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Project Management 2016 - Pinto - Quiz - Chapter 13

MBA Project Management

PROJECT MANAGEMENT 2016

Case study guides and online resources (2016)

Project Management: Achieving Competitive Advantage, 4th Edition, 2016, Jeffrey K. Pinto

 

 

Project Management: Achieving Competitive Advantage, 4e (Pinto)

Chapter 13   Project Evaluation and Control

 

1) The first step in the control cycle is:

  1. A) Setting a goal.
  2. B) Measuring progress.
  3. C) Comparing actual with planned performance.
  4. D) Taking action.

Answer:  A

Diff: 1

Section:  13.1 Control Cycles - A General Model

LO:  13.1: Understand the nature of the control cycle and four key steps in a general project control model.

Classification:  Concept

AACSB:  Application of Knowledge

 

2) Project goal setting includes setting a baseline plan, which is predicated on:

  1. A) The progress measurement.
  2. B) An accurate work breakdown structure.
  3. C) The type of gap analysis the project team plans to use.
  4. D) The budget and schedule limitations.

Answer:  B

Diff: 2

Section:  13.1 Control Cycles - A General Model

LO:  13.1: Understand the nature of the control cycle and four key steps in a general project control model.

Classification:  Concept

AACSB:  Application of Knowledge

 

3) Measurement mechanisms should include a clear definition of:

 

  1. A) The project baseline.
  2. B) The reporting relationships among members of the project team.
  3. C) What to measure.
  4. D) Trigger points.

Answer:  C

Diff: 2

Section:  13.1 Control Cycles - A General Model

LO:  13.1: Understand the nature of the control cycle and four key steps in a general project control model.

Classification:  Concept

AACSB:  Application of Knowledge

 

 

4) A measurement process that determines the project goals and then the degree to which the actual performance lives up to these goals is:

  1. A) A metric system.
  2. B) Goal-performance linkage.
  3. C) Five degrees of separation.
  4. D) Gap analysis.

Answer:  D

Diff: 2

Section:  13.1 Control Cycles - A General Model

LO:  13.1: Understand the nature of the control cycle and four key steps in a general project control model.

Classification:  Concept

AACSB:  Application of Knowledge

5) If significant deviations from the project plan are detected, corrective action is taken and then:

  1. A) The monitoring and control cycle begins anew.
  2. B) Project goals are adjusted to reflect current reality.
  3. C) The project stakeholders are informed of the budget or time difficulties.
  4. D) The critical chain is reviewed for task dependency.

Answer:  A

Diff: 2

Section:  13.1 Control Cycles - A General Model

LO:  13.1: Understand the nature of the control cycle and four key steps in a general project control model.

Classification:  Concept

AACSB:  Application of Knowledge

 

6) The project control cycle is continuous.

Answer:  TRUE

Diff: 1

Section:  13.1 Control Cycles - A General Model

LO:  13.1: Understand the nature of the control cycle and four key steps in a general project control model.

Classification:  Concept

AACSB:  Application of Knowledge

 

7) Gap analysis refers to any measurement process that first determines the goals and then the degree to which the actual performance lives up to those goals.

Answer:  FALSE

Diff: 2

Section:  13.1 Control Cycles - A General Model

LO:  13.1: Understand the nature of the control cycle and four key steps in a general project control model.

Classification:  Concept

AACSB:  Application of Knowledge

 

8) Sketch the project control cycle and discuss the activities that take place in each step.

Answer:  The project control cycle consists of setting a goal, measuring progress, comparing actual with planned performance, and taking action and recycling the process. Project goal setting goes beyond overall scope development to include setting the project baseline plan, predicated on an accurate work breakdown structure. Progress measurement should be achieved by a system that allows for ongoing measurement to be focused on what matters, conducted quickly, and in real time. Comparing actual with planned performance is the basis for gap analysis; the smaller the gaps, the more successful the project. Finally, taking action to narrow the gaps between actual and planned performance is considered corrective action in most cases, although a project could be terminated if the gaps are too wide or cannot be closed sufficiently. This process is iterative, so after corrective action is taken, the goal-setting process can begin anew.

Diff: 2

Section:  13.1 Control Cycles - A General Model

LO:  13.1: Understand the nature of the control cycle and four key steps in a general project control model.

Classification:  Concept

AACSB:  Application of Knowledge

 

9) What is a tracking Gantt chart and what are the benefits and drawbacks of its use?

Answer:  A tracking Gantt chart is a Gantt chart with an indication of current project status for each activity. The bar representing each activity changes color to reflect the percentage completion status, ranging from 0% to 100%, of the activity. At any given point in time it is possible to see the progress that has been made on all activities and to determine whether a project is progressing on, ahead of, or behind schedule.

A benefit of tracking Gantt charts is that they are easy to understand. This type of chart can be updated quickly allowing for real-time control. While they show the status of activities, they do not convey why the activities are in their current state. Tracking Gantt charts also do not allow for future projections of the project's status or predictions regarding project completion time or adherence to budget.

Diff: 2

Section:  13.1 Control Cycles - A General Model

LO:  13.1: Understand the nature of the control cycle and four key steps in a general project control model.

Classification:  Concept

AACSB:  Application of Knowledge

10) Define human factors and discuss their impact on project success?

Answer:  Human factors in project management focus on how humans behave and interact with the project management process. The controls discussed in the chapter all rely on objective and measurable data based on project outcomes. It is also important to maintain a clear understanding of the importance of people in the project implementation process. Humans must use these technical systems and at times the systems may be ill-suited for convenient use or the circumstances facing the users may provide incentives for the systems to be gamed or deliberately misused. Both non-technical and technical measures should be deployed in order to get a complete picture of how a project is progressing.

Diff: 1

Section:  13.1 Control Cycles - A General Model

LO:  13.1: Understand the nature of the control cycle and four key steps in a general project control model.

Classification:  Concept

AACSB:  Application of Knowledge

 

 

11) Identify a different key success driver and inhibitor for the project stages of formation, build-up, main phase, and close-out.

Answer:  There is considerable overlap in many of the key success drivers and inhibitors for project success. The presence of team and personal motivation and top management support appear throughout all of the phases of successful projects. Poor leadership and an unmotivated team are equally popular in each phase of a failed project. The breakdown in its entirety appears in the table.

 

Diff: 2

Section:  13.1 Control Cycles - A General Model

LO:  13.1: Understand the nature of the control cycle and four key steps in a general project control model.

Classification:  Application

AACSB:  Application of Knowledge

12) The classic project S-curve is a plot of:

  1. A) Labor hours versus money expended.
  2. B) Money expended versus elapsed time.
  3. C) Elapsed time versus labor hours.
  4. D) Number of personnel versus days behind schedule.

Answer:  A

Diff: 2

Section:  13.2 Monitoring Project Performance

LO:  13.2: Recognize the strengths and weaknesses of common project evaluation and control methods.

Classification:  Concept

AACSB:  Application of Knowledge

 

 

13) Use the S-curve to choose the BEST statement about the project it describes. The horizontal axis is in weeks.

  1. A) The total project costs in week 10 are less than budgeted.
  2. B) The total project costs in week 10 exceed the budgeted cost.
  3. C) The project cost more from weeks 25 through 30 than it did in weeks 10 through 15.
  4. D) The total amount spent on the project at the end of the 20th week is approximately $30,000.

Answer:  C

Diff: 2

Section:  13.2 Monitoring Project Performance

LO:  13.2: Recognize the strengths and weaknesses of common project evaluation and control methods.

Classification:  Critical Thinking

AACSB:  Analytical Thinking

14) Use the S-curve to choose the BEST statement about the project it describes. The horizontal axis is in weeks.

  1. A) More time passes from weeks 5 to 10 than from weeks 20 to 25.
  2. B) More time passes from $50,000 to $60,000 than from $5,000 to $10,000.
  3. C) More money is spent from weeks 0 to 10 than from weeks 30 to 40.
  4. D) The total amount spent on the project at the end of the 40th week is approximately $110,000.

