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
PV (Present Value) = BCWS (Budgeted Cost of Work
Schedule)
EV (Earned Value) = BCWP (Budgeted Cost of Work
Performed)
AC (Actual Cost) = ACWP (Actual Cost of Work Performed)
ROI = (ARR / Investment) * 100 % Bigger is better
BCR = Benefits / Cost
Benefit Cost Ratio (BCR) Bigger is better
((BCR or Benefit / Cost)
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
when resources, such as project team members,
consultants, and SMEs are available to work on the
project. It takes into account vacations, other
commitments within the organization, or restrictions
on contracted work, overtime issues, and so on
24) Program Evaluation and Review Technique (PERT)
uses a weighted average formula to predict the
length of activities and the project. Specifically, PERT
uses a 'pessimistic,' 'optimistic,' and 'most likely'
estimate to predict when the project will be
completed
25) The critical path is the longest path to completion
in the network diagram.
26) Activities on the critical path have no float or
slack.
27) Free float is the amount of time an activity can be
delayed without affecting the next activity's
scheduled start date.
28) Total float is the amount of time an activity can
be delayed without affecting the project end date.
29) Heuristic is simply a rule of thumb
30) Crashing involves adding resources, which
typically increases cost.
31) Fast tracking adds risk as tasks are allowed to
overlap
32) Each resource in the project must be accounted
for and assigned to a cost category.
Categories include the following:
a. Labor costs
b. Material costs
c. Travel costs
d. Supplies
e. Hardware costs
f. Software costs
g. Special categories (inflation, cost reserve, and so
on)
33) There are three generally accepted categories of
estimating accuracy:
a. Rough order of magnitude This estimate is “rough”
and is used during the Initiating processes and in top-
down estimates. The range of variance for the
estimate can be –25 percent to +75 percent.
b. Budget estimate This estimate is also somewhat
broad and is used early in the planning processes and
also in top-down estimates. The range of variance for
the estimate can be –10 percent to +25 percent.
c. Definitive estimates This estimate type is one of
the most accurate. It is used late in the planning
processes and is associated with bottom-up
estimating. The range of variance for the estimate
can be –5 percent to +10 percent.
34) The opportunity cost is the amount of the project
that was not chosen
35) Quality is the sum of the characteristics of a
product that allow it to meet the demands or
expectations of the project
36) Grade, according to the PMBOK, “is a category or
rank given to entities having the same functional use
but different technical characteristics.” For example,
there are different grades of paint, different grades of
metal, and even different grades of travel.
37) The design of experiments (DOE) approach relies
on statistical what-if scenarios to determine what
3
variables within a project will result in the best
outcome.
38) Design of experiments is an analytical technique
that identifies the elements or variables that will have
the greatest effect on overall project outcomes
39) There are five types of powers the project
manager yields: (R F C E R)
a. Reward
b. Formal
c. Coercive (penalty) d. Expert
e. Referent
40) Among the above powers Reward, Formal &
Coercive (penalty) come with the "Position"
41) Expert & Reward are considered the best types of
powers and Coercive (penalty) is "Least" for obvious
reasons
42) Seven reasons for conflict, in order of most
common to least common:
a. Schedules
b. Priorities
c. Resources
d. Technical beliefs
e. Administrative policies and procedures
f. Costs
g. Personalities
43) Five different approaches to conflict resolution
a. Problem solving (win - win) [BEST]
b. Forcing (win - lose)
c. Compromising (lose - lose)
d. Smoothing
e. Withdrawal
NOTE: Forcing (win - lose) and Problem Solving (win -
win) are the ONLY two modes that result in a
RESOLUTION to the conflict.
44) The halo effect is the promoting the person to
manage projects since he/she is good at a technology
45) Confronting (Problem Solving) is the best
problem-solving technique since it meets the problem
directly
46) In a Weak Matrix structure, functional
management will have more authority than the
project manager
47) Within communicating there are five
characteristics that affect the message:
a. Paralingual: pitch, tone, and voice inflections
b. Feedback: sender confirmation of the message by
asking questions, for a response, or other
confirmation signals
c. Active listening: receiver confirms message receipt
d. Effective listening: receiver offers confirmation of
the message, such as nodding their head, asking
questions, or other interactions.
e. Nonverbal: facial expressions, hand gestures, and
body language
48) One of the first inputs to risk management is the
project charter
49) Historical information is always an excellent
source of information for risk identification
50) Brainstorming is likely the most common
approach to risk identification
51) Force majeure is a powerful and unexpected
event, such as a hurricane or other disaster
52) Contracts are known by many names:
a. Agreement
b. Subcontract
 c. Purchase order
d. Memorandum of understanding
53) All contracts in the United States are backed by
the US court systems
54) According to the Guide to the PMBOK, the project
charter should be published by a manager external to
the project but with sufficient power and authority to
carry it off.
55) When a project is performed under contract, the
contract can serve as the project charter
56) Cost reimbursable contracts are used when the
degree of uncertainty is high and when the project
requires a large investment prior to completion of the
project
57) The scope statement contains an exhaustive list
of the project deliverables, their requirements, and
measurable criteria used to determine project
completion
58) The scope statement is an output to the Scope
Definition process and is used to create the WBS
59) Cause-and-effect diagrams, also called Ishikawa
or fishbone diagrams, show the relationship between
the effects of quality problems and their causes
60) The primary function of the Closing process is to
formalize project completion and disseminate this
information to the project participants
61) According to the Guide to the PMBOK, the project
manager is identified and assigned as an output of
the Initiation process. In practice, project managers
are very often assigned at the beginning of this
process.
62) The work package level is the lowest level in the
WBS. Time and cost estimation is easily determined
at this level as are resource assignments. Quality
control measurements can be determined at this
level as well.
63) The code of accounts is assigned to the elements
in the WBS
64) Each element in the WBS is assigned a unique
identifier. These are collectively known as the code of
accounts
65) The Responsibility Assignment Matrix (RAM) links
project roles and responsibilities with project
activities
66) The WBS is the deliverables-oriented hierarchy of
project work.
67) The staffing management plan details how and
when human resources will be added to and taken off
the project. It is an output of Organizational Planning
68) Analogous estimating is not a qualitatively based
technique. It is a top-down estimating technique that
considers previous similar activities when calculating
estimates
69) Mandatory dependency, also known as hard logic.
