Professional Documents
Culture Documents
Information Technology Project Management Revised 6th Edition Schwalbe Test Bank instant download all chapter
Information Technology Project Management Revised 6th Edition Schwalbe Test Bank instant download all chapter
Information Technology Project Management Revised 6th Edition Schwalbe Test Bank instant download all chapter
https://testbankdeal.com/product/information-technology-project-
management-9th-edition-schwalbe-test-bank/
https://testbankdeal.com/product/information-technology-project-
management-7th-edition-kathy-schwalbe-test-bank/
https://testbankdeal.com/product/information-technology-project-
management-8th-edition-kathy-schwalbe-test-bank/
https://testbankdeal.com/product/information-technology-project-
management-9th-edition-schwalbe-solutions-manual/
Information Technology Project Management 8th Edition
Kathy Schwalbe Solutions Manual
https://testbankdeal.com/product/information-technology-project-
management-8th-edition-kathy-schwalbe-solutions-manual/
https://testbankdeal.com/product/information-technology-project-
management-7th-edition-kathy-schwalbe-solutions-manual/
https://testbankdeal.com/product/information-technology-project-
management-4th-edition-marchewka-test-bank/
https://testbankdeal.com/product/information-technology-project-
management-5th-edition-marchewka-test-bank/
https://testbankdeal.com/product/information-technology-project-
management-4th-edition-marchewka-solutions-manual/
Chapter 7: Project Cost Management
Student: ___________________________________________________________________________
1. Although information technology projects have a poor track record in meeting project goals, they have a
good track record in meeting budget goals.
True False
3. Any new technology or business process is untested and has inherent risks.
True False
4. Many projects that are started never finish because of cost management problems.
True False
5. When justifying investments in new information systems and technology, the focus should only be on
revenues or expenses.
True False
6. Organizations have a history of spending too much money in the early phases of information technology
projects.
True False
7. Project managers must conduct cash flow analysis to determine net present value.
True False
10. Learning curve theory does not apply to the amount of time it takes to complete some tasks.
True False
11. If a project manager gets sick for two weeks or an important supplier goes out of business, management
reserve could be set aside to cover the resulting costs.
True False
12. ROM estimates can be referred to as a ballpark estimate, a guesstimate, a swag, or a broad gauge.
True False
13. A definitive estimate should be the least accurate of the three types of estimates.
True False
14. Estimates are usually done at various stages of a project and should become more accurate as time
progresses.
True False
15. The cost management plan is part of the overall project management plan.
True False
16. A large percentage of total project costs are often labor costs.
True False
17. Parametric models are least reliable when historical information was used to create the model.
True False
18. When developing an estimate for a large software project, estimates cannot be made before clear system
requirements have been produced.
True False
19. The people who develop software cost estimates often have a great deal of experience with cost estimation.
True False
21. The WBS is not a required input when developing a cost estimate.
True False
24. There does not need to be a change control system to define procedures for changing the cost baseline.
True False
25. The formulas for variances and indexes start with EV, the earned value.
True False
26. If cost variance is a positive number, it means that performing the work cost more than planned.
True False
27. If the cost performance index is less than one or less than 100 percent, the project is under budget.
True False
28. In an earned value chart, when the actual cost line is right on or above the earned value line, costs are less
than or equal to planned.
True False
29. Many projects, particularly information technology projects, do not have good planning information, so
tracking performance against a plan might produce misleading information.
True False
30. Databases are a common tool for cost estimating, cost budgeting, and cost control.
True False
31. The Standish Group’s CHAOS studies reported an average cost overrun for unsuccessful IT projects ranged
from 180 percent in 1994 to ____ percent in 2004.
A. 28
B. 43
C. 56
D. 73
32. Three separate surveys of software project cost overruns found that the average cost overrun for all of the
projects in their survey samples (not just unsuccessful projects) were ____ percent.
A. 13–14
B. 23–24
C. 33–34
D. 43–44
33. ____ includes the processes required to ensure that a project team completes a project within an approved
budget.
A. Cost budgeting
B. Cost estimating
C. Cost control
D. Project cost management
34. ____ involves developing an approximation or estimate of the costs of the resources needed to complete a
project.
A. Determining the budget
B. Consolidation of costs
C. Controlling costs
D. Estimating costs
35. ____ involves allocating the overall cost estimate to individual work items to establish a baseline for
measuring performance.
A. Determining the budget
B. Consolidation of costs
C. Controlling costs
D. Estimating costs
37. ____ helps you develop an accurate projection of a project’s financial costs and benefits.