Answer:  D

Diff: 2

Section:  13.2 Monitoring Project Performance

LO:  13.2: Recognize the strengths and weaknesses of common project evaluation and control methods.

Classification:  Critical Thinking

AACSB:  Analytical Thinking

 

 

15) Use the S-curve where the solid line is actual cost and the dashed line is budgeted cost to choose the BEST statement.

 

  1. A) The project is further ahead of budget from weeks 36 through 40 than from weeks 8 through 12.
  2. B) The project never experiences negative variance.
  3. C) The project is further behind budget from weeks 0 through 16 than from 24 through 40.
  4. D) The project is in a constant state of positive variance.

Answer:  A

Diff: 2

Section:  13.2 Monitoring Project Performance

LO:  13.2: Recognize the strengths and weaknesses of common project evaluation and control methods.

Classification:  Critical Thinking

AACSB:  Analytical Thinking

 

16) Use the S-curve where the solid line is actual cost and the dashed line is budgeted cost to choose the BEST statement.

 

  1. A) The project never experiences negative variance.
  2. B) With regards to budget, the project starts badly but finishes well
  3. C) With regards to budget, the project starts well but finishes badly.
  4. D) The project is in a constant state of positive variance.

Answer:  B

Diff: 2

Section:  13.2 Monitoring Project Performance

LO:  13.2: Recognize the strengths and weaknesses of common project evaluation and control methods.

Classification:  Concept

AACSB:  Application of Knowledge

 

17) A project manager that uses milestones as a project control device is using a:

  1. A) Proactive control system.
  2. B) Predictive control system.
  3. C) Feedback control system.
  4. D) Reactive control system.

Answer:  D

Diff: 1

Section:  13.2 Monitoring Project Performance

LO:  13.2: Recognize the strengths and weaknesses of common project evaluation and control methods.

Classification:  Concept

AACSB:  Application of Knowledge

 

18) An excellent way to coordinate schedules with vendors and suppliers is through the use of:

  1. A) Milestones.
  2. B) S-curves that plot expenditures against time.
  3. C) S-curves that plot planned expenditures against time.
  4. D) A tracking Gantt chart.

Answer:  A

Diff: 1

Section:  13.2 Monitoring Project Performance

LO:  13.2: Recognize the strengths and weaknesses of common project evaluation and control methods.

Classification:  Concept

AACSB:  Application of Knowledge

 

19) Milestones are generally considered to be:

  1. A) Demotivators for the project team.
  2. B) Key project review gates.
  3. C) The end of the project for all team members except the project manager.
  4. D) Points where two or more activities merge.

Answer:  B

Diff: 1

Section:  13.2 Monitoring Project Performance

LO:  13.2: Recognize the strengths and weaknesses of common project evaluation and control methods.

Classification:  Concept

AACSB:  Application of Knowledge

 

20) A tracking Gantt chart:

  1. A) Monitors costs and budget expenditures.
  2. B) Identifies key points in the project's progress.
  3. C) Identifies the stage of completion for each task.
  4. D) Identifies the performance to budget for the overall project by a certain date.

Answer:  C

Diff: 2

Section:  13.2 Monitoring Project Performance

LO:  13.2: Recognize the strengths and weaknesses of common project evaluation and control methods.

Classification:  Concept

AACSB:  Application of Knowledge

 

 

21) How does a tracking Gantt chart's appearance differ from a standard Gantt chart?

  1. A) The tracking Gantt chart has a plot against time on the X1 axis and shows progress against budget on the X2 axis.
  2. B) The tracking Gantt chart is composed of dollar signs that show the relative expense of the activity in comparison with other activities.
  3. C) Each bar in the tracking Gantt chart shows who is responsible for completion of the activity in question.
  4. D) Each bar in the tracking Gantt chart varies from 100% solid if the activity is completed to 100% alternative pattern if the activity has not begun.

Answer:  D

Diff: 2

Section:  13.2 Monitoring Project Performance

LO:  13.2: Recognize the strengths and weaknesses of common project evaluation and control methods.

Classification:  Concept

AACSB:  Application of Knowledge

22) It is possible to measure:

  1. A) Only positive deviations from the schedule baseline with a tracking Gantt chart.
  2. B) Only negative deviations from the schedule baseline with a tracking Gantt chart.
  3. C) Both positive and negative deviations from the schedule baseline with the tracking Gantt chart.
  4. D) Both positive and negative deviations from the budget with the tracking Gantt chart.

Answer:  A

Diff: 1

Section:  13.2 Monitoring Project Performance

LO:  13.2: Recognize the strengths and weaknesses of common project evaluation and control methods.

Classification:  Concept

AACSB:  Application of Knowledge

 

23) The classic S-curve is a plot of cumulative cost versus elapsed time in weeks.

Answer:  TRUE

Diff: 1

Section:  13.2 Monitoring Project Performance

LO:  13.2: Recognize the strengths and weaknesses of common project evaluation and control methods.

Classification:  Concept

AACSB:  Application of Knowledge

 

 

24) Positive variance on an S-curve represents significant project progress.

Answer:  FALSE

Diff: 2

Section:  13.2 Monitoring Project Performance

LO:  13.2: Recognize the strengths and weaknesses of common project evaluation and control methods.

Classification:  Concept

AACSB:  Application of Knowledge

 

25) One strength of S-curve analysis is that it provides real-time tracking information.

Answer:  TRUE

Diff: 2

Section:  13.2 Monitoring Project Performance

LO:  13.2: Recognize the strengths and weaknesses of common project evaluation and control methods.

Classification:  Concept

AACSB:  Application of Knowledge

 

26) Since a project may get ahead of or fall behind schedule, a calendar date cannot be a milestone.

Answer:  TRUE

Diff: 2

Section:  13.2 Monitoring Project Performance

LO:  13.2: Recognize the strengths and weaknesses of common project evaluation and control methods.

Classification:  Concept

AACSB:  Application of Knowledge

 

27) It is possible to measure both positive and negative deviations from the schedule baseline with the tracking Gantt chart.

Answer:  TRUE

Diff: 2

Section:  13.2 Monitoring Project Performance

LO:  13.2: Recognize the strengths and weaknesses of common project evaluation and control methods.

Classification:  Concept

AACSB:  Application of Knowledge

 

28) Use the S-curves for this project to create a table showing budgeted and actual expenses and variance in thousands of dollars and comment on the project's performance. The horizontal axis is in weeks.

 

Answer:  The project experiences positive variance from the beginning through week 40 after which point the variance becomes negative. The largest positive variance occurs at the end of the 15th week when the variance is $3,000 and the largest negative variance occurs at the end when the discrepancy is $2,000. The full set of values for the project are computed in the table below. The performance is unknown; budget performance appears to be good, but we are not given information regarding client acceptance.

 

Time

Cumulative Budgeted Cost

Cumulative Actual Cost

5

2

3

10

4

6

15

7.5

10.5

20

12.5

14.5

25

18.5

19.5

30

25.5

25.5

35

30.5

31.5

40

33.5

33.5

45

35.5

34.5

50

36.5

34.5

Diff: 2

Section:  13.2 Monitoring Project Performance

LO:  13.2: Recognize the strengths and weaknesses of common project evaluation and control methods.

Classification:  Critical Thinking

AACSB:  Analytical Thinking

 

29) What are any four benefits to using milestones as a form of project control? What advantage do they hold over pure S-curve analysis?

Answer:  There are several benefits to using milestones as a form of project control:

Milestones signal the completion of important project steps.

Milestones can motivate the project team.

Milestones offer points at which to reevaluate client needs and any potential change requests.

Milestones help coordinate schedules with vendors and suppliers.

Milestones identify key project review gates.

Milestones signal other team members when their participation is expected to begin.

S-curve analysis is a plot of expense versus time, but it is difficult to ascertain why variance from the anticipated curve exists and whether the variance is good news or bad news.

Diff: 2

Section:  13.2 Monitoring Project Performance

LO:  13.2: Recognize the strengths and weaknesses of common project evaluation and control methods.

Classification:  Application

AACSB:  Application of Knowledge

 

30) What are drawbacks to a pure S-curve analysis?

