PM Test Center

__________ is an activity sequencing technique that uses arrows to represent activities.

A. Critical chain method
B. Activity-on-Arrow (AOA)
C. Activity-on-Node (AON)
D. Precedence Diagramming Method (PDM)

Answer: B. Activity-on-Arrow (AOA)
In an AOA, activities are arrows and nodes are used to connect them.

You are the project manager for a utility company. While determining the type of contract with one of your suppliers, you realize that the scope has not been defined yet. Which of the following contract types is your best choice?

A. Firm Fixed Price (FFP)
B. Time and Material (T&M)
C. Cost Plus Fixed Fee (CPFF)
D. Cost Plus Award Fee (CPAF)

Answer: B. Time and Material (T&M)
This type of contract is used when the scope is not well defined. If a fixed price contract were used, change orders would ensue, which would typically lead to a cost overrun. This pay-as-you-go method allows the buyer and seller to work together to progressively elaborate on the project scope.

__________ is an activity sequencing technique that uses nodes to represent activities.

A. Project management software
B. Activity-on-Arrow (AOA)
C. Precedence Diagramming Method (PDM)
D. Critical chain method

Answer: C. Precedence Diagramming Method (PDM)
In a PDM, also known as AON, activities are nodes and arrows are used to show relationships.

You are the project manager for a utility company. While determining the type of contract with one of your suppliers, you want to pay a simple fee but recognize that the project will take nearly a decade to complete. Which of the following contract types is your best choice?

A. Cost Plus Fixed Fee (CPFF)
B. Time and Material (T&M)
C. Firm Fixed Price (FFP)
D. Fixed Price with Economic Price Adjustment (FP-EPA)

Answer: D. Fixed Price with Economic Price Adjustment (FP-EPA)
This type of contract is used when a project is estimated to take many years to complete. It is basically a fixed price contract with pre-defined adjustments due to financial conditions. It is used on long-term relationships and provides good protection for both parties.

You are the project manager for a utility company. While determining the type of contract with one of your suppliers, you determine that you want to reimburse costs and pay a fee based on achieving performance objectives. Which of the following contract types is your best choice?

A. Cost Plus Fixed Fee (CPFF)
B. Cost Plus Incentive Fee (CPIF)
C. Firm Fixed Price (FFP)
D. Fixed Price Incentive Fee (FPIF)

Answer: B. Cost Plus Incentive Fee (CPIF)
This type of contract pays a supplier a certain amount based on meeting metrics. All allowable costs are reimbursed.

During the Manage Project Team process, a common tool used to provide constructive feedback is:

A. Project performance appraisal
B. Ground rules
C. Training
D. Team-building activities

Answer: A. Project performance appraisal
Project performance appraisals can be used to during the project to provide a communication medium. They can be formal or informal and can be used to improve team performance, one individual at a time. All other choices are tools and techniques for the Develop Project Team process.

You were assigned a twelve-person team on your project so you decide to bring a RAM to your kick-off meeting. When asked by an intern how the RAM would help, you explain that it:

A. Provides a diagram that decomposes all work.
B. Reduces overall project costs by eliminating all outsourcing.
C. Minimizes delays to the schedule by overlapping tasks.
D. Ensures that there is only one person who is ultimately responsible for a task.

Answer: D. Ensures that there is only one person who is ultimately responsible for a task.
A Responsibility Assignment Matrix (RAM) is used to show team members and their roles/responsibilities on the project. Used early in the life cycle, this table can reduce confusion on activities throughout the project.

As the project manager with a time conscience sponsor, you have been monitoring earned value throughout the year long project. At the halfway point, you report that the SPI is 0.8. This means that the project is:

A. Ahead of schedule
B. Under budget
C. Behind schedule
D. Over budget

Answer: C. Behind schedule
The Schedule Performance Index (SPI) determines how much ahead or behind schedule you are. An SPI of 1.0 means you are on target. Therefore, an SPI of 1.5 means that you are progressing at 150% of the baseline, which is a good thing. Conversely, an SPI of 0.8 represents only moving at 80% of the baseline, not so good. In short, over 1.0 is good, under 1.0 is bad.

Ouchi developed Theory Z as a hybrid organization. This concept states that management deems workers as trustworthy and capable of working without close supervision because:

A. Workers are motivated by a hierarchy of needs.
B. Management provides a supportive environment with lifetime employment.
C. Workers are threatened with job loss.
D. The government demands it from their people.

Answer: B. Management provides a supportive environment with lifetime employment.
Theory Z is a philosophy on collective responsibility, often times associated with a life-long commitment. It is based on trust so threats and demands are not part of the equation while a hierarchy of needs describe Theory X (low levels) and Theory Y (high levels).

Your company is in the process of deciding whether to continue with Project A or terminate it and begin Project B instead. You have already invested 12 months and $100,000 on Project A. It will take another 24 months and $50,000 to complete it. Project B is actually a better solution since the end product will result in a greater long-term savings. However, it will take 18 months and $250,000 to complete. Additionally, all time and money spent on Project A already would be wasted. Which project should the company chose?

A. Project A because the company has already spent 12 months and $100,000
B. Project A because it is still more inexpensive than Project B
C. Project B because time and money spent on Project A is irrelevant to the decision
D. Project B because it can be completed in less time than Project A

Answer: C. Project B because time and money spent on Project A is irrelevant to the decision
When a decision is being made from a cost perspective, expended (or sunk) costs are ignored. The goal is to make the best decision regardless of what paths were taken prior to that point in time.