A. Profit cycle costing
B. Financial costing
C. Life cycle costing
D. Profit margin costing
38. ____, with assistance from financial experts in their organizations, should create estimates of the costs and
benefits of the project for its entire life cycle.
A. Financial managers
B. Project managers
C. Budget managers
D. System managers
39. Since organizations depend on reliable information technology, there are also huge costs associated with
____.
A. work time
B. technical planning
C. uptime
D. downtime
40. ____ is a method for determining the estimated annual costs and benefits for a project and the resulting
annual cash flow.
A. Life cycle costing
B. Profit margin analysis
C. Cost estimating
D. Cash flow analysis
41. ____ are those costs that an organization can easily measure in dollars.
A. Intangible costs
B. Direct costs
C. Tangible costs
D. Indirect costs
42. Project managers should focus on ____, since they can control them.
A. sunk costs
B. indirect costs
C. direct costs
D. intangible costs
43. ____ are costs that are not directly related to the products or services of the project, but are indirectly related
to performing the project.
A. Intangible costs
B. Tangible costs
C. Direct costs
D. Indirect costs
45. ____ allow for future situations that may be partially planned for.
A. Contingency reserves
B. Management reserves
C. Unknown unknowns
D. Direct reserves
46. ____ allow for future situations that are unpredictable.
A. Contingency reserves
B. Management reserves
C. Known unknowns
D. Indirect reserves
48. A ____ is done very early in a project or even before a project is officially started.
A. budgetary estimate
B. definitive estimate
C. rough order of magnitude estimate
D. final estimate
50. A ____ is used for making many purchasing decisions for which accurate estimates are required and for
estimating final project costs.
A. budgetary estimate
B. definitive estimate
C. rough order of magnitude estimate
D. final estimate
51. ____ use the actual cost of a previous, similar project as the basis for estimating the cost of the current
project.
A. Actual estimates
B. Parametric estimates
C. Bottom-up estimates
D. Analogous estimates
52. ____ involve estimating individual work items or activities and summing them to get a project total.
A. Actual estimates
B. Parametric estimates
C. Bottom-up estimates
D. Analogous estimates
53. A(n) ____ might provide an estimate of $50 per line of code for a software development project based on
the programming language the project is using, the level of expertise of the programmers, the size and
complexity of the data involved, and so on.
A. analogous cost estimate
B. parametric model
C. bottom-up estimate
D. reserve analysis
54. Tom DeMarco, a well-known author on software development, suggests ____ reasons for the inaccuracies
of many information technology project cost estimates and some ways to overcome them.
A. three
B. four
C. five
D. six
55. If the cost estimate will be the basis for contract awards and performance reporting, it should be a ____ and
as accurate as possible.
A. budgetary estimate
B. definitive estimate
C. rough order of magnitude estimate
D. final estimate
56. The main goal of the ____ process is to produce a cost baseline for measuring project performance and
project funding requirements.
A. cost budgeting
B. cost consolidation
C. cost control
D. cost estimating
57. A ____ is a time-phased budget that project managers use to measure and monitor cost performance.
A. budget baseline
B. ledger
C. cost baseline
D. cost line
58. The project management plan, project funding requirements, work performance data, and organizational
process assets are inputs for the process of ____.
A. controlling costs
B. budgeting costs
C. consolidating costs
D. estimating costs
59. ____ is a project performance measurement technique that integrates scope, time, and cost data.
A. Cost baseline
B. Earned value management
C. Constructive cost modeling
D. Parametric modeling
60. The ____ is that portion of the approved total cost estimate planned to be spent on an activity during a given
period.
A. AC
B. EV
C. RP
D. PV
61. The ____ is the ratio of actual work completed to the percentage of work planned to have been completed at
any given time during the life of the project or activity.
A. AC
B. EV
C. RP
D. PV
62. The ____ is an estimate of the value of the physical work actually completed.
A. AC
B. EV
C. RP
D. PV
63. The ____ is the total direct and indirect costs incurred in accomplishing work on an activity during a given
period.
A. AC
B. EV
C. RP
D. PV
64. Variances are calculated by subtracting the actual cost or planned value from ____.
A. EV
B. AC
C. PV
D. RP
67. The ____ is the ratio of earned value to actual cost and can be used to estimate the projected cost of
completing the project.
A. SV
B. CV
C. CPI
D. SPI
68. The ____ is the ratio of earned value to planned value and can be used to estimate the projected time to
complete the project.
