to
manage expectations? It is likely you were able to come up with a list very
similar to the one below.
 .1 Expert judgment — Nothing is more effective in managing stakeholders
than the subject matter experts on your team. Just as we have said repeatedly
in this course, take it to the team. Trust your subject matter experts to
engage the stakeholders.
 .2 Communication skills — These are the methods the project defined in the
communications management plan as discussed earlier in this chapter.
 .3 Interpersonal and team skills — Interpersonal skills include things like
your ability to build trust, resolve conflict, listen actively, and overcome
resistance to change.

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 .4 Ground rules — A good project manager is also a good manager. Do not

underestimate the importance of this statement. Part of being a good
manager is establishing basic, foundational rules with which the team must
comply.
 .5 Meetings — One of the best ways to engage stakeholders is to meet with
them and then not waste their time.
The outputs from the manage stakeholder engagement process are largely
changes, and represent exactly what you would expect if you stopped for a
moment and thought about it. If you communicate with stakeholders throughout
a project about what was happening and what they wanted, what would come
from that? The formal outputs from the manage stakeholder expectations
process include the following:
 .1 Change requests — Managing the expectations of a project’s
stakeholders can generate requested changes to the product of the project,
corrective actions, or even preventive actions.
 .2 Project management plan updates — Parts of the project management
plan may need to be updated based upon the information obtained through
managing stakeholder expectations. When new communications
requirements are developed, the communications management plan is
especially prone to such updating.
 .3 Project document updates — Although any of the project documents
may require updating because of information obtained through managing
stakeholder expectations, the risk register is of particular interest.
13.4 Monitor Stakeholder Engagement
Like most of the knowledge areas, Slide 424
stakeholder management ends with a
monitor process. Without going any
further you should already know quite a
bit about this process. Just like all the
previous control processes, monitor
stakeholder engagement is part of
integrated change control found in the Image 139: Monitor Stakeholder Engagement
monitor and controlling process group.
The core objective of these processes is to ensure the team is aware of any
changes and that only “good” changes are allowed to occur.
The inputs to the control stakeholder engagement process are as follows:
Slide 425
 .1 Project Management Plan — There are a number of aspects of the
project management plan which aid in the controlling of stakeholder
engagement. Of particular use is the project lifecycle, the definition of how
work is accomplished, how the resource requirements will met, the change
management plan, and the techniques used for communication amongst the
stakeholders.

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 .2 Project documents — Items such as the project schedule, stakeholder

register, issue log, change log and various project communications are
examples of project communications.
 .3 Work performance data — These are primary observations and
measurements identified during activities being performed to carry out
project work.
 .4 Enterprise environmental factors — The team is now looking for tools
to help them ensure the project stakeholders stay engaged with the project at
the appropriate level. Everything from organizational culture and political
climate to global and regional trends must come into play for the team to
succeed.
 .5 Organizational process assets — Any historical information, corporate
policies, and procedures and today social media tools come into play.
The tools and techniques used to control stakeholder engagement include the
following:
 .1 Data analysis — Alternative analysis, root cause analysis, and stakeholder
analysis are all types of data analysis the team will use to monitor
stakeholder engagement.
 .2 Decision making — monitoring project stakeholders the team may often
use multicriteria decision analysis and voting to help make decision. The
key is that the team actually makes decision.
 .3 Data representation — A stakeholder engagement assessment matrix
allows the team to monitor whether or not the project stakeholders are
engaged and to track stakeholder changes.
 .4 Communication skills — Project leaders must make effective use of
presentations to ensure stakeholders are kept up to date and listen to
feedback from those stakeholders.
 .5 Interpersonal and team skills — All the skills discussed in this course
come back into play here. Tools such as active listening, cultural awareness,
leadership, networking and political awareness are all used.
 .6 Meetings — Primarily in the form of statutes review meetings, meetings
are a critical tool for controlling stakeholder engagement.
The outputs from control stakeholder engagement are focused on information
and updates as follows:
 .1 Work performance information — All the performance data is collected
from the various controlling processes and is analyzed, integrated and placed
in context.
 .2 Change requests — As the project manager and team interact with
stakeholders, it is likely that those interactions will generate change requests.

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 .3 Project management plan updates — Once the team begins producing

results, the overall project management strategy can be evaluated and
updated.
 .4 Project document updates — Documents outside the project
management plan might also have to be updated as the team evaluates the
overall effectiveness of the project management strategy.
Summary
The newly added stakeholder management knowledge area is likely the easiest
are on the exam. Make sure in your studies you know the following: Slide 426

 Know the four processes

 Know the components in each process.
 Understand the models discussed.
 Focus on understanding why stakeholders are important.
 Focus on the importance of transparency and understanding each
stakeholder’s interest.

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Exercise 23 — Stakeholder Management Exercise Exercise 23 –

Stakeholder
1. Which of the following is NOT an input to the identify stakeholders process? Management

A. Project charter
B. Enterprise environmental factors
C. Business documents
D. Statement of work
2. Which of the following is an input to the identify stakeholders process?
A. Work breakdown structure
B. Stakeholder management strategy
C. Agreements
D. Stakeholder identification strategy
3. Which of the following is a tool and technique used in the identify
stakeholder process?
A. Expert judgment
B. Communication models
C. Communication methods
D. Interpersonal skills
4. Which of the following is an output from the identify stakeholders process?
A. Project document updates
B. Communication management strategy
C. Stakeholder analysis
D. Stakeholder register
5. Which of the following is an input to the plan stakeholder engagement
process?
A. Communications management strategy
B. Stakeholder management plan
C. Agreements
D. RACI diagram
6. Which of the following is NOT an input to the plan stakeholder engagement
process?
A. Enterprise environmental factor
B. Stakeholder register
C. Project management plan
D. Organizational process assets
7. Which of the following is NOT a tool or technique used in the plan
stakeholder engagement process?
A. Organizational process assets
B. Expert judgment
C. Meetings
D. Decision making
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8. Which of the following is an output for the plan stakeholder engagement

process?
A. Human resources management plan
B. Stakeholder register
C. Stakeholder engagement plan
D. Change requests
9. Which of the following is NOT an input to the manage stakeholder
engagement process?
A. Project management plan
B. Human resources management plan
C. Enterprise environmental factors
D. Organizational process assets
10. Which of the following is a named input to the manage stakeholder
engagement process?
A. Human resources management plan
B. Change requests
C. Communications management plan
D. Enterprise environmental factors
11. Which of the following is a tool or technique used in the manage stakeholder
engagement process?
A. Expert judgment
B. Management skills
C. Stakeholder communications
D. Stakeholder analysis
12. Which of the following is not a tool or technique used in the manage
stakeholder engagement process?
A. Expert judgment
B. Stakeholder analysis
C. Interpersonal and team skills
D. Ground rules
13. Which of the following is NOT an output from the manage stakeholder
engagement process?
A. Change requests
B. Approved change requests
C. Project management plan updates
D. Project document updates

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14. Which of the following is an input to the monitor stakeholder engagement

process?
A. Work performance data
B. Stakeholder management plan
C. Communications management plan
D. Issue log
15. Which of the following is NOT an input to the monitor stakeholder
engagement process?
A. Project management plan
B. Change log
C. Work performance data
D. Project documents
16. Which of the following is a tool or technique used in the monitor stakeholder
engagement process?
A. Communication methods
B. Interpersonal skills
C. Management skills
D. Meetings
17. Which of the following is not a tool or technique used in the monitor
stakeholder engagement process?
A. Information management systems
B. Expert judgment
C. Management skills
D. Meetings
18. Which of the following is not an output of the monitor stakeholder
engagement process?
A. Work performance data
B. Work performance information
C. Change requests
D. Project document updates
19. Which of the following is an output of the monitor stakeholder engagement
process?
A. Issue log
B. Stakeholder register
C. Stakeholder management plan
D. Work performance information

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Exercise 23 — Stakeholder Management Exercise

Answers
 Answer D. PMBOK Guide p. 509-510 - The inputs to the identify
stakeholders process include the following:
 Project charter
 Business documents
 Project documents
 Agreements
 Enterprise environmental factors
 Organizational process assets
2. Answer C. PMBOK Guide p. 509-510 - The inputs to the identify
stakeholders process include the following:
 Project charter
 Business documents
 Project documents
 Agreements
 Enterprise environmental factors
 Organizational process assets
3. Answer A. PMBOK Guide p. 509-510 - The inputs to the identify
stakeholders process include the following:
 Project charter
 Business documents
 Project documents
 Agreements
 Enterprise environmental factors
 Organizational process assets
4. Answer D. PMBOK Guide p. 514-515 – The output to the identify
stakeholders process include the following:
 Stakeholder register
 Change requests
 Project management plan updates
 Project document updates
5. Answer C. PMBOK Guide p. 518-520 – The inputs to the plan stakeholder
engagement process include the following:
 Project charter
 Project management plan
 Project documents
 Agreements
 Enterprise environmental factors
 Organizational process assets

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6. Answer D. PMBOK Guide p. 518-520 – The inputs to the plan stakeholder

management process include the following:
 Project charter
 Project management plan
 Project documents
 Agreements
 Enterprise environmental factors
 Organizational process assets
7. Answer A. PMBOK Guide p. 520-522 – The tools and techniques used in
the plan stakeholder engagement process are as follows:
 Expert judgment
 Data gathering
 Data analysis
 Decision making
 Data representation
 Meetings
8. Answer C. PMBOK Guide p. 522 – The outputs to the plan stakeholder
management process include the following:
 Stakeholder engagement plan

9. Answer B. PMBOK Guide p. 525-526 – The inputs to the manage

stakeholder engagement process include the following:
 Project management plan
 Project documents
 Enterprise environmental factors
 Organizational process assets
10. Answer D. PMBOK Guide p. 525-526 – The inputs to the manage
stakeholder engagement process include the following:
 Project management plan
 Project documents
 Enterprise environmental factors
 Organizational process assets
11. Answer A. PMBOK Guide p. 526-528 – The tools or techniques used in the
manage stakeholder engagement process include the following:
 Expert judgment
 Communication skills
 Interpersonal and team skills
 Ground rules
 Meetings

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12. Answer B. PMBOK Guide p. 526-528 – The tools or techniques used in the
manage stakeholder engagement process include the following:
 Expert judgment
 Communication skills
 Interpersonal and team skills
 Ground rules
 Meetings
13. Answer B. PMBOK Guide p. 528-529 – The outputs from the manage
stakeholder engagement process include the following:
 Change request
 Project management plan updates
 Project document updates

14. Answer A. PMBOK Guide p. 532-533 – The inputs to monitor stakeholder

engagement process include the following:
 Project management plan
 Project documents
 Work performance data
 Enterprise environmental factors
 Organizational process assets
15. Answer B. PMBOK Guide p. 532-533 – The inputs to monitor stakeholder
engagement process include the following:
 Project management plan
 Project documents
 Work performance data
 Enterprise environmental factors
 Organizational process assets
16. Answer D. PMBOK Guide – The tools and techniques used in the monitor
stakeholder engagement process include the following:
 Data analysis
 Decision making
 Data representation
 Communication skills
 Interpersonal and team skills
 Meetings
17. Answer C. PMBOK Guide p. 533-535 – The tools and techniques used in
the control stakeholder engagement process include the following:
 Data analysis
 Decision making
 Data representation
 Communication skills
 Interpersonal and team skills
 Meetings
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18. Answer A. PMBOK Guide p. 535-536 – The outputs from the control
stakeholder engagement process include the following:
 Work performance information
 Change requests
 Project management plan updates
 Project documents updates
19. Answer D. PMBOK Guide p. 535-536 – The outputs from the control
stakeholder engagement process include the following:
 Work performance information
 Change requests
 Project management plan updates
 Project documents updates

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Professional Responsibility
Overview
There is not a section on the exam for professional responsibility. It is a topic
that appears in every section. PMI® addresses the topic in four areas:
responsibility, respect, fairness and honesty. Most of this topic is
straightforward. However, it is important to remember that PMI® uses a North
American perspective on these topics. As you study and work to complete your
exam, there are some important points to always keep in the forefront of your
mind. These rules or guidelines can be broken into four different categories:
 Your duty to the profession
 Scope and estimates
 Authority
 Above all else
If you remember these guidelines throughout your preparation, you will find
many of the questions much easier.
Your Duty to the Profession
The first category of guidelines is your duty to the profession of project Slide 428
management. The guidelines are based on PMI’s Code of Ethics and
Professional Conduct found on PMI’s website at:
http://www.pmi.org/About-Us/Ethics/Code-of-Ethics.aspx
PMI® demands compliance with all organizational rules and policies, and
compliance with PMI’s Code of Ethics and Professional Conduct. It is expected
that you will advance the profession.
Another key part of these obligations is the management of conflicts. As the
project manager you must manage conflict of interest situations and other
prohibited professional conduct. However—be careful here. Conflicts of
interest are not necessarily bad. They represent situations where stakeholders or
you have different interests that are opposed to each other. It is the project
manager’s job to balance these competing and sometimes conflicting interests.
It is also the project manager’s responsibility to make sure they are never in a
situation where they have competing agendas. The project manager must always
have the best interests of the project and their organization front and center.
For the exam, it is also important to remember the type of project you are
leading. It is a large, multi-national project and it is therefore important that you
understand the culture of foreign project locations and follow their customs and
rules.
Scope and Estimates Slide 429-
430
The second set of guidelines to remember for the exam focus on the area of
scope and estimates. It is critically important that you involve the stakeholders

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in the development of scope and engage them early in the process. Furthermore,
do not perform project tasks until the scope is verified. When asked to make
scope changes, do so only through the scope management process, and don’t add
any work without the sponsor’s approval.
The PMBOK® Guide is not prescriptive, as it supports a number of
methodologies each with different phases and structures. Therefore, it is
important that scope verification is done at the end of each phase. As a basic
rule, all deliverables must be quantifiable, and the project manager must ensure
that the team develops tasks and assigns resources to all tasks to complete the
scope. The project manager must also ensure the team reviews all deliverables
and doesn’t allow incomplete or incorrect deliverables to be released.
Another key project manager role is the preparation and publishing of accurate
estimates. Sometimes this also includes the requirement to cut schedules or
budgets. If forced to cut either, it’s best not to make across the board reductions.
Cuts should be made where they will have the greatest impact. When this occurs,
the project manager must also modify scope and quality to fit the reduced budget
or schedule.
Authority
The third area of focus is the project manager’s authority. In the real world this Slide 431
is often an area of frustration for PM’s due to the frequent perceived lack of
authority they hold. For the exam, focus on the following four keys:
 Work should not begin without a charter. If the project does not have a
charter, the project manager cannot be sufficiently empowered to do any
work or get resources to do work.
 A project manager must understand the limits of their authority and only take
actions within the limits of that authority.
 A project manager should never misrepresent their authority to anyone for
any reason.
 When something is beyond the limits of a project manager’s authority, they
must escalate those items to senior management and/or the project sponsor.
This is critical to ensure the credibility and success of all involved.
Above All Else…
The two most important concepts to remember for the exam impact almost every Slide 432-
question. First, you must remember that you are looking for the BEST answer to 433
the question, and not the perfect answer. Many questions will only provide
answers that are sub-optimal. Rarely will you see an answer that is a direct
quote from the standards.
The second concept is regarding the process a project manager should use to
resolve any situation. In every case the project manager should first evaluate the
event and evaluate the event’s impact to the project’s cost, schedule, scope,

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quality, and customer satisfaction. Based upon this analysis, the project team
should then develop alternatives and offer a recommendation. Only then should
the project manager approach the sponsor and/or management. The key here is
that a project manager never simply drops a problem off with their manager.
They always bring solutions.
Other less critical concepts include the fact that negotiations can involve items
other than money because many internal items can be bartered. The project
manager is often responsible for the development of the processes used on a
project, therefore it is important that they never shortcut the defined processes.
If the project manager does not follow the process, no one else will either.
Project managers who do a poor job planning their projects are likely to be out of
work because poorly planned projects are most likely to be cancelled.
When reporting to senior management and/or project sponsors, milestone reports
are the appropriate level of detail. This is often different from many candidates’
real world experience.