Answer:  S-curves do not allow troubleshooting (interpretation as to the cause of a negative or positive variance). The project may incur expenses far under what was budgeted, but solely by examining the curve, there is no way to tell if less work has been completed than planned or if some amazingly cost-effective method of completing work has been implemented. The same holds true for the opposite effect, expenses could be far above what was anticipated and instead of being ahead of schedule, the project could be in serious financial trouble. Such are the vicissitudes of S-curves.

Diff: 2

Section:  13.2 Monitoring Project Performance

LO:  13.2: Recognize the strengths and weaknesses of common project evaluation and control methods.

Classification:  Application

AACSB:  Application of Knowledge

 

 

31) What are the problems with milestones as a project control mechanism?

Answer:  The problem with milestones is that they are a reactive control system. You must first engage in project activities and then evaluate them relative to your goal. If you significantly underperform your work to that point, you are faced with having to correct what has already transpired. Imagine, for example, that a project team misses a milestone by a large margin. Not having received any progress reports until the point that the bad news becomes public, the project manager is probably not in a position to craft an immediate remedy for the shortfall. At this point, the problems are compounded. Due to the delay in receiving the bad news, remedial steps are themselves delayed, pushing the project even farther behind.

Diff: 2

Section:  13.2 Monitoring Project Performance

LO:  13.2: Recognize the strengths and weaknesses of common project evaluation and control methods.

Classification:  Application

AACSB:  Application of Knowledge

32) Earned value management is also known as:

  1. A) The golden triangle method (GTM).
  2. B) The achieved value method (AVM).
  3. C) The program evaluation and review method (PERM).
  4. D) Earned value analysis (EVA).

Answer:  A

Diff: 1

Section:  13.3 Earned Value Management

LO:  13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification:  Concept

AACSB:  Application of Knowledge

 

33) Earned value management jointly considers the impact of:

  1. A) Time, cost, and planned cost.
  2. B) Project performance, planned performance, and cost.
  3. C) Performance, cost, and time.
  4. D) Planned cost, planned performance, and time.

Answer:  C

Diff: 2

Section:  13.3 Earned Value Management

LO:  13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification:  Concept

AACSB:  Application of Knowledge

 

 

34) Which of these tools allows a project team to make future projections of project status based on its current state?

  1. A) Tracking Gantt chart
  2. B) Milestone chart
  3. C) S-curve
  4. D) Earned value management

Answer:  C

Diff: 2

Section:  13.3 Earned Value Management

LO:  13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification:  Concept

AACSB:  Application of Knowledge

 

35) Take the factors considered by earned value analysis and subtract those considered by project S-curves. The factor(s) you have remaining are:

  1. A) Performance and cost.
  2. B) Cost and schedule.
  3. C) Time.
  4. D) Performance.

Answer:  D

Diff: 2

Section:  13.3 Earned Value Management

LO:  13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification:  Application

AACSB:  Application of Knowledge

36) Take the factors considered by earned value analysis and subtract those considered by tracking Gantt charts. The factor(s) you have remaining are:

  1. A) Cost.
  2. B) Cost and schedule.
  3. C) Schedule and performance.
  4. D) Performance.

Answer:  A

Diff: 2

Section:  13.3 Earned Value Management

LO:  13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification:  Concept

AACSB:  Application of Knowledge

 

 

37) Planned value is:

  1. A) The total budget for the project.
  2. B) A cost estimate of the budgeted resources across the project's life cycle.
  3. C) The real budgeted value of the work that has actually been performed to date.
  4. D) The cumulative total costs incurred in accomplishing the various project work packages.

Answer:  B

Diff: 2

Section:  13.3 Earned Value Management

LO:  13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification:  Concept

AACSB:  Application of Knowledge

 

38) Earned value is:

  1. A) The total budget for the project.
  2. B) A cost estimate of the budgeted resources across the project's life cycle.
  3. C) The real budgeted value of the work that has actually been performed to date.
  4. D) The cumulative total costs incurred in accomplishing the various project work packages.

Answer:  C

Diff: 2

Section:  13.3 Earned Value Management

LO:  13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification:  Concept

AACSB:  Application of Knowledge

 

39) The earned value to date divided by the planned value of work scheduled to be performed is the:

  1. A) Cost performance index.
  2. B) Budgeted cost at completion index.
  3. C) Budget efficiency index.
  4. D) Schedule performance index.

Answer:  D

Diff: 2

Section:  13.3 Earned Value Management

LO:  13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification:  Critical Thinking

AACSB:  Analytical Thinking

 

40) The earned value divided by the actual, cumulative cost of the work to date is the:

  1. A) Cost performance index.
  2. B) Budgeted cost at completion index.
  3. C) Budget efficiency index.
  4. D) Schedule performance index.

Answer:  A

Diff: 2

Section:  13.3 Earned Value Management

LO:  13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification:  Critical Thinking

AACSB:  Analytical Thinking

 

41) A project manager can calculate the projected schedule of the project to completion by using the:

  1. A) Cost performance index.
  2. B) Schedule performance index.
  3. C) Budgeted cost at completion index.
  4. D) Budget efficiency index.

Answer:  B

Diff: 2

Section:  13.3 Earned Value Management

LO:  13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification:  Concept

AACSB:  Application of Knowledge

 

42) A project manager can calculate the projected budget to completion by using the:

  1. A) Budgeted cost at completion index.
  2. B) Budget efficiency index.
  3. C) Cost performance index.
  4. D) Schedule performance index.

Answer:  C

Diff: 2

Section:  13.3 Earned Value Management

LO:  13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification:  Concept

AACSB:  Application of Knowledge

 

 

43) The project baseline is established by combining data from the:

  1. A) Work breakdown structure and the project budget.
  2. B) Time-phased project budget and the PERT chart.
  3. C) S-curve and the project budget.
  4. D) Time-phased project budget and the work breakdown structure.

Answer:  D

Diff: 2

Section:  13.3 Earned Value Management

LO:  13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification:  Concept

AACSB:  Application of Knowledge

44) Use the data to calculate the earned value for the project. All amounts are in thousands of dollars.

 

  1. A) $38,500
  2. B) $43,250
  3. C) $54,750
  4. D) $100,000

Answer:  A

Diff: 2

Section:  13.3 Earned Value Management

LO:  13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification:  Critical Thinking

AACSB:  Analytical Thinking

 

 

45) Use the data to calculate the earned value for the project. All amounts are in thousands of dollars.

 

  1. A) $38,500
  2. B) $46,550
  3. C) $56,750
  4. D) $61,125

Answer:  B

Diff: 2

Section:  13.3 Earned Value Management

LO:  13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification:  Critical Thinking

AACSB:  Analytical Thinking

 

46) Use the data to calculate the earned value for the project. All amounts are in thousands of dollars.

  1. A) $65,500
  2. B) $69,550
  3. C) $71,100
  4. D) $76,125

Answer:  C

Diff: 2

Section:  13.3 Earned Value Management

LO:  13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification:  Critical Thinking

AACSB:  Analytical Thinking

 

 

47) At the end of week 20, this project has cost $79,000 and has an earned value as indicated in the table. Use the data to calculate the cost performance index for the project. All amounts are in thousands of dollars.

  1. A) 1.11
  2. B) 0.82
  3. C) 0.94
  4. D) 0.90

Answer:  D

Diff: 3

Section:  13.3 Earned Value Management

LO:  13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification:  Critical Thinking

AACSB:  Analytical Thinking

48) At the end of week 10, this project has cost $9,000 and has an earned value as indicated in the table. Use the data to calculate the cost performance index for the project. All amounts are in thousands of dollars.

 

  1. A) 2.5
  2. B) 2.1
  3. C) 1.8
  4. D) 1.5

Answer:  A

Diff: 3

Section:  13.3 Earned Value Management

LO:  13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification:  Critical Thinking

AACSB:  Analytical Thinking

 

 

49) Use the data to calculate the schedule performance index for the project for the end of week 20. All amounts are in thousands of dollars.