A. SV
B. CV
C. CPI
D. SPI
69. The ____ is an estimate of what it will cost to complete the project based on performance to date.
A. CPI
B. SV
C. EAC
D. SPI
70. Using simplified percentage complete amounts for a one-year project with weekly reporting and an average
task or work packet size of one week, you can expect about a(n) ____ percent error rate.
A. 1
B. 5
C. 11
D. 15
71. Using good _________________________ can change the false perception that costs grow and failures are
to be expected.
________________________________________
72. The main outputs of the ____________________ process are activity cost estimates, basis of
estimates, and project document updates.
________________________________________
73. The main outputs of the ____________________ process are a cost performance baseline, project funding
requirements, and project document updates.
________________________________________
74. The main outputs of the ____________________ process are work performance measurements, budget
forecasts, organizational process asset updates, change requests, project management plan updates, and project
document updates.
________________________________________
75. Information technology project managers need to be able to present and discuss project information in
____________________ terms as well as in technical terms.
________________________________________
76. ____________________ are revenues minus expenditures.
________________________________________
77. ____________________ allows you to see a big-picture view of the cost of a project throughout its life
cycle.
________________________________________
78. ____________________ considers the total cost of ownership, or development plus support costs, for a
project.
________________________________________
79. ____________________ costs or benefits are costs or benefits that are difficult to measure in monetary
terms.
________________________________________
80. ____________________ cost is money that has been spent in the past.
________________________________________
81. ____________________ states that when many items are produced repetitively, the unit cost of those items
decreases in a regular pattern as more units are produced.
________________________________________
82. A(n) ____________________ is a document that describes how the organization will manage cost variances
on the project.
________________________________________
84. ____________________ uses project characteristics in a mathematical model to estimate project costs.
________________________________________
85. In practice, many people find that using a combination or hybrid approach involving analogous, bottom up,
and/or parametric modeling provides the best ____________________.
________________________________________
86. It is helpful to analyze the total dollar value as well as the percentage of the total amount for each major
______________________________ category.
________________________________________
87. It’s important for the team to ____________________ assumptions they made when developing the cost
baseline and have several experts review it.
________________________________________
88. In addition to providing input for budgetary estimates, cost budgeting provides a(n)
____________________.
________________________________________
89. ____________________ has many cost management features to help you enter budgeted costs, set a
baseline, enter actuals, calculate variances, and run various cost reports.
________________________________________
90. A(n) ____________________ is the original project plan plus approved changes.
________________________________________
91. After you total the EV, AC, and PV data for all activities on a project, you can use the CPI and
___________________________________ to project how much it will cost and how long it will take to finish
the project based on performance to date.
________________________________________
92. In general, ____________________ numbers for cost and schedule variance indicate problems in those
areas.
________________________________________
93. _________________________ and SPI less than one or less than 100 percent indicate problems.
________________________________________
94. The cost performance index can be used to calculate the ______________________________.
________________________________________
95. Many organizations now collect and control an entire suite of projects or investments as one set of
interrelated activities in one place, called a(n) ____________________.
________________________________________
96. List and briefly describe the three project cost management processes.
97. What are tangible, intangible, direct and indirect costs? Give examples of each.
98. What are the three basic types of cost estimating? Describe each type.
99. Describe four problems with Information Technology cost estimates.
100. List and describe the three values calculated for an activity in earned value management. Give examples of
each.
Chapter 7: Project Cost Management Key
1. Although information technology projects have a poor track record in meeting project goals, they have a
good track record in meeting budget goals.
FALSE
3. Any new technology or business process is untested and has inherent risks.
TRUE
4. Many projects that are started never finish because of cost management problems.
TRUE
5. When justifying investments in new information systems and technology, the focus should only be on
revenues or expenses.
FALSE
6. Organizations have a history of spending too much money in the early phases of information technology
projects.
FALSE
7. Project managers must conduct cash flow analysis to determine net present value.
TRUE
10. Learning curve theory does not apply to the amount of time it takes to complete some tasks.
FALSE
11. If a project manager gets sick for two weeks or an important supplier goes out of business, management
reserve could be set aside to cover the resulting costs.
TRUE
12. ROM estimates can be referred to as a ballpark estimate, a guesstimate, a swag, or a broad gauge.
TRUE
13. A definitive estimate should be the least accurate of the three types of estimates.
FALSE
14. Estimates are usually done at various stages of a project and should become more accurate as time
progresses.