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Exercise 24 — Professional Responsibility Exercise 24 —

Professional
Responsibility
1. You are asked to take over a project that has a SPI of 1.04 and a CPI of 1.11.
As you begin your examination of the project documentation from the
previous project manager, you discover a payment to one of the project’s
contractors in the amount of $1,250,000 that was not approved in
accordance with company policies. What should you do?
A. Immediately contact the sponsor.
B. Immediately contact the contractor.
C. Escrow the payment amount for further investigation.
D. You are significantly under budget so there is no need to worry.
2. You are leading a large multinational project. You have just learned that one
of your primary vendors has bribed a subcontractor located in a nation where
such activity is not only common, but expected. What should you do?
A. Resign from the project to allow the project to continue without
putting yourself at risk.
B. Report the action to all contractors and subs so all parties can gain
advantage.
C. Report the offense to the sponsor.
D. Take no action as this is the contractor’s problem and not yours.
3. You are asked to take over a project for a project manager that has taken a
leave of absence. You have met with the previous project manager and
reviewed all project documents. As your first week comes to an end you
produce your first status report and submit it to leadership. On the following
morning you discover that an old data file was used to produce the report and
is not accurate. What should you do?
A. Update the data and submit the correct report the following week.
B. Correct the data and submit the new report with an explanation of the
error.
C. Contact management about the mistake and tell them to expect
changes in the next report.
D. Inform management that you received faulty data and thus report was
not accurate.

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4. You are given the opportunity to interview for your dream position. It is the
opportunity to lead a large global project with several dozen resources across
three continents. The project will require the team to work almost entirely
virtually. Unfortunately, you do not have any experience working with
virtual teams. What should you do when discussing the project with the
sponsor?
A. Because you are PMP® certified inform the sponsor that you have the
necessary experience.
B. Inform the sponsor you lack the requisite experience and decline the
offer.
C. Since you have led large international teams before convince the
sponsor that you have the experience.
D. Inform the sponsor that you have not led virtual teams before, but
highlight why you believe you are a good fit for the project.
5. You are one of five project managers who have been asked to participate in
an upcoming portfolio management meeting. The purpose of the meeting is
to help leadership select the best of several projects to complete. Each of the
participating project managers has a vested interest in one of the particular
projects and is therefore biased. The selected project will be highly visible
and likely a great success. How should you and the other project managers
proceed?
A. You each should not give opinions as you are not objective.
B. As a group you should make a single Ben Franklin T that shows the
pros and cons of each project.
C. You each should explain why the project you would lead would be
best and provide as much supporting documentation as possible.
D. You each should recommend the project that would be best for the
organization in the long run, regardless of who will run it.
6. You are leading a large engineering project in a foreign country. As part of
the project you are required to move several very large machine components
from the dock facilities to the project location. To ensure the machinery is
transported successfully, your local contact informs you that a local police
fee will have to be paid for traffic coordination. What should you do?
A. Pay the fee.
B. Find another way to complete the project.
C. Do not pay the fee because it is a bribe.
D. Do not pay the fee unless it was included in the project estimate.

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7. You are a functional manager who has been tasked with providing several
key deliverables for a project that is strongly supported by senior
management. You and the project manager strongly disagree on the tasks
that need to be done, how the project should proceed, and in the project
itself. The project manager is relatively new and you have significant
organizational experience. What should you do?
A. Ask to have the work reassigned.
B. Sit down with the project manager and attempt to describe why the
project should not be done.
C. Provide the project manager with what they need.
D. Inform your manager of your concerns and get their support.
8. You are managing a large team. One of your resources has been tasked with
writing a report which they are several days late producing. Just 30 minutes
before a meeting to discuss the report, they hand you the completed report.
Quickly reviewing the report, you notice several errors. What should you
do?
A. Cancel the meeting and rewrite the report.
B. Continue with the meeting as planned.
C. Allow the meeting to continue, but require the resource to discuss
how they plan to deal with the errors.
D. Cancel the meeting until you can fully review the report and it can be
fixed.
9. You need to schedule a meeting with your team. As you review everyone’s
calendar you notice that one of your resources has scheduled a meeting with
a critical stakeholder who is a member of the senior leadership team. You
were not aware of the meeting. What should you do?
A. Address the concern with the resource.
B. Ignore it. It is part of their job.
C. Discuss the situation with your boss.
D. Ask to be included in the meeting.
10. You are leading a large process improvement project within your
organization. Once completed, it is expected the project will save the
organization 20% on its fixed costs. Your team has spent four weeks
planning the project and has prepared detailed estimates for all deliverables.
When you present the schedule and budget to senior management you are
told to cut the budget by seven percent. What should you do?
A. Reduce the budget as requested and note the changes in the risk
register.
B. Provide the accurate estimate of costs and be able to support it.
C. Meet with the project team and work together to reduce the budget as
requested.
D. Revisit your plan projections to find additional project outcomes that
justify the higher project costs.

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11. You are one of six project managers leading a major program. You just
completed preparing your status report for the current reporting period which
shows a CPI of 0.86 and an SPI of 0.84. As you prepare for the status
meeting tomorrow afternoon, you recall that another project manager on the
program has had several major deliverables you knew were late, but they still
are reporting they are on schedule. What should you do?
A. Stop using EVMS and simply report on schedule and budget.
B. Bring up the issue in private with the program manager.
C. Meet with the other project manager to discuss the issue.
D. Develop a risk strategy in case the other project truly is late and it
impacts you.
12. You have a meeting scheduled for the next day with a contractor to complete
the negotiations to have them deliver a major component of your project
when you discover your project is likely to be cancelled. What should you
do?
A. Postpone the negotiations.
B. Use the meeting to inform the contractor it is likely to be cancelled.
C. Cut the meeting short.
D. Only negotiate the key elements.
13. You are taking over a project for a large manufacturing organization. The
project was originally scheduled to take 22 months and is currently 14
months into the schedule. The previous project manager consistently
reported the project as both on time and on budget. However, after a careful
review of the project documentation and interviews with the project team
you have discovered the project is significantly over budget and behind
schedule. In fact the project is likely to cost twice the original budget and
will likely take 36 months to complete. What should you do?
A. Decline to accept the project.
B. Move forward with the original schedule and report the missed
targets.
C. Meet with the team to restructure the project to meet the project
deadline.
D. Report your assessment to the project sponsor.
14. You are reviewing the implementation plan for a major project you are
leading. As you review the documentation you discover a key error that will
prevent you from meeting a key milestone. What should you do?
A. Change the milestone date.
B. Develop alternatives to meet the milestone date.
C. Discuss with the team the importance of hitting milestones at the next
team meeting.
D. Inform the sponsor of the missed milestone.

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15. You work as a project manager for an IT consulting organization. Your boss
has promised you a percentage of a major contract bonus if you achieve
specific contractually-based performance incentives. As you complete the
second-to-last major deliverable, your team informs you of a situation that
will prevent you from achieving the performance incentive. What should
you do?
A. Continue the project as planned.
B. Alter the project schedule to achieve the incentive.
C. Inform your manager that you will not achieve the target.
D. Negotiate with the client to achieve the bonus and provide the desired
result.
16. You work as a project manager for an IT consulting organization. Your boss
has promised you a percentage of a major contract bonus if you achieve
specific contractually-based performance incentives. You are on target to
achieve the incentive target, but your team has discovered that meeting the
letter of the contract will not meet the customer’s functional requirements.
What should you do?
A. Continue the project as planned.
B. Inform your boss.
C. Inform the customer of the situation and work out a mutually
agreeable solution.
D. Add as much functionality as you can while maintaining the
incentive.
17. You work as a contract project manager and have been provided with a
significant amount of data from your various clients that is proprietary. The
daughter of your next door neighbor contacts you for help on her masters’
thesis that would require you to share some of the proprietary data for
academic research purposes only. What should you do?
A. Refuse to share the information.
B. Contact your clients and seek permission to disclose the information.
C. Share the information, but ask the student to not disclose any client
names.
D. Release the information without any direct client references.
18. Which of the following is not a responsibility of the project manager?
A. Provide accurate and truthful representations of cost estimates.
B. Maintain all customer confidentialities.
C. Determine the legality of company project management procedures.
D. Ensure that a conflict of interest does not compromise the legitimate
interest of the customer.

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19. You are leading a $9,600,000 software development project when you
discover that the firm providing your project with several key resources is
struggling to maintain resources due to a labor dispute. Yours is one of five
projects within your organization that is using the same firm for development
resources. What should you do?
A. Negotiate with the firm to ensure your project maintains proper
resourcing.
B. Cancel the contract with the firm.
C. Inform the other project managers about the labor issue.
D. Contact the firm and advise it that you will cancel the contract if it
does not settle the labor dispute.
20. You are managing a large team. One of your resources has been tasked with
writing a report which they are several days late producing. Just 30 minutes
before a meeting to discuss the report, they hand you the completed report.
Quickly reviewing the report, you notice several errors. How could this
situation have been prevented?
A. Postpone the meeting earlier when you did not receive the report.
B. Coach and mentor the employee.
C. Require more frequent updates from the employee.
D. Ensure the employee was properly trained to do the job.
21. You are leading a road construction project. The effort requires your
company to pour more than 24 miles of eight lane highway. You have
completed more than 80% of the project and are now reviewing the latest
quality test results. The tests show 40% of the poured concrete does not
meet your company’s quality standard, but is only slightly below standard.
You are certain the concrete will function as is, and do not believe the slight
variance is significant. What should you do?
A. Ensure the remaining concrete meets the standards.
B. Report the lesser quality level and try to find a solution.
C. List in the next report that the concrete “meets the quality needs”.
D. Ask management to change the quality standard to the achieved level.
22. You are a PMP® certified project manager and are contacted by PMI®
regarding your best friend who is also a PMP®. PMI® is asking about
information you have regarding unethical behavior by your friend. You
know the accusations are true, but do not want to incriminate your friend.
What should you do?
A. Stay out of the situation and ignore the information request.
B. Contact PMI® and provide the factual information you have as
required by the PMI® code of conduct.
C. Contact PMI® and deny the accusation.
D. Contact PMI® and recuse yourself from the situation because of your
personal relationship with the accused.

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23. You have been asked to lead a $60,000 petrochemicals project for your
company. The project will require the cooperation of more than 50 resources
across three continents. These resources speak five different primary
languages and most of the work will be completed via virtual teams. What is
the best way to ensure cultural differences do not derail the project?
A. Always choose your words carefully whenever you communicate
with the team.
B. You should spend more time on the WBS to make absolutely sure it is
complete.
C. At a team meeting ask each team member to describe something
unique about their culture.
D. Make sure you encode all communications.
24. You are leading an IT project within your organization. As you are preparing
your weekly status report, you see that two of your resources are not
reporting actual hours and are only reporting percent complete. This is
skewing the EVMS reporting. What is the best thing to do?
A. Report the resources to their functional managers.
B. Discuss the impacts of these actions with the resources.
C. Continue reporting the information as received.
D. Continue reporting the information as received, but report the missing
data.
25. Your company president has asked that you contract part of your latest
project to a firm the organization has used many times before. As the project
manager, what should you be most concerned about in this situation?
A. Meeting management’s schedule expectations.
B. The contract terms and conditions.
C. Meeting management’s cost expectations.
D. Making sure the firm has the qualifications to complete the project
work.

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26. You have been asked to lead a $60,000 petrochemicals project for your
company. The project will require the cooperation of more than 50 resources
across three continents. These resources speak five different primary
languages. To help ensure a tightly knit team you initiate some team-
building games during team meetings. However, two of your resources
refuse to participate and inform you that such activities are culturally
unacceptable in their country. What should you do?
A. Tell the team members they need to be familiar with how things are
done in the headquarters company’s country and they should
participate.
B. Excuse the team members from playing and arrange to discuss
alternative activities with which they would be more comfortable.
C. Ask to have the team members removed from the team as they are
likely going to have other issues as well.
D. Excuse the team members from the activity and any future team-
building activities.
27. It is the first day of your new job with a large manufacturing organization.
You are taking over as the project manager on a project that has been
ongoing for nine months. As part of your review of the project
documentation you discover the previous project manager made a US
$2,500,000 payment that was not approved in accordance with the
organization’s policies. The project currently has an SPI of 0.98 and a CPI
of 1.14. What should you do?
A. Ignore the payment as it happened prior to your arrival.
B. Ignore the payment because both the CPI and SPI are within
acceptable boundaries.
C. Put the payment in an escrow account.
D. Contact your manager and inform them of the discrepancy.
28. A project manager is being considered as the potential leader of a project
which will deal exclusively with a virtual team located on several different
continents. What should they do when discussing the opportunity with the
sponsor?
A. Decline the assignment because they do not have experience with
virtual teams.
B. Point out to the sponsor that they have not had experience with
virtual teams, but also explain why they think they would be an
excellent fit for the project.
C. Avoid any conversation regarding the types of teams involved so the
sponsor does not know they lack experience in this area.
D. Since they have managed many projects with a wide range of teams,
it does not matter that the new project involves virtual teams and they
should tell the sponsor they have the relevant experience.

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29. While staffing a project in another country, the project leader from that
country comes to you with a suggested team consisting of members of the
project leader’s family. Your first course of action should be to:
A. Inquire if hiring only through family lines is common practice in the
project leader’s country.
B. Review the resumes of the individuals to see if they are qualified.
C. Ask the project leader to provide additional names of people
unrelated to him/her.
D. Use a different project leader to prevent problems later in the project.
30. A major negotiation with a potential subcontractor is scheduled for tomorrow
when you discover there is a good chance the project will be cancelled.
What should you do?
A. Do not spend too much time preparing for the negotiations.
B. Cut the negotiations short.
C. Only negotiate major items.
D. Postpone the negotiations.
31. One of your project resources is three days late with a report. Five minutes
before the meeting where the topic of the report is to be discussed, they hand
you the report. You notice some serious errors in it. What should you do?
A. Cancel the meeting and reschedule when the report is fixed.
B. Go to the meeting and tell the other attendees there are errors in the
report.
C. Ask the employee to do the presentation and remain silent as the
other attendees find the errors.
D. Cancel the meeting and rewrite the report yourself.
32. You are leading a project that is part of a large, critical program. At a high-
level status meeting, you hear another project manager report their project is
on schedule even though you remember several deliverables from their
project arrived late to you and negatively impacted your schedule. What
should you do?
A. Meet with the program manager.
B. Develop a risk control plan.
C. Discuss the issue with your boss.
D. Meet with the other project manager.
33. A large, complex construction project in a foreign country requires
coordination to move needed equipment through crowded streets. To ensure
the equipment is transported successfully, your contact in that country
informs you that you will have to pay the local police a fee for coordinating
traffic. What should you do?
A. Do not pay the fee because it is a bribe.
B. Eliminate the work.
C. Pay the fee.
D. Do not pay the fee unless it is part of the project estimate.
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34. You are in the fifth year as a project manager for your organization and have
successfully managed over a dozen projects. Your manager has consistently
asked you to cut your budgets by ten percent after you have given it to them.
You have been assigned to lead a new project with more than twenty major
stakeholders and the scope is somewhat vague. This project has a high
priority and is very visible throughout the organization. Which of the
following is the best thing to do?
A. Reduce the estimates prior to delivery to the sponsor and note the
changes in the risk register.
B. Provide accurate estimates for the project costs and be able to support
them.
C. Meet with the project team and identify where you can cut ten
percent of the costs.
D. Re-plan the project to exceed the stakeholders’ expectations.
35. You are in the middle of a large project for your organization when you
discover that an external contractor your project is using is having significant
issues with its employees due to a labor dispute. There are several other
projects within your organization also using this contractor. What should
you do?
A. Cancel the contract with the contractor.
B. Inform the other project managers about the labor dispute.
C. Contact the contractor and advise them you will cancel the contract
on your project unless the labor dispute is settled.
D. Attempt to keep the contractor’s resources on your project.
36. You are finalizing the monthly project status report due to the project sponsor
when you discover several of your resources have not been reporting their
actual hours spent on project activities. This has resulted in skewed project
statistics. What is the most appropriate action to take?
A. Discuss the impacts of these actions with team members.
B. Continue reporting the information as presented to you.
C. Report the ream member’s actions to their functional managers.
D. Provide accurate and truthful representations in all project reports.

