PM Test Center

Sally, made a testing error that cost the project several thousand dollars and a week delay. However, when the project sponsor learned of the mistake, he tells everyone that it must have been caused by something else because Sally is always careful. This is an example of:

A. Halo effect
B. Theory X
C. Theory Y
D. Motivation agent

Answer: A. Halo effect
The halo effect is the inclination of rating an individual highly on all aspects of his/her work.

While interviewing for a new job, the hiring manager tells you that there are perquisites tied to the position. Based on what you know about these benefits, these could include any of the following except:

A. Company car
B. Health plan
C. Office with windows
D. Use of executive cafeteria

Answer: B. Health plan
A perquisite (or perk) is a special reward. Not every employee is eligible to receive them.

Which of the following is an example of Herzberg’s Theory’s hygiene factors?

A. Career path within the company
B. Increased salary
C. Increased responsibility
D. Getting along with executives

Answer: B. Increased salary
According to Herzberg, hygiene factors can ruin motivation but does not improve motivation. Things like salary, status, benefits all help keep employees at their positions but will not improve their work.

When hiring a supplier with a time and material contract, one concern to be aware of is:

A. Supplier is not motivated to reduce cost
B. You must have clear scope
C. There is usually an increase in change orders
D. Work can be incomplete or sloppy if they fall behind

Answer: A. Supplier is not motivated to reduce cost
For a time and material contract, there is little to no incentive for the vendor to reduce cost. In fact, the more work there is and the longer the project takes, the more the vendor could earn. The other choices are disadvantages for fixed price contracts.

When hiring a supplier with a fixed price contract, one concern to be aware of is:

A. Supplier is not motivated to reduce cost
B. Work can be incomplete or sloppy if they fall behind
C. It is only appropriate for small projects
D. Total project cost is unknown

Answer: B. Work can be incomplete or sloppy if they fall behind
When a vendor is working with a fixed price contract, they do their best to keep their cost down. The more they save themselves, the more they profit. Therefore, in the event the vendor falls behind, in efforts to keep their profit margins high, they could reduce the quality of their work.

__________ 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.