Mandatory dependencies are inherent in the nature
of the work
70) Discretionary dependencies, also called preferred
logic, preferential logic, and soft logic, are defined by
the project management team
71) "Best Practice” often refers to a specific sequence
of work, described in terms of “Soft Logic”.
Sometimes "Experience" is also attributes to Soft
Logic
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72) Finish to start is the most commonly used logical
relationship in PDM and most project management
software packages
73) There are three major documents and each has a
specific purpose:
a. Project Charter. Formally authorizes the project.
b. Project Scope Statement. States what work is to be
accomplished and what deliverables need to be
produced.
c. Project Management Plan. States how the work will
be performed
74) Philip Crosby devised the zero defects theory,
meaning do it right the first time. Proper Quality
Planning leads to less rework and higher productivity
75) According to Bruce Tuckmann, “Forming,
Storming, Norming and Performing ” are the stages of
team development
76) The performing stage is similar to Maslow’s self-
actualization
77) Myers Brigg’s theory states that “Sensing” and
“Intuition” personality types are related to
“Information” preference in other words ‘Hard Data
verses what might be’
78) Juran = Fitness for use, conformance. Quality by
design.
79) Joseph M. Juran is noted for his fitness for use
premise. Simply put, this means the stakeholders’
and customers’ expectations are met or exceeded.
80) W. Edwards Deming suggested that as much as
85 percent of the cost of quality is a management
problem
81) Shewhart = Plan-Do-Check-Act cycle.
82) TQM = Quality must be managed in and must be
a continuous process
83) Six Sigma = Six Sigma is a measurement-based
strategy; no more than 3.4 defects per million.
84) Kaizen = Continuous improvement; improve
quality of people first.
85) Continuous improvement = Watch continuously for
ways to improve quality.
86) Statement of work (SOW) comprises of
a. Business Need
b. Product Scope Description and
c. Strategic Plan
87) Conflict should be addressed early and usually in
private, using a direct, collaborative approach
88) Organization, Environmental & external
assumptions should be addressed by the Project
Charter
89) WBS Dictionary” is a document which describes
the details for each component in the WBS. It
includes a breif description of the of the “Scope” or
“Statement of the work” , defined deliverables, a list
of associated activities, and a list of milestones
90) Project Manager must consider “cultural
differences” while deciding upon recongnization and
rewards during team development.
91) Technical inability and poor risk management by
the contractor is mostly the reason for the project not
to meet the customer expectations
92) Critical Chain Project Management” is typically
the “Management of Buffers”
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
o Contract closure procedure
The difference between the two is focus, formality
and frequency. Administrative closure focuses on
closing the project or project phase whereas Contract
closure focuses on closing a contract that is part of
the project
130) Contingency Reserve (Known Unknowns) is for
the risks remaining after the Risk Response Planning
Management Reserve (Unknown Unknows is any
extra amount reserved t cover “unforeseen risks”
Cost Baseline will include the Contingency Reserve
Cost Budget will include the Management Reserve
131) Quality is defined as the degree to which the
project fulfills requirement
132) Quality MUST BE PLANNED IN AND NOT
INSPECTED IN
133) The Project Manager ultimately has the
responsibility for the Product of the Project and
134) Senior Management is responsible for the Quality
of entire Organization
135) Cost of Nonconformance is greater than the cost
of conformance
136) Most projects will fit one of the six needs and
demands
o Market demand
o Business need
o Customer request
o Technological advance
o Legal requirement
o Social need
137) The project charter (which is an output of the
Develop the Project Charter process) is the written
acknowledgment that the project exists. The project
charter names the project manager and gives that
person the authority to assign organizational
resources to the project
138) Net present value (NPV) assumes reinvestment is
made at the cost of capital
139) IRR assumes reinvestment at the IRR rate and is
the discount rate when NPV is equal to zero
140) Payback period does not consider the time value
of money and is therefore the least precise of all the
cash flow analysis techniques
141) Preliminary project scope statement describes
the objectives of the project and the high level
requirements needed to satisfy stakeholder
expectations
142) The PMIS in the Develop Project Management
Plan process includes a subsystem called the
configuration management system
143) Change control system, which is a subsystem of
the configuration management system
144) Stakeholder analysis is a tool and technique of
Scope Definition used to determine and document
the needs, wants, and expectations of stakeholders
and prioritize and quantify those needs into project
requirements
145) The purpose of the project scope statement is to
document the project objectives, deliverables, and
requirements so that they can be used to direct the
project team’s work and as a basis for future project
decisions
146) The scope statement further elaborates the
project objectives, deliverables, requirements, and
6
constraints and assumptions defined in the
preliminary scope statement. It serves as a basis for
future project decisions
147) Alternatives identification is a tool and technique
of the Scope Definition process that includes
brainstorming and lateral thinking techniques
148) Poor scope definition might lead to cost
increases, rework, schedule delays, and poor morale
149) According to the PMBOK Guide, functionality and
specific conditions that must be met in order to
satisfy the project, contract, standard, or specification
describe the criteria for requirements, not objectives
150) Product analysis (TT Scope Definition) includes
techniques such as value engineering, value analysis,
systems analysis, systems engineering, product
breakdown, and functional analysis
151) The product scope description can be used as an
input to the Scope Definition process when the
project charter and/or preliminary project scope
statement are missing
152) The lowest level of any WBS is called the work
package level
153) For the exam, remember that the key to DOE is
that it equips you with a statistical framework that
allows you to change the variables that have the
greatest effect on overall project outcomes at once
instead of changing one variable at a time.
154) Quality checklists are an output of the Quality
Planning process, and checklist analysis is a tool and
technique of the Risk Identification process
155) Cost-benefit analysis considers trade-offs in the
Quality Planning process
156) Benchmarking compares previous similar
activities to the current project activities to provide a
standard to measure performance against.
157) Failure costs; is also known as the cost of poor
quality. Failure costs include both internal and
external costs.
Internal failure costs are costs associated with not
meeting the customer’s expectations while you still
had control over the product. This results in rework,
scrapping, and downtime.
