The process of forecasting or approximating the time and cost of completing project deliverables is called
A.
Budgeting.
B.
Predicting.
C.
Estimating.
D.
Planning.
E.
Guesstimating.
question
A.
Top down/bottom up.
Estimating processes are frequently classified as top-down and bottom-up. Top-down estimates are usually done by senior management. Bottom-up estimates are typically done by the people doing the work.
answer
In practice, estimating processes are frequently classified as
A.
Top down/bottom up.
B.
Rough/polished.
C.
Precise/order of magnitude.
D.
Draft/final.
E.
Broad/Specific.
question
B.
Cultural norms affect the accuracy of estimates
Organizational culture can significantly influence project estimates. Organizations vary in the importance they attach to estimates.
answer
What is the relationship between organizational culture and estimating?
A.
There is no relationship
B.
Cultural norms affect the accuracy of estimates
C.
Culture determines whether estimates are made
D.
Estimating alters cultural norms
E.
Estimating and culture are independent
question
A.
Past experience.
Past experience is a good starting point for developing time and cost estimates. But past experiences must almost always be refined to reach an acceptable level of accuracy.
answer
A good starting point for developing time and cost estimates is
A.
Past experience.
B.
Work packages.
C.
Task analysis.
D.
Time and motion studies.
E.
Work breakdown structure.
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D.
Profit
Factors that need to be considered to improve the quality of estimates are the planning horizon, the project duration, the people responsible for making the estimates, project management structure and organization, padding estimates, and the organizational culture.
answer
Which of the following is NOT one of the factors that need to be considered to improve quality of estimates for project times and costs?
A.
Planning horizon
B.
People
C.
Padding estimates
D.
Profit
E.
Project structure
question
B.
Project duration
Long duration projects increase the uncertainty in estimates.
answer
Ed is looking over the actual results of projects and comparing them to what was estimated. He notices that the projects that took six months or longer to complete were noticeably more off the estimates. Which of the following factors is he recognizing?
A.
Padding estimates
B.
Project duration
C.
Project structure
D.
People
E.
Organization culture
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A.
Padding estimates
In work situations where we are asked for time and cost estimates, most of us are inclined to add a little padding to increase the probability and reduce the risk of being late. If everyone at all levels of the project adds a little padding to reduce risk, the project duration and cost are seriously overstated.
answer
Janet is forecasting how much money her department needs to support a new project. She estimates that two people and $25,000 in expenses will cover her needs. Because management typically insists on reducing forecasts by 20 percent, she increases her estimates to allow for that reduction. Which of the following factors is illustrated in this situation?
A.
Padding estimates
B.
Planning horizon
C.
Project structure
D.
People
E.
Organization culture
question
D.
Internal, small project
Good conditions for top-down estimating are when there is high uncertainty involved in the project, when the project is small and internal, when the scope is unstable and when it involves strategic decision making.
answer
Which of the following is a good condition for top-down estimating?
A.
Cost and time important
B.
Fixed price contract
C.
Customer wants details
D.
Internal, small project
E.
Large scale project involving several subcontractors
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C.
When there is a fixed price contract
Good conditions for bottom-up estimating are when cost and time are important to the project, when there is a fixed-price contract and when the customer wants details.
answer
Which of the following is a good condition for bottom-up estimating?
A.
When the project involves strategic decision making
B.
When the project is internal and small
C.
When there is a fixed price contract
D.
When there is high uncertainty involved in the project
E.
When there is an unstable scope
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B.
Planning horizon
If Richard will not have funding to start the project for 12 months, he needs to consider the planning horizon. The accuracy of the time and cost estimates decrease as the planning horizon expands.
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Richard is collecting estimates for a house that he will have the funding to build in 12 months. Which of the following factors does Richard need to consider in regard to the quality of these estimates?
A.
Padding estimates
B.
Planning horizon
C.
Project structure
D.
People
E.