 

  1. A) 1.14
  2. B) 0.88
  3. C) 0.94
  4. D) 0.81

Answer:  B

Diff: 3

Section:  13.3 Earned Value Management

LO:  13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification:  Critical Thinking

AACSB:  Analytical Thinking

50) Use the data to calculate the schedule performance index for the project for the end of week 10. All amounts are in thousands of dollars.

 

  1. A) 1.24
  2. B) 0.93
  3. C) 0.81
  4. D) 0.76

Answer:  C

Diff: 3

Section:  13.3 Earned Value Management

LO:  13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification:  Critical Thinking

AACSB:  Analytical Thinking

 

 

51) The first step in earned value management is to:

  1. A) Create the activity and resource usage schedules.
  2. B) Develop a time-phased budget that shows expenditures across the project's life.
  3. C) Total the actual costs of doing each task to arrive at the actual cost of work performed.
  4. D) Clearly define each activity that will be performed including its resource needs and budget.

Answer:  D

Diff: 2

Section:  13.3 Earned Value Management

LO:  13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification:  Concept

AACSB:  Application of Knowledge

 

52) In earned value management analysis, the cumulative amount of the budget becomes the:

  1. A) Planned value.
  2. B) Scheduled value.
  3. C) Cost basis.
  4. D) Cost driver.

Answer:  A

Diff: 2

Section:  13.3 Earned Value Management

LO:  13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification:  Concept

AACSB:  Application of Knowledge

53) In earned value management, schedule variance is defined as:

  1. A) The difference between the earned value and the actual cost.
  2. B) The difference between the earned value and the planned value.
  3. C) The difference between the actual cost and the planned value.
  4. D) The difference between the cost and schedule performance indices multiplied by the budgeted cost at completion.

Answer:  B

Diff: 2

Section:  13.3 Earned Value Management

LO:  13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification:  Concept

AACSB:  Application of Knowledge

 

 

54) The budget variance is calculated as:

  1. A) Earned value minus planned value.
  2. B) Planned value minus actual cost.
  3. C) Earned value minus actual cost.
  4. D) Cost minus planned value.

Answer:  C

Diff: 2

Section:  13.3 Earned Value Management

LO:  13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification:  Concept

AACSB:  Application of Knowledge

 

55) Use the earned value table (all amounts indicated are dollars) to determine the earned value to the nearest hundred dollars given the indicated state of the project.

 

Activity

5

10

15

20

25

30

35

Plan

% Complete

A

850

350

 

 

 

 

 

1,200

100%

B

 

400

125

 

 

 

 

525

100%

C

 

 

1,275

650

 

 

 

1,925

100%

D

 

 

 

2800

4,500

350

 

7,650

95%

E

 

 

 

 

680

400

 

1,080

75%

F

 

 

 

 

 

125

875

1,000

80%

G

 

 

 

 

 

300

1200

1,500

45%

Monthly Plan

850

750

1,400

3,450

5,180

1,175

2,075

14,880

 

Monthly Act

900

650

1,350

3,875

4,780

850

2,000

 

 

  1. A) $16,900
  2. B) $14,900
  3. C) $14,400
  4. D) $13,200

Answer:  D

Diff: 2

Section:  13.3 Earned Value Management

LO:  13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification:  Concept

AACSB:  Analytical Thinking

 

56) Use the earned value table to determine the schedule performance index given the indicated state of the project.

 

Activity

5

10

15

20

25

30

35

Plan

% Complete

A

850

350

 

 

 

 

 

1,200

100%

B

 

400

125

 

 

 

 

525

100%

C

 

 

1,275

650

 

 

 

1,925

100%

D

 

 

 

2800

4,500

350

 

7,650

95%

E

 

 

 

 

680

400

 

1,080

75%

F

 

 

 

 

 

125

875

1,000

80%

G

 

 

 

 

 

300

1200

1,500

45%

Monthly Plan

850

750

1,400

3,450

5,180

1,175

2,075

14,880

 

Monthly Act

900

650

1,350

3,875

4,780

850

2,000

 

 

  1. A) 0.89
  2. B) 0.92
  3. C) 1.09
  4. D) 1.13

Answer:  A

Diff: 2

Section:  13.3 Earned Value Management

LO:  13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification:  Concept

AACSB:  Analytical Thinking

 

 

57) Use the earned value table to determine the cost performance index given the indicated state of the project.

 

Activity

5

10

15

20

25

30

35

Plan

% Complete

A

850

350

 

 

 

 

 

1,200

100%

B

 

400

125

 

 

 

 

525

100%

C

 

 

1,275

650

 

 

 

1,925

100%

D

 

 

 

2800

4,500

350

 

7,650

95%

E

 

 

 

 

680

400

 

1,080

75%

F

 

 

 

 

 

125

875

1,000

80%

G

 

 

 

 

 

300

1200

1,500

45%

Monthly Plan

850

750

1,400

3,450

5,180

1,175

2,075

14,880

 

Monthly Act

900

650

1,350

3,875

4,780

850

2,000

 

 

  1. A) 0.89
  2. B) 0.92
  3. C) 1.09
  4. D) 1.13

Answer:  B

Diff: 2

Section:  13.3 Earned Value Management

LO:  13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification:  Concept

AACSB:  Analytical Thinking

 

58) Use the earned value table to determine the estimated time to completion given the indicated state of the project.

 

Activity

5

10

15

20

25

30

35

Plan

% Complete

A

850

350

 

 

 

 

 

1,200

100%

B

 

400

125

 

 

 

 

525

100%

C

 

 

1,275

650

 

 

 

1,925

100%

D

 

 

 

2800

4,500

350

 

7,650

95%

E

 

 

 

 

680

400

 

1,080

75%

F

 

 

 

 

 

125

875

1,000

80%

G

 

 

 

 

 

300

1200

1,500

45%

Monthly Plan

850

750

1,400

3,450

5,180

1,175

2,075

14,880

 

Monthly Act

900

650

1,350

3,875

4,780

850

2,000

 

 

  1. A) 35 days
  2. B) 37 days
  3. C) 39 weeks
  4. D) 41 weeks

Answer:  C

Diff: 2

Section:  13.3 Earned Value Management

LO:  13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification:  Concept

AACSB:  Analytical Thinking

 

 

59) Use the earned value table to determine the estimated cost to completion given the indicated state of the project.

 

Activity

5

10

15

20

25

30

35

Plan

% Complete

A

850

350

 

 

 

 

 

1,200

100%

B

 

400

125

 

 

 

 

525

100%

C

 

 

1,275

650

 

 

 

1,925

100%

D

 

 

 

2800

4,500

350

 

7,650

95%

E

 

 

 

 

680

400

 

1,080

75%

F

 

 

 

 

 

125

875

1,000

80%

G

 

 

 

 

 

300

1200

1,500

45%

Monthly Plan

850

750

1,400

3,450

5,180

1,175

2,075

14,880

 

Monthly Act

900

650

1,350

3,875

4,780

850

2,000

 

 

  1. A) $15,966
  2. B) $16,235
  3. C) $18,164
  4. D) $17,441

Answer:  B

Diff: 2

Section:  13.3 Earned Value Management

LO:  13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification:  Concept

AACSB:  Analytical Thinking

 

60) Use the earned value table for Project Makeready to determine the earned value at week 49.

 

Activity

7

14

21

28

35

42

49

Plan

% Complete

Install fixtures

325

250

 

 

 

 

 

575

100%

Refinish floors

 

550

85

 

 

 

 

635

100%

Replace doors

 

 

350

275

 

 

 

625

100%

Complete tiling

 

 

 

1,200

565

 

 

1,765

80%

Install back door

 

 

 

 

875

225

 

1,100

70%

Landscaping

 

 

 

 

 

200

350

550

25%

Monthly Plan

325

800

435

1,475

1,440

425

350

5,250

 

Monthly Act

550

550

550

1,100

1,650

550

1,100

 

 

  1. A) $4,950
  2. B) $6,050
  3. C) $4,155
  4. D) $5,250

Answer:  C

Diff: 2

Section:  13.3 Earned Value Management

LO:  13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification:  Critical Thinking

AACSB:  Analytical Thinking

 

 

61) What is the cost variance of Project Makeready based on the data in the earned value table shown below?