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37. Five interns from another country are working on your project. You have
arranged for the entire project team to participate in some games as team-
building activities to help improve team dynamics. At the event the interns
refuse to participate, claiming the games involve unacceptable behavior in
their country and they would feel uncomfortable participating. What should
you do?
A. Tell the students they need to become familiar with how things are
done in their host country.
B. Excuse the students from playing the game and arrange to discuss
alternative team- building activities in which they would feel more
comfortable participating.
C. Report the interns to their functional manager and request they be
removed from the project so their attitude does not negatively impact
the project.
D. Tell the students they are excused from the games and to not attend
any team-building activities in the future.

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Exercise 24 — Professional Responsibility Answers

1. Answer A. As a project manager you might run into this situation regularly.
The best thing to do is make sure the sponsor is aware of the situation and
then proceed under the guidance of the project sponsor in accordance with
organizational policies.
2. Answer C. There are many nations in the world where bribery is very
commonplace. According to PMI®, this does not make it acceptable to do.
Even though the activity was done by a contractor with a sub you are still
responsible.
3. Answer B. It is critical that management always has confidence in the
information you provide. As part of this you can never be perceived as
hiding or minimizing anything. Therefore, the correct answer requires you to
notify management immediately with a corrected report and an explanation.
4. Answer D. Being ethical does not require you to give up a great opportunity
such as this. The sponsor wanted to interview you based upon something
they saw on your resume or heard about you. So long as you are honest
about your experience and do not attempt to deceive the sponsor there is no
reason to not attempt to get the job. Maybe the sponsor values something
you possess more than experience leading virtual teams.
5. Answer D. Nothing ever said the right answer would be the easy answer. In
fact, in many cases the right answer is very hard. You professional
responsibility is to make the best recommendation you can regardless of self
interest.
6. Answer A. In this case, you should pay the fee because it is a proper
payment to a government organization.
7. Answer C. Sometimes the simple answer is best. In this case, you are not
the project manager. It is your job to provide the deliverables as the project
has already been approved by senior management. You must do this first.
After that you can try to change people’s mind about the project.
8. Answer D. As a project manager, it is critical that you value people’s time.
As part of this you must make sure documents are properly reviewed and
corrected before going forward.
9. Answer A. This is only a potential issue. The first thing you need to do is
find out if it is a real issue. Proper resolution of this issue requires good
communication. You need to go talk to the resource.
10. Answer B. As a project manager, you are ethically bound to provide
accurate estimates and supporting detail. You should not change numbers
simply to please management as you are very unlikely to hit those revised
numbers.

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11. Answer C. You should first confront the other project manager in private to
get an explanation rather that creating a public issue without justification.
12. Answer A. You are ethically obligated to not waste your contractor’s time
and be above board with information you have. Therefore, you should at the
least postpone the negotiations.
13. Answer D. You already have expectations that are being missed. The best
answer would be to evaluate the situation and bring alternatives to the
sponsor. However, that is not one of the choices. The best of the given
choices is to inform the sponsor.
14. Answer B. Remember, you always develop options before you do anything
else. Only then do you go to management. In this case developing
alternatives is one of the choices so take it!
15. Answer A. Contract incentives are provided as a means to achieve goals that
are beyond the requirements. Missing an incentive does not mean you are
not delivering. The best option is to continue the project as planned.
16. Answer C. In this case, your first responsibility is to ensure the product you
develop meets the customer’s needs. The contract puts you at odds with this
goal. You could easily meet the contract specifications and receive the bonus
without meeting the customer’s real needs. Therefore, you should inform
them of the situation and negotiate a mutually agreeable solution.
17. Answer B Many companies are willing to share their information for
academic purposes so long as they receive derivative works. However, you
may only disclose such information with the client’s permission.
18. Answer C. As a project manager, unless previously agreed upon, it is not
your role to determine the legality of any organizational procedure as you
likely lack the specific training required.
19. Answer C. Your first responsibility is to do what is in the best interest of
your company. Therefore, you should inform the other project managers and
work together with the contractor to resolve the situation.
20. Answer A. This question is very tricky and requires you to read the choices
carefully. The objective is to pick the choice that has the highest probability
of preventing the problem situation, a meeting with a poorly prepared report.
The only option that does that is postponing the meeting more quickly. All
the other choices might solve the problem, but there are no guarantees.
21. Answer B. Reporting the lesser quality level and trying to find an answer is
the closest solution to a perfect world. All other choices fail to meet your
ethical obligations.
22. Answer B. Hopefully, this was an easy one for you, at least in theory. You
are required to provide information about any unethical situation to which
you are privy.

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23. Answer C. This is a trick question of sorts. The only answer that does not
only involve you is asking the team to describe a unique aspect of their
culture. All the others only address your issues.
24. Answer B. The only answer that attempts to resolve the issue without
escalation is discussing the impacts of these actions with the resources. Only
if this does not work should you go to the resource managers.
25. Answer D. Management has selected the firm. Your primary driver is
making sure the firm has the ability to actually do the specified work.
26. Answer B. Team building is critical to any team’s success. However, it is
also important that a project manager is sensitive to cultural differences. The
only option that takes this into account is excusing the team members from
playing the activity and arranging to discuss acceptable alternatives.
27. Answer D. Ignoring the actions of the previous project manager is not an
option regardless of how well the project is doing. The only viable answer is
to tell your manager immediately.
28. Answer B. It is always important to point out key deficiencies. However, it
is also reasonable for the project manager to explain why they believe they
are a good fit. So long as the project manager has provided all the pertinent
facts to the sponsor they have done their job.
29. Answer A. This is one of those questions where you have to ask, what
would you do first? The answer is find out if hiring family members is a
common practice.
30. Answer D. Postponing the negotiations is the most ethical choice and shows
good faith. Spending time negotiating at this time would be a waste.
31. Answer A. Allowing an employee to deliver an inaccurate report, even one
they create is a public condemnation of the employee and should never be
done. It is best to privately discuss the issue with the employee after
cancelling the meeting and give them the opportunity to correct the report.
32. Answer D. This question requires you to go back to your conflict resolution
methods. The best way to resolve a conflict is through confrontation or
problem solving. This means meeting with the other project manager to
resolve the issue before going to anyone else.
33. Answer C. This is a fee paid to a governmental organization for services
and is not a bribe. Do not get tricked because a bribe is listed in the possible
answers.
34. Answer B. If your estimates are accurate you are obligated to stick to them.

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35. Answer B. There is nothing in the question which indicates the dispute has
caused a problem on the project, so there is no need to cancel the contract.
Additionally, cancelling the contract requires following the termination
procedures outlined in the contract and cannot be done unilaterally. Keeping
all the resources yourself puts your interests above the organizations. The
only answer which is viable is to inform the other project managers.
36. Answer D. A project manager should always report truthfully.
37. Answer B. It is important to remember that a professional project manager
always respects cultural differences. Respecting differences requires the
project manager to allow the interns to not participate, but also find other
activities they can do so as to not demean them.

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Course Presentation 549

PMP 2018 Exam Prep

Looking Glass Development, LLC
(303) 663‐5402 / (888) 338‐7447
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Course Structure
Application & Exam
Types of Questions
PM Basics
Ten Knowledge Areas
Professional Responsibility
Practice Exams

v. 10.0 - © Copyright and all rights reserved –

1/31/2018
2017 Looking Glass Development, LLC. 2

The Application & Exam

Looking Glass Development, LLC
(303) 663‐5402 / (888) 338‐7447
4610 S. Ulster St. #150 Denver, CO 80237
[email protected]

PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 550

PMP Application & Exam
Extra Reading
 Project and Program Risk Management, R. Max Wideman, Editor
 Quality Management for Projects and Programs, Lewis R. Ireland
 Doing Business Internationally, Walker, Walker and Shmitz
 The Cultural Dimensions of International Business, Gary P. Ferraro
 Global Literacies, Robert Rosen
 How to Lead Work Teams, Fran Rees
 Principles of Project Management, PMI®
 Project Management A Systems Approach, Harold Kerzner
 Human Resource Skills for the Project Manager, Vijay K. Verma
 Earned Value Practice Standard, PMI® 
 The Scrum Guide™ , Jeff Sutherland and Ken Schwaber

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PMP Application & Exam
The Acme Widget Factory
 You are a project manager for a large multinational. 
 You are managing 100 resources located in five different 
time zones on two different continents.  
 A matrixed organization and none of the resources are 
dedicated to only your project or report directly to you.
Your Challenges
Significant Scope Change Problems with Product Quality
Schedule & Cost Overruns Resource Burnout
Problems with Resource  Many Don’t Like Your Processes
Constraints
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PMP Application & Exam
What do the letters PMP mean?
• Project Management Professional.

What are the benefits of being a PMP?
• Higher income potential.
• Shows knowledge of international standards.
• Is required by a growing number of employers.

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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 551

PMP Application & Exam
Work
How Do I Become A PMP?
Experience
Application Application Applicant
Pass Exam
Submission Completeness Payment
(1 year)
90 Days Review Process
Contact
Hours

Receive
Certification

PMP

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PMP Application 
Applying online is the fastest way
http://www.pmi.org/certification/project‐
management‐professional‐pmp.aspx
Mailing Address
PMI Certification Department
Fourteen Campus Boulevard
Newtown Square, PA. 19073

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PMP Exam
Percentage of 
Domain Questions
Initiation 13%
Planning 24%
Executing 31%
Monitoring & Controlling 25%
Closing 7%
Total Number of Scored Questions 175
Total Number of Unscored Questions 25
Total Questions on Exam 200

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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 552

PMP Exam
Task Initiating – 13%
Task 1 Perform project assessment based upon available information, lessons 
learned from previous projects, & meetings with relevant stakeholders in 
order to support the evaluation of the feasibility of new products or services 
within the given assumptions and/or constraints.
Task 2 Identify key deliverables based on the business requirements in order to 
manage customer expectations & direct the achievement of project goals.
Task 3 Perform stakeholder analysis using appropriate tools & techniques in order to 
align expectations & gain support for the project.
Task 4 Identify high level risks, assumptions, & constraints based on the current 
environment, organizational factors, historical data, & expert judgment, in 
order to propose an implementation strategy.
Task 5 Participate in the development of the project charter by compiling & analyzing 
gathered information in order to ensure project stakeholders are in agreement 
on its elements.

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PMP Exam

Task Initiating – 13%

Task 6 Obtain project charter approval from the sponsor, in order to formalize the 
authority assigned to the project manager & gain commitment & acceptance 
for the project.
Task 7 Conduct benefit analysis with relevant stakeholders to validate project 
alignment with organizational strategy & expected business value.
Task 8 Inform stakeholders of the approved project charter to ensure common 
understanding of the key deliverables, milestones & their roles & 
responsibilities.

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PMP Exam
Task Planning – 24%
Task 1 Review & assess detailed project requirements, constraints, & assumptions 
with stakeholders based on the project charter, lessons learned, & by using 
requirements gathering techniques in order to establish detailed project 
deliverables.
Task 2 Develop a scope management plan, based on the approved project scope & 
using scope management techniques, in order to define, maintain, & manage 
the scope of the project.
Task 3 Develop the cost management plan based on the project scope, schedule, 
resources, approved project charter & other information, using estimating 
techniques, in order to manage project costs.
Task 4 Develop the project schedule based on the approved project deliverables & 
milestones, scope & resource management plans in order to manage timely 
completion of the project.

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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 553

PMP Exam
Task Planning – 24%
Task 5 Develop the human resource management plan by defining the roles & 
responsibilities of the project team members in order to create a project 
organizational structure & provide guidance regarding how resources will be 
assigned & managed.
Task 6 Develop the communications management plan based on the project 
organizational structure & stakeholder requirements, in to define & manage 
the flow of project information.
Task 7 Develop the procurement management plan based on the project scope, 
budget, & schedule, in order to ensure that the required project resources will 
be available.
Task 8 Develop the quality management plan & define the quality standards for the 
project and its products, based on the project scope, risks & requirements, in 
order to prevent the occurrence of defects & control the cost of quality.

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PMP Exam
Task Planning – 24%
Task 9 Develop the change management plan by defining how changes will be 
addressed & controlled in order to track & manage change.
Task 10 Plan for risk management by developing a risk management plan; identifying, 
analyzing, & prioritizing project risk; creating the risk register; & defining risk 
response strategies in order to manage uncertainty & opportunity throughout 
the project life cycle.
Task 11 Present the project management plan to the relevant stakeholders according 
to applicable policies & procedures in order to obtain approval to proceed 
with project execution.
Task 12 Conduct kick‐off meeting communicating the start of the project, key 
milestones, & other relevant information in order to inform & engage 
stakeholders & gain commitment.
Task 13 Develop the stakeholder management plan by analyzing needs, interests, & 
potential impact in order to effectively manage stakeholders’ expectations & 
engage them in project decisions.
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PMP Exam
Task Executing – 31%
Task 1 Acquire & manage project resources by following the human resource & 
procurement management plans in order to meet project requirements.
Task 2 Manage task execution based on the project management plan by leading & 
developing the project team in order to achieve project deliverables.
Task 3 Implement the quality management plan using the appropriate tools & 
techniques in order to ensure that work is performed in accordance with 
required quality standards.
Task 4 Implement approved changes & corrective actions by following the change 
management plan in order to meet project requirements.
Task 5 Implement approved actions by following the risk management plan in order 
to minimize the impact of the risks & take advantage of opportunities on the 
project.
Task 6 Manage the flow of information by following the communications plan in 
order to keep stakeholders engaged & informed.
Task 7 Maintain stakeholder relationships by following the stakeholder management 
plan in order to receive continued support & management expectations.
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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 554

PMP Exam
Task Monitoring & Controlling – 25%
Task 1 Measure project performance using appropriate tools & techniques in order 
to identify & quantify any variances & corrective actions.
Task 2 Manage changes to the project by following the change management plan in 
order to ensure that project goals remain aligned with business needs.
Task 3 Verify that project deliverables conform to the quality standards established in 
the quality management plan by using appropriate tools and techniques to 
meet project requirements and business needs. 
Task 4 Monitor & assess risk by determining whether exposure has changed & 
evaluating the effectiveness of response strategies in order to manage the 
impact of risks & opportunities on the project.
Task 5 Review the issue log, update if necessary, & determine corrective actions by 
using appropriate tools & techniques in order to minimize the impact on the 
project.
Task 6 Capture, analyze, & manage lessons learned, using lessons learned 
management techniques in order to enable continuous improvement.
Task 7 Monitor procurement activities according to the procurement plan in order to 
verify compliance with project objectives.
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PMP Exam
Task Closing – 7%
Task 1 Obtain final acceptance of the project deliverables from relevant stakeholders 
in order to confirm that project scope & deliverables were achieved.
Task 2 Transfer the ownership of deliverables to the assigned stakeholders in 
accordance with the project plan in order to facilitate project closure.
Task 3 Obtain financial, legal, & administrative closure using generally accepted 
practices & policies in order to communicate formal project closure & ensure 
transfer of liability.
Task 4 Prepare & share the final project report according to the communications 
management plan in order to document & convey project performance & 
assist in project evaluation.

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PMP Exam
Task Closing – 7%
Task 5 Collate lessons learned that were documented throughout the project & 
conduct a comprehensive project review in order to update the organization’s 
knowledge base.
Task 6 Archive project documents & materials using generally accepted practices in 
order to comply with statutory requirements & for potential use in future 
projects & audits.
Task 7 Obtain feedback from relevant stakeholders using appropriate tools & 
Techniques & based on the stakeholder management plan in order to evaluate 
their satisfaction.