158) The process improvement plan is a subsidiary
plan of the project management plan and targets
inefficiencies in a process or activity. The quality
baseline is used to document the quality objectives of
the project and is used as a basis for future Quality
processes
159) The WBS dictionary should be documented with
the code of account identifier, an SOW, the
responsible organization, and a milestone schedule
for the WBS components
160) Design of experiments is a tool and technique of
the Quality Planning process that provides statistical
analysis for changing key product or process
elements all at once (not one at a time) to optimize
the process
161) According to the PMBOK Guide, the risk
management plan should include the following
elements:
o Methodology
o Roles and responsibilities
o Budgeting
o Timing
o Risk categories
 oDefinitions of risk probability and impact
oProbability and impact matrix
oRevised stakeholder tolerances
oReporting formats
oTracking
162) The output of the Risk Identification process is
the risk register. The risk register contains the
following elements:
o List of identified risks
o List of potential responses
o Root causes of risks
o Updated risk categories
163) Risk urgency assessment is a tool and technique
of Qualitative Risk Analysis process
164) Qualitative Risk Analysis is a fast and easy
method of determining probability and impact
165) The risk management plan details how risk
management processes will be implemented,
monitored, and controlled throughout the life of the
project.
166) The risk management plan does not include
responses to risks or triggers. Responses to risks are
documented in the risk register as part of the Risk
Response Planning process
167) The information-gathering techniques in the Risk
Identification process are
o brainstorming,
o the Delphi technique,
o interviewing,
o root cause identification, and
o SWOT analysis.
168) Quantitative Risk Analysis analyzes the
probability of risks and their consequences using a
numerical rating
169) Monte Carlo analysis is a simulation technique &
not a Modeling technique
170) When the question describes sensitivity analysis,
which is a tool and technique of the Quantitative Risk
Analysis process. Tornado diagrams are often used to
display sensitivity analysis data
171) The simplest form of “Risk Analysis” is
“Sensitivity Analysis”
172) Following options are diagramming techniques of
the Risk Identification process
o Ishikawa diagram
o Process flowchart
o Influence diagram
173) Passive acceptance is when the team has decided
to take no action and make no plans for the risk. This
is a strategy that can be used for either positive or
negative risks.
174) The PMBOK Guide divides contracts into three
categories:
o Fixed price or lump sum (biggest risk is borne by
the seller & good when original scope is well defined)
o Cost reimbursable (biggest risk is borne by the
buyer)
o Time and materials (T&M)
175) The three outputs of the Plan Contracting process
are
o procurement documents (request for proposal
(RFP), request for information (RFI), invitation for bid
(IFB), request for quotation (RFQ)), o evaluation
criteria,and
o contract statement of work updates.
7
176) Understand the difference between bid and/or
quotation and proposal for the exam. Bids or
quotations are used when price is the only deciding
factor among bidders. Proposals are used when there
are considerations other than price
177) A contract statement of work (SOW) contains the
details of the procurement item in clear, concise
terms. It includes the following elements:
o The project objectives
o A description of the work of the project and any
post project operational support needed
o Concise specifications of the product or services
required
o The project schedule, time period of services, and
work location
178) According to the PMBOK Guide, using templates
and checklists is one way to ensure that you don’t
miss any key responsibilities when planning the
project and will help reduce the amount of time spent
on project planning
179) According to the PMBOK Guide, the RAM
(Responsibility Assignment Matrix) relates the OBS to
the WBS to assure that every component of the work
of the project is assigned to an individual.
180) The letters in the acronym RACI (sample portion
of a type of RAM) are the designations are
o R = Responsible for performing the work
o A = Accountable, the one who is responsible for
producing the deliverable or work package and
approves or signs off on the work
o C = Consult, someone who has input to the work or
decisions
o I = Inform, someone who must be informed of the
decisions or results
181) The RAM and RACI charts are tools and
techniques of Human Resource Planning process
182) Standard forms are a tool and technique of the
Plan Contracting process. Standard forms can be
nondisclosure agreements, standardized contracts,
and so on.
183) Plan Purchases and Acquisitions can directly
influence the project schedule, and the project
schedule can directly influence this process
184) Resource availability is an output of the Acquire
Project Team and Select Seller processes
185) For the exam, remember that resource
availability isn’t determined until the Executing stage
and becomes an input to the Activity Resource
Estimating process
186) Remember that you cannot perform Schedule
Development until you have completed all the
following processes of project Planning: Scope
Planning, Scope Definition, Create WBS, Risk
Identification, Risk Response Planning, Plan
Purchases and Acquisitions, Activity Resource
Estimating, Activity Definition, Activity Sequencing,
and Activity Duration Estimating
187) Schedule Development has 10 tools and
techniques:
o Schedule network analysis (produces the project
schedule)
o Critical path method ()
o Schedule compression
o What-if scenario analysis
o Resource leveling
o Critical chain method
 oProject management software
oApplying calendars
oAdjusting leads and lags
oSchedule model
188) The higher the standard deviation is for an
activity, the higher the risk. Since standard deviation
measures the difference between the pessimistic and
the optimistic times, a greater spread between the
two, which results in a higher number, indicates a
greater risk. Conversely, a low standard deviation
means less risk
189) Monte Carlo is a simulation technique that shows
the probability of all the possible project completion
dates
190) Monte Carlo analysis can be used in the Schedule
Development process to determine multiple, probable
project durations
191) Resource leveling can cause the original critical
path to change.
192) CPM manages the total float of schedule networks
paths, whereas critical chain manages buffer activity
durations and resources
193) Cost aggregation (TT of Cost Budgeting) is the
process of tallying the schedule activity cost
estimates at the work package level and then totaling
the work package levels to higher level WBS
component levels
194) Funding limit reconciliation (TT of Cost Budgeting)
involves reconciling the amount of funds spent with
the amount of funds budgeted for the project
195) Cost baselines are displayed as an S curve.
196) The primary output of Cost Estimating is activity
cost estimates
197) Parametric estimating multiplies a known
element—such as the quantity of materials needed—
by the time it takes to install or complete one unit of
materials. The result is a total estimate for the
activity
198) The project schedule determines the start and
ending dates of activities, determines float times,
generally shows resource assignments, and details
the activity sequences and durations.