Project duration
question
A.
They are made by someone who uses experience and/or information from someone else to determine overall project cost and duration
Top-down estimates usually are derived from someone who uses experience and/or information to determine the project duration and total cost.
answer
Which of the following does NOT help describe a bottom-up estimating approach?
A.
They are made by someone who uses experience and/or information from someone else to determine overall project cost and duration
B.
They establish low-cost, efficient methods for completing activities
C.
They typically comes from the people actually doing the work and who are most knowledgeable about the task at hand
D.
Estimates are made at the work package level and then "rolled up" to determine estimates for major deliverables and for the project itself
E.
They can take place after the project has been planned in detail
question
B.
Template
Template methods are used in bottom-up approach to estimating.
answer
Which of the following methods is NOT considered a top-down approach to estimating project time and cost?
A.
Ratio
B.
Template
C.
Apportion
D.
Function point
E.
Learning curve
question
A.
Ratio
Top-down methods (sometimes called parametric) usually use ratios, or surrogates, to estimate project times or costs. Top-down approaches are often used in the concept or "need" phase of a project to get an initial duration and cost estimate for the project. For example, contractors frequently use the number of square feet to estimate the cost and time to build a new house.
answer
Jose is forecasting project time and cost for constructing a new building by multiplying the total square footage by a given dollar amount. Which of the following methods is he using?
A.
Ratio
B.
Template
C.
Apportion
D.
Function point
E.
Learning curve
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D.
Function point
In the software industry, software development projects are frequently estimated using weighted macro variables called "function points" or major parameters such as number of inputs, number of outputs, number of inquiries, number of data files, and number of interfaces.
answer
Sean is forecasting the time and cost of developing a customized software program by looking at the number of inputs, outputs, inquiries, files, and interfaces. Which of the following methods is he using?
A.
Ratio
B.
Template
C.
Apportion
D.
Function point
E.
Learning curve
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E.
Learning curve
This is a phenomenon of tasks that are labor intensive. In these circumstances the pattern of improvement phenomenon can be used to predict the reduction in time to perform the task. From empirical evidence across all industries, the pattern of this improvement has been quantified in the learning curve (also known as improvement curve, experience curve, and industrial progress curve).
answer
Laura is forecasting the time and cost of developing an intranet for a new customer. Her department has completed six such intranets for customers during the last two years. Although the proposed system is about the same size as the others, she estimates that it will take about 10 percent less time and money. Which of the following methods is she using?
A.
Ratio
B.
Template
C.
Apportion
D.
Function point
E.
Learning curve
question
B.
Labor.
answer
Learning curves are more likely to be applied in situations where most of the costs are
A.
Materials.
B.
Labor.
C.
Overhead.
D.
Evenly spread over materials, labor, and overhead.
E.
Labor and materials.
question
C.
Uses pooled experience of senior and/or middle managers to estimate the total project duration and cost
The consensus method simply uses the pooled experience of senior and/or middle managers to estimate the total project duration and cost. This typically involves a meeting where experts discuss, argue, and ultimately reach a decision as to their best guess or estimate.
answer
Which of the following describes the consensus method?
A.
Should be used only for projects that require the same task, group of tasks, or product to be repeated several times
B.
Uses several people with relevant experience regarding the task at hand to make time and cost estimates
C.
Uses pooled experience of senior and/or middle managers to estimate the total project duration and cost
D.
Uses the number of square feet to estimate the total cost and time of the project
E.
Uses weighted macro variables or major parameters such as the number of inputs or outputs to estimate the total cost and time of the project
question
C.
Learning curve
answer
Which of the following is NOT one of the bottom-up approaches to estimating project time and cost?
A.
Parametric procedures applied to specific tasks
B.
Estimates for the WBS work packages
C.
Learning curve
D.
Template method
E.
Range estimates
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D.