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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 555

PMP Exam
Must get 61% or better
There is no penalty for wrong answers
Fees:
PMI members pay $405
Non‐members pay $555
Each applicant has one (1) 
year to take exam
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PMP Exam
 The exam is NOT based on the PMBOK Guide®.
 The exam requires more than memorization.

 Almost half of the exam requires you to identify what 
you would do in a given situation.

 The exam emphasizes the five (5) process groups, ten 
(10) knowledge areas and 47 processes.

 Exam requires you to answer the questions from 
PMI’s perspective based on the RDS.
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PMP Exam
 Rarely will the answer be a direct quote from the 
PMBOK Guide.
 Questions can be series based, i.e. you must answer 
the first question correctly to answer the next three (3) 
or four (4) questions.
 A small percentage of the questions will be based on 
the inputs and outputs from the PMBOK Guide.
 Earned Value, Critical Chain, PERT, EMV, and CPM will 
almost certainly be on the test.
 Approximately 10%‐15% of the exam will require the 
use of other formulas.
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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 556

PMP Exam
Test‐Taking Strategies
 Predict the answer.
 Your first instinct.
 Read the whole question.
 Look for wrong answers.
 Don’t overanalyze.
 Key words.
 Confusing answer choices.
 True statements.
 No pattern.
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Types of Exam Questions

Looking Glass Development, LLC
(303) 663‐5402 / (888) 338‐7447
4610 S. Ulster St. #150 Denver, CO 80237
[email protected]

Types of Questions
Two Right Answers 
 Remember, what would you do first.

Made up Terms
 Failing to know the key terms & 
acronyms will = failure.

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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 557

Types of Questions
Two Right Answers
During your daily standup, a teammate reports that
they are struggling with a critical task that is causing
the project backlog item to be delayed. What should
you do?
A. Immediately inform the sponsor and key stakeholders.
B. Evaluate alternatives with the team.
C. Trust the team to handle it.
D. Keep pushing ahead as there is nothing you can do.

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Types of Questions
Situational Questions 
Molly works for a large multi-national organization that
manufactures steel as a project coordinator. Her organization
is matrixed. She is responsible for three different projects,
each with teams of ten to 20 team members who are also
assigned to multiple projects. Yesterday she received an
email from the vice president of stamped products
complaining that one of her three projects was failing to meet
the customer’s expectations, and they had sent notification of
their intent to cancel the contract. What is the most likely
cause of this problem?
A. The customers in question were not involved early enough in the
process.
B. Customer sign-off was not obtained for the scope statement.
C. Scope definition happened too late in the process.
D. The customer did not read their e-mail.

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Types of Questions
Extraneous Information 
You are the project coordinator for a textile 
manufacturing company that is based in Southeast Asia.  
Your project’s original budget was $648,000 USD, and 
you have already spent $462,000 USD.  You currently 
have a CPI of 0.86 and an SPI of 0.62.  Your project has 
an EV of US $399,000 and an ETC of $288,316.  You are 
more than halfway through your project, and have a 
TCPI of 0.86.  Your sponsor has just requested a major 
shift in project scope; what should you do?
A. Try to convince the sponsor to change their mind.
B. Agree to implement the changes immediately.
C. Evaluate the changes for impacts to the cost and schedule.
D. Stop the project until the issue is resolved.

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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 558

Types of Questions
Understanding vs. Memorization 
At lunch you are sitting with a new employee within the 
organization.  They are an experienced scrum master and 
commenting about how frustrated they are with the organizational 
requirement to use a Work Breakdown Structures for their 
projects especially early in the process when requirements are so 
poorly defined.  You comment that a properly done WBS is similar 
to an FBS and an important tool for project success even early in 
the project. Which of the following statements best justifies this 
statement?
A. The WBS is a great communication tool.
B. A well formed WBS provides a strong visualization of the product of 
the project across its phases.
C. A well formed WBS is similar to a FBS allowing for task assignments. 
D. The WBS allows for progressive elaboration using placeholder work 
packages.
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Types of Questions
Questions With Invented Terms
Your boss wants to know what cost performance measures your 
team must achieve to complete the project within the original 
budget. Which of the following do you provide to her?
A. The Cost Performance Index
B. The To‐Complete Performance Index
C. The Remaining Budget Ratio
D. The Estimate For Completion

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Types of Questions
Answers With More than One 
Component
According to the PMBOK® Guide, how stringently must a project 
manager ensure that all the defined process interactions occur?
A. Interactions within the planning process are dependent on the nature 
of the project, and so there is a great deal of flexibility.
B. Interactions within the planning process are not dependent on the 
nature of the project and are only depend on the PMBOK® Guide, so 
there is not significant flexibility.
C. Interactions within the planning process group are not dependent on 
the nature of the project but there is significant flexibility based on the 
definitions in the PMBOK® Guide.
D. None of the above is true. 

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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 559

Recurring Themes
PMI’isms
 There is a basic assumption that you keep historical 
records for all your projects.
 You must understand the process of project 
management (what to do first, second, etc.).
 You must not only understand the topics, but also why 
you should care about them.
 Everything should be coordinated with the 
stakeholders of a project and expectations managed.

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Recurring Themes
PMI’isms
 All roles and responsibilities must be clearly defined.
 A project plan is not a Gantt chart.
 A WBS is not an org chart but is a wonderful and key 
element of successful project management.
 Project managers are awesome and are very skilled.
 PMI does not support gold plating (adding extra 
functionality).
 Expert judgment and bottoms up is preferred.
 Environmental factors are influencing the project.
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The Exam – Why People Fail
 Belief that they can pass the test from their 
experience (not studying).
 A lack of PM experience.
 Failure to read the questions.
 Failure to read all of the choices.
 Not trusting their knowledge.
 Nervousness.

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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 560

Organizations and 
Project Management

Looking Glass Development, LLC
(303) 663‐5402 / (888) 338‐7447
4610 S. Ulster St. #150 Denver, CO 80237
[email protected]

Organizations
Differentiation vs. Integration
The need for specialized areas of
expertise (Production,
Marketing, Finance, etc.). The
level of differentiation
hinges on the needs of the
organization.

The need for coordinated and

cross-functional efforts to
accomplish organizational tasks.
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Organizations
Organic or Simple
Small, startup organizations.
Every member of the team has multiple roles 
and responsibilities.
No one in the organization has a project 
management title.  
The project managed by the owner with no 
administrative support.
Is the weakest organizational structure. 
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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 561

Organizations
A Functional Organization
Project
Chief Executive Coordinator

Accounting Dept. Sales Dept. Marketing Dept. Engineering Dept.

Employee 1 Employee 4 Employee 7 Employee 10

Employee 2 Employee 5 Employee 8 Employee 11

Employee 3 Employee 6 Employee 9 Employee 12

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Organizations
Potential Advantages of a Functional 
Organization
 Clear reporting relationships.
 Highly specialized expertise.
 Homogeneous groups.
 Drive for technical excellence.
 Clear career path.
 Creates high quality organizational knowledge within 
the functional area.
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Organizations
Potential Issues with a Functional 
Organization
 Conflicting priorities from overlapping projects.
 Project boundaries limited to discipline.
 Barrier to customer influence & satisfaction.
 Employee development opportunities limited.
 Project Manager is dependent on personal influence.
 Hierarchical decision and communication processes.
 Overwork technical issues vs. build to a standard.
 Fosters part‐time roles.
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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 562

Organizations
A Projectized Organization (PBO)
Chief Executive
Or Program Mgr.

Project 1 Project 2 Project 3

Accounting Staff Accounting Staff Accounting Staff

Sales Staff Sales Staff Sales Staff

Marketing Staff Marketing Staff Marketing Staff

Engineering Staff Engineering Staff Engineering Staff

Project Manager Project Manager Project Manager

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Organizations
Potential Advantages of a Projectized
Organization
 Strong project manager role.
 Full‐time administrative staff clear accountability.
 Fosters collocation.
 Improves focus.
 Cost & performance tracking of projects.
 Decision‐making based on overall project view.
 Customer relationships tied to various projects
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Organizations
Potential Issues with a Projectized 
Organization
 Reduction of employee’s professional identity.
 Reduced focus on technical competence.
 Leadership by the non‐technically skilled.
 Focus on administrative work vs. technical work.
 De‐valuing of functional managers.
 Process vs. deliverable emphasis.
 Creates redundancy of efforts.
 Project end can be traumatic event.
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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 563

Organizations
The Matrix Organization
Are a blend of Functional and Projectized
organizations.
They are described as WEAK if they more 
closely align to Functional Organizations.
They are described as STRONG if they more 
closely align to Projectized Organizations.

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Organizations
A Weak Matrix Organization
Chief Executive

Accounting Dept. Sales Dept. Marketing Dept. Engineering Dept.

Employee 1 Employee 4 Employee 7 Employee 10

Employee 2 Employee 5 Employee 8 Employee 11

Employee 3 Employee 6 Employee 9 Employee 12

Project
Coordinator Resources Assigned to a Given Project

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Organizations
A Balanced Matrix Organization
Chief Executive

Accounting Dept. Sales Dept. Marketing Dept. Engineering Dept.

Employee 1 Employee 4 Employee 7 Employee 10

Employee 2 Employee 5 Employee 8 Employee 11

Employee 3 Employee 6 Employee 9 Project Mgr

Resources Assigned to a Given Project

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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 564

Organizations
A Strong Matrix Organization
Chief Executive

Accounting Sales Engineering Mgr of Project

Dept. Dept. Dept. Managers (PMO)

Employee 1 Employee 4 Employee 7 Project Mgr 1

Employee 2 Employee 5 Employee 8 Project Mgr 2

Employee 3 Employee 6 Employee 9 Project Mgr 3

Resources Assigned to a Given Project

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Organizations
Potential Advantages of a Matrix 
Organization
 Visibility to project objectives.
 Improved control of resources by project managers.
 Rapid response to contingencies.
 Greater support from functional managers.
 Coordination of efforts across organization.
 Project end is not a traumatic event.
 Strong technical base.
 More effective dissemination of information.
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Organizations
Potential Issues with a Matrix 
Organization
 Project personnel report to more than one boss.
 Complex to monitor and control.
 Conflicts with resource allocation and project 
priorities.
 Potential for duplication of effort with 
“independent” projects.
 Power struggles and competition for scarce 
resources.

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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 565

Organizations
Organizational Structures
Weak  Balanced  Strong 
Matrix Matrix Matrix

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The Basics of Project 
Management

Looking Glass Development, LLC
(303) 663‐5402 / (888) 338‐7447
4610 S. Ulster St. #150 Denver, CO 80237
[email protected]

The Basics of PM
What is Project Management?
 The management of a temporary endeavor 
undertaken to create a unique product or service.

 It requires the project team to deliver the agreed 
upon service or product with the agreed upon 
functionality on time and on budget with the agreed 
upon level of quality.

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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 566

The Basics of PM
Projects Operations
 Have unique charter & goals  Usually has semi‐permanent 
 Might have unique  charter
organization  Semi‐permanent organization
 Develops a unique product   Maintains an existing set of 
or service practices
 Defined start & end dates  Provides a standard product 
 Mostly heterogeneous  or service (e.g. an assembly 
teams line)
 Are continuous

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The Basics of PM
A program is a group of related projects 
managed in a coordinated way to obtain 
benefits and control.

A portfolio is a grouping of related and 
unrelated projects and programs managed & 
grouped for visibility and control purposes.

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Organizational Project Management
Projects Programs Portfolios
Projects have defined objectives.   Programs have a larger scope and  Portfolios have an organizational scope 
Scope Scope is progressively elaborated  provide more significant benefits. that changes with the strategic 
throughout the project lifecycle. objectives or the organization
Project managers expect change  Program managers expect change  Portfolio managers continuously 
& implement processes to keep  from both inside & outside the  monitor changes in the broader internal 
Change change managed & controlled. program & are prepared to manage to  & external environment.
it.
Project managers progressively  Program managers develop the  Portfolio managers create & maintain 
elaborate high‐level information  overall program plan & create high‐ necessary processes & communication 
Planning into detailed plans throughout the  level plans to guide detailed planning  relative to the aggregate portfolio.
project lifecycle. at the component level.
Project managers manage the  Program managers manage the  Portfolio managers may manage or 
project team to meet the project  program staff & the project managers;  coordinate portfolio management staff, 
Management objectives. they provide vision & overall  or program and project staff that may 
leadership. have reporting responsibilities into the 
aggregate portfolio,
Success is measured by product & Success is measured by the degree to  Success is measured in terms of the 
project quality, timeliness, budget  which the program satisfies the needs  aggregate investment performance & 
Success compliance, & degree of  & benefits for which it was  benefit realization of the portfolio.
customer satisfaction. undertaken.
Project managers monitor &  Program managers monitor the  Portfolio managers monitor strategic 
control the work of producing the  progress of program components to  changes & aggregate resource 
Monitoring products, services, or results that  ensure the overall goals, schedules,  allocation, performance results, & risk of 
the project was undertaken to  budget, & benefits of the program will  the portfolio,
produce. be met.

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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 567

The Basics of PM
Key Terms
Project Management Office (PMO) —
Centralizes the management of projects. 
Typical 3 structures:
 Supportive – Providing a consultative role by 
providing templates, best practices, training, access 
to information, & lessons learned.
 Controlling – Provide support & require 
compliance.
 Directive – Take control of the projects by directly 
managing the projects.
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The Basics of PM
Key Terms
Management by Objectives (MBO) — Requires all 
processes, initiatives and operations to be tracked 
against specific, defined objectives. MBO only works 
if management strongly supports it.  MBO has three 
basic steps:
– Establish unambiguous and realistic objectives.
– Regularly evaluate if the objectives are being met.
– Implement corrective action.
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The Basics of PM
Key Terms
 Work Performance Data — The raw observations & 
measurements identified during activities performed 
to carry out project work: % work physically 
completed, start & finish dates & technical measures.
 Work Performance Information – The performance 
data collected from controlling processes: status of 
deliverables, status of change requests, forecasted 
ETC.
 Work Performance Reports – The physical or 
electronic representation of work performance 
information.
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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 568

The Basics of PM
Key Terms
Project Life Cycle — A series of phases that a 
project passes through from its initiation to 
its closure.  It provides the basic framework 
for managing the project.
Project Phases – Represent a collection of 
logically related project activities that 
culminate in the completion of one or more 
deliverables.
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The Basics of PM
Key Terms – Life Cycles
Predictive — Also known as fully plan driven, are 
ones where the scope, time & cost are 
determined as early as possible – Waterfall.
Iterative & Incremental – Project phases 
intentionally repeat one or more project activities 
as the team’s understanding increases.
Adaptive – Change driven or agile are intended to 
respond to high levels of change & stakeholder 
involvement with fixed time & cost.
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The Basics of PM
Key Terms
 Constraints — Represent factors that limit options of the 
project manager and project team.  
• Common constraints include time, budget, requirements, 
resources and/or risks.
• Management’s responsibility to set the priority of each constraint.
• Project manager and project team’s responsibility to analyze the 
impacts of changes against the project constraints.  

 Organizational Project Management Maturity Model 
(OPM3) — Is PMI’s model to help organizations 
determine their level of project management maturity.
 Stakeholders & Stakeholder Management —
Stakeholders represent anyone with a vested interest in 
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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 569

The Basics of PM
It’s all about managing
Scope
six (6) things. It’s simple
really…
Risk Quality

Resources Schedule

Budget

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The Basics of PM

Plan Do
Monitoring &
Controlling Processes
Planning Processes

Initiating Closing
Processes Processes

Executing Processes

Act Check

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The Basics of PM

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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 570

The Basics of PM
Project
Boundaries
Monitoring &
Controlling Processes Project End
Deliverables Users
Planning Processes

Project Project Initiating Closing

Initiator/ Inputs Processes Processes
Sponsor

Executing Processes Project Process

Records Assets
*Source: PMBOK Guide 2013 p.54

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The Basics of PM
Linear
Well Known Risks,
Sequential,
Limited Scope Change
Waterfall / SDLC
CMM
DOD- STD-2167A
+MIL-STD-1521B

MIL-STD-498

Low Formality High Formality

Little Documentation DSDM Spiral
Well-Documented,
Limited Process Adaptive Dev RUP RUP RUP
Rigid Process
AUP
EssUP Significant Number of Steps
Crystal Lite
XP CMMI
FDD
Scrum
Iterative
Code / Fix
Potential for Unknown Risks
Significant Scope Change & Feedback
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The Basics of PM
The Big 3 Life Cycles

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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 571

The Basics of PM
Keys to the Predictive Waterfall Model
 The Waterfall Model offers the most number of 
standard decision gates.