 

Activity

7

14

21

28

35

42

49

Plan

% Complete

Install fixtures

325

250

 

 

 

 

 

575

100%

Refinish floors

 

550

85

 

 

 

 

635

100%

Replace doors

 

 

350

275

 

 

 

625

100%

Complete tiling

 

 

 

1,200

565

 

 

1,765

80%

Install back door

 

 

 

 

875

225

 

1,100

70%

Landscaping

 

 

 

 

 

200

350

550

25%

Monthly Plan

325

800

435

1,475

1,440

425

350

5,250

 

Monthly Act

550

550

550

1,100

1,650

550

1,100

 

 

  1. A) -$1,896
  2. B) -$1,096
  3. C) -$800
  4. D) -$406

Answer:  A

Diff: 2

Section:  13.3 Earned Value Management

LO:  13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification:  Critical Thinking

AACSB:  Analytical Thinking

 

62) Use the earned value table for Project Makeready to determine the schedule variance.

 

Activity

7

14

21

28

35

42

49

Plan

% Complete

Install fixtures

325

250

 

 

 

 

 

575

100%

Refinish floors

 

550

85

 

 

 

 

635

100%

Replace doors

 

 

350

275

 

 

 

625

100%

Complete tiling

 

 

 

1,200

565

 

 

1,765

80%

Install back door

 

 

 

 

875

225

 

1,100

70%

Landscaping

 

 

 

 

 

200

350

550

25%

Monthly Plan

325

800

435

1,475

1,440

425

350

5,250

 

Monthly Act

550

550

550

1,100

1,650

550

1,100

 

 

  1. A) -$1,896
  2. B) -$1,096
  3. C) -$800
  4. D) -$206

Answer:  B

Diff: 2

Section:  13.3 Earned Value Management

LO:  13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification:  Critical Thinking

AACSB:  Analytical Thinking

 

 

63) Use the earned value table for Project Makeready to calculate their schedule performance index.

 

Activity

7

14

21

28

35

42

49

Plan

% Complete

Install fixtures

325

250

 

 

 

 

 

575

100%

Refinish floors

 

550

85

 

 

 

 

635

100%

Replace doors

 

 

350

275

 

 

 

625

100%

Complete tiling

 

 

 

1,200

565

 

 

1,765

80%

Install back door

 

 

 

 

875

225

 

1,100

70%

Landscaping

 

 

 

 

 

200

350

550

25%

Monthly Plan

325

800

435

1,475

1,440

425

350

5,250

 

Monthly Act

550

550

550

1,100

1,650

550

1,100

 

 

  1. A) 1.46
  2. B) 0.68
  3. C) 0.79
  4. D) 1.26

Answer:  C

Diff: 2

Section:  13.3 Earned Value Management

LO:  13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification:  Critical Thinking

AACSB:  Analytical Thinking

 

64) Use the earned value table for Project Makeready to calculate the estimated cost to completion.

 

Activity

7

14

21

28

35

42

49

Plan

% Complete

Install fixtures

325

250

 

 

 

 

 

575

100%

Refinish floors

 

550

85

 

 

 

 

635

100%

Replace doors

 

 

350

275

 

 

 

625

100%

Complete tiling

 

 

 

1,200

565

 

 

1,765

80%

Install back door

 

 

 

 

875

225

 

1,100

70%

Landscaping

 

 

 

 

 

200

350

550

25%

Monthly Plan

325

800

435

1,475

1,440

425

350

5,250

 

Monthly Act

550

550

550

1,100

1,650

550

1,100

 

 

  1. A) $4,285
  2. B) $5,250
  3. C) $6,050
  4. D) $7,645

Answer:  D

Diff: 2

Section:  13.3 Earned Value Management

LO:  13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification:  Critical Thinking

AACSB:  Analytical Thinking

 

65) If an activity's progress is defined as 0% until the activity is complete, the project manager is using:

  1. A) The 50/50 rule.
  2. B) The all or nothing rule.
  3. C) The 0/100 rule.
  4. D) The Do Not Pass Go rule.

Answer:  C

Diff: 1

Section:  13.5 Issues in the Effective Use of Earned Value Management

LO:  13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification:  Concept

AACSB:  Application of Knowledge

 

 

66) Once an activity is begun, it is assumed to be half done under the:

  1. A) "Once begun, half done" rule.
  2. B) Minimal effort rule.
  3. C) Midway rule.
  4. D) 50/50 rule.

Answer:  D

Diff: 1

Section:  13.5 Issues in the Effective Use of Earned Value Management

LO:  13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification:  Concept

AACSB:  Application of Knowledge

67) Each activity contained a series of milestones that represented a previously agreed-upon amount of work. Once the low graffiti was erased, 35% of the activity had been completed and once the mid-level graffiti was erased, 70% of the activity had been completed. This project manager was clearly in the:

  1. A) Percentage complete camp.
  2. B) Micromanagement camp.
  3. C) 35/70 camp.
  4. D) 3K specifications camp.

Answer:  A

Diff: 1

Section:  13.5 Issues in the Effective Use of Earned Value Management

LO:  13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification:  Critical Thinking

AACSB:  Analytical Thinking

 

68) Very short work packages would be better managed by:

  1. A) The percentage complete rule.
  2. B) The 0/100 rule.
  3. C) The caveat emptor rule.
  4. D) The prior knowledge rule.

Answer:  B

Diff: 2

Section:  13.5 Issues in the Effective Use of Earned Value Management

LO:  13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification:  Critical Thinking

AACSB:  Analytical Thinking

 

 

69) Earned value directly links all three primary project success metrics (cost, schedule, and customer satisfaction).

Answer:  FALSE

Diff: 2

Section:  13.3 Earned Value Management

LO:  13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification:  Concept

AACSB:  Application of Knowledge

 

70) The one factor that earned value management considers that an S-curve does not include is performance.

Answer:  TRUE

Diff: 2

Section:  13.3 Earned Value Management

LO:  13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification:  Concept

AACSB:  Application of Knowledge

 

71) The earned value of a project is the cumulative total costs incurred in accomplishing the various work packages.

Answer:  FALSE

Diff: 2

Section:  13.3 Earned Value Management

LO:  13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification:  Concept

AACSB:  Application of Knowledge

72) A project manager needs the work breakdown structure and a time-phased project budget to establish the project baseline.

Answer:  TRUE

Diff: 2

Section:  13.3 Earned Value Management

LO:  13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification:  Concept

AACSB:  Application of Knowledge

 

 

73) Five weeks in the semester you have completed 0% of your project management class under the 0/100 rule.

Answer:  TRUE

Diff: 2

Section:  13.5 Issues in the Effective Use of Earned Value Management

LO:  13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification:  Concept

AACSB:  Application of Knowledge

 

74) Your organization is in the midst of a project in uncharted waters; nothing you have attempted before comes close to many of the activities that are necessary to bring this project to completion. Your earned value management should probably be tracked closely with a percentage complete rule in increments of 5 to 10 percent.

Answer:  FALSE

Diff: 2

Section:  13.5 Issues in the Effective Use of Earned Value Management

LO:  13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification:  Concept

AACSB:  Application of Knowledge

 

 

75) You are the new consultant to the project manager for a large chicken project. During your first meeting with the project manager he brings you up to speed on the project status by showing you these S-curves. You glance at the graph, compose your thoughts, and make what comments on this project?

 

Answer:  The solid line, representing the cumulative actual expenses, stops at the end of the 6th month, meaning that the project is probably at the end of the 6th month or in the 7th month with no figures yet reported. Another possibility is that the project was abandoned, but if you're having this meeting about it, chances are that it is still a viable concern. Finally, the project could be done, but again, this is unlikely if you're being brought in to consult at this stage.