TRUE
15. The cost management plan is part of the overall project management plan.
TRUE
16. A large percentage of total project costs are often labor costs.
TRUE
17. Parametric models are least reliable when historical information was used to create the model.
FALSE
18. When developing an estimate for a large software project, estimates cannot be made before clear system
requirements have been produced.
FALSE
19. The people who develop software cost estimates often have a great deal of experience with cost estimation.
FALSE
21. The WBS is not a required input when developing a cost estimate.
FALSE
24. There does not need to be a change control system to define procedures for changing the cost baseline.
FALSE
25. The formulas for variances and indexes start with EV, the earned value.
TRUE
26. If cost variance is a positive number, it means that performing the work cost more than planned.
FALSE
27. If the cost performance index is less than one or less than 100 percent, the project is under budget.
FALSE
28. In an earned value chart, when the actual cost line is right on or above the earned value line, costs are less
than or equal to planned.
FALSE
29. Many projects, particularly information technology projects, do not have good planning information, so
tracking performance against a plan might produce misleading information.
TRUE
30. Databases are a common tool for cost estimating, cost budgeting, and cost control.
FALSE
31. The Standish Group’s CHAOS studies reported an average cost overrun for unsuccessful IT projects ranged
from 180 percent in 1994 to ____ percent in 2004.
A. 28
B. 43
C. 56
D. 73
32. Three separate surveys of software project cost overruns found that the average cost overrun for all of the
projects in their survey samples (not just unsuccessful projects) were ____ percent.
A. 13–14
B. 23–24
C. 33–34
D. 43–44
33. ____ includes the processes required to ensure that a project team completes a project within an approved
budget.
A. Cost budgeting
B. Cost estimating
C. Cost control
D. Project cost management
34. ____ involves developing an approximation or estimate of the costs of the resources needed to complete a
project.
A. Determining the budget
B. Consolidation of costs
C. Controlling costs
D. Estimating costs
35. ____ involves allocating the overall cost estimate to individual work items to establish a baseline for
measuring performance.
A. Determining the budget
B. Consolidation of costs
C. Controlling costs
D. Estimating costs
37. ____ helps you develop an accurate projection of a project’s financial costs and benefits.
A. Profit cycle costing
B. Financial costing
C. Life cycle costing
D. Profit margin costing
38. ____, with assistance from financial experts in their organizations, should create estimates of the costs and
benefits of the project for its entire life cycle.
A. Financial managers
B. Project managers
C. Budget managers
D. System managers
39. Since organizations depend on reliable information technology, there are also huge costs associated with
____.
A. work time
B. technical planning
C. uptime
D. downtime
40. ____ is a method for determining the estimated annual costs and benefits for a project and the resulting
annual cash flow.
A. Life cycle costing
B. Profit margin analysis
C. Cost estimating
D. Cash flow analysis
41. ____ are those costs that an organization can easily measure in dollars.
A. Intangible costs
B. Direct costs
C. Tangible costs
D. Indirect costs
42. Project managers should focus on ____, since they can control them.
A. sunk costs
B. indirect costs
C. direct costs
D. intangible costs
43. ____ are costs that are not directly related to the products or services of the project, but are indirectly related
to performing the project.
A. Intangible costs
B. Tangible costs
C. Direct costs
D. Indirect costs
45. ____ allow for future situations that may be partially planned for.
A. Contingency reserves
B. Management reserves
C. Unknown unknowns
D. Direct reserves
46. ____ allow for future situations that are unpredictable.
A. Contingency reserves
B. Management reserves
C. Known unknowns
D. Indirect reserves
48. A ____ is done very early in a project or even before a project is officially started.
A. budgetary estimate
B. definitive estimate
C. rough order of magnitude estimate
D. final estimate
50. A ____ is used for making many purchasing decisions for which accurate estimates are required and for
estimating final project costs.
A. budgetary estimate
B. definitive estimate
C. rough order of magnitude estimate
D. final estimate
51. ____ use the actual cost of a previous, similar project as the basis for estimating the cost of the current
project.
A. Actual estimates
B. Parametric estimates
C. Bottom-up estimates
D. Analogous estimates
52. ____ involve estimating individual work items or activities and summing them to get a project total.
A. Actual estimates
B. Parametric estimates
C. Bottom-up estimates
D. Analogous estimates
53. A(n) ____ might provide an estimate of $50 per line of code for a software development project based on
the programming language the project is using, the level of expertise of the programmers, the size and
complexity of the data involved, and so on.