 Examples include:
o Conceptual Design Review
o Requirements Review
o Preliminary Design Review
o Critical Design Review

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The Basics of PM
The Basic Predictive Model
Analysis

Design

Development

Testing

Deployment
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The Basics of PM
Keys to the Predictive Model
 A waterfall model offers the easiest departmentalization and 
managerial control.
 A waterfall model forces the team to completely define all 
requirements before proceeding to the next phase.  This is 
also its biggest disadvantage.
 The waterfall model has strong emphasis on documentation 
and the development of source code.
 The waterfall model provides a very structured and 
disciplined approach to development.  This high degree of 
structure may also be seen as a disadvantage by many.
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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 572

The Basics of PM
Keys Challenges to the Predictive Model
 Real projects rarely follow the sequential flow of 
the waterfall model.

 At the beginning of a project requirements can 
often be uncertain.

 Developing in a waterfall model can be a long 
process without yielding any results until the very 
end.
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The Basics of PM
The Iterative Life Cycles

2.Evaluate 1. Determine
Alternatives Objectives
& Prototypes Requirements,
Alternatives, &
Constraints

3. Determine Next 4. Plan Next Level

Level

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The Basics of PM
Advantages of the Iterative Model
 The spiral model is evolutionary.

 The spiral model provides strong focus on project 
risk.

 Prototypes allow for rapid evaluation.

 Can incorporate other models within iterations as 
special cases.

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Course Presentation 573

The Basics of PM
Challenges of the Iterative Model
 Team must have strong risk assessment expertise.

 Potentially less ability to control costs and schedule 
overruns.

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The Basics of PM
Prototyping
 Prototyping assumes it is often difficult to 
know all the requirements at the beginning of 
the project.

 Prototyping requires the developer to build a 
simplified version of the proposed system and 
present it to the customer as part of the 
development process.

 The prototype should never be deployed!

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The Basics of PM
Reasons to Prototype
 Prototypes can be used to complete 
requirements analysis.
 Prototypes can account for design 
uncertainty.
 Prototypes can allow experimentation 
and comparison of multiple solutions.

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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 574

The Basics of PM
Dangers of Prototyping
 False Expectations – “the system is now 
complete”.
 Increased Expense – must develop 
prototype and production system.
 Poorly Designed Systems – Prototyping 
focuses on rapid development which 
can lead to heavy layering and a failure 
to make global considerations.

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The Basics of PM
Managing WIP
Deliverable  1  In Option 1 the best 
Option 1 A A resource for the 
deliverable attempts 
Option 2 A C A
to do each task for the 
Deliverable  2 feature and nothing 
Option 1 B B gets delivered. 
Option 2 B B C
 In Option 2 resourcing 
Deliverable 3
is applied based upon 
Option 1 C C availability and two 
Option 2 features are delivered. 
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The Basics of PM
 Based on industrial process theory. 
– Self‐organization 
– Emergence 
 Defined process control vs. empirical process 
control.
– Defined Processes ‐ Repeatable processes such as in 
manufacturing. Leads to commoditization. In projects 
often leads to rework. 
– Empirical Processes ‐ Complex processes where it is 
difficult to have consistent processes. Focuses on 3 
keys.

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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 575

The Basics of PM
Foundation
 Visibility – The aspects of the process that affect 
the outcome must be visible to those controlling 
the process & what is seen must be true. 
 Inspection – The various aspects of the process 
must be examined frequently enough that 
unacceptable variances in the process can be 
detected. 
 Adaptation – If one or more of the processes are 
determined out of control the processes change. 
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The Basics of PM
The Scrum Roles
 Product Owner – Responsible for representing 
interests of all stakeholders, obtaining funding, 
defining initial requirements, ROI, and objectives 
(Product Backlog). 
 The Team – Develops the functionality. Is self‐
managing, self‐organizing, and cross functional. 
 Scrum Master – Responsible for the Scrum process, 
teaching Scrum to everyone, implementing Scrum so 
it fits with culture, and that everyone follows Scrum 
rules & practices. 
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The Basics of PM
Scrum
2 – 6 Week 
Vision  Sprints  Daily Scrum
Every 24 Hours

Sprint Review
Not longer than 4 hours 
Release Planning 

for a 30 day sprint nor 
more than 1 hour to plan. 
Ranked Product 
Backlog 
Sprint end date & 
deliverables do not
change
PO, SM & Team
conduct Sprint  Sprint 
Planning Meeting  Tasks 
Shippable Product
• 1/2 to complete  Sprint
grooming. Backlog 

• 1/
2 to define tasks & 
task estimates in ½ 
or full days. No task 
longer than 1 day. 

Sprint Retrospective 
Not more than 2 hours for 
a 30 day sprint. Not more 
Scrum = 3 Roles + 4 Artifacts + 5 Meetings  than 1 hour to plan. 
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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
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The Basics of PM
A Project Vision
• Serves as a Charter or 
Project Vision
• Required to begin any 
project.
• Never longer than a single 
page.
• Includes 5 key pieces of 
information: Need, 
justification, success 
criteria, prioritization, 
constraints & assumptions.
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Key Scrum Artifacts
Product Backlog
• A prioritized list of items to 
be delivered. 
• Each item is “relatively 
independent” of the others. 
• Backlog may be reprioritized 
at any time. 
• Items = User Stories or PBIs 
• PBI = Product Backlog Item 

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The Basics of PM
PBI To Do In Progress Validate Impeded Done
5 3 2
PBI TaskTask
TaskTask

PBI Task
Task
Task

PBI Task
Task Task
Task
Task

PBI Task
Task

PBI Task Task

Task

Technical 
Debt
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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 577

The Basics of PM
2000 
Burndown Chart
1800 

1600 
Points/Work Remaining

1400 

1200 

1000 

800 

600 

400 

200

0 
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39

Time
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The Basics of PM
Sprint Planning Meeting
PO speak to the sprint goal.
Acceptance criteria.
Team forecasts number of stories.
Team breaks PBIs into tasks.
Estimate tasks:  0.5 / 1.
Build sprint burndown and task board.

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The Basics of PM
The Daily Scrum
 10 to 15 minute meeting for team to answer 3 
questions.
 Stand up means STAND UP! 
 Target 10 minutes, 15 max. 
 Same time every day & don’t miss a day. 
 Stand in front of the visual progress artifact. 
 Everybody is present. 
 No typing during the meeting. 
 Concentrate on the 2nd and 3rd questions. 
 Don’t talk to the Scrum Master. Talk to the team. 
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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 578

The Basics of PM
Sprint Review
Summary of sprint by PO.
PO demonstrates every acceptance criteria of 
every story delivered.
Gather feedback from stakeholders and 
incorporate into product backlog.
Update release plan and discuss next step.

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The Basics of PM
Sprint Retrospective
The most important Scrum meeting.
Important to change something in every 
sprint.
Remember: “It’s not a lesson learned until you 
do something about.”
Work on only the 2 most important lessons.

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The Basics of PM
Day 1 Day 2 ‐ X Last Day
Daily Scrum
Plan Retro & Review
Sprint  Work & Backlog  Sprint Review & 
AM Planning Grooming Sprint Retrospective

1. Free Time
Work & Backlog  2. Google 20% Time
PM Work Grooming 3. Personal Time

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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 579

The Basics of PM
PMBOK® Guide Knowledge Areas
Knowledge Areas describe project management 
knowledge and practice in terms of their component 
processes.
 Integration Management  Resource Management
 Scope Management  Communications Management
 Schedule Management  Risk Management
 Cost Management  Procurement Management
 Quality Management  Stakeholder Management

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The Basics of PM
Ten Knowledge Areas Extended
 4 Integration Management 6.1 Plan Schedule Management
 5 Scope Management 6.2 Define Activities
6.3 Sequence Activities
 6 Schedule Management
6.4 Estimate Activity Durations
 7 Cost Management 6.5 Develop Schedule
 8 Quality Management 6.6 Control Schedule
 9 Resources Management
 10 Communications Management
 11 Risk Management
 12 Procurement Management
 13 Stakeholder Management

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The Basics of PM

Inputs Tools & Techniques Outputs

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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 580

The Basics of PM
Ten Knowledge Areas Extended
 4 Integration Management 6.1 Plan Schedule Management
 5 Scope Management 6.2 Define Activities
6.3 Sequence Activities
 6 Schedule Management
6.4 Estimate Activity Durations
 7 Cost Management 6.5 Develop Schedule
 8 Quality Management 6.6 Control Schedule
 9 Resources Management 6.3.1 Inputs
6.3.2 Tools & Techniques
 10 Communications Management 6.3.2.1 Precedence diagramming
 11 Risk Management method (PDM)
6.3.2.2 Dependency determination
 12 Procurement Management and integration

 13 Stakeholder Management 6.3.2.3 Leads and lags

6.3.2.4 Project management
information system
6.3.3 Outputs
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The Basics of PM
The Process Groups & 
Knowledge Areas Combined

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Project Integration Management

Looking Glass Development, LLC
(303) 663‐5402 / (888) 338‐7447
4610 S. Ulster St. #150 Denver, CO 80237
[email protected]

PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 581

Integration Management
Initiating Process Group
The processes and activities needed to 
identify, define, combine, unify and  4. Project Integration
Management

coordinate the various processes and project  4.1
Develop Project
Charter

management activities within the Project 
Management Process Groups. Planning Process Group

4. Project Integration
Management
4.2
Develop Project
Management
Plan

Executing Process Group

Closing Process Group 4. Project Integration Monitoring & Controlling Process Group
Management
4.3
4. Project Integration
Direct 4. Project Integration
Management & Manage Management
Project Work
4.7 4.5 4.6
Close Project 4.4 Monitor & Perform
Or Phase Manage Control Project Integrated
Project Work Change Control
Knowledge

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*Note: Not all process interactions & data flows among the process groups are shown.

Integration Management
4.1 Develop Project Charter
Names the project manager & sponsor.
Explains how the project supports the organizational 
strategy.
Explains the business need & why the need exists.
Defines any constraints and assumptions that exist (this 
includes any deadlines, budget limitations, resource 
limitations, any known risks, and scope must haves).
Defines the project success criteria (it is always 
recommended that success criteria be quantitative in 
nature as subjective success criteria usually leads to 
failure. Initiating Process Group

4. Project Integration
Management

4.1
Develop Project
Charter
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Integration Management
4.1 Develop Project Charter
Inputs Tools & Techniques Outputs
.1 Business documents .1 Expert judgment .1 Project charter
.2 Agreements .2 Data gathering .2 Assumption log 
.3 Enterprise environmental  factors .3 Interpersonal and team 
.4 Organizational process assets skills
.4 Meetings

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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 582

Integration Management
The Business Case
 Benefit Measurement Methods – subjective measures.
 Constrained Optimization Methods – linear, integer, 
dynamic or multi‐objective programming.
 Economic Models
– Payback Period 
– Future Value
– Present Value
– Net Present Value (NPV) 
– Internal Rate of Return (IRR) 
– Benefit / Cost ratio (BCR or BCI)
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Integration Management
The Business Case
Discounting or Present Value – Value today of funds 
available in the future.
PV = FV / (1 + i)n
– If you want $1,000 in three (3) years how much do you 
have to invest today at 8% to receive your $1,000?
– End of Yr. 1 = $1,000 /   (1 + 8%) = $925.93
– End of Yr. 2 = $925.93 / (1 + 8%) = $857.34
– End of Yr. 3 = $857.34 / (1 + 8%) = $793.83

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Integration Management
The Business Case
Net Present Value – Present Value minus 
present cost.

Internal Rate of Return ‐ Average rate of return 
earned over the life of the project.  It is where 
discounted cash flow – up front cost = 0.

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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 583

Integration Management
4.2 Develop Project Management Plan
 The Project Management Plan is a key project 
document that is a collection of the outputs of the 
planning processes of the Planning Process Group.

 Describes which project management processes will 
be used.
 Describes how the project is executed, monitored and 
controlled, and closed. Planning Process Group

4. Project Integration
Management

 Updated throughout the project. 4.2
Develop Project
Management
Plan

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Integration Management
4.2 Develop Project Management Plan
Inputs Tools & Techniques Outputs
.1 Project charter .1 Expert judgment .1 Project management
.2 Outputs from planning .2 Data gathering plan
processes .3 Interpersonal and
.3 Enterprise environmental team skills
factors .4 Meetings
.4 Organizational process
assets

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Integration Management
Project Management Plan Project Documents
1. Scope management plan 1. Activity attributes                          19. Quality control measurements
2. Requirements management plan 2. Activity list                                      20. Quality metrics
3. Schedule management plan 3. Assumption log                              21. Quality report
4. Cost management plan 4. Basis of estimates                          22. Requirements documentation
5. Quality management plan 5. Change log                                      23. Requirements traceability matrix
6. Resource management plan 6. Cost estimates                                24. Resource breakdown structure
7. Communications management plan 7. Cost forecasts                                 25. Resource calendars
8. Risk management plan 8. Duration estimates                        26. Resource requirements 
9. Procurement management plan 9. Issue log                                          27. Risk register
10. Stakeholder engagement plan 10. Lessons learned register             28. Risk report
11. Change management plan 11. Milestone list                                29. Schedule data
12. Configuration management plan 12. Physical resource assignments  30. Schedule forecasts
13. Scope baseline 13. Project calendars                         31. Stakeholder register
14. Schedule baseline 14. Project communications             32. Team charter
15. Cost baseline 15. Project schedule                          33. Test & evaluation documents
16. Performance measurement baseline 16. Project schedule network diagram
17. Project life cycle description 17. Project scope statement
18. Development approach 18. Project team assignments
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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 584

Integration Management
Baselines, Logs & Registers
 Scope baseline — The scope baseline includes the scope 
statement, work breakdown structure (WBS), and WBS 
dictionary.
 Milestone list — The milestone list is a listing of the major, 
defined milestones for the project.
 Resource calendars — A good project manager knows when their 
resources will be available to complete project work and does 
not assume they will simply be there when the schedule says 
they will. 
 Schedule baseline — The schedule baseline represents a 
snapshot or picture of the schedule as promised to the sponsor.  
It is critical that the project manager is always comparing the 
actual delivered results to the scheduled results found in the 
schedule baseline.
 Cost baseline — The cost baseline is the same as the Schedule 
Baseline, except it is focused on the project budget instead of 
the schedule.
 Risk register — The risk register is a critical document for project 
success.  The Risk Register documents all the known potential 
risks, their triggers, categories, owners, and the response 
strategies.  The risk register is discussed extensively in the risk 
management knowledge area.
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Integration Management

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Integration Management
4.3 Direct & Manage Project Work
Project Manager, with project team, directs 
performance and manages interfaces with the 
rest of the organization

Executing Process Group

4. Project Integration
Management
4.3
Direct
& Manage
Project Work

4.4
Manage
Project
Knowledge

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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 585

Integration Management
4.3 Direct & Manage Project Work
Inputs Tools & Techniques Outputs
.1 Project management .1 Expert judgment .1 Deliverables
plan .2 Project management .2 Work performance
.2 Project documents information system data
.3 Approved change .3 Meetings .3 Issue log
requests .4 Change requests
.4 Enterprise .5 Project management
environmental plan updates
factors .6 Project document
.5 Organizational updates
process assets .7 Organizational
process assets
updates

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Integration Management
4.4 Manage Project Knowledge
 This is the process where the team uses existing 
knowledge and also creates new to achieve the 
project’s objectives and contribute to organizational 
learning.
 There are two types of knowledge used in this 
process:
 Explicit – Knowledge that can be readily codified using 
words, pictures, or numbers.
 Tacit – Knowledge that is personal and often difficult to 
express such as beliefs, insights, experience and know‐how.
Executing Process Group