199) Motivation can be extrinsic or intrinsic.
o Extrinsic motivators are material rewards and might
include bonuses, the use of a company car, stock
options, gift certificates, training opportunities, extra
time off, and so on o Intrinsic motivators are specific
to the individual. Some people are just naturally
driven to achieve—it’s part of their nature
200) The introduction of a new team member will start
the formation and development of the team all over
again with the forming stage
201) Teams in the norming stage of Develop Project
Team exhibit affection and familiarity with one
another and make joint decisions
202) Request Seller Responses obtains bids and
proposals from vendors.
203) Select Sellers is the receipt of bids and proposals
and the selection of a vendor
204) Independent estimates (TT of Select Sellers), also
called should cost estimates, are a way to check
proposed pricing
205) Fait accompli is a tactic used during contract
negotiations where one party convinces the other
8
that the particular issue is no longer relevant or
cannot be changed
206) The process analysis technique (TT of Perform
Quality Assurance process) includes root cause
analysis to analyze a problem and solution and to
create preventive actions
207) You are preparing project performance appraisals
and have decided you’d like each team member to
get feedback regarding their performance from
several sources, including peers, superiors, and
subordinates. This is called 360-degree feedback and
is part of the project performance appraisals tool and
technique of the Manage Project Team process.
208) Understand for the exam that configuration
management involves
o identifying the physical characteristics of the
product, service, or result of the project (or its
individual components);
o controlling changes to those characteristics; and
o Documenting changes to verify that requirements
are met.
o It also includes the change management system
and
o documents the process for requesting, tracking,
and determining whether change requests should be
approved or denied.
209) Activities associated with configuration change
management in the Integrated Change Control
process
o Configuration identification
o Configuration status accounting and
o Configuration verification and auditing
210) Integrated Change Control, Schedule Control, and
Cost Control are all concerned with three issues:
o influencing the things that cause change,
o determining that change is needed or has
happened,
o and managing the change
211) Change control systems are documented
procedures that describe
o How to submit change requests.
o They track the status of the change requests,
o document the management impacts of change,
o track the change approval status, and
o define the level of authority needed to approve
changes.
212) Change control systems do not approve or deny
the changes—that’s the responsibility of the
configuration control board (CCB)
213) The configuration control board (CCB) has the
authority to approve or deny change requests. Their
authority is defined and outlined by the organization
214) “Recommended” corrective action is an output of
several of the change control processes, including
Scope Change Control, Schedule Control, Cost
Control, Risk Monitoring and Control, and Perform
Quality Control.
215) “Approved” corrective action is an output of the
Integrated Change Control process. Remember that
Integrated Change Control is where all change
requests are processed and either approved or
denied.
216) Also note that corrective action is an output of
the Monitoring and Controlling processes and an
input to the Executing processes
217) Cost variances (both positive and negative) are
calculated using a performance measurement
analysis tool (specifically earned value techniques)
218) EVT (earned value techniques) compares what
you’ve received or produced to what you’ve spent.
219) Workarounds are unplanned responses.
Workarounds deal with negative risk events as they
occur.
220) Schedule variances will sometimes—but not
always—impact the schedule. Changes to noncritical
path tasks will not likely impact the schedule, but
changes to critical path tasks will always impact the
schedule
221) Budget updates might require cost rebaselining
222) You can remember the difference between Scope
Verification and Perform Quality Control this way:
o Scope Verification = accepting work results
o Perform Quality Control = checking for correct work
results (assuring that the quality requirements are
met)
223) Projects come to an end for several reasons:
o They’re completed successfully.
o They’re canceled or killed prior to completion.
o They evolve into ongoing operations and no longer
exist as projects.
224) Four formal types of project endings exist that
you might need to know for the exam:
o Addition
o Starvation
o Integration
o Extinction
225) For the exam, remember that product verification
performed during the Closing processes determines
whether all of the work of the project was completed
correctly according to the contract terms and
satisfactorily according to stakeholder expectations,
whereas product documentation is verified and
accepted during the Scope Verification process. One
more note: when projects end prematurely, the Scope
Verification process is where the level of detail
concerning the amount of work completed gets
documented.
226) Contract documentation is an input to both the
Close Project and Contract Closure processes
227) Note PMI defines “Scope Statement” as the basis
for making future project decisions and for confirming
or developing common understanding of project
scope among project stakeholders.
228) Scope Verification
o Verified work results
229) Perform Quality Control
o Assured quality requirements were met
230) Close Project
o Product verification (work was correct and
satisfactory)
o Collecting project documents
o Disseminating final acceptance notice
o Documenting lessons learned
o Archiving project records
231) Contract Closure
o Product verification (work was correct and
satisfactory)
o Formal acceptance and closure
9
232) WBS element changes are scope changes.
Schedule revisions are often required as a result of
scope changes.
233) Close Project and Contract Closure are the
processes in the Closing process group and are
performed in that order
234) The work performance information is reviewed to
determine the status of project activities and make
certain the project goals and objectives are met. This
is an input to the Close Project process
235) According to the PMBOK Guide, the procurement
audit examines the procurement process from
Procurement Planning through Contract
Administration
236) Integrity means adhering to an ethical standard
237) Hammocks are summary-level activities or
aggregate activities shown as a summary activity on
a project schedule network diagram.
238) Contract Negotiation has “5’ Sequential steps
(Note Agreement is AFTER Closure)
o Protocol
o Probing
o Scratch Bargaining
o Closure and
o Agreement
239) The Primary Objective of establishing a Quality
Assurance Process is “For Quality
Improvement”
240) “Quality Function Deployment Process” identifies
what the customer’s needs are (Spoken/unspoken
words) and translates those needs into technical
requirements. Appropriate for each stage of the
product development life cycle
241) Decision Tree is a diagram that describes a
decision under consideration and the implications of
choosing one of the alternatives
242) The Project Charter provides the
o high level requirements,
o constraints,
o assumptions,
o stakeholders and
o the measures of success.