A. analogous cost estimate
B. parametric model
C. bottom-up estimate
D. reserve analysis
54. Tom DeMarco, a well-known author on software development, suggests ____ reasons for the inaccuracies
of many information technology project cost estimates and some ways to overcome them.
A. three
B. four
C. five
D. six
55. If the cost estimate will be the basis for contract awards and performance reporting, it should be a ____ and
as accurate as possible.
A. budgetary estimate
B. definitive estimate
C. rough order of magnitude estimate
D. final estimate
56. The main goal of the ____ process is to produce a cost baseline for measuring project performance and
project funding requirements.
A. cost budgeting
B. cost consolidation
C. cost control
D. cost estimating
57. A ____ is a time-phased budget that project managers use to measure and monitor cost performance.
A. budget baseline
B. ledger
C. cost baseline
D. cost line
58. The project management plan, project funding requirements, work performance data, and organizational
process assets are inputs for the process of ____.
A. controlling costs
B. budgeting costs
C. consolidating costs
D. estimating costs
59. ____ is a project performance measurement technique that integrates scope, time, and cost data.
A. Cost baseline
B. Earned value management
C. Constructive cost modeling
D. Parametric modeling
60. The ____ is that portion of the approved total cost estimate planned to be spent on an activity during a given
period.
A. AC
B. EV
C. RP
D. PV
61. The ____ is the ratio of actual work completed to the percentage of work planned to have been completed at
any given time during the life of the project or activity.
A. AC
B. EV
C. RP
D. PV
62. The ____ is an estimate of the value of the physical work actually completed.
A. AC
B. EV
C. RP
D. PV
63. The ____ is the total direct and indirect costs incurred in accomplishing work on an activity during a given
period.
A. AC
B. EV
C. RP
D. PV
64. Variances are calculated by subtracting the actual cost or planned value from ____.
A. EV
B. AC
C. PV
D. RP
67. The ____ is the ratio of earned value to actual cost and can be used to estimate the projected cost of
completing the project.
A. SV
B. CV
C. CPI
D. SPI
68. The ____ is the ratio of earned value to planned value and can be used to estimate the projected time to
complete the project.
A. SV
B. CV
C. CPI
D. SPI
69. The ____ is an estimate of what it will cost to complete the project based on performance to date.
A. CPI
B. SV
C. EAC
D. SPI
70. Using simplified percentage complete amounts for a one-year project with weekly reporting and an average
task or work packet size of one week, you can expect about a(n) ____ percent error rate.
A. 1
B. 5
C. 11
D. 15
71. Using good _________________________ can change the false perception that costs grow and failures are
to be expected.
project cost management
72. The main outputs of the ____________________ process are activity cost estimates, basis of
estimates, and project document updates.
cost estimating
73. The main outputs of the ____________________ process are a cost performance baseline, project funding
requirements, and project document updates.
cost budgeting
74. The main outputs of the ____________________ process are work performance measurements, budget
forecasts, organizational process asset updates, change requests, project management plan updates, and project
document updates.
cost control
75. Information technology project managers need to be able to present and discuss project information in
____________________ terms as well as in technical terms.
financial
76. ____________________ are revenues minus expenditures.
Profits
77. ____________________ allows you to see a big-picture view of the cost of a project throughout its life
cycle.
Life cycle costing
78. ____________________ considers the total cost of ownership, or development plus support costs, for a
project.
Life cycle costing
79. ____________________ costs or benefits are costs or benefits that are difficult to measure in monetary
terms.
Intangible
80. ____________________ cost is money that has been spent in the past.
Sunk
81. ____________________ states that when many items are produced repetitively, the unit cost of those items
decreases in a regular pattern as more units are produced.
Learning curve theory
82. A(n) ____________________ is a document that describes how the organization will manage cost variances
on the project.
cost management plan
84. ____________________ uses project characteristics in a mathematical model to estimate project costs.
Parametric modeling
85. In practice, many people find that using a combination or hybrid approach involving analogous, bottom up,
and/or parametric modeling provides the best ____________________.
cost estimates
86. It is helpful to analyze the total dollar value as well as the percentage of the total amount for each major
______________________________ category.
WBS or
work breakdown structure or
work breakdown structure (WBS) or
WBS (work breakdown structure)
87. It’s important for the team to ____________________ assumptions they made when developing the cost
baseline and have several experts review it.
document
88. In addition to providing input for budgetary estimates, cost budgeting provides a(n)
____________________.
cost baseline
89. ____________________ has many cost management features to help you enter budgeted costs, set a
baseline, enter actuals, calculate variances, and run various cost reports.
