Following are the Formulas I consolidated for PMP preparation Discounted Cash Flow = CF x Discount Factor

ARR = S Cash Flow / No. of Years

Earned Value Analysis ROI = (ARR / Investment) * 100 % Bigger is better
PV (Present Value) = BCWS (Budgeted Cost of Work BCR = Benefits / Cost
Schedule)
EV (Earned Value) = BCWP (Budgeted Cost of Work Benefit Cost Ratio (BCR) Bigger is better
Performed) ((BCR or Benefit / Cost)
AC (Actual Cost) = ACWP (Actual Cost of Work Performed) Revenue or Payback VS. cost) Or PV or Revenue / PV of Cost

CV = EV – AC Net Present Value (NPV) = Net Present Value Bigger is better

SV = EV – PV
CPI = EV / AC Internal Rate of Return (IRR) Bigger is better
SPI = EV / PV
Payback Period Less is better Net Investment / Avg. Annual
ETC = BAC – EV [Future Variances are Atypical or Not cash flow
Consistent or Di similar]
ETC = (BAC – EV) / CPI [Future Variances are Typical or Exp. Value = Probability % x Consequence $
Consistent or similar]
Class of Estimates
EAC = BAC / CPI [simplest formula: typical or no variances] Definitive +5%
EAC = AC + ETC [Initial Estimates are flawed] Capital Cost +10-15%
EAC = AC + BAC – EV [Future variances are Atypical or Not Appropriation +15-25%
Consistent or Di similar] Feasibility +25-35%
EAC = AC + BAC – EV / CPI [Future Variances are Typical or Order of Magnitude > +35% (-50 - 75%)
Consistent or similar]
Contract Incentives
VAC = BAC – EAC Savings = Target Cost – Actual Cost
Bonus = Savings x Percentage
% COMPLETE = EV / BAC x 100 Contract Cost = Bonus + Fees
% SPENT = AC / BAC x 100 Total Cost = Actual Cost + Contract Cost

CV% = CV / EV x 100 Expected Monetary Value Probability * Impact

SV% = SV / PV x 100
Point of Total Assumption (PTA) ((Ceiling Price - Target
Float or Slack Price) / buyer's Share Ratio) +
LS - ES and LF – EF Target Cost

MEAN -> Average To Complete Performance Index [TCPI]

MODE -> The “most found” number Values for the TCPI index of less then 1.0 is good because it
RANGE -> Largest - Smallest Measure. indicates the efficiency to complete is less than planned. How
MEDIUM -> No in the middle or avg. of 2 middle Nos efficient must the project team be to complete the remaining
work with the remaining money?
PERT = O + 4ML + P / 6 ( BAC - EV ) / ( BAC - AC )
STD. DEV. OF TASK = P – O / 6
TASK VAR. = [(P - O)/6 ] squared = Std. Dev ^ 2 Cost of Quality (CoQ) =
CP STD. DEV. = √ σ² + σ² + σ² ( ( Review Efforts + Test Efforts + Training Efforts + Rework
Efforts + Efforts of Prevention) / Total efforts) x 100 %
SIGMA
1 = 68.26
2 = 95.46
3 = 99.73
6 = 99.99