 People can’t be forced to share what 4. Project Integration

Management
4.3

they know. Direct
& Manage
Project Work

4.4
Manage
Project
Knowledge
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Integration Management
4.4 Manage Project Knowledge
Inputs Tools & Techniques Outputs
.1 Project management plan .1 Expert judgment .1 Lessons learned
.2 Project documents .2 Knowledge register
.3 Deliverables management .2 Project management
.4 Enterprise environmental .3 Information plan updates
factors management .3 Organizational
.4 Interpersonal & process assets
.5 Organizational process
team skills updates
assets

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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
 Course Presentation 586

Integration Management
4.5 Monitor & Control Project Work
 Monitoring processes – collect, measure, disseminate, 
assess. 
 Control via corrective actions.
 Compare actual work to plans/baselines.
 Analyze, track, forecast.
 Monitor implemented changes.
Monitoring & Controlling Process Group

4. Project Integration
Management
4.5 4.6
Monitor & Perform
Control Project Integrated
Work Change Control

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Integration Management
4.5 Monitor & Control Project Work
Inputs Tools & Techniques Outputs
.1 Project management plan .1 Expert judgment .1 Work performance
.2 Project documents .2 Data analysis reports
.3 Work performance information .3 Decision making .2 Change requests
.4 Agreements .4 Meetings .3 Project management
plan updates
.5 Enterprise environmental factors
.4 Project document
.6 Organizational process assets updates

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Integration Management
4.6 Perform Integrated Change Control
 Performed from the very beginning to the very end.
 Identify that a change has occurred.
 Influence factors that circumvent the integrated change 
control process.
 Review, approve (or reject), monitor change requests.
 Maintain integrity of the baselines.
 Review and approve all recommended corrective and 
preventive actions. Monitoring & Controlling Process Group

 Assess impact of proposed 
4. Project Integration
Management
4.5 4.6
Monitor & Perform

changes. Control Project

Work
Integrated
Change Control

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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 587

Integration Management
4.6 Perform Integrated Change Control
Inputs Tools & Techniques Outputs
.1 Project management plan .1 Expert judgment .1 Approved change
.2 Project documents .2 Change control tools requests
.3 Work performance reports .3 Data analysis .2 Project management
.4 Decision making plan updates
.4 Change requests
.5 Meetings .3 Project documents
.5 Enterprise environmental factors
updates
.6 Organizational process assets

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Integration Management
4.7 Close Project or Phase
All the activities necessary to finalize project 
activities

Close a phase or the whole project – verify 
project deliverables and coordinate 
acceptance Closing Process Group

4. Project Integration
Management

4.7
Close Project
Or Phase

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Integration Management
4.7 Close Project or Phase
Inputs Tools & Techniques Outputs
.1 Project charter .1 Expert Judgment .1 Project documents
.2 Project management .2 Data analysis updates
plan .3 Meetings .2 Final product,
.3 Project documents service or result
transition
.4 Accepted deliverables
.3 Final report
.5 Business documents
.4 Organizational
.6 Agreements
process assets
.7 Procurement updates
documentation
.8 Organizational process
assets

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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 588

Integration Management
Summary
 Seven (7) processes.
 Role and components of the charter.
 Charter issued by party external to the project.
 Project management plan is collection of other plans –
level of detail depends on the project.
 Change control throughout the project.
 Closure = deliverables AND project records.
 Environmental factors are at play.
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Project Scope Management

Looking Glass Development, LLC
(303) 663‐5402 / (888) 338‐7447
4610 S. Ulster St. #150 Denver, CO 80237
[email protected]

Scope Management
 Scope management is the process of defining what  Planning Process Group
work is required and then making sure all of that  5. Project Scope
Management
5.1
work and only that work is done. (PMBOK Guide p.129) Plan Scope
Management

 No project is ever conducted without a plan. 5.2
Collect
Requirements

 A WBS must be created for all projects.
5.3

 Involve all the project stakeholders in requirements  Define
Scope

 You must obtain approval of the project scope  5.4
Create
WBS

before execution begins.
 Do not ever gold plate the project.  Monitoring and Controlling Process Group

 Scope changes allowed so long as they 
5. Project Scope
Management
5.5
Validate

follow the agreed upon change  Scope

management process.  5.6
Control
Scope

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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 589

Scope Management
The Product vs. Project Scope:
Project Scope –The work that must be 
performed to deliver a product, service or 
result with the specified features and 
functions.  PMBOK Guide 2012 p. 555

Product Scope – The features and functions 
that characterize a product service or result. 
PMBOK Guide 2012 p. 552

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Scope Management
The Scope Management Plan Answers…
 How will you determine the product scope for the 
project?  This includes the specific requirements of the 
product, service, or result.
 How will you balance the needs of all your stakeholders?
 What tools and techniques will the project team 
specifically use?
 Are there enterprise environmental factors and 
organizational process assets that must be accounted for 
or used?
 What will the scope change management process be?
 How will you measure scope performance and adjust to 
variances as needed?
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Scope Management
The Steps in Scope Management
 Determine the product, service, or result 
requirements.  Make sure all the requirements tie back 
to the business need described in the charter.
 Balance the needs of the various stakeholders to 
determine the correct requirements.
 Develop a Work Breakdown Structure according to 
PMI® standards that is focused on being deliverable.
 Verify that the scope that has been specified is being 
accomplished according to the plan.
 Measure the project scope performance and adjust it 
according to the Scope Change Management Plan.
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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 590

Scope Management
How Scope is Measured
Project scope is measured against the project 
management plan.  Did the team finish the 
work they said they would do.  
Product scope is measured against the project 
requirements.

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Scope Management
5.1 Plan Scope Management
 Process of creating a scope management plan 
that documents how the project scope will be 
Planning Process Group
defined, validated & controlled.
5. Project Scope
Management

 It tells everyone how scope will be
5.1
Plan Scope
Management

managed throughout the project. 5.2
Collect
Requirements

5.3
Define
Scope

5.4
Create
WBS

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Scope Management
5.1 Plan Scope Management
Inputs Tools & Techniques Outputs
.1 Project charter .1 Expert judgment .1 Scope management
.2 Project management plan .2 Data analysis plan
.3 Enterprise environmental .3 Meetings .2 Requirements
factors management plan
.4 Organizational process
assets

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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 591

Scope Management
5.2 Collect Requirements
 Process of defining and documenting 
stakeholders’ need to meet the project 
Planning Process Group
objectives.
5. Project Scope
Management
5.1
Plan Scope
Management

 This process is directly tied to  5.2
Collect
Requirements

managing expectations.
5.3
Define
Scope

5.4
Create
WBS

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Scope Management
5.2 Collect Requirements
Inputs Tools & Techniques Outputs
.1 Project charter .1 Expert judgment .1 Requirements
.2 Project management .2 Data gathering documentation
plan .3 Data analysis .2 Requirements
.3 Project documents traceability matrix
.4 Decision making
.4 Business documents .5 Data representation
.5 Agreements .6 Interpersonal and
.6 Enterprise team skills
environmental factors .7 Context diagram
.7 Organizational process .8 Prototypes
assets

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Scope Management
Requirements Data Gathering
Brainstorming
Interviews
Focus groups
Questionnaires and surveys 
Benchmarking 
Nominal group techniques 
The Delphi technique 
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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 592

Scope Management
Voting
 Voting — This is exactly what it sounds like.  Decisions are made 
based upon the opinions of a group.  There are a number of 
ways this can be done:
 Unanimity — This is where everyone agrees on a course of 
action.
 Majority — This is a process where the majority of members 
in the group decide direction.  Anything over 50% wins.
 Plurality — This is used when a simple majority is not 
possible.  In these cases, whichever group has the largest 
number wins—even though it is not a majority.
 Autocratic decision making— This is a fancy way of dictatorship.  
In this method, one person makes the decision for the group.
 Multicriteria decision analysis — Establishes a basic framework 
for making a decision when the team is looking at aspects in 
conflict with each other.  A common example is the relationship 
between cost and quality.
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Scope Management
Idea Mapping Guidelines
 Idea maps use the way the brain processes information 
associatively.  They are single‐page diagrams that visually 
captures ideas in a non‐linear format.
 Characteristics of a Mind Map:
1. The main idea, is crystallized in a central image.
2. The main themes radiate from the central image as 'branches’.
3. Each branch comprises a key image or word drawn or printed 
on its associated line.
4. Topics of lesser importance are represented as 'twigs' of the 
relevant branch.
5. The branches form a connected nodal structure.
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Scope Management
Brainstorming Steps
1. A question or problem is posed to the group and 
each member silently generates and writes down 
their ideas.
2. The moderator writes down the ideas on a flip chart 
until all the ideas are recorded.
3. Each recorded idea is discussed until all group 
members have a clear understanding.
4. Individual vote privately to prioritize the ideas, 
using a scale of 1 to 5, with 1 being the lowest and 5 
being the highest.  After each vote the ballots are 
counted and the team revote until the highest 
option is selected.
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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 593

Scope Management
5.3 Define Scope
 Taking the detailed requirements defined in the 
collect requirements process and developing a 
detailed description of the product or service 
Planning Process Group
that will meet those needs. 
5. Project Scope
Management
5.1
Plan Scope
Management

5.2
Collect
Requirements

5.3
Define
Scope

5.4
Create
WBS

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Scope Management
5.3 Define Scope
Inputs Tools & Techniques Outputs
.1 Project charter .1 Expert judgment .1 Project scope
.2 Project management .2 Data analysis statement
plan .3 Decision making .2 Project documents
.3 Project documents .4 Interpersonal and updates
.4 Enterprise environmental team skills
factors .5 Product analysis
.5 Organizational process
assets

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Scope Management
Charter vs. Scope Statement
Project Charter Project Scope Statement
Project scope description (progressively         
Project purpose elaborated)
Measurable project objectives and related success     criteria Project deliverables
High‐level requirements Acceptance criteria
High‐level project description, boundaries, and key 
deliverables Project exclusions
Overall project risk
Summary milestone schedule
Preapproved financial resources
Key stakeholder list
Project approval requirements (i.e., what constitutes success, 
who decides the project is successful, who signs off on the 
project)
Project exit criteria (i.e., what are the conditions to be met in 
order to close or to cancel the project or phase).
Assigned project manager, responsibility, and authority level.
Name and authority of the sponsor or other person(s) 
authorizing the project charter
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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 594

Scope Management
5.4 Create WBS
 A WBS is a deliverable‐oriented, hierarchical 
decomposition of the work to be executed by the 
project team.  It enables them to accomplish the 
Planning Process Group
project objectives and create the required 
5. Project Scope

product, service, or result.  Management
5.1
Plan Scope
Management

5.2
Collect
Requirements

5.3
Define
Scope

5.4
Create
WBS

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Scope Management
WBS Terminology
Work Packages
Decomposition
Progressive elaboration
Placeholder work packages
Control account

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Scope Management
Components of the WBS
 The WBS Structure – resembles an organization 
chart or decision tree.
 The WBS Dictionary – A brief synopsis of the 
project and each major component or work 
package.
 The Code of Accounts – The numbering system 
used to reference and roll‐up the WBS.
– The highest level is 1
– The next level is 1.x
– The next level is 1.x.x and so on
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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 595

Effective WBS’s
Basement
Finish
Project

Design Drywall
& HVAC Plumbing Electrical Framing &
Inspections Finish

Rough
Design Inspections Trunk Line Drywall
Electrical

Rough
Rough Design Branch Lines Outlets Mud & Tape
Electrical

Final Design Rough HVAC Fixtures Texture

Box
Rough Frame Paint
Connections

Final Carpet

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Scope Management
5.4 Create WBS
Inputs Tools & Techniques Outputs
.1 Project management .1 Expert judgment .1 Scope baseline
plan .2 Decomposition .4 Project document
.2 Project documents updates
.3 Enterprise environmental
factors
.4 Organizational process
assets

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Scope Management
5.5 Validate Scope
Formalizing acceptance of deliverables.
Review deliverables with stakeholders.
Is binary in nature.
Often in parallel with quality control.
Monitoring and Controlling Process Group

5. Project Scope
Management
5.5
Validate
Scope

5.6
Control
Scope

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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 596

Scope Management
5.5 Validate Scope
Inputs Tools & Techniques Outputs
.1 Project management plan .1 Inspection .1 Accepted deliverables
.2 Project documents .2 Decision making .2 Work performance
.3 Verified deliverables information
.4 Work performance data .3 Change requests
.4 Project document
updates

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Scope Management
5.6 Control Scope
Influence the factors that create project 
scope changes.
Control the impact of those changes.
Ensure use of Integrated Change Control.
Manage changes. Monitoring and Controlling Process Group

5. Project Scope

Scope creep.
Management
5.5
Validate
Scope

5.6
Control
Scope

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Scope Management
5.6 Control Scope
Inputs Tools & Techniques Outputs
.1 Project management .1 Data analysis .1 Work performance
plan information
.2 Project documents .2 Change requests
.3 Work performance .3 Project management
data plan updates
.4 Organizational .4 Project document
process assets updates

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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 597

Scope Management
Project Scope Management ‐
Summary
Six (6) processes.
Project and product scope.
Scope is revised throughout project.
WBS – know its importance and that it is 
used in many other processes; and it is 
deliverables based.

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Schedule Management

Looking Glass Development, LLC
(303) 663‐5402 / (888) 338‐7447
4610 S. Ulster St. #150 Denver, CO 80237
[email protected]

Schedule Management
All the processes required to ensure timely 
completion of the project.

The major output of these processes is the 
project schedule.
Planning Process Group

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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 598

Schedule Management
6.1 Plan Schedule Management
Defines the “rules” for developing & 
managing the schedule.
The benefit of this process is that it 
provides guidance & direction 
Planning Process Group
on how the schedule will be 
managed.

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Schedule Management
6.1 Plan Schedule Management
Inputs Tools & Techniques Outputs
.1 Project charter .1 Expert judgment .1 Schedule Management
.2 Project management .2 Data analysis plan
plan .3 Meetings
.3 Enterprise environmental
factors
.4 Organizational process
assets

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Schedule Management
6.2 Define Activities
 Creating a “list” of all the work that needs to be 
done to produce the project deliverables. 
 Work packages are decomposed into 
schedule activities.
 These schedule activities provide a  Planning Process Group

basis for estimating, scheduling, 
executing, and monitoring and 
controlling.

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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 599

Schedule Management
Rolling Wave Planning
Project Analyze Define New Purchase Construct & Test &
Less
Initiation Existing System And Install Test System Implement
Details Components System
Situation Requirements Package

Planning
Details

More
Details
Project Time
Start

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Schedule Management
6.2 Define Activities
Inputs Tools & Techniques Outputs
.1 Project management .1 Expert judgment .1 Activity list
plan .2 Decomposition .2 Activity attributes
.2 Enterprise .3 Rolling wave planning .3 Milestone list
environmental factors .4 Meetings .4 Change requests
.3 Organizational process .5 Project management
assets plan updates

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Schedule Management
6.3 Sequence Activities
Ordering the activities that have been defined 
and assigning logical dependencies.

Planning Process Group

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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 600

Schedule Management
6.3 Sequence Activities 
Inputs Tools & Techniques Outputs
.1 Project management .1 Precedence .1 Project schedule
plan diagramming network diagrams
.2 Project documents method (PDM) .2 Project document
.3 Enterprise .2 Dependency updates
environmental factors determination and
.4 Organizational process integration
assets .3 Leads and lags
.4 Project management
information system

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Schedule Management
PDM
Finish to Start
Start to Start
Finish to Finish
Start to Finish F-S
S – F is not common
A B D
F H
S-S
C E
G F-F

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Schedule Management
Conditional Diagramming
GERT is most common.
Allows for probability.
Allows for looping.