Project 2007 or
Microsoft Project or
Microsoft Project 2007
90. A(n) ____________________ is the original project plan plus approved changes.
baseline
91. After you total the EV, AC, and PV data for all activities on a project, you can use the CPI and
___________________________________ to project how much it will cost and how long it will take to finish
the project based on performance to date.
SPI or
schedule performance index or
schedule performance index (SPI) or
SPI (schedule performance index)
92. In general, ____________________ numbers for cost and schedule variance indicate problems in those
areas.
negative
93. _________________________ and SPI less than one or less than 100 percent indicate problems.
CPI or
Cost performance index or
Cost performance index (CPI) or
CPI (cost performance index)
94. The cost performance index can be used to calculate the ______________________________.
EAC or
estimate at completion or
estimate at completion (EAC) or
EAC (estimate at completion)
95. Many organizations now collect and control an entire suite of projects or investments as one set of
interrelated activities in one place, called a(n) ____________________.
portfolio
96. List and briefly describe the three project cost management processes.
Estimating costs involves developing an approximation or estimate of the costs of the resources needed to
complete a project. The main outputs of the cost estimating process are activity cost estimates, basis of
estimates, and project document updates. A cost management plan is created as part of integration management
when creating the project management plan. It should include information related to the level of accuracy for
estimates, variance thresholds for monitoring cost performance, reporting formats, and other related
information.
Determining the budget involves allocating the overall cost estimate to individual work items to establish a
baseline for measuring performance. The main outputs of the cost budgeting process are a cost performance
baseline, project funding requirements, and project document updates.
Controlling costs involves controlling changes to the project budget. The main outputs of the cost control
process are work performance measurements, budget forecasts, organizational process asset updates, change
requests, project management plan updates, and project document updates.
97. What are tangible, intangible, direct and indirect costs? Give examples of each.
Tangible and intangible costs and benefits are categories for determining how definable the estimated costs and
benefits are for a project. Tangible costs or benefits are those costs or benefits that an organization can easily
measure in dollars. For example, suppose the Surveyor Pro project described in the opening case included a
preliminary feasibility study. If a company completed this study for $100,000, the tangible cost of the study is
$100,000. If Juan’s government estimated that it would have cost $150,000 to do the study itself, the tangible
benefits of the study would be $50,000 if it assigned the people who would have done the study to other
projects. Conversely, intangible costs or benefits are costs or benefits that are difficult to measure in monetary
terms. Suppose Juan and a few other people, out of personal interest, spent some time using government-owned
computers, books, and other resources to research areas related to the study. Although their hours and the
government-owned materials were not billed to the project, they could be considered intangible costs. Intangible
benefits for projects often include items like goodwill, prestige, and general statements of improved
productivity that an organization cannot easily translate into dollar amounts. Because intangible costs and
benefits are difficult to quantify, they are often harder to justify.
Direct costs are costs that can be directly related to producing the products and services of the project. You can
attribute direct costs directly to a certain project. For example, the salaries of people working full time on the
project and the cost of hardware and software purchased specifically for the project are direct costs. Project
managers should focus on direct costs, since they can control them.
Indirect costs are costs that are not directly related to the products or services of the project, but are indirectly
related to performing the project. For example, the cost of electricity, paper towels, and so on in a large building
housing a thousand employees who work on many projects would be indirect costs. Indirect costs are allocated
to projects, and project managers have very little control over them.
98. What are the three basic types of cost estimating? Describe each type.
A rough order of magnitude (ROM) estimate provides an estimate of what a project will cost. ROM
estimates can also be referred to as a ballpark estimate, a guesstimate, a swag, or a broad gauge. This type of
estimate is done very early in a project or even before a project is officially started. Project managers and top
management use this estimate to help make project selection decisions. The timeframe for this type of estimate
is often three or more years prior to project completion. A ROM estimate’s accuracy is typically –50 percent to
+100 percent, meaning the project’s actual costs could be 50 percent below the ROM estimate or 100 percent
above. For information technology project estimates, this accuracy range is often much wider. Many
information technology professionals automatically double estimates for software development because of the
history of cost overruns on information technology projects.
A budgetary estimate is used to allocate money into an organization’s budget. Many organizations develop
budgets at least two years into the future. Budgetary estimates are made one to two years prior to project
completion. The accuracy of budgetary estimates is typically –10 percent to +25 percent, meaning the actual
costs could be 10 percent less or 25 percent more than the budgetary estimate.