Phase estimating
Phase estimating is used when an unusual amount of uncertainty surrounds a project and it is impractical to estimate times and costs for the entire project.
answer
Which of the following would be the best method for projects where the final product is not known and the uncertainty is very large?
A.
Function point
B.
Template
C.
Learning curve
D.
Phase estimating
E.
Apportion
question
D.
Range estimating
Range estimating works best when work packages have significant uncertainty associated with the time or cost to complete. Under these circumstances it is a prudent policy to require three estimates: low, average and high.
answer
Rob is responsible for estimating a work package that has a significant amount of uncertainty associated with the time and cost to complete. Due to the uncertainty involved he will be making a low, an average and a high estimate. Rob is using which estimating approach?
A.
Parametric procedures applied to specific tasks
B.
Template method
C.
Apportion method
D.
Range estimating
E.
Learning curve
question
B.
Detailed estimates are crucial to project success; therefore, an effort should be made to make estimates as detailed as possible for all projects
At any level of management, the detail of an estimate should be no more than necessary and sufficient. Otherwise time and money are wasted.
answer
Which of the following is NOT true in regard to the level of detail estimates should contain?
A.
It will vary with the complexity of the project
B.
Detailed estimates are crucial to project success; therefore, an effort should be made to make estimates as detailed as possible for all projects
C.
The more detailed the estimate is the more the estimate will cost to create
D.
Inadequate detail might lead to estimates that fall short of their intended purpose
E.
Excessive detail means unproductive paperwork and unnecessary expenditures
question
C.
Direct project overhead
The salary of the project manager would be an example of the direct project overhead cost. The cost is linked to the project, but cannot be directly linked to a work package.
answer
The salary of the project manager would be an example of what type of cost found in a project?
A.
Labor
B.
Direct
C.
Direct project overhead
D.
General and administrative overhead
E.
Salary
question
E.
All of these are examples of costs found in a project.
Typical costs found in a project include direct costs, which consist of labor, materials and equipment, direct project overhead costs and general and administrative overhead costs.
answer
Typical kinds of costs found in a project include all of the following EXCEPT
A.
Direct costs.
B.
Project overhead costs.
C.
General and administrative overhead costs.
D.
Labor.
E.
All of these are examples of costs found in a project.
question
D.
General and administrative overhead
Accounting is an example of a cost that is carried out for the duration of the project and cannot be linked to a specific work package or even the project itself. These costs are called general and administrative overhead.
answer
Accounting would be an example of which of the following costs typically found in a project?
A.
Labor
B.
Direct
C.
Direct project overhead
D.
General and administrative overhead
E.
Salary
question
E.
Labor, materials and equipment
Direct project costs can be clearly chargeable to a specific work package. These costs represent real cash outflows as the project progresses; therefore they are usually separated from overhead costs. They include labor, materials and equipment costs.
answer
Which of the following would best represent direct project costs?
A.
Only labor
B.
Only materials
C.
Only equipment
D.
Both labor and materials
E.
Labor, materials and equipment
question
D.
Estimates should include a normal level of contingency
Estimates should be made by the individuals responsible for the work, should involve several people with relevant experience and knowledge of the tasks, should be made based on normal conditions and should not include any allowances for contingencies, should be created with consistent time units, and should be independent of other projects.
answer
Which of the following is NOT one of the recommended guidelines for developing useful work package estimates?
A.
Estimates should be made by those responsible for the work
B.
Use several people to estimate the same work
C.
Estimates should be based on normal conditions
D.
Estimates should include a normal level of contingency
E.
Estimates should be independent of other projects
question
D.
Creating historical databases of previous projects
Some organizations have large estimating departments of professional estimators—e.g., Boeing, Kodak, IBM—that have developed large time and cost databases.
answer
Companies are using which of the following for improving the estimating process for future projects?
A.
Adjusting estimates based on individual forecasting abilities
B.
Benchmarking and using the experience of other companies
C.
Using time and motion studies
D.