80%
A B C
20%

Eyeball Diagram

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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 601

Schedule Management
Dependencies
 Mandatory (hard logic) — Mandatory dependencies 
are defined as situations where the ordering of task, 
activities or deliverables is locked into place by the 
work itself and there is no other alternative path.
 Discretionary (soft logic) — Discretionary 
dependencies are situations where there is more than 
one possible path to complete the project work, but 
someone has chosen a specific path for some reason.
 External — External dependencies refer to situations 
where dependencies  are placed on the project team 
by some outside force, regardless of logic or 
preference.  Regulations and laws are the most 
common form of external dependencies.

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Dependency Determination

Mandatory  Mandatory 
External  Internal 
Dependency Dependency

Discretionary  Discretionary 
External  Internal 
Dependency Dependency

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Schedule Management
Leads & Lag
 Lead time occurs whenever a finish‐to‐start 
relationship allows the successor task to start 
prior to the completion of the predecessor. 
 Lag time represents a relationship that requires a 
delay between the two tasks. 

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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 602

Schedule Management
Leads & Lag

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Schedule Management
6.4 Estimate Activity Durations
Compilation (not the sum) of activity duration 
estimates results in the project duration.
All supporting data is documented.
Uses identified risks and cost estimates.
Accuracy improves over time. Planning Process Group

Ranges, e.g. 280 days ‐5% to +10%.

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Schedule Management
6.4 Estimate Activity Duration
Inputs Tools & Techniques Outputs
.1 Project management plan .1 Expert judgment .1 Duration estimates
.2 Project documents .2 Analogous estimating .2 Basis of estimates
.3 Enterprise environmental .3 Parametric estimating .3 Project document
factors .4 Three point estimating updates
.4 Organizational process .5 Bottom-up estimating
assets .6 Data analysis
.7 Decision making
.8 meetings

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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 603

Schedule Management
Project Evaluation & Review Technique 
(PERT)

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Schedule Management
Project Evaluation & Review Technique 
(PERT)
4X
Most
PERT    
Optimistic   + Likely +    Pessimistic
Weighted  =
6
Average    
PERT     
Pessimistic ‐ Optimistic
Standard   =
6
Deviation     
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Schedule Management
Distributions
 A binomial distribution is used whenever there are only two 
possible outcomes. 
 A uniform distribution represents a scenario where each 
value of a random variable has an equal probability of 
occurrence. 
 A triangular distribution is a continuous probability 
distribution that begins with a minimum value, ends with a 
maximum value, and makes use of a mode, or most likely 
value somewhere along the continuum. 
 A beta distribution represents a distribution of probabilities 
when we don’t know what the probability is. 
 The central limit theorem (CLT) states that the mean of a 
large population of independent and random variables, each 
having a finite mean and variance will be normally 
distributed.

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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 604

Schedule Management
Reserves
 Contingency Reserves — These represent reserves 
controlled by the project manager and they are to 
be used for know unknowns.  This means the 
project manager and team can plan for an event 
that they see as possible. 
 Management Reserves — These represent reserves 
controlled by the project sponsor or the senior 
management. They cannot be accessed without 
their permission.  Management reserves are used 
to respond to unknown unknowns. These are 
events that cannot be planned for. 
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Schedule Management
Agile Estimation
• Ideal Time ‐ Assumes resources 100% dedicated
• Relative Sizing – Often called T‐Shirt sizing.
• Story Points – Aggregates complexity & time.  
• Fibonacci Sequence – Another comparison 
technique.
• Affinity Estimating – Process of grouping 
requirements into categories or collections.  Used 
to group similarly sized user stories together.
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Schedule Management
6.5 Develop Schedule
Iterative.
Determines planned start and end dates for 
activities and the whole project.
Baseline for measuring progress. Planning Process Group

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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 605

Schedule Management
CPM
The Critical Path is the project path which will 
be the longest duration or where all activities 
have zero float.
The Critical Path does not necessarily have the 
greatest risk.
The Critical Path determines the earliest 
completion of the project.

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Schedule Management
ES DUR EF
CPM Deliverable
 ES ‐ Early Start is the earliest the task can begin. LS Float LF
 Dur – Duration is the amount of calendar time the task will take.
 EF ‐ The Early Finish is the earliest the task can end.
 LS – The Late Start is the latest the task can begin.
 LF – The Late Finish is the latest the task can end.
 Float ‐ The Slack, slip or float is amount of time the task can delay 
without impacting the project end date.  Also called Total Float.
 Near Critical Path – A network path close in length to the critical path.
 Free Float – The amount of time a task can delay without delaying the 
early start date
 Project Float – The amount of time the project can be delayed without 
impacting an externally imposed completion date.
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Schedule Management
The Critical Path Method
 EF = ES + DUR = Forward Pass ES DUR EF
Deliverable
 LS = LF – DUR = Backward Pass
LS Float LF
 Float = LF – EF or LS – ES
2 2 4
Deliverable C
6 4 8
2 3 5 8 2 10
Deliverable D Deliverable F
5 3 8 8 0 10
0 2 2 2 4 6 6 2 8
Deliverable A Deliverable B Deliverable E
0 0 2 2 0 6 6 0 8
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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
 Course Presentation 606

Schedule Management
Resource Optimization
After CPM.
Redistribute resource assignments where a 
resource is needed on more than one task in 
the same time period.
Can change the critical path.

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Schedule Management
Critical Chain Method
 Critical Chain = Longest chain of dependent tasks with zero 
PDM/CPM
slack taking into consideration resource constraints.
10 15 10

Progress equal burn rate of the buffers vs. work complete.
15 30 10 20
Measurement is done against the Project Buffer.
30 10
OR 10 BL 15 PR 10 FB 10

R 15 OR 30 GR 10

FB 17 Y 20 PB 27

FB 5 BL 30 Y 10

Using CPM would take an estimated 75 units.  Which is then 
missed by 100%.  
CCPM allows for more accurate estimates with smaller misses.
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Schedule Management
A Sample Story Map
The Story Story Story Story Story Story Story Story Story
Backbone Story Story Story Story Story

Sequence
Walking Story Story Story Story Story Story Story Story Story
Skeleton
Story Story Story Story Story
Less
Optional Story Story Story Story Story Story Story Story
Optionality

Story Story Story Story Story Story Story Story

Story Story
Story Story Story Story
Story Story Story Story Story
More
Story
Optional
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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 607

Schedule Management
6.5 Develop Schedule
Inputs Tools & Techniques Outputs
.1 Project management plan .1 Schedule network .1 Schedule baseline
.2 Project documents analysis .2 Project schedule
.3 Agreements .2 Critical path method .3 Schedule data
.4 Enterprise environmental .3 Resource optimization .4 Project calendars
factors .4 Data analysis .5 Change requests
.5 Organizational process .5 Leads and lags .6 Project management
assets .6 Schedule compression plan updates
.7 Project management .7 Project document
information system updates
.8 Agile release planning

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Schedule Management
Leveling vs. Smoothing
Resource leveling involves adjusting the start 
and finish dates of tasks to prevent resources 
from becoming over allocated. 
Resource smoothing adjust the project activities 
so they do not exceed predefined resource 
limits.  This is different from leveling in that 
smoothing does not allow the project’s critical 
path to change and the project’s completion 
date cannot be delayed. 
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Schedule Management
Leveling vs. Smoothing

Similarities
Resource Leveling Resource Smoothing
A schedule network analysis  A schedule network analysis 
technique. technique.
A resource optimization  A resource optimization 
technique. technique.
Improves resource utilization. Improves resource utilization.

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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 608

Schedule Management
Leveling vs. Smoothing
Differences 
Resource Leveling Resource Smoothing
Aim is to adjust start and end dates of a project  Aim is to achieve optimal resource usage by 
with resource constraints while balancing  avoiding peaks and valleys in the resource 
resource requirements and resource availability  usage profile. Hence the name smoothing. 
Used in resource‐constrained scheduling.  Used in time‐constrained scheduling. 
Critical path of the project will be affected, and  Critical path of the project won't change.
usually the length of critical path will increase. 
Can be applied to resources on critical path.  Doesn't apply to resources on critical path. 
Free and total float (or slack) may be used.  Free and total float (or slack) are used. 
Will optimize all the resources and may change  May not be able to optimize all the resources if 
the duration of the project.  sufficient slack (or float) isn't available, but 
does not change the duration of the project. 
Risk: May change the critical path and hence the  Risk: Loss of flexibility due to reduction in 
duration.  slack. Hence chances of increase in number of 
near‐critical activities. 
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Schedule Management
Other Terms
 One‐Point Estimate – A single value estimate.
 Regression Analysis – A graphic analysis to track if two 
variables are related.
 Heuristic – A rule of thumb.
 Learning Curve – The improvement achieved by doing 
an activity more than once.
 Monte Carlo Simulation – A computer model which 
allows the analyst to simulate an activity 1,000 or more 
times to achieve a probability of a result.
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Schedule Management
Crashing vs. Fast Tracking
 Fast Tracking — Fast Tracking is doing dependent 
items in parallel.  It amounts to changing a finish‐
to‐start relationship to a start‐to‐start or a finish‐
to‐finish relationship. For the exam it is important 
that you remember that the negative impact of 
Fast Tracking is the potential for rework.
 Crashing — Crashing is increasing the number of 
hours worked.  This can be done by adding 
resources assigned to a task, activity or deliverable 
or by simply working overtime.  The negative 
impact of Crashing that must be remembered is a 
likely increase in costs.
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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 609

Schedule Management
Gantt Charts

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Schedule Management
Milestone Chart

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Schedule Management
6.6 Control Schedule
Part of Integrated Change Control.
Determine the current status of the project 
schedule.
Influence the factors that create schedule changes.
Determine that the project schedule has changed.
Manage the changes as they occur.

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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 610

Schedule Management
6.6 Control Schedule 
Inputs Tools & Techniques Outputs
.1 Project management .1 Data analysis .1 Work performance
plan .2 Critical path method information
.2 Project documents .3 Project management .2 Schedule forecasts
.3 Work performance data information system .3 Change requests
.4 Organizational process .4 Resource optimization .4 Project management
assets .5 Leads and lags plan updates
.6 Schedule compression .5 Project documents
updates

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Schedule Management 
Schedule Management – Summary
Six (6) processes.
PERT, GERT, PDM, CPM, CCPM.
Crashing, fast tracking.
Decomposition, baseline, float or slack.
Schedule development is iterative.

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Project Cost Management

Looking Glass Development, LLC
(303) 663‐5402 / (888) 338‐7447
4610 S. Ulster St. #150 Denver, CO 80237
[email protected]

PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 611

Cost Management
All the process involved in planning, estimating, 
budgeting, and controlling costs so that the 
project can be completed within the approved 
budget. Planning Process Group

7. Project Cost
Management

7.1
Plan Cost
Management

Monitoring and Controlling Process Group

7.2
7. Project Cost Estimate
Costs
Management

7.4 7.3
Control Determine
Costs Budget

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Cost Management
 Primarily concerned with cost of resources.
 Also concerned with 
– Life‐cycle costing
– Opportunity cost 
– Sunk costs
 The Cost Management Plan is part of 
overall project management plan.
– Control thresholds
– Earned value rules
– Reporting formats
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Cost Management
7.1 Plan Cost Management
Defining the rules which are used to manage 
project costs.
It defines how the team will  Planning Process Group

manage the money. 7. Project Cost

Management

7.1
Plan Cost
Management

7.2
Estimate
Costs

7.3
Determine
Budget

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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 612

Cost Management
7.1 Plan Cost Management
Inputs Tools & Techniques Outputs
.1 Project charter .1 Expert judgment .1 Cost management
.2 Project management .2 Data analysis plan
plan .3 Meetings
.3 Enterprise
environmental factors
.4 Organizational process
assets

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Cost Management
7.2 Estimate Costs
Developing an approximation of the costs of 
the resources needed to complete each 
schedule activity Planning Process Group

7. Project Cost
Management

Cost Estimating ≠ Pricing 7.1

Plan Cost
Management

7.2
Estimate
Costs

7.3
Determine
Budget

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Cost Management
7.2 Estimate Costs
Inputs Tools & Techniques Outputs
.1 Project management .1 Expert judgment .1 Cost estimates
plan .2 Analogous estimating .2 Basis of estimates
.2 Project documents .3 Parametric estimating .3 Project documents
.3 Enterprise .4 Bottom-up estimating updates
environmental factors .5 Three-point
.4 Organizational process estimating
assets .6 Data analysis
.7 Project management
information system
.8 Decision making

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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 613

Cost Management
Accuracy of estimates increases as the 
project progresses
Rough Order of Magnitude
‐25% to +75%
Budget Estimate or the Budget
‐5% to +10%

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Cost Management
7.3 Determine Budget
Aggregating the cost estimates of 
individual activities or work packages to 
establish a total Cost Baseline. Planning Process Group

7. Project Cost
Management

7.1
Plan Cost
Management

7.2
Estimate
Costs

7.3
Determine
Budget

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Cost Management
Accounting Terms
 Variable Costs – Costs that change as the units produced 
changes.
 Fixed Costs – Costs that do not change with changes to 
volume produced.
 Direct Costs – Costs that are directly attributed to 
project work.
 Indirect Costs – Items that benefit more than one 
project and are not attributed to a specific activity.
 Value Analysis or Engineering – Finding less costly ways 
to do the same work.
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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
 Course Presentation 614

Cost Management
7.3 Determine Budget
Inputs Tools & Techniques Outputs
.1 Project management .1 Expert judgment .1 Cost baseline
plan .2 Cost aggregation .2 Project funding
.2 Project documents .3 Data analysis requirements
.3 Business documents .4 Historical information .3 Project documents
.4 Agreements review updates
.5 Enterprise .5 Funding limit
environmental factors reconciliation
.6 Organizational process .6 Financing
assets

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Cost Management
The difference
Funding Requirements  between the
maximum
funding and the
end of the cost
baseline is
Management
Cumulative $

Reserve.