Channels of Communication (N x (N – 1)) / 2

Project Selection
PV = F V / (1+r)ⁿ (or) FV = PV x (1+r)ⁿ

Cash Flow = Cash Inflow – Cash Outflow

1
My Condensed Notes on PMP Preparation a. Functional
b. Matrix
i. Weak
1) According to the Project Management Body of ii. Balanced
Knowledge (PMBOK), a “project” is a temporary iii. Strong
endeavor undertaken to create a unique product or c. Projectized
service.”
17) Organization Structure And Project
2) Triple constraint- project scope, time and cost Characteristics
3) A portfolio is a collection of projects or programs and a. Functional
other work that are grouped together to facilitate i. PM's Authority [Little or none]
effective management of that work to meet strategic ii. Resource Availability [Little or
business objectives. The projects or programs in the none]
portfolio may not necessarily be interdependent or iii. Who controls Project Budget
directly related [Functional Manager]
4) Project Portfolio Management is a management iv. PM's Role [Part - Time]
process to select the projects that should be invested v. PM Admin Staff [Part - Time]
in. Specifically, it is the selection process based on b. Weak Matrix
the need, profitability, and affordability of the i. PM's Authority [Limited]
proposed projects. ii. Resource Availability [Limited]
5) A project management office (PMO) is an iii. Who controls Project Budget
organizational unit to centralize and coordinate the [Functional Manager]
management of projects under its domain. A PMO can iv. PM's Role [Part - Time]
also be referred to as a "program management v. PM Admin Staff [Part - Time]
office," "project office," or "program office." A PMO c. Balanced Matrix
oversees the management of projects, programs, or a i. PM's Authority [Low to moderate]
combination of both ii. Resource Availability [Low to
moderate]
6) Project management is a set of tools and techniques iii. Who controls Project Budget
that are used to organize the work of the project to [Mixed]
help bring about a successful project. iv. PM's Role [Full - Time]
7) The contract between the organization and the v. PM Admin Staff [Part - Time]
vendor super cedes all other workrelated documents d. Strong Matrix
8) Customers, internal or external, are the most i. PM's Authority [Moderate to high]
important stakeholders in a project ii. Resource Availability [Moderate
9) Scope verification must take place at the end of each to high]
phase iii. Who controls Project Budget
10) Money already spent on a project is called sunk [Project Manager]
iv. PM's Role [Full - Time]
cost and should not be taken into consideration when
v. PM Admin Staff [Full - Time]
determining if a project should continue. Instead, the
e. Projectized
cost of the work to complete is one of the elements
i. PM's Authority [High to almost
that should be taken into consideration when
total]
considering to kill a project
ii. Resource Availability [High to
11) Phase end reviews are also called phase exits, almost total]
phase gates, or kill points. iii. Who controls Project Budget
12) The project life cycle goes through a series of [Project Manager]
phases to create the product iv. PM's Role [Full - Time]
13) Project managers manage things, but lead v. PM Admin Staff [Full - Time]
people. What's the difference? 18) The WBS is a decomposition of all the
Management is the process of getting the results that deliverables the project will create
are expected by project stakeholders. 19) Inspections may also be known as:
Leadership is the ability to motivate and inspire a. Reviews
individuals to work towards those expected results. b. Product reviews
14) Project c. Audits
a. Projects don't last forever. They are d. Walk-throughs
temporary and unique
b. Projects pass through logical phases to
20) Graphical evaluation and review technique
(GERT) models allow for loops and conditional
reach their completion
branching
c. Purpose of Project is to attain its objective
and then terminate 21) Crashing adds more resources to activities to
15) Operations decrease their duration, which typically adds cost
a. Operations, however, do go on and on. 22) Project calendar This calendar shows when work
They are ongoing and repetitive is allowed on the project. For example, a project may
b. Operations may be influenced, or even require the project team to work nights and
created, by the outcome of a project weekends so as not to disturb the ongoing operations
c. Objective of an ongoing operation is to of the organization during working hours. In addition,
sustain business the project calendar accounts for holidays, working
16) Organization Structure hours, and work shifts that the project will cover
2
23) Resource calendar The resource calendar controls variables within a project will result in the best
when resources, such as project team members, outcome.
consultants, and SMEs are available to work on the 38) Design of experiments is an analytical technique
project. It takes into account vacations, other that identifies the elements or variables that will have
commitments within the organization, or restrictions the greatest effect on overall project outcomes
on contracted work, overtime issues, and so on 39) There are five types of powers the project
24) Program Evaluation and Review Technique (PERT) manager yields: (R F C E R)
uses a weighted average formula to predict the a. Reward
length of activities and the project. Specifically, PERT b. Formal
uses a 'pessimistic,' 'optimistic,' and 'most likely' c. Coercive (penalty) d. Expert
estimate to predict when the project will be e. Referent
completed 40) Among the above powers Reward, Formal &
25) The critical path is the longest path to completion Coercive (penalty) come with the "Position"
in the network diagram. 41) Expert & Reward are considered the best types of
26) Activities on the critical path have no float or powers and Coercive (penalty) is "Least" for obvious
slack. reasons
27) Free float is the amount of time an activity can be 42) Seven reasons for conflict, in order of most
delayed without affecting the next activity's common to least common:
scheduled start date. a. Schedules
28) Total float is the amount of time an activity can b. Priorities
be delayed without affecting the project end date. c. Resources
29) Heuristic is simply a rule of thumb d. Technical beliefs
e. Administrative policies and procedures
30) Crashing involves adding resources, which f. Costs
typically increases cost. g. Personalities
31) Fast tracking adds risk as tasks are allowed to 43) Five different approaches to conflict resolution
overlap a. Problem solving (win - win) [BEST]
32) Each resource in the project must be accounted b. Forcing (win - lose)
for and assigned to a cost category. c. Compromising (lose - lose)
Categories include the following: d. Smoothing
a. Labor costs e. Withdrawal
b. Material costs NOTE: Forcing (win - lose) and Problem Solving (win -
c. Travel costs win) are the ONLY two modes that result in a
d. Supplies RESOLUTION to the conflict.
e. Hardware costs 44) The halo effect is the promoting the person to
f. Software costs manage projects since he/she is good at a technology
g. Special categories (inflation, cost reserve, and so
on)
45) Confronting (Problem Solving) is the best
problem-solving technique since it meets the problem
33) There are three generally accepted categories of directly
estimating accuracy:
a. Rough order of magnitude This estimate is “rough”
46) In a Weak Matrix structure, functional
management will have more authority than the
and is used during the Initiating processes and in top-
project manager
down estimates. The range of variance for the
estimate can be –25 percent to +75 percent. 47) Within communicating there are five
b. Budget estimate This estimate is also somewhat characteristics that affect the message:
broad and is used early in the planning processes and a. Paralingual: pitch, tone, and voice inflections
also in top-down estimates. The range of variance for b. Feedback: sender confirmation of the message by
the estimate can be –10 percent to +25 percent. asking questions, for a response, or other
c. Definitive estimates This estimate type is one of confirmation signals
the most accurate. It is used late in the planning c. Active listening: receiver confirms message receipt
processes and is associated with bottom-up d. Effective listening: receiver offers confirmation of
estimating. The range of variance for the estimate the message, such as nodding their head, asking
can be –5 percent to +10 percent. questions, or other interactions.
34) The opportunity cost is the amount of the project e. Nonverbal: facial expressions, hand gestures, and
body language
that was not chosen
35) Quality is the sum of the characteristics of a
48) One of the first inputs to risk management is the
project charter
product that allow it to meet the demands or
expectations of the project 49) Historical information is always an excellent
36) Grade, according to the PMBOK, “is a category or source of information for risk identification
rank given to entities having the same functional use 50) Brainstorming is likely the most common
but different technical characteristics.” For example, approach to risk identification
there are different grades of paint, different grades of 51) Force majeure is a powerful and unexpected
metal, and even different grades of travel. event, such as a hurricane or other disaster
37) The design of experiments (DOE) approach relies 52) Contracts are known by many names:
on statistical what-if scenarios to determine what a. Agreement
b. Subcontract
3
 c. Purchase order 72) Finish to start is the most commonly used logical
d. Memorandum of understanding relationship in PDM and most project management
53) All contracts in the United States are backed by software packages
the US court systems 73) There are three major documents and each has a
54) According to the Guide to the PMBOK, the project specific purpose:
charter should be published by a manager external to a. Project Charter. Formally authorizes the project.
the project but with sufficient power and authority to b. Project Scope Statement. States what work is to be
carry it off. accomplished and what deliverables need to be
55) When a project is performed under contract, the produced.
contract can serve as the project charter c. Project Management Plan. States how the work will
56) Cost reimbursable contracts are used when the be performed
degree of uncertainty is high and when the project 74) Philip Crosby devised the zero defects theory,
requires a large investment prior to completion of the meaning do it right the first time. Proper Quality
project Planning leads to less rework and higher productivity
57) The scope statement contains an exhaustive list 75) According to Bruce Tuckmann, “Forming,
of the project deliverables, their requirements, and Storming, Norming and Performing ” are the stages of
measurable criteria used to determine project team development
completion 76) The performing stage is similar to Maslow’s self-
58) The scope statement is an output to the Scope actualization
Definition process and is used to create the WBS 77) Myers Brigg’s theory states that “Sensing” and
59) Cause-and-effect diagrams, also called Ishikawa “Intuition” personality types are related to
“Information” preference in other words ‘Hard Data
or fishbone diagrams, show the relationship between
verses what might be’
the effects of quality problems and their causes
60) The primary function of the Closing process is to
78) Juran = Fitness for use, conformance. Quality by
design.
formalize project completion and disseminate this
information to the project participants 79) Joseph M. Juran is noted for his fitness for use
61) According to the Guide to the PMBOK, the project premise. Simply put, this means the stakeholders’
and customers’ expectations are met or exceeded.
manager is identified and assigned as an output of
the Initiation process. In practice, project managers 80) W. Edwards Deming suggested that as much as
are very often assigned at the beginning of this 85 percent of the cost of quality is a management
process. problem
62) The work package level is the lowest level in the 81) Shewhart = Plan-Do-Check-Act cycle.
WBS. Time and cost estimation is easily determined 82) TQM = Quality must be managed in and must be
at this level as are resource assignments. Quality a continuous process
control measurements can be determined at this 83) Six Sigma = Six Sigma is a measurement-based
level as well. strategy; no more than 3.4 defects per million.
63) The code of accounts is assigned to the elements 84) Kaizen = Continuous improvement; improve
in the WBS quality of people first.
64) Each element in the WBS is assigned a unique 85) Continuous improvement = Watch continuously for
identifier. These are collectively known as the code of ways to improve quality.
accounts 86) Statement of work (SOW) comprises of
65) The Responsibility Assignment Matrix (RAM) links a. Business Need
project roles and responsibilities with project b. Product Scope Description and
activities c. Strategic Plan
66) The WBS is the deliverables-oriented hierarchy of 87) Conflict should be addressed early and usually in
project work. private, using a direct, collaborative approach
67) The staffing management plan details how and 88) Organization, Environmental & external
when human resources will be added to and taken off assumptions should be addressed by the Project
the project. It is an output of Organizational Planning Charter
68) Analogous estimating is not a qualitatively based 89) WBS Dictionary” is a document which describes
technique. It is a top-down estimating technique that the details for each component in the WBS. It
considers previous similar activities when calculating includes a breif description of the of the “Scope” or
estimates “Statement of the work” , defined deliverables, a list
69) Mandatory dependency, also known as hard logic. of associated activities, and a list of milestones
Mandatory dependencies are inherent in the nature 90) Project Manager must consider “cultural
of the work differences” while deciding upon recongnization and
70) Discretionary dependencies, also called preferred rewards during team development.
logic, preferential logic, and soft logic, are defined by 91) Technical inability and poor risk management by
the project management team the contractor is mostly the reason for the project not
71) "Best Practice” often refers to a specific sequence to meet the customer expectations
of work, described in terms of “Soft Logic”. 92) Critical Chain Project Management” is typically
Sometimes "Experience" is also attributes to Soft the “Management of Buffers”
Logic