243) Based on this information, or the lack of it, the
Charter is an excellent source to start to identify the
Project Risks
244) 9 ‘bilities’ (A MAP FOR US)
Maintainability: The ability of a unit to be restored
within a specified time to its performance capability
under the environmental operating conditions within
a specified, average period of time
Usability: is the ability of a product to perform its
intended function for the specified user under the
prescribed conditions
Reliability: is the degree to which a unit of equipment
performs its intended function under specific
conditions for specified period of time
Availability: is the probability of the product being
capable of performing a required function when
called upon
245) Activity Resource Estimating involves
determining what physical resources (People,
Equipment, etc) and what quantities should be used
and when they would be needed to perform project
activities
246) Physical limitations are an attribute of
“Mandatory Dependencies”
247) A Project Phase is “Marked by the completion of
one or more deliverables”
248) A “Product Description” should define the
relationship between the product that is being
created and the business need
249) Contingency Plans can be best described as
“Planned responses to Risk Events”
250) Staff assignments and resource availability are
the outputs of “Acquire the Project Team” Process
251) Complex and large projects would be more
effectively managed in “Strong” and ‘Projectized”
Structure
252) If Changes are well defined, its Fixed Price
Contract but if they are not then its T & M
253) Contract Management Plan is an OUTPUT to
“Select Seller Process”
254) Punitive Damages are the damages intended to
punish the wrong doer
255) “Utility Theory” considers the pains or tolerance
level a stakeholder has to risk
256) There are three key components to a Risk
o Risk Event (The Event)
o Probability of the Event
o Impact or Effects of the Event (Amount at Stake)
257) Delhi technique is a “Consensus Technique”
258) Residual Risk are those that “Remain” after Risk
Responses have been taken
259) Inputs to Performance Reporting are
o Work Performance Information
o Performance Measurements
o Forecasted Completion
o QC Measurement
o Project Plan
o Approved Change Requests and
o Deliverables
260) Interpersonal communication takes three forms
o Verbal
o Non-verbal and
o Written
261) When distributing information, the total message
impact from the sender is
a. 7% words ,
b. 38% vocal tones and
c. 55% body language
262) A ‘Planning Package” is a WBS component below
the control account but above the work package. It is
used for planning unknown work content that does
not have detailed schedule activities
263) There are two types of “Decision Models” that
can be used for Project Selection during the initiation
Process
o Comparative (Benefit measurement Rating) Models
o Constrained (Mathematical Decision Models)
264) Comparative (Benefit measurement Rating)
Models
o Decision Tree
o Criteria Profiling
o Weighted Factor
o Q-Sorting
o Delphi Technique
265) Constrained (Mathematical Decision Models)
o Logical Framework Analysis
o Linear Program Programming
266) The “Control Points” in the WBS used for isolated
assignment to work centers are referred to as the
“Control Account Plan”
267) Control account Plan (CAP) is a management
control point where the integration of scope, budget
and schedule take place and where the measurement
of performance takes place.
These CAPS are placed at the selected management
points in the WBS.
268) Cost Estimates include All Resources to be
charged to the Project
269) A Control Account is a management control point
that can be placed at selected management points of
the WBS above the Work Package Level
270) To convey information between two or more
parties, the communication process must have a
medium. The three most common media are
o Visual
o Auditory and
o Tactile
271) Four steps of performing RCA (Root Cause
Analysis) are
o Data Collection
o Casual Factor Charting
o Root Cause Identification
o Recommendation Generating and Implementation
272) Scatter Diagrams are used to investigate the
possible relationship between two variables that both
relate to the same “EVENT”
273) BCR (Benefit Cost Ratio) compares the benefits to
the costs of the project where the Benefits are the
same as Revenues or often referred to as the
“Payback period”
274) Project performance is impacted by Four Basic
Cultures
o World
o National
o Business and
o Leadership
275) When one considers their Culture to be superior,
they are called “Ethnocentric”
276) Use of personal space during social interaction is
known as “Proxemics”
277) Risk is the notion of dealing with “Uncertainty”
o Knows at the extreme end of the Uncertainty
Spectrum will definitely affect you, although you have
no control over them
o Knows-Unknowns are items that will affect you
although you are not able to predict how or how
much they will effect you
o Unknown – Unknowns are items or situations whose
existence we cannot imagine (Who knows?)
278) A Records Management Systems is a specific set
of processes, related control functions and
automation tools used by the PM to manage contract
documentation and records. Its the TT of Contract
Administration Process
279) Parametric (Top – Down) uses historical data and
statistical relationships to determine costs
280) Constructive team roles include Initiators,
Information seekers, Information givers,
Encouragers, Clarifiers, Harmonizers, Summarizers
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
PROJECT LIFE CYCLE & PHASES
1) Characteristics of a general project life cycle include
Cost and staffing levels are low at the start, peak as
the work is carried out, and drop rapidly as the
project draws to a close Stakeholder influences, risks
and uncertainty are the greatest at the start of the
project. These factors decrease over the life of the
project Ability to influence the final characteristics of
the project’s product, without significantly impacting
the cost, is highest at the start of the project and
decreases as the project progresses towards
completion
2) The project life cycle goes through a series of phases
to create the product
3) Phase end reviews are also called phase exits, phase
gates, or kill points
4) A Project Phase is “Marked by the completion of one
or more deliverables”. In other words, a project phase
is generally concluded and formally closed with a
review of the deliverables to determine completeness
and acceptance
5) Formal phase completion does not necessarily
include authorizing the subsequent phase. For
instance, if the risk is deemed too great for the
project to continue or if the objectives are no longer
required, a phase can be closed with the decision to
not initiate any other phases
6) There are three types of phase – phase relationships
A sequential relationship: where a phase can only
start once the previous phase is complete
An overlapping relationship: where the phase
starts prior to completion of the previous phase. This
can sometimes be applied in schedule compression
techniques like fast tracking An iterative
relationship: where only one phase is planned at
any given time and the planning for the next is
carried out as the work progresses on the current
phase and deliverables. This approach is useful in
highly uncertain, undefined or rapidly changing
environments such as research.
7) The Process Groups are NOT project phases. As
projects are separated into distinct phases or
subprojects such as feasibility study, concept
development, design, prototype, build, test, etc, all of
the Process Groups would normally be repeated for
each phase or subproject
ORGANIZATIONAL STRUCTURE
8) In a Weak Matrix structure, functional management
will have more authority than the project manager
and the project manager role is more of a project
coordinator or expediter than that of a true project
manager.
Project Expediter: The project expediter acts
primarily as a staff assistant and communications
coordinator. The expediter cannot personally make or
enforce decisions
Project Coordinator: Similar to the project
expediter except the coordinator has some power to
make decisions, some authority, and reports to a
higher-level manager
9) Complex and large projects would be more effectively
managed in “Strong” and ‘Projectized”
Structure/Matrix
12
10) In a balanced matrix, Power is shared. This is a
combination of both Functional and Projectized.