Creating historical databases of previous projects
E.
Establishing an estimating training course for all employees
question
E.
To help establish a project selection process.
Estimates are not important to help establish a project selection process. This process should be established before the project was selected.
answer
Reasons why estimating time and cost are important include all of the following EXCEPT
A.
To schedule work.
B.
To determine how long the project should take and cost.
C.
To develop cash flow needs.
D.
To determine how well the project is progressing.
E.
To help establish a project selection process.
question
B.
Template method.
If the project is similar to past projects, the costs from past projects can be used as a starting point for the new project. Differences in the new project can be noted and past times and costs adjusted to reflect these differences.
answer
The bottom-up approach for estimating times and costs that uses costs from past projects that were similar to the current project is known as
A.
Detailed WBS work package estimates.
B.
Template method.
C.
Function point method.
D.
Time-phased cost estimates.
E.
Phase estimating.
question
A.
Apportion
Apportionment is used when projects closely follow past projects in features and costs. Given good historical data, estimates can be made quickly with little effort and reasonable accuracy. This method is very common in projects that are relatively standard but have some small variation or customization.
answer
Which of the following top-down methods is used when projects closely follow past projects in regard to features and costs of those features, and result in costs being assigned by percentages to major segments of the project?
A.
Apportion
B.
Function point
C.
Phase estimating
D.
Learning curve
E.
Consensus
question
C.
Normal conditions not applying.
Estimates are supposed to be based on normal conditions. While this is a good starting point, it rarely holds true in real life. This is especially true when it comes to the availability of resources. Resource shortages, whether in the form of people, equipment, or materials, can extend original estimates.
answer
Refining estimates may be necessary for a number of reasons. For example, resource shortages, in the form of people, equipment, or materials, can extend original estimates. This is a good example of
A.
Hidden interaction costs.
B.
Things going wrong on a project.
C.
Normal conditions not applying.
D.
Changes in project scope.
E.
The customer not being clear about their expectations.
question
A.
Hidden interaction costs.
Interaction costs are hidden in estimates. According to the guidelines, each task estimate is supposed to be done independently. However, tasks are rarely completed in a vacuum. Work on one task is dependent upon prior tasks, and the hand-offs between tasks require time and attention. For example, people working on prototype development need to interact with design engineers after the design is completed, whether to simply ask clarifying questions or to make adjustments in the original design.
answer
Refining estimates may be necessary for a number of reasons. For example, people working on prototype development needing time to interact with the design engineers after the design is completed is a good example of
A.
Hidden interaction costs.
B.
Things going wrong on a project.
C.
Normal conditions not applying.
D.
Changes in project scope.
E.
The customer not being clear about their expectations.
question
D.
Changes in project scope.
As he or she gets further and further into the project, the manager obtains a better understanding of what needs to be done to accomplish the project. This may lead to major changes in project plans and costs. Likewise, if the project is a commercial project, changes often have to be made midstream to respond to new demands by the customer and/or competition.
answer
Refining estimates may be necessary for a number of reasons. For example, a manager getting further into a project and obtaining a better understanding of what needs to be done to accomplish a project and meet the needs of the customer is an example of
A.
Hidden interaction costs.
B.
Things going wrong on a project.
C.
Normal conditions not applying.
D.
Changes in project scope.
E.
There is never a good reason to refine estimates.
question
B.
Things going wrong on a project.
Design flaws are revealed after the fact, extreme weather conditions occur, accidents happen, and so forth. Although you shouldn't plan for these risks to happen when estimating a particular task, the likelihood and impact of such events need to be considered.
answer
Refining estimates may be necessary for a number of reasons. For example, design flaws being revealed after the fact, extreme weather conditions, and accidents occurring are good examples of
A.
Hidden interaction costs.
B.
Things going wrong on a project.
C.
Normal conditions not applying.
D.
Changes in project scope.
E.
None of these are correct.
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