A definitive estimate provides an accurate estimate of project costs. Definitive estimates are used for making
many purchasing decisions for which accurate estimates are required and for estimating final project costs.
Definitive estimates are made one year or less prior to project completion. A definitive estimate should be the
most accurate of the three types of estimates. The accuracy of this type of estimate is normally –5 percent to
+10 percent, meaning the actual costs could be 5 percent less or 10 percent more than the definitive estimate.
99. Describe four problems with Information Technology cost estimates.
1. Estimates are done too quickly. Developing an estimate for a large software project is a complex task
requiring a significant amount of effort. Many estimates must be done quickly and before clear system
requirements have been produced. Rarely are the more precise, later estimates less than the earlier estimates for
information technology projects. It is important to remember that estimates are done at various stages of the
project, and project managers need to explain the rationale for each estimate.
2. Lack of estimating experience. The people who develop software cost estimates often do not have much
experience with cost estimation, especially for large projects. There is also not enough accurate, reliable project
data available on which to base estimates. If an organization uses good project management techniques and
develops a history of keeping reliable project information, including estimates, it should help improve the
organization’s estimates. Enabling information technology people to receive training and mentoring on cost
estimating will also improve cost estimates.
3. Human beings are biased toward underestimation. For example, senior information technology professionals
or project managers might make estimates based on their own abilities and forget that many junior people will
be working on a project. Estimators might also forget to allow for extra costs needed for integration and testing
on large information technology projects. It is important for project managers and top management to review
estimates and ask important questions to make sure the estimates are not biased.
4. Management desires accuracy. Management might ask for an estimate, but really desire a more accurate
number to help them create a bid to win a major contract or get internal funding. It is important for project
managers to help develop good cost and schedule estimates and to use their leadership and negotiation skills to
stand by those estimates.
100. List and describe the three values calculated for an activity in earned value management. Give examples of
each.
The planned value (PV), also called the budget, is that portion of the approved total cost estimate planned to be
spent on an activity during a given period. Suppose a project included a summary activity of purchasing and
installing a new Web server. Suppose further that, according to the plan, it would take one week and cost a total
of $10,000 for the labor hours, hardware, and software involved. The planned value (PV) for that activity that
week is, therefore, $10,000.
The actual cost (AC) is the total direct and indirect costs incurred in accomplishing work on an activity during
a given period. For example, suppose it actually took two weeks and cost $20,000 to purchase and install the
new Web server. Assume that $15,000 of these actual costs were incurred during Week 1 and $5,000 was
incurred during Week 2. These amounts are the actual cost (AC) for the activity each week.
The earned value (EV) is an estimate of the value of the physical work actually completed. It is based on the
original planned costs for the project or activity and the rate at which the team is completing work on the project
or activity to date. The rate of performance (RP) is the ratio of actual work completed to the percentage of
work planned to have been completed at any given time during the life of the project or activity. For example,
suppose the server installation was halfway completed by the end of week 1. The rate of performance would be
50 percent (50/100) because by the end of week 1, the planned schedule reflects that the task should be 100
percent complete and only 50 percent of that work has been completed.
Another random document with
no related content on Scribd:
Nature. Nᵒ. T. ct. qr.
Pistols.—A chest with 50 or 60 = 10 feet.
Park pickets 40 0 9 1
Pikes 12 dozen 1 1 0
Sheep Skins 280 1 0 0
Shovels of iron 100 1 0 0
Shovels, shod with iron 138 1 0 0
Bushel 500 0 12 0
Sand bags
½” 500 0 7 1
Bales
2 Bushel 250 0 8 1
The following is the tonnage allowed to the military officers of the ordnance
embarked for foreign service, for their camp equipage and baggage:
For a field officer 5 tons.
For a captain 3 ”
For a subaltern 1½ ”
12th June, 1799.
TUBES—of tin plates are the best for service. Tubes must pass through a
gauge of ²/₁₀ of an inch diameter. The composition is mealed powder, mixt up stiff
with spirits of wine. They are made up in bundles of 100 each.
U niforms —
Hutton.
Lombard’s Tables.
VENT.—The vents of English guns are all ²/₁₀ of an inch diameter.—See
remark 9 of the article Velocity.
WOOD.—Artillery carriages are generally made of elm, ash, and oak. The bed
and house of a sea mortar are made of oak, and the bolster of elm. The bottoms of
land mortar beds are of oak, and the upper parts of elm.