Resources would have two managers – Project
Manager and Functional Managers. After Project
Completion, resources go back to Functional
department.
GENERAL POINTS
11) The outputs of process groups are:
a) Initiating: Project charter
b) Planning: project management plan;
c) Executing: work results;
d) Monitoring & Controlling: corrective actions;
e) Closing: project product
12) Scope includes
a) The project and product requirements,
b) Criteria,
c) Assumptions,
d) Constraints, and
e) Other influences related to a project
f) and how each will be managed or addressed within
the project
13) A project manager is identified and assigned as early
in the project as is feasible, preferably while the
project charter is being developed and always prior to
the start of planning
14) It is recommended that the project manager
participate in the development of project charter, as
the charter provides the project manager with the
authority to apply resources to project activities
15) Projects are authorized by someone external to the
project such as sponsor, PMO or portfolio steering
committee
16) Stakeholder identification is a continuous process and
can be difficult
17) The project initiator or sponsor should be at a level
that is appropriate to funding the project. They will
either create the charter or authorize project
manager to do.
18) The initiator’s signature on the charter authorizes the
project
19) The Statement Of Work (SOW) is a narrative
description of products or services to be delivered by
the project
20) SOW references Business Need: An organization’s
business need may be based on a market demand,
technological advance, legal requirement or
government regulation
Product Scope Description: This documents the
characteristics of the product that the project will be
undertaken to create. The description should also
document the relationship between the products or
services being created and the business need that
the project will address
Strategic Plan: Documents the organization’s
strategic goals. Therefore, all projects should be
aligned with the strategic plan
21) Business case or similar document provides the
necessary information from a business standpoint to
determine whether or not the project is worth the
required investment.
22) Business case includes business need and cost-
benefit analysis
23) A contract is an input to the charter if the project is
being done for the external customer
24) Project baselines include but not limited to
Schedule baseline
Cost performance baseline and
Scope baseline
25) Common formats for performance reports include bar
charts, Scurves, histograms, and tables
26) Performance Reporting is a Controlling process. It
creates Performance Reports, which are comparisons
of performance to the performance baselines. These
are typically done in tabular or graphical format.
27) The “Earned Value Technique” is a method to
measure project performance against the project
baseline
28) Change Requests include
Corrective action: Documented direction for
executing the project work to bring expected future
performance of the project work in line with the
project management plan
Preventive action: A documented direction to
perform an activity that can reduce the probability of
negative consequences associated with the project
risks
Defect repair: The formally documented
identification of a defect in a project component with
a recommendation to either repair the defect or
completely replace the component
Updates: Changes to formally controlled
documentation, plan, etc. to reflect modified or
additional ideas or content
29) Benchmarking compares previous similar activities to
the current project activities to provide a standard to
measure performance against.
30) Project scope management includes the processes
required to ensure that the project includes all the
work required, and only the work required, to
complete the project successfully.
31) Managing the project scope is primarily concerned
with defining and controlling what is and is not
included in the project
32) Scope baseline of the project include
Approved detailed project scope statement,
Its associated WBS and
WBS dictionary
33) The scope baseline is then monitored, verified and
controlled throughout the lifecycle of the project
34) The stakeholder register is used to identify
stakeholders that can provide information on detailed
project and product requirements
35) Several group activities can be organized to
identify project and product requirements. Some of
the group creativity techniques that can be used are:
Brainstorming: A technique used to generate and
collect multiple ideas related to project and product
requirements
Nominal group technique: This technique
enhances brainstorming with a voting process used
to rank the most useful ideas for further
brainstorming or prioritization
The Delphi technique: A selected group of experts
answers questionnaires and provides feedback
regarding the responses from each round of
requirements gathering. The responses are only
available with the facilitator to maintain anonymity
Idea/mind mapping: Ideas created through
individual brainstorming are consolidated into a
single map to reflect commonality and differences in
understanding, and generate new ideas
13
Affinity diagram: The technique allows large
numbers of ideas to be sorted into groups for review
and analysis
36) There are multiple methods of reaching a group
decision including
Unanimity: Everyone agrees on a single course of
action
Majority: Support from more than 50% of the group
Plurality: The largest block in a group decides even
if a majority is not achieved
Dictatorship: One individual makes the decision for
the group
37) Work Breakdown Structure (WBS) is a deliverable
oriented hierarchical decomposition of the work to be
executed by the project team, to accomplish the
project objectives and create the required
deliverables, with each descending level of the WBS
representing an increasingly detailed definition of the
project work.
38) The WBS is a decomposition of all the deliverables
the project will create
39) The work package level is the lowest level in the
WBS. Time and cost estimation is easily determined
at this level as are resource assignments. Quality
control measurements can be determined at this
level as well
40) Each element in the WBS is assigned a unique
identifier. These are collectively known as the code of
accounts. Typically, these codes are associated with
a corporate chart of accounts and are used to track
the costs of the individual work elements in the WBS
41) Level one of the WBS is the project itself
42) A ‘Planning Package” is a WBS component
below the control account but above the work
package. It is used for planning unknown work
content that does not have detailed schedule
activities
43) Control account Plan (CAP) is a management
control point where the integration of scope, budget
and schedule take place and where the measurement
of performance takes place. These CAPS are placed
at the selected management points in the WBS.