4
93) Critical Chain is another schedule network 112) Code of Accounts identifies WBS items; Chart of
analysis technique that modifies the project schedule Accounts monitors project costs by category
to account for limited resources 113) In decision tree, a circle is a chance
94) The Critical Chain method adds duration buffers 114) In Precedence Diagramming Method (PDM) or
that are non-work schedule activities to maintain Activity on Node (AON) network diagrams, nodes are
focus on the planned activity durations activities and arrows are dependencies
95) Cost Of Quality (COQ) are the cost types in 115) In Arrow Diagramming Method (ADM) or Activity
modern quality management on Arrow (AOA) network diagrams, arrows are
a. “Prevention Costs”, activities and nodes are dependencies
b. “appraisal costs” & 116) Dummies are only used on ADM
c. “failure costs”
117) ADM tasks can only have FS relationships
96) The key components of the communication model
include: 118) PDM uses one time estimate to determine
a. Encode. duration, while ADM can use more than one time
b. Message. estimate.
c. Medium. 119) Scope Verification is done during Project
d. Noise. monitoring and controlling BUT Product verification is
e. Decode. done during the Project Closing
97) Common formats for performance reports include 120) Audits:
a. Bar charts, o Quality Audit in Perform QA,
b. S curves, o Risk Audit in Risk Monitoring and Control,
c. Histograms, and o Inspections and Audits in Contract Administration,
d. Tables. o Procurement Audits in Close Contracts
98) Face-to-face meetings are the most effective 121) The outputs of process groups are:
means for communicating and resolving issues with o initiating: charter and preliminary scope statement;
stakeholders. o planning: project management plan;
o executing: work results;
99) Order of Magnitude estimates are also knows as
o monitoring: corrective actions;
conceptual, ballpark or preliminary estimates
o closing: project product.
100) “Tight Matrix” is putting all project personnel 122) Reporting formats:
together. Also referred as “collocated” o Forecast Report (what is expected to happen on a
101) Strategies for “Negative Risks or threats” (Avoid project),
Transfer Mitigate) o Progress Report (what happened since the last
102) Strategies for “Postive Risks or Opportunities” report),
(Share Exploit Enhance) o Status Report (state of the project at the current
103) Common Strategy for both threats and time),
o Earned Value Report (focuses on Earned Value
opportunities is “Acceptance”
Management),
104) There are 3 stages of “reaction to stress” (Alarm, o Variance Report (what happened vs. what should
Resistance & Exhaustion) have happened).
105) Some of the traits/qualities exhibited by effective 123) Performance Reporting is a Controlling process. It
leaders are creates Performance Reports, which are comparisons
a. Flexibility, of performance to the performance baselines. These
b. Ambition, are typically done in tabular or graphical format.
c. Intelligence,
d. Decisiveness,
124) Information Distribution is an Executing process.
It creates Organizational Process Assets such as
e. Creativity,
project presentations, stakeholder notifications and
f. Persistence and
status reports.
g. Energy
106) Detailed Tasks are detailed in “Project Schedule”, 125) Develop Project Team is an Executing Process. It
creates a Team Performance Assessment, and helps
which is part of Project Plan and note its NOT WBS.
you determine what additional training would be
WBS is a “deliverable oriented document”
beneficial.
107) An abnormal trend is formed when seven or more
consecutive data points reflect a steadily increasing
126) Manage Project Team is a Controlling Process. It
creates input to performance appraisals as well as
or decreasing pattern over time
recommended changes, corrective actions and
108) Scope Verification is concerned with the preventative actions.
acceptance of deliverables
127) Scope Baseline includes
109) Quality control is concerned with making sure the a. Project Scope Statement,
deliverables meet quality requirements. Quality b. WBS, &
Control is done first; both are Monitoring and c. WBS Dictionary
Controlling processes.
128) A large portion of the PM’s time while the work is
110) Quality Assurance (Executing) is focused on being done is spent measuring and implementing
process: process analysis, quality audits, etc. corrective actions
111) Quality Control (Monitoring and Controlling) is 129) Project Close Process includes creation of two
focused on sampling results to see if they meet procedures
quality standards
5
 o Administrative closure procedure and constraints and assumptions defined in the
o Contract closure procedure preliminary scope statement. It serves as a basis for
The difference between the two is focus, formality future project decisions
and frequency. Administrative closure focuses on 147) Alternatives identification is a tool and technique
closing the project or project phase whereas Contract of the Scope Definition process that includes
closure focuses on closing a contract that is part of brainstorming and lateral thinking techniques
the project 148) Poor scope definition might lead to cost
130) Contingency Reserve (Known Unknowns) is for increases, rework, schedule delays, and poor morale
the risks remaining after the Risk Response Planning 149) According to the PMBOK Guide, functionality and
Management Reserve (Unknown Unknows is any
specific conditions that must be met in order to
extra amount reserved t cover “unforeseen risks”
satisfy the project, contract, standard, or specification
Cost Baseline will include the Contingency Reserve
describe the criteria for requirements, not objectives
Cost Budget will include the Management Reserve
150) Product analysis (TT Scope Definition) includes
131) Quality is defined as the degree to which the techniques such as value engineering, value analysis,
project fulfills requirement
systems analysis, systems engineering, product
132) Quality MUST BE PLANNED IN AND NOT breakdown, and functional analysis
INSPECTED IN 151) The product scope description can be used as an
133) The Project Manager ultimately has the input to the Scope Definition process when the
responsibility for the Product of the Project and project charter and/or preliminary project scope
134) Senior Management is responsible for the Quality statement are missing
of entire Organization 152) The lowest level of any WBS is called the work
135) Cost of Nonconformance is greater than the cost package level
of conformance 153) For the exam, remember that the key to DOE is
136) Most projects will fit one of the six needs and that it equips you with a statistical framework that
demands allows you to change the variables that have the
o Market demand greatest effect on overall project outcomes at once
o Business need instead of changing one variable at a time.
o Customer request 154) Quality checklists are an output of the Quality
o Technological advance
Planning process, and checklist analysis is a tool and
o Legal requirement
technique of the Risk Identification process
o Social need
155) Cost-benefit analysis considers trade-offs in the
137) The project charter (which is an output of the Quality Planning process
Develop the Project Charter process) is the written 156) Benchmarking compares previous similar
acknowledgment that the project exists. The project
activities to the current project activities to provide a
charter names the project manager and gives that
standard to measure performance against.
person the authority to assign organizational
resources to the project 157) Failure costs; is also known as the cost of poor
quality. Failure costs include both internal and
138) Net present value (NPV) assumes reinvestment is external costs.
made at the cost of capital
Internal failure costs are costs associated with not
139) IRR assumes reinvestment at the IRR rate and is meeting the customer’s expectations while you still
the discount rate when NPV is equal to zero had control over the product. This results in rework,
140) Payback period does not consider the time value scrapping, and downtime.
of money and is therefore the least precise of all the 158) The process improvement plan is a subsidiary
cash flow analysis techniques plan of the project management plan and targets
141) Preliminary project scope statement describes inefficiencies in a process or activity. The quality
the objectives of the project and the high level baseline is used to document the quality objectives of
requirements needed to satisfy stakeholder the project and is used as a basis for future Quality
expectations processes
142) The PMIS in the Develop Project Management 159) The WBS dictionary should be documented with
Plan process includes a subsystem called the the code of account identifier, an SOW, the
configuration management system responsible organization, and a milestone schedule
143) Change control system, which is a subsystem of for the WBS components
the configuration management system 160) Design of experiments is a tool and technique of
144) Stakeholder analysis is a tool and technique of the Quality Planning process that provides statistical
Scope Definition used to determine and document analysis for changing key product or process
the needs, wants, and expectations of stakeholders elements all at once (not one at a time) to optimize
and prioritize and quantify those needs into project the process
requirements 161) According to the PMBOK Guide, the risk
145) The purpose of the project scope statement is to management plan should include the following
document the project objectives, deliverables, and elements:
requirements so that they can be used to direct the o Methodology
project team’s work and as a basis for future project o Roles and responsibilities
decisions o Budgeting
146) The scope statement further elaborates the o Timing
o Risk categories
project objectives, deliverables, requirements, and
6
 oDefinitions of risk probability and impact 176) Understand the difference between bid and/or
oProbability and impact matrix quotation and proposal for the exam. Bids or
oRevised stakeholder tolerances quotations are used when price is the only deciding
oReporting formats factor among bidders. Proposals are used when there
oTracking are considerations other than price
162) The output of the Risk Identification process is 177) A contract statement of work (SOW) contains the
the risk register. The risk register contains the details of the procurement item in clear, concise
following elements: terms. It includes the following elements:
o List of identified risks o The project objectives
o List of potential responses o A description of the work of the project and any
o Root causes of risks post project operational support needed
o Updated risk categories o Concise specifications of the product or services
163) Risk urgency assessment is a tool and technique required
of Qualitative Risk Analysis process o The project schedule, time period of services, and
164) Qualitative Risk Analysis is a fast and easy work location
method of determining probability and impact 178) According to the PMBOK Guide, using templates
165) The risk management plan details how risk and checklists is one way to ensure that you don’t
management processes will be implemented, miss any key responsibilities when planning the
monitored, and controlled throughout the life of the project and will help reduce the amount of time spent
project. on project planning
166) The risk management plan does not include 179) According to the PMBOK Guide, the RAM
responses to risks or triggers. Responses to risks are (Responsibility Assignment Matrix) relates the OBS to
documented in the risk register as part of the Risk the WBS to assure that every component of the work
Response Planning process of the project is assigned to an individual.
167) The information-gathering techniques in the Risk 180) The letters in the acronym RACI (sample portion
Identification process are of a type of RAM) are the designations are
o brainstorming, o R = Responsible for performing the work
o the Delphi technique, o A = Accountable, the one who is responsible for
o interviewing, producing the deliverable or work package and
o root cause identification, and approves or signs off on the work
o SWOT analysis. o C = Consult, someone who has input to the work or
168) Quantitative Risk Analysis analyzes the decisions
probability of risks and their consequences using a o I = Inform, someone who must be informed of the
numerical rating decisions or results
169) Monte Carlo analysis is a simulation technique & 181) The RAM and RACI charts are tools and
techniques of Human Resource Planning process
not a Modeling technique
170) When the question describes sensitivity analysis, 182) Standard forms are a tool and technique of the
Plan Contracting process. Standard forms can be
which is a tool and technique of the Quantitative Risk
nondisclosure agreements, standardized contracts,
Analysis process. Tornado diagrams are often used to
and so on.
display sensitivity analysis data
183) Plan Purchases and Acquisitions can directly
171) The simplest form of “Risk Analysis” is influence the project schedule, and the project
“Sensitivity Analysis” schedule can directly influence this process
172) Following options are diagramming techniques of
the Risk Identification process
184) Resource availability is an output of the Acquire
Project Team and Select Seller processes
o Ishikawa diagram
o Process flowchart 185) For the exam, remember that resource
o Influence diagram availability isn’t determined until the Executing stage
173) Passive acceptance is when the team has decided and becomes an input to the Activity Resource
Estimating process
to take no action and make no plans for the risk. This
is a strategy that can be used for either positive or 186) Remember that you cannot perform Schedule
negative risks. Development until you have completed all the
174) The PMBOK Guide divides contracts into three following processes of project Planning: Scope
Planning, Scope Definition, Create WBS, Risk
categories:
Identification, Risk Response Planning, Plan
o Fixed price or lump sum (biggest risk is borne by
Purchases and Acquisitions, Activity Resource
the seller & good when original scope is well defined)
Estimating, Activity Definition, Activity Sequencing,
o Cost reimbursable (biggest risk is borne by the
and Activity Duration Estimating
buyer)
o Time and materials (T&M) 187) Schedule Development has 10 tools and
175) The three outputs of the Plan Contracting process techniques:
o Schedule network analysis (produces the project
are
schedule)
o procurement documents (request for proposal
o Critical path method ()
(RFP), request for information (RFI), invitation for bid
o Schedule compression
(IFB), request for quotation (RFQ)), o evaluation
o What-if scenario analysis
criteria,and
o Resource leveling
o contract statement of work updates.
o Critical chain method
7
 oProject management software that the particular issue is no longer relevant or
oApplying calendars cannot be changed
oAdjusting leads and lags 206) The process analysis technique (TT of Perform
oSchedule model Quality Assurance process) includes root cause
188) The higher the standard deviation is for an analysis to analyze a problem and solution and to
activity, the higher the risk. Since standard deviation create preventive actions
measures the difference between the pessimistic and 207) You are preparing project performance appraisals
the optimistic times, a greater spread between the and have decided you’d like each team member to
two, which results in a higher number, indicates a get feedback regarding their performance from
greater risk. Conversely, a low standard deviation several sources, including peers, superiors, and
means less risk subordinates. This is called 360-degree feedback and
189) Monte Carlo is a simulation technique that shows is part of the project performance appraisals tool and
the probability of all the possible project completion technique of the Manage Project Team process.
dates 208) Understand for the exam that configuration
190) Monte Carlo analysis can be used in the Schedule management involves
Development process to determine multiple, probable o identifying the physical characteristics of the
project durations product, service, or result of the project (or its
191) Resource leveling can cause the original critical individual components);
path to change. o controlling changes to those characteristics; and
192) CPM manages the total float of schedule networks o Documenting changes to verify that requirements
paths, whereas critical chain manages buffer activity are met.
durations and resources o It also includes the change management system
193) Cost aggregation (TT of Cost Budgeting) is the and
o documents the process for requesting, tracking,
process of tallying the schedule activity cost
and determining whether change requests should be
estimates at the work package level and then totaling
approved or denied.
the work package levels to higher level WBS
component levels 209) Activities associated with configuration change
194) Funding limit reconciliation (TT of Cost Budgeting) management in the Integrated Change Control
process
involves reconciling the amount of funds spent with
o Configuration identification
the amount of funds budgeted for the project
o Configuration status accounting and
195) Cost baselines are displayed as an S curve.
o Configuration verification and auditing
196) The primary output of Cost Estimating is activity
cost estimates 210) Integrated Change Control, Schedule Control, and
197) Parametric estimating multiplies a known Cost Control are all concerned with three issues:
o influencing the things that cause change,
element—such as the quantity of materials needed—
o determining that change is needed or has
by the time it takes to install or complete one unit of
happened,
materials. The result is a total estimate for the
o and managing the change
activity
198) The project schedule determines the start and 211) Change control systems are documented
procedures that describe
ending dates of activities, determines float times,
o How to submit change requests.
generally shows resource assignments, and details
o They track the status of the change requests,
the activity sequences and durations.
o document the management impacts of change,
199) Motivation can be extrinsic or intrinsic. o track the change approval status, and
o Extrinsic motivators are material rewards and might o define the level of authority needed to approve
include bonuses, the use of a company car, stock changes.
options, gift certificates, training opportunities, extra
time off, and so on o Intrinsic motivators are specific
212) Change control systems do not approve or deny
the changes—that’s the responsibility of the
to the individual. Some people are just naturally
configuration control board (CCB)
driven to achieve—it’s part of their nature
200) The introduction of a new team member will start 213) The configuration control board (CCB) has the
authority to approve or deny change requests. Their
the formation and development of the team all over
authority is defined and outlined by the organization
again with the forming stage
201) Teams in the norming stage of Develop Project 214) “Recommended” corrective action is an output of
several of the change control processes, including
Team exhibit affection and familiarity with one
Scope Change Control, Schedule Control, Cost
another and make joint decisions
Control, Risk Monitoring and Control, and Perform
202) Request Seller Responses obtains bids and Quality Control.
proposals from vendors.
215) “Approved” corrective action is an output of the
203) Select Sellers is the receipt of bids and proposals Integrated Change Control process. Remember that
and the selection of a vendor Integrated Change Control is where all change
204) Independent estimates (TT of Select Sellers), also requests are processed and either approved or
called should cost estimates, are a way to check denied.
proposed pricing 216) Also note that corrective action is an output of
205) Fait accompli is a tactic used during contract the Monitoring and Controlling processes and an
negotiations where one party convinces the other input to the Executing processes