Carriages— Ship.—The cheeks, transoms, and trucks of elm;
the axle trees of oak.
” Garrison.—The whole of oak; trucks, iron.
” Field.—Heavy 24 and 12 Pr. the cheeks and
transoms of elm; the axle trees of ash.
In the wheel the nave and fellies are
of elm; the spokes of ash; limber
shafts, bars, and axle trees are of
ash. Light guns, from 3 to 12 Prs. the
cheeks and transoms are of elm; the
ammunition boxes are of fir. In the
wheels, the nave is of elm, the spokes
of oak, and the fellies of ash. In the
limber the shafts and bars of ash.
THE END.
Footnotes:
[1] The 12 Prs. which have a small box on their limbers, carry 6 round shot and 2
case shot, with 6 cartridges of 4 lbs. and 2 of 3 1-2 lbs. of powder, more than the
above proportion.
[2] A small limber box has lately been added to the medium 12 Prs. which carries
6 round shot and 6 case shot, with a small proportion of the small stores. See
note page 11.
[3] Though the waggons will contain 20,000 cartridges, it is customary to load
them with only 18 half barrels of 1000 each, and 2 half barrels of flints.
[4] For 16 Prs. in the French work, the compiler has said 18 Prs.—for 8 Prs. 9
Prs.—for 12 inch mortars, 13 inch; to which they nearly answer.
[5] Our iron mortars, on iron beds, all admit of being fired at low angles.
[6] A German author proposes that the mounds of earth which enable the guns
to fire en barbette, should be so arranged, that the embrasures may be opened
between them; and when the guns descend to the embrazures, the barbettes will
serve as traversers.
[7] The compiler must here apologize for coining the word defiladed, which he is
obliged to do, never having seen this subject treated of in English. But the
French use the word defile in a contrary sense to enfile; and as we admit the
words enfilade and enfiladed from the latter, we cannot refuse the terms defilade
and defiladed from the former.
[8] This column expresses the number of pounds of metal in the guns, to each
pound in the shot.
[9] See the word Shell for the principle on which the Germans class them in
pounders.
[10] See the word Chambers, for Experiments on the best form.
[11] Stone Mortars should not be fired at a greater distance than 250 yards.
[12] For the Ranges with the 5½ inch Brass, see the Iron Mortars.
Transcriber’s Notes:
The cover image was created by the transcriber, and is in the public domain.
New original cover art included with this eBook is granted to the public domain.
Antiquated spellings were not corrected.
The illustrations have been moved so that they do not break up paragraphs and so
that they are next to the text they illustrate.
Typographical and punctuation errors have been silently corrected.
*** END OF THE PROJECT GUTENBERG EBOOK THE
BOMBARDIER, AND POCKET GUNNER ***
1.D. The copyright laws of the place where you are located also
govern what you can do with this work. Copyright laws in most
countries are in a constant state of change. If you are outside
the United States, check the laws of your country in addition to
the terms of this agreement before downloading, copying,
displaying, performing, distributing or creating derivative works
based on this work or any other Project Gutenberg™ work. The
Foundation makes no representations concerning the copyright
status of any work in any country other than the United States.
1.E.6. You may convert to and distribute this work in any binary,
compressed, marked up, nonproprietary or proprietary form,
including any word processing or hypertext form. However, if
you provide access to or distribute copies of a Project
Gutenberg™ work in a format other than “Plain Vanilla ASCII” or
other format used in the official version posted on the official
Project Gutenberg™ website (www.gutenberg.org), you must, at
no additional cost, fee or expense to the user, provide a copy, a
means of exporting a copy, or a means of obtaining a copy upon
request, of the work in its original “Plain Vanilla ASCII” or other
form. Any alternate format must include the full Project
Gutenberg™ License as specified in paragraph 1.E.1.
• You pay a royalty fee of 20% of the gross profits you derive from
the use of Project Gutenberg™ works calculated using the
method you already use to calculate your applicable taxes. The
fee is owed to the owner of the Project Gutenberg™ trademark,
but he has agreed to donate royalties under this paragraph to
the Project Gutenberg Literary Archive Foundation. Royalty
payments must be paid within 60 days following each date on
which you prepare (or are legally required to prepare) your
periodic tax returns. Royalty payments should be clearly marked
as such and sent to the Project Gutenberg Literary Archive
Foundation at the address specified in Section 4, “Information
about donations to the Project Gutenberg Literary Archive
Foundation.”
• You comply with all other terms of this agreement for free
distribution of Project Gutenberg™ works.
1.F.