The project has been performing poorly with respect to budget. From the beginning, the variance has been positive and seems to be increasing as the project progresses. This may be the result of every single activity costing more than estimated or a common thread such as labor or transportation costs that weaves through every activity that costs more than estimated. Other explanations include that the project was purposely underestimated so it would be approved or that the budget was cut by someone not closely associated with its planning or execution.

You can't reliably comment on when the project will finish; it may be performing badly on the time-phased budget because actual work is ahead of schedule. For this reason you can't say the project will end in an over-budget situation.

Diff: 2

Section:  13.3 Earned Value Management

LO:  13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification:  Critical Thinking

AACSB:  Analytical Thinking

 

 

76) What is earned value management and how can it be used to monitor project status?

Answer:  Earned Value Management (EVM) is a project status tracking tool that jointly monitors budget, time, and performance and allows future projections of project status based on current state and baseline. Earned value is the real budgeted cost, or value, of the work that has actually been performed. This is compared to the planned value across the project's life cycle and the actual costs incurred in accomplishing the various work packages. The work breakdown structure and a time-phased budget can be combined to create a project baseline that allows a project manager to compare the project's progress and expenses against plan at any and all stages of project completion.

Diff: 2

Section:  13.3 Earned Value Management

LO:  13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification:  Application

AACSB:  Application of Knowledge

77) What are the inputs and the steps in applying earned value management as a project management tool?

Answer:  The two pieces of data required to implement earned value management are the work breakdown structure and a time-phased project budget. The work breakdown structure identifies the individual work packages and tasks necessary to accomplish the project. It also gives us some understanding of the hierarchy of tasks, in order to set up work packages and identify personnel needs. The time-phased budget allows us to identify the correct sequencing of tasks and enables the project team to determine the points in the project when budget money is likely to be spent in pursuit of those tasks. These two pieces of information are combined to form the project baseline, which shows time-phased activities and expenditures for them.

Earned value is calculated by applying the percentage completion of all project activities to the expenses of those activities. We can then compare the planned budget against the actual earned value, using the original project budget baseline.

Diff: 2

Section:  13.3 Earned Value Management

LO:  13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification:  Concept

AACSB:  Application of Knowledge

 

 

78) Geoff coolly surveyed his earned value table at the conclusion of month 24. It was hard to believe that two short years ago, with his membership at Match.com about to expire, he had managed to craft an ad that was both urbane and manly enough as to catch the eye of the divine Miss Smylie. (The male model photo he substituted for his own certainly didn't hurt either.) Now he was almost done managing this critical project. Some might think him crass for taking such an approach, but he practiced what he preached at the small commuter school where he taught. Calculate all of the schedule and cost variances (costs in the table are in dollars) for this project and comment on Geoff's skills as a project manager.

 

Activity

4

8

12

16

20

24

28

Total

% Complete

Courtship

1000

2000

3000

3000

3000

1000

 

13000

90%

Proposal

 

500

5000

0

0

5000

 

10500

100%

Negotiations

 

500

0

1000

 

 

 

1500

100%

Invitations

 

 

800

 

 

 

 

800

100%

Showers

 

 

400

800

800

 

 

2000

100%

Musicians

 

 

 

400

 

 

1000

1400

20%

Caterer

 

 

 

200

2000

 

5000

7200

30%

Rehearsal

 

 

 

 

400

 

4000

4400

10%

Party

 

 

 

 

 

1000

2000

3000

20%

Ceremony

 

 

500

500

500

500

3500

5500

20%

Reception

 

 

1000

 

1000

 

6000

8000

30%

Honeymoon

 

 

 

 

2000

 

4000

6000

40%

Total

1000

3000

10700

5900

9700

7500

25500

63300

 

Cumulative

1000

4000

14700

20600

30300

37800

63300

 

 

Actual

2500

5100

12700

6400

10600

9000

0

 

 

Cumulative Actual

2500

7600

20300

26700

37300

46300

 

 

 

Answer:  The schedule variances for this earned value management table are as follows:

Planned value (PV) is $37,800 from the table.

Earned value (EV) is the sum of the products of the activity total costs times their percentage complete.

 

EV =  × 1000

EV = $35,880

 

Schedule Performance Index: EV/PV = 35,880/37,800 = 0.949

Estimated Time to Completion: (1/SPI) Planned Time = (1/.949)28 = 29.498 months

 

The cost variances for the EVM table are:

Actual cost of work performed (AC): $46,300 (from table)

Earned value (EV): $35,880 (calculated above)

Cost performance index (CPI): EV/AC=35,880/46,300 = 0.775

Estimated cost to completion: (1/CPI) Plan Budget = (1/0.775) ∗ 63,300 = $81,683

 

 

Geoff's skills as a project manager are a cause for concern; instead of bringing the project in for $63,300 and in 28 months, he stands to spend an extra $18,383 and not complete the project by the 28th month, extending past this deadline an extra 6 weeks. EVM isn't everything though; what's an extra $18 grand and 6 weeks when you've found your soul mate?

Diff: 2

Section:  13.3 Earned Value Management

LO:  13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification:  Critical Thinking

AACSB:  Analytical Thinking

79) Inspired by his trip to Greece, the gentleman farmer decided he needed a Mykonos-style windmill pumping a pond for his sheep and orchard. His earned value table for the project appears below. At the end of June, what was the estimated time to completion and the estimated cumulative cost to completion?

 

Activity

Jan

Feb

Mar

Apr

May

Jun

Jul

Plan

% Complete

Earned Value

Grading

500

150

 

 

 

 

 

650

100%

650

Footings

 

200

150

 

 

 

 

350

100%

350

Foundation

 

 

800

300

 

 

 

1,100

80%

880

Masonry

 

 

 

300

300

200

 

800

70%

560

Interior

 

 

 

 

700

2,000

 

2,700

50%

1,350

Pump Install

 

 

 

 

 

 

3,000

3,000

40%

1,200

Painting

 

 

 

 

 

350

400

750

25%

188

Monthly Plan

500

350

950

600

1,000

2,550

3,400

9,350

 

5,178

Cumulative

500

850

1,800

2,400

3,400

5,950

9,350

 

 

 

Monthly Actual

600

400

900

800

800

2,800

0

 

 

 

Cumulative Actual

600

1,000

1,900

2,700

3,500

6,300

 

 

 

 

Answer:  At the end of June, the PV=5950; EV=5,178; and AC=6,300. The SPI=0.87 and the estimated time to completion is 8.04 months. The cost performance is 0.82, so the estimated cost to completion is $11,377.

Diff: 3

Section:  13.3 Earned Value Management

LO:  13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification:  Critical Thinking

AACSB:  Analytical Thinking

 

 

80) Inspired by his trip to Greece, the gentleman farmer decided he needed a Mykonos-style windmill pumping a pond for his sheep and orchard. His earned value table for the project appears below. Develop a plot that shows the project baseline and earned value through June and comment on the project.

 

Activity

Jan

Feb

Mar

Apr

May

Jun

Jul

Plan

% Complete

Earned Value

Grading

500

150

 

 

 

 

 

650

100%

650

Footings

 

200

150

 

 

 

 

350

100%

350

Foundation

 

 

800

300

 

 

 

1,100

80%

880

Masonry

 

 

 

300

300

200

 

800

70%

560

Interior

 

 

 

 

700

2,000

 

2,700

50%

1,350

Pump Install

 

 

 

 

 

 

3,000

3,000

40%

1,200

Painting

 

 

 

 

 

350

400

750

25%

188

Monthly Plan

500

350

950

600

1,000

2,550

3,400

9,350

 

5,178

Cumulative

500

850

1,800

2,400

3,400

5,950

9,350

 

 

 

Monthly Actual

600

400

900

800

800

2,800

0

 

 

 

Cumulative Actual

600

1,000

1,900

2,700

3,500

6,300

 

 

 

 

Answer:  The project is slightly over budget and slightly behind, but not dramatically so.

 

Diff: 2

Section:  13.3 Earned Value Management

LO:  13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification:  Critical Thinking

AACSB:  Analytical Thinking

 

 

81) What is the significance of the 0/100 rule and the 50/50 rule and why would each be used?