8
217) Cost variances (both positive and negative) are 232) WBS element changes are scope changes.
calculated using a performance measurement Schedule revisions are often required as a result of
analysis tool (specifically earned value techniques) scope changes.
218) EVT (earned value techniques) compares what 233) Close Project and Contract Closure are the
you’ve received or produced to what you’ve spent. processes in the Closing process group and are
219) Workarounds are unplanned responses. performed in that order
Workarounds deal with negative risk events as they 234) The work performance information is reviewed to
occur. determine the status of project activities and make
220) Schedule variances will sometimes—but not certain the project goals and objectives are met. This
is an input to the Close Project process
always—impact the schedule. Changes to noncritical
path tasks will not likely impact the schedule, but 235) According to the PMBOK Guide, the procurement
changes to critical path tasks will always impact the audit examines the procurement process from
schedule Procurement Planning through Contract
221) Budget updates might require cost rebaselining Administration
236) Integrity means adhering to an ethical standard
222) You can remember the difference between Scope 237) Hammocks are summary-level activities or
Verification and Perform Quality Control this way: aggregate activities shown as a summary activity on
o Scope Verification = accepting work results a project schedule network diagram.
o Perform Quality Control = checking for correct work
results (assuring that the quality requirements are
238) Contract Negotiation has “5’ Sequential steps
(Note Agreement is AFTER Closure)
met)
o Protocol
223) Projects come to an end for several reasons:
o Probing
o They’re completed successfully.
o Scratch Bargaining
o They’re canceled or killed prior to completion.
o Closure and
o They evolve into ongoing operations and no longer
o Agreement
exist as projects.
239) The Primary Objective of establishing a Quality
224) Four formal types of project endings exist that Assurance Process is “For Quality
you might need to know for the exam: Improvement”
o Addition
o Starvation
240) “Quality Function Deployment Process” identifies
what the customer’s needs are (Spoken/unspoken
o Integration
words) and translates those needs into technical
o Extinction
requirements. Appropriate for each stage of the
225) For the exam, remember that product verification product development life cycle
performed during the Closing processes determines 241) Decision Tree is a diagram that describes a
whether all of the work of the project was completed decision under consideration and the implications of
correctly according to the contract terms and choosing one of the alternatives
satisfactorily according to stakeholder expectations,
whereas product documentation is verified and
242) The Project Charter provides the
o high level requirements,
accepted during the Scope Verification process. One
o constraints,
more note: when projects end prematurely, the Scope
o assumptions,
Verification process is where the level of detail
o stakeholders and
concerning the amount of work completed gets
o the measures of success.
documented.
226) Contract documentation is an input to both the 243) Based on this information, or the lack of it, the
Charter is an excellent source to start to identify the
Close Project and Contract Closure processes
Project Risks
227) Note PMI defines “Scope Statement” as the basis
for making future project decisions and for confirming
244) 9 ‘bilities’ (A MAP FOR US)
Maintainability: The ability of a unit to be restored
or developing common understanding of project
within a specified time to its performance capability
scope among project stakeholders.
under the environmental operating conditions within
228) Scope Verification a specified, average period of time
o Verified work results Usability: is the ability of a product to perform its
229) Perform Quality Control intended function for the specified user under the
o Assured quality requirements were met prescribed conditions
230) Close Project Reliability: is the degree to which a unit of equipment
o Product verification (work was correct and performs its intended function under specific
satisfactory) conditions for specified period of time
o Collecting project documents Availability: is the probability of the product being
o Disseminating final acceptance notice capable of performing a required function when
o Documenting lessons learned called upon
o Archiving project records 245) Activity Resource Estimating involves
231) Contract Closure determining what physical resources (People,
o Product verification (work was correct and Equipment, etc) and what quantities should be used
satisfactory) and when they would be needed to perform project
o Formal acceptance and closure activities
246) Physical limitations are an attribute of
“Mandatory Dependencies”
9
247) A Project Phase is “Marked by the completion of 266) The “Control Points” in the WBS used for isolated
one or more deliverables” assignment to work centers are referred to as the
248) A “Product Description” should define the “Control Account Plan”
relationship between the product that is being 267) Control account Plan (CAP) is a management
created and the business need control point where the integration of scope, budget
249) Contingency Plans can be best described as and schedule take place and where the measurement
“Planned responses to Risk Events” of performance takes place.
250) Staff assignments and resource availability are These CAPS are placed at the selected management
the outputs of “Acquire the Project Team” Process points in the WBS.
251) Complex and large projects would be more 268) Cost Estimates include All Resources to be
effectively managed in “Strong” and ‘Projectized” charged to the Project
Structure 269) A Control Account is a management control point
252) If Changes are well defined, its Fixed Price that can be placed at selected management points of
Contract but if they are not then its T & M the WBS above the Work Package Level
253) Contract Management Plan is an OUTPUT to 270) To convey information between two or more
“Select Seller Process” parties, the communication process must have a
254) Punitive Damages are the damages intended to medium. The three most common media are
punish the wrong doer o Visual
255) “Utility Theory” considers the pains or tolerance o Auditory and
level a stakeholder has to risk o Tactile
256) There are three key components to a Risk 271) Four steps of performing RCA (Root Cause
o Risk Event (The Event) Analysis) are
o Probability of the Event o Data Collection
o Impact or Effects of the Event (Amount at Stake) o Casual Factor Charting
257) Delhi technique is a “Consensus Technique” o Root Cause Identification
o Recommendation Generating and Implementation
258) Residual Risk are those that “Remain” after Risk
Responses have been taken
272) Scatter Diagrams are used to investigate the
possible relationship between two variables that both
259) Inputs to Performance Reporting are relate to the same “EVENT”
o Work Performance Information
o Performance Measurements
273) BCR (Benefit Cost Ratio) compares the benefits to
the costs of the project where the Benefits are the
o Forecasted Completion
same as Revenues or often referred to as the
o QC Measurement
“Payback period”
o Project Plan
o Approved Change Requests and 274) Project performance is impacted by Four Basic
o Deliverables Cultures
260) Interpersonal communication takes three forms o World
o National
o Verbal
o Business and
o Non-verbal and
o Leadership
o Written
261) When distributing information, the total message 275) When one considers their Culture to be superior,
they are called “Ethnocentric”
impact from the sender is
a. 7% words , 276) Use of personal space during social interaction is
b. 38% vocal tones and known as “Proxemics”
c. 55% body language 277) Risk is the notion of dealing with “Uncertainty”
262) A ‘Planning Package” is a WBS component below o Knows at the extreme end of the Uncertainty
the control account but above the work package. It is Spectrum will definitely affect you, although you have
used for planning unknown work content that does no control over them
not have detailed schedule activities o Knows-Unknowns are items that will affect you
263) There are two types of “Decision Models” that although you are not able to predict how or how
much they will effect you
can be used for Project Selection during the initiation
o Unknown – Unknowns are items or situations whose
Process
existence we cannot imagine (Who knows?)
o Comparative (Benefit measurement Rating) Models
278) A Records Management Systems is a specific set
o Constrained (Mathematical Decision Models)
of processes, related control functions and
264) Comparative (Benefit measurement Rating)
automation tools used by the PM to manage contract
Models
documentation and records. Its the TT of Contract
o Decision Tree
Administration Process
o Criteria Profiling
279) Parametric (Top – Down) uses historical data and
o Weighted Factor
statistical relationships to determine costs
o Q-Sorting
o Delphi Technique 280) Constructive team roles include Initiators,
265) Constrained (Mathematical Decision Models) Information seekers, Information givers,
o Logical Framework Analysis Encouragers, Clarifiers, Harmonizers, Summarizers
o Linear Program Programming and Gate Keepers