44) A Control Account is a management control point
where scope, cost and schedule are integrated and
compared to the earned value for performance
measurement. They are placed at selected
management points of the WBS above the Work
Package Level
45) Each Control Account may include one or more work
packages, but each of the work packages must be
associated with only one control account
46) WBS Dictionary” is a document which describes
the details for each component in the WBS. It
includes a brief description of the “Scope” or
“Statement of the work”, defined deliverables, a list
of associated activities, and a list of milestones
47) Scope Verification differs from Quality Control in that
scope verification is primarily concerned with
acceptance of the deliverables, while quality control
is primarily concerned with correctness of the
deliverable and meeting the quality requirements
specified for the deliverables
48) Scope Baseline includes Project Scope Statement,
WBS, WBS Dictionary
49) Scope Verification is Verified work results
50) Perform Quality Control is Assured quality
requirements were met
51) You can remember the difference between Scope
Verification and Perform Quality Control this way:
Scope Verification = accepting work results
Perform Quality Control = checking for correct work
results (assuring that the quality requirements are
met)
52) Control Quality is generally performed before Verify
Scope but these two processes can be performed in
parallel
53) Scope verification must take place at the end of each
phase
54) Scope Verification is done during Project monitoring
and controlling BUT Product verification is done
during the Project Closing
55) Control scope is the process of monitoring the status
of the project and product scope and managing
changes to the scope baseline
56) Rolling Wave Planning is a form of progressive
elaboration planning where the work to be
accomplished in the near term is planned in detail
and future work is planned at a higher level of the
WBS
57) In an environment where there is a great degree
of flexibility or instability, it's good to use a rolling
wave planning approach. This approach allows team
members to plan as much as possible. While
executing that part of the plan, they continue to plan
future
work as they learn more about it
58) A milestone is a significant point or event in the
project
59) Precedence Diagramming Method (PDM) includes
four dependencies or logical relationships:
Finish to Start (FS):
Finish to Finish (FF):
Start to Start (SS):
Start to Finish (SF):
60) Finish to start is the most commonly used
logical relationship in PDM and most project
management software packages.
61) PDM uses one time estimate to determine duration,
while ADM can use more than one time estimate.
62) In Precedence Diagramming Method (PDM) or Activity
on Node (AON) network diagrams, nodes are
activities and arrows are dependencies
63) Mandatory dependency, also known as hard logic.
Mandatory dependencies are inherent in the nature
of the work
64) Discretionary dependencies, also called preferred
logic, preferential logic, and soft logic, are defined by
the project team
65) A lead allows an acceleration of the successor activity
66) A lag directs a delay in the successor activity
67) Analogous estimating is not a qualitatively based
technique. It is a top-down estimating technique that
considers previous similar activities when calculating
estimates
68) Analogous estimating is generally less expensive and
time consuming but also less accurate
69) Parametric estimating multiplies a known element—
such as the quantity of materials needed—by the
time it takes to install or complete one unit of
materials. The result is a total estimate for the
activity
70) Three point Estimate originated from Program
Evaluation and Review Technique (PERT), which uses
a weighted average formula to predict the length of
14
activities and the project. Specifically, PERT uses a
'pessimistic,' 'optimistic,' and 'most likely' estimate to
predict when the project will be completed
71) Critical Path Method (CPM) manages the total
float of schedule networks paths, whereas Critical
Chain manages buffer activity durations and
resources.
72) The critical path is the longest path to completion in
the network diagram.
73) Activities on the critical path have no float or slack.
74) Free float is the amount of time an activity can be
delayed without affecting the next activity's
scheduled start date.
75) Total float is the amount of time an activity can be
delayed without affecting the project end date.
76) Resource leveling can cause the original critical path
to change. It is used when shared or critical required
resources are only available at certain times, are only
available in limited quantities, or to keep resource
usage at a constant level
77) Heuristic is simply a rule of thumb
78) Crashing involves adding resources to activities in
order to decrease their duration, which typically
increases cost
79) Fast tracking adds risk as tasks are allowed to
overlap
80) Rough order of magnitude is “rough” and is used
during the Initiating processes and in range of +50/-
50
81) There are three generally accepted categories of
estimating accuracy:
Rough order of magnitude This estimate is
“rough” and is used during the Initiating processes
and in top-down estimates. The range of variance for
the estimate can be –25 percent to +75 percent.
Budget estimate This estimate is also somewhat
broad and is used early in the planning processes and
also in top-down estimates. The range of variance for
the estimate can be –10 percent to +25 percent.
Definitive estimates This estimate type is one of
the most accurate. It is used late in the planning
processes and is associated with bottom-up
estimating. The range of variance for the estimate
can be –5 percent to +10 percent
82) Rough Order of Magnitude (ROM) estimates are also
knows as conceptual, ballpark or preliminary
estimates
83) The opportunity cost is the amount of the project that
was not chosen
84) Money already spent on a project is called sunk costs
and should not be taken into consideration when
determining if a project should continue. Instead, the
cost of the work to complete is one of the elements
that should be taken into consideration when
considering to kill a project
85) Variance analysis involves comparing actual project
results to planned or expected results.
86) Trend analysis involves examining project results
over time to determine if performance is improving
87) Earned Value Management compares the baseline
plan to actual schedule and cost performance.
88) BCR (Benefit Cost Ratio) compares the benefits to the
costs of the project where the Benefits are the same
as Revenues or often referred to as the “Payback
period”
89) Management Horizon is also known as the Payback
Period, which is the amount of time it takes for the
 program to break even on the investment. In
business and economics, payback period refers to the
period of time required for the return on an
investment to repay the sum of the original
investment. As it does not properly account for the
time value of money, risk, financing, or any other
important considerations such as the opportunity
cost, the payback period is considered as method of
analysis with serious limitations and qualifications for
its use.
90) One concern is that as the payback period measure
does not take into account benefits delivered after
the payback period it does not measure profitability
91) Parametric (Top – Down) uses historical data and
statistical relationships to determine costs
92) Each resource in the project must be accounted
for and assigned to a cost category. Categories
include the following:
Labor costs
Material costs
Travel costs
Supplies
Hardware costs
Software costs
Special categories (inflation, cost reserve, and so on)
93) Quality is defined as the degree to which the project
fulfills requirement
94) Quality MUST BE PLANNED IN AND NOT INSPECTED IN
95) The Project Manager ultimately has the responsibility
for the Product of the Project and
96) Senior Management is responsible for the Quality of
entire Organization
97) Cost of quality involves three types of costs:
Prevention,
Appraisal, and Failure costs
Internal costs and External costs
98) Failure cost is also known as the cost of poor quality.
Internal failure costs – Failures found by the project
External failure costs – Failures found by the
customer
99) Internal failure costs are costs associated with not
meeting the customer’s expectations while you still
had control over the product. This results in rework,
scrapping, and downtime
100) External failure costs include Liabilities
Warranty work
Lost business
101) Quality Assurance (Executing) is focused on
process: process analysis, quality audits, etc.
102) Quality Control (Monitoring and Controlling) is
focused on sampling results to see if they meet
quality standards.
103) Philip B. Crosby = Zero defects and prevention or
rework results.