Answer:  The 0/100 rule and the 50/50 rule are both techniques for assigning a completion value to activities in a project. A completion value for every activity is a vital piece of information when applying earned value management analysis. The 0/100 rule says that an activity is 0% complete until it is finished, at which time it is 100% complete. The 50/50 rule says that once an activity has been started, it is assigned a value of 50% complete until it is completed, at which time it is 100% complete. Both rules are easy to apply; rather than trying to estimate a precise completion percentage, the project manager or subcontractor needs only supply one of two numbers. These rules are appropriate when work packages are short or are of a nature that vendor deliveries are required.

Diff: 1

Section:  13.5 Issues in the Effective Use of Earned Value Management

LO:  13.3 Understand how Earned Value Management can assist project tracking and evaluation.

Classification:  Concept

AACSB:  Application of Knowledge

82) Earned value management at the portfolio level requires:

  1. A) A single project manager with a single metric system.
  2. B) Aggregation of all earned value measures across the firm's entire project portfolio.
  3. C) Only positive variances for both budget and schedule.
  4. D) Only negative variances for both budget and schedule.

Answer:  B

Diff: 2

Section:  13.4 Using Earned Value to Manage a Portfolio of Projects

LO:  13.4: Use Earned Value Management for project portfolio analysis.

Classification:  Concept

AACSB:  Application of Knowledge

 

83) Can earned value be used to manage a portfolio of projects? If so, how would this analysis proceed?

Answer:  I'm glad you asked! Earned value management can indeed be used at the portfolio level. The process involves the aggregation of all earned value measures across the firm's entire project portfolio in order to give an indication as to the efficiency with which a company is managing its projects. Each project is described by its own EVM calculations and these calculations are rolled up into an overall portfolio number that reflects schedule and cost variance and estimated completion costs.

Diff: 1

Section:  13.4 Using Earned Value to Manage a Portfolio of Projects

LO:  13.4: Use Earned Value Management for project portfolio analysis.

Classification:  Concept

AACSB:  Application of Knowledge

 

 

84) A recurring problem with establishing accurate or meaningful EVM results has to do with:

  1. A) The 0/100 rule.
  2. B) Over-reliance on the S-curve.
  3. C) The need to recognize the human factor.
  4. D) The need to satisfy stakeholders within budget and time parameters.

Answer:  C

Diff: 2

Section:  13.6 Human Factors in Project Evaluation and Control

LO:  13.5: Understand behavioral concepts and other human issues in evaluation and control.

Classification:  Concept

AACSB:  Application of Knowledge

 

85) In the formation stage, failed projects are more likely to have:

  1. A) Technical limitations.
  2. B) Personal ambition.
  3. C) Clear objectives.
  4. D) Team motivation.

Answer:  A

Diff: 2

Section:  13.6 Human Factors in Project Evaluation and Control

LO:  13.5: Understand behavioral concepts and other human issues in evaluation and control.

Classification:  Concept

AACSB:  Application of Knowledge

86) In the build-up stage of a successful project, it is important that:

  1. A) An adequate budget exists.
  2. B) Top management support exists.
  3. C) The project personnel are in a state of flux.
  4. D) There is a clear sense of earned value management.

Answer:  B

Diff: 2

Section:  13.6 Human Factors in Project Evaluation and Control

LO:  13.5: Understand behavioral concepts and other human issues in evaluation and control.

Classification:  Concept

AACSB:  Application of Knowledge

 

 

87) An unmotivated team is a key success inhibitor in every project stage with the EXCEPTION of the:

  1. A) Main phase.
  2. B) Formation phase.
  3. C) Close-out phase.
  4. D) Build-up phase.

Answer:  C

Diff: 2

Section:  13.6 Human Factors in Project Evaluation and Control

LO:  13.5: Understand behavioral concepts and other human issues in evaluation and control.

Classification:  Concept

AACSB:  Application of Knowledge

 

88) Funding problems are a key success inhibitor in the:

  1. A) Build-up phase.
  2. B) Close-out phase.
  3. C) Main phase.
  4. D) Formation phase.

Answer:  D

Diff: 2

Section:  13.6 Human Factors in Project Evaluation and Control

LO:  13.5: Understand behavioral concepts and other human issues in evaluation and control.

Classification:  Concept

AACSB:  Application of Knowledge

 

89) The critical success factor that relates to the underlying purpose for the project is the:

  1. A) Project mission.
  2. B) Technical acceptance.
  3. C) Technical tasks.
  4. D) Client consultation.

Answer:  A

Diff: 1

Section:  13.6 Human Factors in Project Evaluation and Control

LO:  13.5: Understand behavioral concepts and other human issues in evaluation and control.

Classification:  Concept

AACSB:  Application of Knowledge

 

90) The project control process is captured in the critical success factor of:

  1. A) Communication.
  2. B) Monitoring and feedback.
  3. C) Troubleshooting.
  4. D) Client consultation.

Answer:  B

Diff: 2

Section:  13.6 Human Factors in Project Evaluation and Control

LO:  13.5: Understand behavioral concepts and other human issues in evaluation and control.

Classification:  Concept

AACSB:  Application of Knowledge

 

91) Knowing the correct steps to take once problems develop is a function of a team's:

  1. A) Communication ability.
  2. B) Technical task ability.
  3. C) Troubleshooting ability.
  4. D) Client acceptance ability.

Answer:  B

Diff: 2

Section:  13.6 Human Factors in Project Evaluation and Control

LO:  13.5: Understand behavioral concepts and other human issues in evaluation and control.

Classification:  Concept

AACSB:  Application of Knowledge

 

92) The Project Implementation Profile includes this critical success factor.

  1. A) Task interdependence
  2. B) Continuous quality improvement
  3. C) Self-actualization
  4. D) Technical tasks

Answer:  C

Diff: 2

Section:  13.6 Human Factors in Project Evaluation and Control

LO:  13.5: Understand behavioral concepts and other human issues in evaluation and control.

Classification:  Concept

AACSB:  Application of Knowledge

 

 

93) Project control should be:

  1. A) Maintained by the project organization using the most complete measurement system, earned value management.
  2. B) Maintained by the project organization using the simplest measurement, an S-curve.
  3. C) Maintained by both the project organization and the customer using the most complete measurement system, earned value management.
  4. D) Tailored to the needs and culture for which an organization intends it.

Answer:  D

Diff: 2

Section:  13.6 Human Factors in Project Evaluation and Control

LO:  13.5: Understand behavioral concepts and other human issues in evaluation and control.

Classification:  Concept

AACSB:  Application of Knowledge

94) The project implementation profile assesses the performance of the project team with respect to 10 critical success factors and can be used on an ongoing project.

Answer:  TRUE

Diff: 2

Section:  13.6 Human Factors in Project Evaluation and Control

LO:  13.5: Understand behavioral concepts and other human issues in evaluation and control.

Classification:  Concept

AACSB:  Application of Knowledge

 

 

95) Briefly describe any seven critical success factors for project success contained in the Project Implementation Profile.

Answer:  The project implementation profile contains ten critical success factors:

- Project mission relates to the underlying purpose for the project. Project success is predicated on the importance of clearly defining objectives as well as ultimate benefits to be derived from the project.

- Top management support is essential for managers and their teams for authority, direction, and support, and also as the conduit for implementing top management's plans or goals for the organization.

- Project plans and schedules refers to the importance of developing a detailed plan (including scope definition, scheduling of time frames and milestones, and scheduling labor, equipment and other resources) of the required stages of the implementation process.

- Client consultation is essential if clients' needs are to be met. Their degree of involvement correlates highly with their support for the project.

- Personnel includes the recruitment, selection, and training of project team members.

- Technical tasks refers to the necessity of having not only the necessary numbers of personnel for the implementation team but ensuring that they possess technical skills and have the necessary technology and technical support to perform their tasks.

- Client acceptance refers to the final stage of the project development process at which time the overall efficacy of the project is to be determined.

- Monitoring and feedback refer to the project control process by which at each stage of the project implementation, key personnel receive feedback on how the project is progressing compared to initial projections.