10
281) Destructive team roles include Aggressor,
Withdrawer, Blocker, Devil’s advocate, Recognizer,
Topic Jumper and Dominator
282) “To Complete Performance Indicator” (TCPI)
determines the cost performance efficiency required
to complete the project within the original budget
(BAC) or revised budget (EAC);
283) TCPI > 1 is NOT good; To calculate TCPI, take the
value of the work remaining over the value of funds
remaining
284) “Eustress” is a stress that will motivate and
contribute to an increase in performance
285) Quantitative based durations (Parametric
technique) multiply a known element, like lines of
code required by the time it takes to develop one line
of code. The result is the total estimate for the
activity
286) Quality Metrics are the Outputs of Quality
Planning. It is an operation definition that describes
“what” something is and “how” it will be measured in
very specific terms
287) Straight-line depreciation is the simplest method
of depreciating an asset and is frequently utilized on
a project to determine its economic feasibility.
Straight-line depreciation is a method that divides an
asset’s cost and its expected salvage value by its
expected utilization period
288) Performance Reporting is an INPUT to all
“Control” Process (Except Quality Control)
289) Decision Trees are considered Quantitative while
Influence diagram are considered Qualitative.
290) Influence diagram shows the dependencies
among the variables more clearly than the decision
tree
291) A “Bill of Material” (BOM) describes the product in
terms of its assemblies, sub-assemblies and basic
parts
292) Allowing “Automatic Approval” of changes is a
function of the Change Control System and NOT
Configuration Management
293) Contingency Plan document outlines the actions
to be taken if an identified risk event should occur
294) Variable and attribute sampling are forms of
acceptance sampling.
Variable sampling evaluates a characteristic
measured on a numerical scale
Attribute sampling tests for defective or non
defective
295) Parametric Modeling applies to only Project with
Similar characteristics
296) The point of total assumption (PTA) is a price
determined by a fixed price plus incentive fee
contract (FPIF) above which the seller bears all the
loss of a cost overrun. It is also known as the "most
pessimistic cost
297) Variance analysis involves comparing actual
project results to planned or expected results
298) Trend analysis involves examining project results
over time to determine if performance is improving