104) Juran = Fitness for use, conformance. Quality by
design.
105) Fitness for use involves establishing what the
customer needs and attempting to deliver it to them
106) Joseph M. Juran is noted for his fitness for use
premise. Simply put, this means the stakeholders’
and customers’ expectations are met or exceeded.
107) W. Edwards Deming suggested that as much as
85 percent of the cost of quality is a management
problem
108. Shewhart = Plan-Do-Check-Act cycle.
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109. TQM = Quality must be managed in and must be
a continuous process.
110. Total Quality Management (TQM) involves being
proactive, utilizing accountability and leadership, and
continuously improving as a company
111. Six Sigma = Six Sigma is a measurement-based
strategy; no more than 3.4 defects per million.
112. Kaizen = Continuous improvement; improve
quality of people first.
113. Kaizen involves proactively improving the
organization and continuously trying to improve as an
organization.
114. Continuous improvement = Watch continuously
for ways to improve quality.
115. Benchmarking compares previous similar
activities to the current project activities to provide a
standard to measure performance against
116. Design of experiments (DOE) is a statistical
method for identifying which factors may influence
specific variables of a product or process under
development or in production
117. The Design of experiments approach relies on
statistical what-if scenarios to determine what
variables within a project will result in the best
outcome. Design of experiments approach is most
often used on the product of the project, rather than
the project itself. For example, a project team
creating a new bicycle may experiment with the
width of the tires, the weight of the frame, and the
position of the handlebars in relation to the bike seat
to determine the most comfortable ride at an
acceptable cost to the consumer.
118. Five stages of a team development
108) Forming
109) Storming
110) Norming
111) Performing
112) Adjourning
113) 119. Techniques for resolving conflicts
114) Withdrawing/Avoiding - Retreating
115) Smoothing/Accommodating - Emphasizing on
agreements than disagreements
116) Compromising – Satisfying all parties
117) Forcing – Pushing one’s viewpoint
118) Collaborating – Incorporating multiple view points
and driving consensus
119) Confronting/Problem Solving – Head on with give-
and-take policy and open dialogue
120) 120. Forcing uses a direct order.
121. Smoothing focuses on the positive and distracts
attention from the negative.
122. Compromise is consent based on mutual
concession.
123. Problem solving attempts to work out the
solution to the actual problem
 124. There are five types of powers the project
manager yields: ( E R F C R)
121) Expert: The authority of the project manager
comes from experience with the technology the
project focuses on.
122) Reward The project manager has the authority to
reward the project team.
123) Formal The project manager has been assigned
by senior management and is in charge of the
project. Also known as positional power.
124) Coercive (Penalty) The project manager has the
authority to discipline the project team members.
This is also known as “penalty power.” When the
team is afraid of the project manager, it’s coercive.
125) Referent The project team personally knows the
project manager. Referent can also mean the project
manager refers to the person who assigned him the
position—for example, “The CEO assigned me to this
position so we’ll do it this way.” This power can also
mean the project team wants to work on the project
or with the project manager due to the high priority
and impact of the project
126) 125. The best forms of powers include Expert and
Reward. Penalty is the worst
126. Formal, Reward and Powers are derived from
the PM’s position in the company
127. Expert is earned on your own
128. The key components of the communication
model include:
127) Encode. To translate thoughts or ideas into a
language that is understood by others.
128) Message. The output of encoding.
129) Medium. The method used to convey the
message.
130) Noise. Anything that interferes with the
transmission and understanding of the message (e.g.,
distance).
131) Decode. To translate the message back into
meaningful thoughts or ideas
132) 129. A risk is an uncertain event that could have
a positive or negative effect on your project
130. Strategies for “Negative Risks or threats” (Avoid
Transfer Mitigate)
131. Strategies for “Postive Risks or Opportunities”
(Exploit Share Ehance)
132. Common Strategy for both threats and
opportunities is “Acceptance”
133. There are 3 stages of “reaction to stress”
(Alarm, Resistance & Exhaustion)
134. Risk Response Strategies
Threats
o Avoid – remove the cause of the risk so that it
never materializes
o Mitigate – reduce the probability and or impact of
the risk
o Transfer – transfer the risk to another party; usually
done with insurance, performance bonds, warranties,
guarantees or outsourcing the work.
Opportunities
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o Exploit – make sure the opportunity occurs, you can
add work or make a change to the project
o Enhance – increase the probability and or positive
impact of the risk
o Share – share the opportunity with a third party to
be able to take advantage of the opportunity
135. For both Threats & Opportunities
o Accept
Active acceptance – preparing a contingency reserve
of cost or time
Passive acceptance – preparing for the dealing with
the effects of the risk after the risk has occurred
136. Workarounds are unplanned responses.
Workarounds deal with negative risk events as they
occur. As the name implies, workarounds were not
previously known to the project team. The risk event
was unplanned, so no contingency plan existed to
deal with the risk event, and thus it required a
workaround Contingency Plans can be best described
as “Planned responses to Risk Events”
137. Contingency Plan document outlines the actions
to be taken if an identified risk event should occur
138. “Utility Theory” considers the pains or tolerance
level a stakeholder has to risk
139. Residual Risk are those that “Remain” after Risk
Responses have been taken
140. There are three key components to a Risk
133) Risk Event (The Event)
134) Probability of the Event
135) Impact or Effects of the Event (Amount at Stake)
136) 141. Delhi technique is a “Consensus Technique”
142. Risk is the notion of dealing with “Uncertainty”
137) Knows at the extreme end of the Uncertainty
Spectrum will definitely affect you, although you have
no control over them
138) Knows-Unknowns are items that will affect you
although you are not able to predict how or how
much they will effect you
139) Unknown–Unknowns are items or situations
whose existence we cannot imagine(Who knows?)
140) 143. Fast tracking adds risk as tasks are allowed
to overlap
144. Historical information is always an excellent
source of information for risk identification
145. Brainstorming is likely the most common
approach to risk identification
146. Force majeure is a powerful and unexpected
event, such as a hurricane or other disaster
147. Fait accompli is a tactic used during contract
negotiations where one party convinces the other
that the particular issue is no longer relevant or
cannot be changed
148. Some of the traits/qualities exhibited by
effective leaders are Flexibility, Ambition,
Intelligence, Decisiveness, Creativity, Persistence and
Energy
 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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