- Communication channels, both within the project team and with external stakeholders, are important in creating an atmosphere for successful implementation.

Troubleshooting is the ability to take corrective measures once problems develop.

Diff: 3

Section:  13.6 Human Factors in Project Evaluation and Control

LO:  13.5: Understand behavioral concepts and other human issues in evaluation and control.

Classification:  Application

AACSB:  Application of Knowledge

 

96) Use this earned schedule table to determine the schedule variance ($) for this project at the end of Month 6.

 

 

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

PV ($)

$125

$275

$500

$875

$1,485

$2,325

$2,670

EV ($)

$50

$120

$255

$420

$715

$865

$0

  1. A) -$1,460
  2. B) -$865
  3. C) $865
  4. D) $2325

Answer:  A

Diff: 2

Section:  Appendix 13.1 Earned Schedule

LO:  13.6: Understand the advantages of Earned Schedule methods for determining project schedule variance, schedule performance index, and estimates to completion.

Classification:  Application

AACSB:  Application of Knowledge

 

97) Use this earned schedule table to determine the schedule variance (t) for this project at the end of Month 6.

 

 

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

PV ($)

$125

$275

$500

$875

$1,485

$2,325

$2,670

EV ($)

$50

$120

$255

$420

$715

$865

$0

  1. A) -2.74
  2. B) -3.74
  3. C) -2.26
  4. D) -1.26

Answer:  B

Diff: 3

Section:  Appendix 13.1 Earned Schedule

LO:  13.6: Understand the advantages of Earned Schedule methods for determining project schedule variance, schedule performance index, and estimates to completion.

Classification:  Application

AACSB:  Application of Knowledge

 

98) Use this earned schedule table to determine the schedule performance index (t) for this project at the end of Month 6.

 

 

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

PV ($)

$125

$275

$500

$875

$1,485

$2,325

$2,670

EV ($)

$50

$120

$255

$420

$715

$865

$0

  1. A) 0.71
  2. B) 0.54
  3. C) 0.38
  4. D) 0.21

Answer:  C

Diff: 3

Section:  Appendix 13.1 Earned Schedule

LO:  13.6: Understand the advantages of Earned Schedule methods for determining project schedule variance, schedule performance index, and estimates to completion.

Classification:  Application

AACSB:  Application of Knowledge

 

99) Use this earned schedule table to determine the earned schedule for this project at the end of Month 6.

 

 

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

PV ($)

$125

$275

$500

$875

$1,485

$2,325

$2,670

EV ($)

$50

$120

$255

$420

$715

$865

$0

  1. A) 2.93
  2. B) 2.74
  3. C) 2.38
  4. D) 2.26

Answer:  D

Diff: 3

Section:  Appendix 13.1 Earned Schedule

LO:  13.6: Understand the advantages of Earned Schedule methods for determining project schedule variance, schedule performance index, and estimates to completion.

Classification:  Application

AACSB:  Application of Knowledge

 

100) The closer to completion a project gets, the less precise and useful is the information that EVM provides.

Answer:  TRUE

Diff: 2

Section:  Appendix 13.1 Earned Schedule

LO:  13.6: Understand the advantages of Earned Schedule methods for determining project schedule variance, schedule performance index, and estimates to completion.

Classification:  Concept

AACSB:  Application of Knowledge

 

101) The closer to completion a project gets, the less precise and useful is the information that EVM provides.

Answer:  TRUE

Diff: 2

Section:  Appendix 13.1 Earned Schedule

LO:  13.6: Understand the advantages of Earned Schedule methods for determining project schedule variance, schedule performance index, and estimates to completion.

Classification:  Concept

AACSB:  Application of Knowledge

 

102) Briefly describe the important differences between Earned Value Management and Earned Schedule. Why is Earned Schedule gaining acceptance in project management circles?

Answer:  One key difference between Earned Value Management and Earned Schedule is the units used in their basis; Earned Value Management uses the project budget in dollars (or other units of money) as the point of reference while Earned Schedule uses time as the point of reference. The attraction of using time is that classic Earned Value calculations express schedule slippage in terms of dollars. This leaves the project manager with the unenviable task of translating dollar amount to weeks to provide the client with a true indication of how far behind or ahead the project is. The second key difference between the two systems has to do with the accuracy and precision as the project nears completion. As project expenditures rise to approach the planned cost, the ability to measure the lateness of a project disappears. For this reason, Earned Schedule, which uses data already being collected by Earned Value systems, is an increasingly attractive option for project management and progress reporting.

Diff: 2

Section:  Appendix 13.1 Earned Schedule

LO:  13.6: Understand the advantages of Earned Schedule methods for determining project schedule variance, schedule performance index, and estimates to completion.

Classification:  Application

AACSB:  Application of Knowledge

 

103) Use the information in the table regarding this seven-month project to calculate the SPI in terms of dollars and compare it with the SPI calculated in terms of time. Perform both calculations for months 1 through 6. Then use the SPI(t) to provide the Estimate at Completion for Time (EACt).

 

 

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

PV ($)

$125

$275

$500

$875

$1,485

$2,325

$2,670

EV ($)

$150

$320

$510

$850

$1425

$2280

$0

Answer: 

 

 

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

PV ($)

$125

$275

$500

$875

$1,485

$2,325

$2,670

EV ($)

$150

$320

$510

$850

$1425

$2280

$0

SV ($)

$25

$45

$10

-$25

-$60

-$45

 

SPI ($)

1.20

1.16

1.02

0.97

0.96

0.98

 

 

 

 

 

 

 

 

 

C

1

2

3

3

4

5

 

ES

1.2

3.3

4.04

3.93

4.90

5.95

 

SV(t)

0.20

1.3

1.04

-0.67

-0.09

-0.05

 

SPI(t)

1.20

1.65

1.35

0.98

0.98

0.99

 

The Estimate at Completion for Time is:

 

EACt =  =  = 7.063 months

Diff: 3

Section:  Appendix 13.1 Earned Schedule

LO:  13.6: Understand the advantages of Earned Schedule methods for determining project schedule variance, schedule performance index, and estimates to completion.

Classification:  Application

AACSB:  Application of Knowledge

 

 

104) Use the information in the table regarding this seven-month project to create two plots. The first plot should be the S-curve for Earned Value. Indicate on this plot whether the project is ahead or behind schedule and by how much. The second plot should be the Earned Schedule and the Estimate at Completion for Time. Comment on the symmetry of this graph and whether you would expect a similar plot from any other project to exhibit similar characteristics.

 

 

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

PV ($)

$125

$275

$500

$875

$1,485

$2,325

$2,670

EV ($)

$140

$280

$480

$800

$1,280

$1,975

$2,950

Answer:  The Earned Schedule table appears below.

 

 

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

PV ($)

$125

$275

$500

$875

$1,485

$2,325

$2,670

EV ($)

$140

$280

$480

$800

$1,280

$1,975

$2,950

SV ($)

$15

$5

-$20

-$75

-$205

-$350

$280

SPI ($)

1.12

1.02

0.96

0.91

0.86

0.85

1.10

 

 

 

 

 

 

 

 

C

1

2

2

3

4

5

7

ES

1.12

3.03

2.91

3.80

4.66

5.58

8.81

SV(t)

0.12

1.03

-0.09

-0.2

-0.34

-0.42

1.81

SPI(t)

1.12

1.52

0.97

0.95

0.93

0.93

1.26

 

The Earned Value plot appears below. The earned value (dashed red line) falls below the planned value line (solid blue line). Thus, the project is behind schedule by an amount corresponding to the gap between the two lines.

 

 

 

The Earned Schedule and Estimate at Completion Time lines show a symmetry about the average of the two, converging at the completion date of the project. The two lines are inversely related, as the project falls behind schedule, the earned schedule should fall while the estimate at completion should rise.

 

Diff: 3

Section:  Appendix 13.1 Earned Schedule

LO:  13.6: Understand the advantages of Earned Schedule methods for determining project schedule variance, schedule performance index, and estimates to completion.

Classification:  Application

AACSB:  Application of Knowledge

 

 

 

 

 

------

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