Cost Baseline
Actual Costs
Funding Requirements

Time

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Cost Management
Depreciation
Straight Line Depreciation – Present value 
minus present cost.
cost – residual value  = Depreciation amt. to deduct
each year till salvage value
useful life is reached

Production Method ‐
cost – residual value Depreciation amt. to
= deduct each year till
estimated units of useful life (production) salvage value is
reached

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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 615

Cost Management
Depreciation
Double Declining Balance (DDB) – Accelerated depreciation method. Begin 
by dividing 100% by the term of the asset and doubling the result. Each 
subsequent year, that same percentage is multiplied by the remaining 
balance to be depreciated.  Using a purchase price of $100,000 and a 
residual of $25,000 on a five (5) year schedule:
 100% / 5 Year Term = 20%
 Double the 20% rate or 40%
 Year 1 value = $100,000  ‐ ($100,000 * 40%) = $60,000
 Year 2 value = $60,000 – ($60,000 * 40%) = $36,000
 Year 3 value = $36,000 – ($36,000 * 40%) = $21,600
 Since this is less than the salvage value it is $25,000

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Cost Management
Depreciation
Sum of the Years Digits (SYD) – Accelerated depreciation method. 
Begin by adding the number of years in the schedule. For example, 
for a five (5) year schedule add 1+2+3+4+5 = 15.  Next, take the 
asset value minus the residual value and divide it by this result 
(15).  If the salvage value is $25,000 then:
 Year 1 value = $100,000 – (5/15 * $75,000) = $75,000
 Year 2 value = $75,000 – (4/15 * $75,000) = $55,000
 Year 3 value = $55,000 – (3/15 * $75,000) = $40,000
 Year 4 value = $40,000 – (2/15 * $75,000) = $30,000
 Year 5 value = $30,000 – (1/15 * $75,000) = $25,000

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Cost Management
7.4 Control Costs
 Influencing the factors that create changes to the 
cost baseline. 
 Ensuring requested changes are agreed upon.
 Managing the actual changes when and as they 
occur.
 Assuring that potential cost overruns do not exceed 
the authorized funding periodically and in total for 
the project. Monitoring and Controlling Process Group

7. Project Cost
Management

7.4
Control
Costs

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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 616

Cost Management
7.4 Control Costs
Inputs Tools & Techniques Outputs
.1 Project management .1 Expert judgment .1 Work performance
plan .2 Data analysis information
.2 Project documents .3 To-complete .2 Cost forecasts
.3 Project funding performance index .3 Change requests
requirements .4 Project management .4 Project management
.4 Work performance data information system plan updates
.5 Organizational process .5 Project document
assets updates

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Cost Management
Cumulative Cost Curve EAC

VALUE PV BAC

SCHEDULE
AC VARIANCE

COST
VARIANCE

EV
SLIPPAGE
TIME
NOW
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Cost Management

In Alphabetical Order
Actual Costs Earned Value Planned Value
Minus Minus
CV = = SV
CPI = = SPI
Divided By Divided By

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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 617

Cost Management
Forecasting ‐ ETC
 ETC based on new estimate.
 ETC based on atypical variances.
ETC = BAC‐EV
 ETC based on typical variances.
ETC = (BAC‐EV)/CPI
 ETC based on both the CPI & SPI.
ETC = (BAC‐EV)/(CPI*SPI)
BAC = Budget at Completion
BAC-EV = Remaining Work
VAC = Variance at Completion
CPI*SPI = Critical Ratio
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Cost Management
Forecasting ‐ EAC
Using a new estimate
– EAC = AC + ETC
Using remaining budget
– EAC = AC + (BAC‐EV)
Using CPI
– EAC = AC + ((BAC‐EV)/CPI)
Using both CPI & SPI
– EAC = AC + ((BAC‐EV)/(CPI*SPI))
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Cost Management
Forecasting ‐ TCPI
 The calculated projection of cost performance 
that must be achieved on the remaining work 
to meet a specified management goal.
 Using BAC
– TCPI = (BAC – EV) / (BAC – AC)

 Using EAC
– TCPI = (BAC ‐ EV) / (EAC ‐ AC)

 VAC = BAC ‐ EAC
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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 618

Cost Management
Earned Schedule Theory
 Provides formulas for forecasting the project 
completion date, using the earned schedule, 
actual time and estimated duration. 
 Schedule at Completion (SAC) — This is the 
original planned completion duration of the 
project.
 Earned Schedule (ES) — The duration from 
the beginning of the project to the date the 
planned value is supposed to equal to the 
BAC.
 Actual Time (AT) — This is the duration from 
the beginning of the project to status date.
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Cost Management
Earned Schedule Theory
Time variance or (TV) — A measure of 
schedule performance in time units rather 
than cost units and is defined by the 
formula:
TV = ES – AT 
Time Estimate at Completion (TEAC) — The 
forecast of time at completion and is 
similar to EAC.  It uses the same basic 
formulas as EAC but replaces cost with 
schedule.
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Cost Management
Earned Schedule Theory
Time Variance at Completion (TVAC) — The 
estimated amount of time either ahead or 
behind schedule the project is.  It uses the 
following formula:
TVAC = SAC – TEAC

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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 619

Cost Management
Cost Management – Summary
 Four (4) processes.
 Earned value concepts and calculations.
 Life cycle costing.
 Cost baseline.
 Estimating vs. budgeting.
 Types of estimates and estimating.
 Contingency and management reserve.

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Project Quality Management

Looking Glass Development, LLC
(303) 663‐5402 / (888) 338‐7447
4610 S. Ulster St. #150 Denver, CO 80237
[email protected]

Quality Management
All the activities of the performing organization 
that determine quality policies, objectives, and 
responsibilities so that the project will satisfy 
the needs for which it was undertaken.
Executing Process Group Planning Process Group

8. Project Quality 8. Project Quality

Management Management

8.2 8.1
Manage Plan Quality
Quality Management

Monitoring and Controlling Process Group

8. Project Quality
Management

8.3
Control Quality

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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 620

Quality Management
Key Terms
 Project Quality Management must address the 
management of the project & product.
 Quality ‐ “the degree to which a set of inherent 
characteristics fulfill requirements.” (American Society for Quality, 2000)
 Gold Plating – Giving the customer extra 
functionality, adds no value to the project; PMI 
argues against gold plating.
 Marginal Analysis – Finding the point where the cost 
of the incremental improvement in quality equals 
the value of the improvement.

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Quality Management
International Organization for Standardization 
(ISO)
Total Quality Management (TQM)
Six Sigma
Kaizen
Quality vs. Grade
Precision vs. Accuracy
PDCA

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Quality Management
Thought Leaders
 W.E. Deming: (PDCA), Quality = results of work efforts / 
total costs
 J.M. Juran: quality planning, control & improvement. 
People are cause.  Fitness for Use
 P. Crosby: Quality is Free, 0 Defects Conforming to Rqmts, 
Doing It Right the First Time" (DIRFT)
 K. Ishikawa: Cause‐Effect (Fishbone) Diagram, Design 
Statistics, introduced quality circles
 G. Taguchi: Quality as part of the Design, not Inspection, 
Taguchi Method.
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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 621

Quality Management
8.1 Plan Quality
Identifying which quality standards are 
relevant to the project, and determining how 
to satisfy them.
Performed in parallel with other planning 
processes.
Quality is planned, designed, and built in,  
not inspected in. Planning Process Group
8. Project Quality
Management

8.1
Plan
Quality

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Quality Management
8.1 Plan Quality Management
Inputs Tools & Techniques Outputs
.1 Project charter .1 Expert judgment .1 Quality management
.2 Project management plan .2 Data gathering plan
.3 Project documents .3 Data analysis .2 Quality metrics
.4 Enterprise environmental .4 Decision making .3 Project management
factors .5 Data representation plan updates
.5 Organizational process .4 Project documents
.6 Test and inspection
assets updates
planning
.7 Meetings

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Glass Development, LLC.

Quality Management
Cost of Quality
Conformance Nonconformance
Prevention Planning Scrap Failure

Appraisal Training Rework

Auditing Expediting

Warranty
Testing
Service

Controlling Recalls

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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 622

Quality Management
Flowcharts

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Quality Management
Flowcharts

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Quality Management
SIPOC
 Sometimes called COPIS.
 Tool that summarizes the inputs and outputs of 
one or more processes in table form. 
 Acronym SIPOC stands for suppliers, inputs, 
process, outputs, and customers which form the 
columns of the table.
 First used in TQM programs.
 Used today in Six Sigma and Lean manufacturing.

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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 623

Quality Management
SIPOC Steps
1. Create an area that will allow the team to post additions to the 
SIPOC diagram. This could be a transparency (to be projected by an 
overhead) made of the provided template, flip charts with headings  
(S‐I‐P‐O‐C) written on each, or headings written on post‐it notes 
posted to a wall.
2. Begin with the process. Map it in four to five high level steps.
3. Identify the outputs of this process.
4. Identify the customers that will receive the outputs of this process.
5. Identify the inputs required for the process to function properly.
6. Identify the suppliers of the inputs that are required by the process.
7. Optional: Identify the preliminary requirements of the customers. 
This will be verified during a later step of the Six Sigma 
measurement phase.
8. Discuss with project sponsor, Champion, and other involved 
stakeholders for verification.
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Quality Management
SIPOC

Input Output
Supplier Process Customer

Requirements & Requirements &

Feedback Loop Feedback Loop

Requirements List Measurements List Requirements List Measurements List

• ______________ • ______________ • ______________ • ______________

• ______________ • ______________ • ______________ • ______________

• ______________ • ______________ • ______________ • ______________

• ______________ • ______________ • ______________ • ______________

• ______________ • ______________ • ______________ • ______________

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Quality Management
Logical Data Model
 A logical data model is also referred to as a logical schema.  
 It is a data model of a specific problem domain that is expressed 
independently of any specific named database product or storage 
technology.  
 It focuses on the foundational data structure and its elements such 
as relational tables, columns, object‐oriented classes and/or XML 
tags.  
 It represents the abstract structure of a domain of information. 
 A logical data model is most often used in business process seeking 
to capture the important aspects of the organization and how they 
relate to one another.  
 The logical data model is the basis for the physical data model.  
 It is sometimes used as a synonym for a domain model, but the two 
are not the same.  A domain model is more focused on capturing 
the concepts in the problem domain rather than the structure of the 
data associated with that domain.
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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 624

Quality Management
Logical Data Model

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Quality Management
Logical Data Model
Conceptual Data Model Logical Data Model Physical Data Model
Includes high‐level data constructs Includes entities (table), attributes  Includes tables, columns, keys data types, 
(columns/fields) and relationships (keys) validation rules, database triggers, stored 
procedures, domains, and access constraints.
Non‐technical names, so that executives  Uses business names for entities and  Uses more defined and less generic specific 
and managers at all levels can understand  attributes names for tables and columns, such as 
the data basis of architectural description abbreviated column names, limited by the 
database management system (DBMS) and any 
company defined standards.
Uses general high‐level data constructs  Is independent of technology (platform,  Includes primary keys and indices for fast data 
from which architectural descriptions are  DBMS) access.
created in non‐technical terms.
May not be normalized. Is normalized to forth normal form (4NF) May be de‐normalized to meet performance 
requirements based on the nature of the 
database.  If the nature of the database is 
online transaction processing (OLTP) or 
operational data store (ODS) it is usually not 
de‐normalized.  De‐normalization is common in 
data warehouses.
Represented in the DIV‐1 viewpoint  Represented in the DIV‐2 Viewpoint  Represented in the DIV‐3 Viewpoint (DoDAF
(DoDAF V2.0) (DoDAF V2.0), and OV‐7 View (DoDAF V1.5) V2.0), and SV‐11 View (DoDAF V1.5)

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Quality Management
Matrix Diagrams
 Also called a matrix chart.
 Used to show the relationship between two, three or four 
groups of information.  
 Six possible shapes to the matrix: L, T, Y, X, C, and roof‐shaped 
depending on how many variables or groups are being 
compared.  Shape # of Groups What the Matrix Shows
L‐Shaped 2 Groups A <—> B (or A <—> A)
T‐Shaped 3 Groups B <—> A <—> C but NOT B <—> C
Y‐Shaped 3 Groups A <—> B <—> C <—> A
C‐Shaped 3 Groups All three simultaneously (3‐D)
X‐Shaped 4 Groups A <—> B <—> C <—> D <—> A but not
A <—> C or B <—> D
Roof‐shaped 1 Group A <—> A when also A <—> B in L or T
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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 625

Quality Management
Matrix Diagram Symbols
Strong relationship + Positive relationship

Moderate relationship Neutral relationship

Weak or potential
relationship - Negative relationship

Item on left influences item at top

S Supplier
Item at top influences item on left.
C Customer The arrows usually are placed next
to another symbol indicating the
D Doer strength of the relationship

O Owner
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Quality Management
Sample Matrix Diagrams
Customer A Customer B Customer C Customer D
Measure #1 15 22 19 12

Measure #2 95 105 125 97

L‐Shaped Matrix
Measure #3 29 36 27 56

Measure #4 41 58 36 61

Y‐Shaped Matrix

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Quality Management
Test Driven Development (TDD)
 Tests are written BEFORE the code.
 A Unit Test is a test of a small, functional piece of code.
 Unit Tests are given priority in TDD.
 Unit tests make it…
– Easier to find bugs.
– Easier to maintain the code, but not test maintainability or 
test readability.
– Easier to have full code coverage.
– Easier to design & develop code.
– Easier to deliver early & often.
– Easier to track performance.
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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 626

Quality Management

TDD

3. 
1. Red
Refactor

2. Green

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Quality Management
Test Driven Development (TDD)
 Must be able to make it fail.  No code can be 
written without a failing test.  This mean we 
actually run the tests to ensure the failure state 
before writing any code.
 Running the test to prove failure is a fundamental 
difference of TDD.
 Make it work.  Code must be as simple as possible.  
The code must ONLY pass that new test for which it 
was designed.
 Make it better.  This means you must refactor.
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Quality Management
Acceptance Test‐Driven Development
Also called ATDD
Moves testing focus from code to business 
requirements.
Tests created before coding.
Might use functional test framework such as 
FIT (Framework for Integrated Testing) or 
FitNesse
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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 627

Quality Management
Acceptance Test‐Driven Development
 Four stages:
– Discuss the requirements – during planning meeting 
ask acceptance criteria.
– Distill tests in a framework‐friendly format
– Develop the code and hook up the tests
– Demo through exploratory testing

 Regardless of method team must think about 
how the system will be tested before coding.

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Quality Management
Refactoring
Refactoring – Process of changing existing 
code to improve the way it functions.

In XP you are not afraid of refactoring.

Refactoring is part of your regular work & not 
a separate task.

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Quality Management
Types of Refactoring
Yuck – You look at code and it works, but is 
unsatisfactory.  This is about making small 
improvements.
The Not Understood – Code that you look at 
and cannot understand what it is doing.  You 
must make code easier to understand.
New Insights – When new functionality needs 
to be added, or you learn something.
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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 628

Quality Management
Types of Refactoring
 Planned Refactoring – Actually adding refactoring 
to your project plan as a deliverable.
– M. Fowler says it should hardly ever be done, because 
it represents a failure of the team to do the 
refactoring in small enough pieces to be constant.
– Planned refactoring almost always requires 
justification.
– Is evidence that you are not doing enough of the 
other types of refactoring.

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Quality Management
Types of Refactoring
Long Term Refactoring – Trying to get closer to 
some large future goal.  Get some vision of 
where you want things to be in the future.
– Must be done gradually.
– Does not require significant planning.
– The essence is doing small steps.

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Quality Management
8.2 Manage Quality
Answers the question are we following the 
right standards.  e.g. if we follow these 
standards what will the results be?
Provides an umbrella for Continuous 
Improvement . . . 
Completed during execution.

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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 629

Quality Management
8.2 Manage Quality
Inputs Tools & Techniques Outputs
.1 Project management plan .1 Data gathering .1 Quality reports
.2 Project documents .2 Data analysis .2 Test and evaluation documents
.3 Organizational process assets .3 Decision making .3 Change requests
.4 Data representation .4 Project management plan 
.5 Audits updates
.6 Design for X .5 Project documents updates
.7 Problem solving
.8 Quality improvement 
methods

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Quality Management
Root Cause Analysis
A Root Cause is ‐ if removing the item from 
the problem‐fault sequence prevents the 
final undesirable outcome from occurring 
then the item is considered a root cause. 

A Causal Factor ‐ Removing a causal factor 
can benefit the outcome, but it does not 
prevent its recurrence with certainty. 

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Quality Management
Root Cause Analysis
 Define and properly describe the event or 
problem.
 Establish a timeline from the normal situation 
until the failure. 
 Distinguish between root causes and causal 
factors. 
 The team then focuses on problem prediction 
to determine when the problem will happen 
next and what must happen to prevent future 
occurrence.
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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 630

Quality Management
Affinity Diagrams
An affinity diagram is one of the “Seven 
Management and Planning Tools”.
Created by Jiro Kawakita in the 1960s.
Sometimes referred to as the KJ Method.  
Used to sort a large number of ideas created 
during brainstorming based on their natural 
relationships for review and analysis. 
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Quality Management
Affinity Diagrams Steps
1. Record each idea on card or PostIts™.
2. Look for ideas that seem related.
3. Sort the cards into groups until all the cards 
have been used.
4. Once the cards are sorted create clusters or 
subgroups for easier analysis.

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Quality Management
Affinity Diagrams

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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 631

Quality Management
Cause and Effect Diagram
(Ishikawa or fishbone Diagram)
Time Machine Method Material

Major
Defect

Energy Measurement Personnel Environment Effect

Potential Causes

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Quality Management
Histogram

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Quality Management
Scatter Diagram

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PMP Exam Preparation Student Guide v.10.0 ©2017 Looking Glass Development
Course Presentation 632

Quality Management
 In Control – When ‘in control’ a process should not be 
adjusted.
 Specification Limits – Customer expectations or 
contract requirements.
UCL x
3ơ
x x 2ơ
x
x x x
1ơ
X x x
x x -1ơ
x
-2ơ
LCL -3ơ
 What is ‘out of control’ ?
 What is the ‘rule of 7’?
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Quality Management
Pareto Diagrams

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