11
 NOTES 10) In a balanced matrix, Power is shared. This is a
PROJECT LIFE CYCLE & PHASES combination of both Functional and Projectized.
Resources would have two managers – Project
Manager and Functional Managers. After Project
1) Characteristics of a general project life cycle include Completion, resources go back to Functional
Cost and staffing levels are low at the start, peak as department.
the work is carried out, and drop rapidly as the
project draws to a close Stakeholder influences, risks GENERAL POINTS
and uncertainty are the greatest at the start of the 11) The outputs of process groups are:
project. These factors decrease over the life of the a) Initiating: Project charter
project Ability to influence the final characteristics of b) Planning: project management plan;
the project’s product, without significantly impacting c) Executing: work results;
the cost, is highest at the start of the project and d) Monitoring & Controlling: corrective actions;
decreases as the project progresses towards e) Closing: project product
completion 12) Scope includes
2) The project life cycle goes through a series of phases a) The project and product requirements,
to create the product b) Criteria,
3) Phase end reviews are also called phase exits, phase c) Assumptions,
gates, or kill points d) Constraints, and
4) A Project Phase is “Marked by the completion of one e) Other influences related to a project
or more deliverables”. In other words, a project phase
is generally concluded and formally closed with a
f) and how each will be managed or addressed within
review of the deliverables to determine completeness the project
and acceptance
5) Formal phase completion does not necessarily 13) A project manager is identified and assigned as early
include authorizing the subsequent phase. For in the project as is feasible, preferably while the
instance, if the risk is deemed too great for the project charter is being developed and always prior to
project to continue or if the objectives are no longer the start of planning
required, a phase can be closed with the decision to 14) It is recommended that the project manager
not initiate any other phases participate in the development of project charter, as
6) There are three types of phase – phase relationships the charter provides the project manager with the
A sequential relationship: where a phase can only authority to apply resources to project activities
start once the previous phase is complete 15) Projects are authorized by someone external to the
An overlapping relationship: where the phase project such as sponsor, PMO or portfolio steering
starts prior to completion of the previous phase. This committee
can sometimes be applied in schedule compression 16) Stakeholder identification is a continuous process and
techniques like fast tracking An iterative can be difficult
relationship: where only one phase is planned at 17) The project initiator or sponsor should be at a level
any given time and the planning for the next is that is appropriate to funding the project. They will
carried out as the work progresses on the current either create the charter or authorize project
phase and deliverables. This approach is useful in manager to do.
highly uncertain, undefined or rapidly changing 18) The initiator’s signature on the charter authorizes the
environments such as research. project
19) The Statement Of Work (SOW) is a narrative
7) The Process Groups are NOT project phases. As
description of products or services to be delivered by
projects are separated into distinct phases or
the project
subprojects such as feasibility study, concept
development, design, prototype, build, test, etc, all of 20) SOW references Business Need: An organization’s
the Process Groups would normally be repeated for business need may be based on a market demand,
each phase or subproject technological advance, legal requirement or
government regulation
ORGANIZATIONAL STRUCTURE Product Scope Description: This documents the
characteristics of the product that the project will be
8) In a Weak Matrix structure, functional management
undertaken to create. The description should also
will have more authority than the project manager
document the relationship between the products or
and the project manager role is more of a project
services being created and the business need that
coordinator or expediter than that of a true project
the project will address
manager.
Strategic Plan: Documents the organization’s
Project Expediter: The project expediter acts
strategic goals. Therefore, all projects should be
primarily as a staff assistant and communications
aligned with the strategic plan
coordinator. The expediter cannot personally make or
21) Business case or similar document provides the
enforce decisions
necessary information from a business standpoint to
Project Coordinator: Similar to the project
determine whether or not the project is worth the
expediter except the coordinator has some power to
required investment.
make decisions, some authority, and reports to a
22) Business case includes business need and cost-
higher-level manager
benefit analysis
9) Complex and large projects would be more effectively
23) A contract is an input to the charter if the project is
managed in “Strong” and ‘Projectized”
being done for the external customer
Structure/Matrix

12
24) Project baselines include but not limited to Affinity diagram: The technique allows large
Schedule baseline numbers of ideas to be sorted into groups for review
Cost performance baseline and and analysis
Scope baseline 36) There are multiple methods of reaching a group
25) Common formats for performance reports include bar decision including
charts, Scurves, histograms, and tables Unanimity: Everyone agrees on a single course of
26) Performance Reporting is a Controlling process. It action
creates Performance Reports, which are comparisons Majority: Support from more than 50% of the group
of performance to the performance baselines. These Plurality: The largest block in a group decides even
are typically done in tabular or graphical format. if a majority is not achieved
27) The “Earned Value Technique” is a method to Dictatorship: One individual makes the decision for
measure project performance against the project the group
baseline 37) Work Breakdown Structure (WBS) is a deliverable
28) Change Requests include oriented hierarchical decomposition of the work to be
Corrective action: Documented direction for executed by the project team, to accomplish the
executing the project work to bring expected future project objectives and create the required
performance of the project work in line with the deliverables, with each descending level of the WBS
project management plan representing an increasingly detailed definition of the
Preventive action: A documented direction to project work.
perform an activity that can reduce the probability of 38) The WBS is a decomposition of all the deliverables
negative consequences associated with the project the project will create
risks 39) The work package level is the lowest level in the
Defect repair: The formally documented WBS. Time and cost estimation is easily determined
identification of a defect in a project component with at this level as are resource assignments. Quality
a recommendation to either repair the defect or control measurements can be determined at this
completely replace the component level as well
Updates: Changes to formally controlled 40) Each element in the WBS is assigned a unique
documentation, plan, etc. to reflect modified or identifier. These are collectively known as the code of
additional ideas or content accounts. Typically, these codes are associated with
29) Benchmarking compares previous similar activities to a corporate chart of accounts and are used to track
the current project activities to provide a standard to the costs of the individual work elements in the WBS
measure performance against. 41) Level one of the WBS is the project itself
30) Project scope management includes the processes 42) A ‘Planning Package” is a WBS component
required to ensure that the project includes all the below the control account but above the work
work required, and only the work required, to package. It is used for planning unknown work
complete the project successfully. content that does not have detailed schedule
31) Managing the project scope is primarily concerned activities
with defining and controlling what is and is not 43) Control account Plan (CAP) is a management
included in the project control point where the integration of scope, budget
32) Scope baseline of the project include and schedule take place and where the measurement
Approved detailed project scope statement, of performance takes place. These CAPS are placed
Its associated WBS and at the selected management points in the WBS.
WBS dictionary 44) A Control Account is a management control point
33) The scope baseline is then monitored, verified and where scope, cost and schedule are integrated and
controlled throughout the lifecycle of the project compared to the earned value for performance
34) The stakeholder register is used to identify measurement. They are placed at selected
stakeholders that can provide information on detailed management points of the WBS above the Work
project and product requirements Package Level
35) Several group activities can be organized to 45) Each Control Account may include one or more work
identify project and product requirements. Some of packages, but each of the work packages must be
the group creativity techniques that can be used are: associated with only one control account
Brainstorming: A technique used to generate and 46) WBS Dictionary” is a document which describes
collect multiple ideas related to project and product the details for each component in the WBS. It
requirements includes a brief description of the “Scope” or
Nominal group technique: This technique “Statement of the work”, defined deliverables, a list
enhances brainstorming with a voting process used of associated activities, and a list of milestones
to rank the most useful ideas for further 47) Scope Verification differs from Quality Control in that
brainstorming or prioritization scope verification is primarily concerned with
The Delphi technique: A selected group of experts acceptance of the deliverables, while quality control
answers questionnaires and provides feedback is primarily concerned with correctness of the
regarding the responses from each round of deliverable and meeting the quality requirements
requirements gathering. The responses are only specified for the deliverables
available with the facilitator to maintain anonymity 48) Scope Baseline includes Project Scope Statement,
Idea/mind mapping: Ideas created through WBS, WBS Dictionary
individual brainstorming are consolidated into a 49) Scope Verification is Verified work results
single map to reflect commonality and differences in 50) Perform Quality Control is Assured quality
understanding, and generate new ideas
requirements were met
13
51) You can remember the difference between Scope activities and the project. Specifically, PERT uses a
Verification and Perform Quality Control this way: 'pessimistic,' 'optimistic,' and 'most likely' estimate to
Scope Verification = accepting work results predict when the project will be completed
Perform Quality Control = checking for correct work 71) Critical Path Method (CPM) manages the total
results (assuring that the quality requirements are float of schedule networks paths, whereas Critical
met) Chain manages buffer activity durations and
52) Control Quality is generally performed before Verify resources.
Scope but these two processes can be performed in 72) The critical path is the longest path to completion in
parallel the network diagram.
53) Scope verification must take place at the end of each 73) Activities on the critical path have no float or slack.
phase 74) Free float is the amount of time an activity can be
54) Scope Verification is done during Project monitoring delayed without affecting the next activity's
and controlling BUT Product verification is done scheduled start date.
during the Project Closing 75) Total float is the amount of time an activity can be
55) Control scope is the process of monitoring the status delayed without affecting the project end date.
of the project and product scope and managing 76) Resource leveling can cause the original critical path
changes to the scope baseline to change. It is used when shared or critical required
56) Rolling Wave Planning is a form of progressive resources are only available at certain times, are only
elaboration planning where the work to be available in limited quantities, or to keep resource
accomplished in the near term is planned in detail usage at a constant level
and future work is planned at a higher level of the 77) Heuristic is simply a rule of thumb
WBS 78) Crashing involves adding resources to activities in
57) In an environment where there is a great degree order to decrease their duration, which typically
increases cost
of flexibility or instability, it's good to use a rolling
79) Fast tracking adds risk as tasks are allowed to
wave planning approach. This approach allows team
overlap
members to plan as much as possible. While
80) Rough order of magnitude is “rough” and is used
executing that part of the plan, they continue to plan
during the Initiating processes and in range of +50/-
future
50
work as they learn more about it
58) A milestone is a significant point or event in the 81) There are three generally accepted categories of
project estimating accuracy:
59) Precedence Diagramming Method (PDM) includes Rough order of magnitude This estimate is
“rough” and is used during the Initiating processes
four dependencies or logical relationships:
and in top-down estimates. The range of variance for
Finish to Start (FS):
the estimate can be –25 percent to +75 percent.
Finish to Finish (FF):
Budget estimate This estimate is also somewhat
Start to Start (SS):
broad and is used early in the planning processes and
Start to Finish (SF):
also in top-down estimates. The range of variance for
60) Finish to start is the most commonly used the estimate can be –10 percent to +25 percent.
logical relationship in PDM and most project Definitive estimates This estimate type is one of
management software packages. the most accurate. It is used late in the planning
61) PDM uses one time estimate to determine duration, processes and is associated with bottom-up
while ADM can use more than one time estimate. estimating. The range of variance for the estimate
62) In Precedence Diagramming Method (PDM) or Activity can be –5 percent to +10 percent
on Node (AON) network diagrams, nodes are 82) Rough Order of Magnitude (ROM) estimates are also
activities and arrows are dependencies knows as conceptual, ballpark or preliminary
63) Mandatory dependency, also known as hard logic. estimates
Mandatory dependencies are inherent in the nature 83) The opportunity cost is the amount of the project that
of the work was not chosen
64) Discretionary dependencies, also called preferred 84) Money already spent on a project is called sunk costs
logic, preferential logic, and soft logic, are defined by and should not be taken into consideration when
the project team determining if a project should continue. Instead, the
65) A lead allows an acceleration of the successor activity cost of the work to complete is one of the elements
66) A lag directs a delay in the successor activity that should be taken into consideration when
67) Analogous estimating is not a qualitatively based considering to kill a project
technique. It is a top-down estimating technique that 85) Variance analysis involves comparing actual project
considers previous similar activities when calculating results to planned or expected results.
estimates 86) Trend analysis involves examining project results
68) Analogous estimating is generally less expensive and over time to determine if performance is improving
time consuming but also less accurate 87) Earned Value Management compares the baseline
69) Parametric estimating multiplies a known element— plan to actual schedule and cost performance.
such as the quantity of materials needed—by the 88) BCR (Benefit Cost Ratio) compares the benefits to the
time it takes to install or complete one unit of costs of the project where the Benefits are the same
materials. The result is a total estimate for the as Revenues or often referred to as the “Payback
activity period”
70) Three point Estimate originated from Program 89) Management Horizon is also known as the Payback
Evaluation and Review Technique (PERT), which uses Period, which is the amount of time it takes for the
a weighted average formula to predict the length of
14
 program to break even on the investment. In 109. TQM = Quality must be managed in and must be
business and economics, payback period refers to the a continuous process.
period of time required for the return on an
investment to repay the sum of the original 110. Total Quality Management (TQM) involves being
investment. As it does not properly account for the proactive, utilizing accountability and leadership, and
time value of money, risk, financing, or any other continuously improving as a company
important considerations such as the opportunity
cost, the payback period is considered as method of 111. Six Sigma = Six Sigma is a measurement-based
analysis with serious limitations and qualifications for strategy; no more than 3.4 defects per million.
its use.
90) One concern is that as the payback period measure 112. Kaizen = Continuous improvement; improve
does not take into account benefits delivered after quality of people first.
the payback period it does not measure profitability
91) Parametric (Top – Down) uses historical data and 113. Kaizen involves proactively improving the
statistical relationships to determine costs organization and continuously trying to improve as an
92) Each resource in the project must be accounted organization.
for and assigned to a cost category. Categories
include the following: 114. Continuous improvement = Watch continuously
Labor costs for ways to improve quality.
Material costs
Travel costs 115. Benchmarking compares previous similar
Supplies activities to the current project activities to provide a
Hardware costs standard to measure performance against
Software costs
Special categories (inflation, cost reserve, and so on) 116. Design of experiments (DOE) is a statistical
93) Quality is defined as the degree to which the project method for identifying which factors may influence
fulfills requirement specific variables of a product or process under
94) Quality MUST BE PLANNED IN AND NOT INSPECTED IN development or in production
95) The Project Manager ultimately has the responsibility
for the Product of the Project and 117. The Design of experiments approach relies on
96) Senior Management is responsible for the Quality of statistical what-if scenarios to determine what
entire Organization variables within a project will result in the best
97) Cost of quality involves three types of costs: outcome. Design of experiments approach is most
often used on the product of the project, rather than
Prevention,
the project itself. For example, a project team
Appraisal, and Failure costs
creating a new bicycle may experiment with the
Internal costs and External costs
width of the tires, the weight of the frame, and the
98) Failure cost is also known as the cost of poor quality.
position of the handlebars in relation to the bike seat
Internal failure costs – Failures found by the project
to determine the most comfortable ride at an
External failure costs – Failures found by the
acceptable cost to the consumer.
customer
99) Internal failure costs are costs associated with not
118. Five stages of a team development
meeting the customer’s expectations while you still
108) Forming
had control over the product. This results in rework,
109) Storming
scrapping, and downtime
110) Norming
100) External failure costs include Liabilities 111) Performing
Warranty work 112) Adjourning
Lost business 113) 119. Techniques for resolving conflicts
101) Quality Assurance (Executing) is focused on 114) Withdrawing/Avoiding - Retreating
process: process analysis, quality audits, etc. 115) Smoothing/Accommodating - Emphasizing on
102) Quality Control (Monitoring and Controlling) is agreements than disagreements
focused on sampling results to see if they meet 116) Compromising – Satisfying all parties
quality standards. 117) Forcing – Pushing one’s viewpoint
103) Philip B. Crosby = Zero defects and prevention or 118) Collaborating – Incorporating multiple view points
rework results. and driving consensus
104) Juran = Fitness for use, conformance. Quality by 119) Confronting/Problem Solving – Head on with give-
design. and-take policy and open dialogue
105) Fitness for use involves establishing what the 120) 120. Forcing uses a direct order.
customer needs and attempting to deliver it to them
106) Joseph M. Juran is noted for his fitness for use 121. Smoothing focuses on the positive and distracts
premise. Simply put, this means the stakeholders’ attention from the negative.
and customers’ expectations are met or exceeded.
107) W. Edwards Deming suggested that as much as 122. Compromise is consent based on mutual
85 percent of the cost of quality is a management concession.
problem
123. Problem solving attempts to work out the
108. Shewhart = Plan-Do-Check-Act cycle. solution to the actual problem

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 124. There are five types of powers the project o Exploit – make sure the opportunity occurs, you can
manager yields: ( E R F C R) add work or make a change to the project
121) Expert: The authority of the project manager o Enhance – increase the probability and or positive
comes from experience with the technology the impact of the risk
project focuses on. o Share – share the opportunity with a third party to
122) Reward The project manager has the authority to be able to take advantage of the opportunity
reward the project team.
123) Formal The project manager has been assigned 135. For both Threats & Opportunities
by senior management and is in charge of the o Accept
project. Also known as positional power. Active acceptance – preparing a contingency reserve
124) Coercive (Penalty) The project manager has the of cost or time
authority to discipline the project team members. Passive acceptance – preparing for the dealing with
This is also known as “penalty power.” When the the effects of the risk after the risk has occurred
team is afraid of the project manager, it’s coercive.
125) Referent The project team personally knows the 136. Workarounds are unplanned responses.
project manager. Referent can also mean the project Workarounds deal with negative risk events as they
manager refers to the person who assigned him the occur. As the name implies, workarounds were not
position—for example, “The CEO assigned me to this previously known to the project team. The risk event
position so we’ll do it this way.” This power can also was unplanned, so no contingency plan existed to
mean the project team wants to work on the project deal with the risk event, and thus it required a
or with the project manager due to the high priority workaround Contingency Plans can be best described
and impact of the project as “Planned responses to Risk Events”
126) 125. The best forms of powers include Expert and
Reward. Penalty is the worst 137. Contingency Plan document outlines the actions
to be taken if an identified risk event should occur
126. Formal, Reward and Powers are derived from
the PM’s position in the company 138. “Utility Theory” considers the pains or tolerance
level a stakeholder has to risk
127. Expert is earned on your own
139. Residual Risk are those that “Remain” after Risk
128. The key components of the communication Responses have been taken
model include:
127) Encode. To translate thoughts or ideas into a 140. There are three key components to a Risk
language that is understood by others. 133) Risk Event (The Event)
128) Message. The output of encoding. 134) Probability of the Event
129) Medium. The method used to convey the 135) Impact or Effects of the Event (Amount at Stake)
message. 136) 141. Delhi technique is a “Consensus Technique”
130) Noise. Anything that interferes with the
transmission and understanding of the message (e.g., 142. Risk is the notion of dealing with “Uncertainty”
distance). 137) Knows at the extreme end of the Uncertainty
131) Decode. To translate the message back into Spectrum will definitely affect you, although you have
meaningful thoughts or ideas no control over them
132) 129. A risk is an uncertain event that could have 138) Knows-Unknowns are items that will affect you
a positive or negative effect on your project although you are not able to predict how or how
much they will effect you
130. Strategies for “Negative Risks or threats” (Avoid 139) Unknown–Unknowns are items or situations
Transfer Mitigate) whose existence we cannot imagine(Who knows?)
140) 143. Fast tracking adds risk as tasks are allowed
131. Strategies for “Postive Risks or Opportunities” to overlap
(Exploit Share Ehance)
144. Historical information is always an excellent
132. Common Strategy for both threats and source of information for risk identification
opportunities is “Acceptance”
145. Brainstorming is likely the most common
133. There are 3 stages of “reaction to stress” approach to risk identification
(Alarm, Resistance & Exhaustion)
146. Force majeure is a powerful and unexpected
134. Risk Response Strategies event, such as a hurricane or other disaster
Threats
o Avoid – remove the cause of the risk so that it 147. Fait accompli is a tactic used during contract
never materializes negotiations where one party convinces the other
o Mitigate – reduce the probability and or impact of that the particular issue is no longer relevant or
the risk cannot be changed
o Transfer – transfer the risk to another party; usually
done with insurance, performance bonds, warranties, 148. Some of the traits/qualities exhibited by
guarantees or outsourcing the work. effective leaders are Flexibility, Ambition,
Intelligence, Decisiveness, Creativity, Persistence and
Opportunities Energy
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 149. Project manager must possess following
interpersonal skills
141) Leadership
142) Team building
143) Motivation
144) Communication
145) Influencing
146) Decision making
147) Political and cultural awareness and
148) Negotiation
149) 150. Ten most important skills and competencies
for Project Managers
150) People skills
151) Leadership
152) Listening
153) Integrity, ethical behavior, consistent
154) Strong at building trust
155) Verbal communication
156) Strong at building teams
157) Conflict resolution, conflict management
158) Critical thinking, problem solving
159) Understands, balances priorities

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