PMP Study Notes

1. Communication is more complex in Matrix Org., since it involves people from across the organization 2. Phase gate; the order of phases must be strictly consecutive without overlapping in order to allow for gates 3. Referent power is the ability to attract people and build trust, its based on charisma and interpersonal skill 4. Risk assessments means risk identification through Qualitative Risk Analysis 5. Project is not complete when customer accepts the deliverables. It completes when all other project mgmt deliverables like lessons learnt etc are complete 6. Historical relationship (tools in determine budget) is key to improve estimates. Bottom-up cost/resource estimate is the most accurate but most expensive and time-consuming, so the analogue cost estimate is most widely used. 7. Quality Assurance: a. is when you are looking at way the process affects the quality. b. When you perform root cause analysis on process problem 8. Even if confronting (also called problem-solving) sounds negativestill do it 9. Whenever 7 tools used for inspection, its Quality Control, word potential or possible indicates plan quality 10. If you come across a person who is not a PMP, but still claims, then immediately contact PMI 11. Key to a good bonus system: a. Must be achievable b. Should not reward only one or a group c. Goal should not be too aggressive 12. In n(n-1)/2 type of problems, dont forget to add 1 for the PM 13. PM is responsible for creating & executing Proj Mgt Plan, even though the entire team does it 14. Controlling unnecessary changes is one of the important part of PMs role 15. Main role of Functional Manager is to control resources 16. Work authorization systems (part of EEF) helps in minimizing Gold Plating and make sure that Work gets performed in the right order and at the right time. Gold plating is adding features in the scope in order to consume entire budget. It is a non-value added activity. 17. There is nothing called as Time Management Plan, nothing called risk response plan 18. Completing product requirements addresses customer satisfaction 19. AON does not use dummies in network diagram, PERT uses AOA (action on arrow), node are milestones 20. Sunk costs (the already expended cost, cannot be recovered) should not be considered while deciding whether to continue the project or not 21. Earned Value deals with: It doesnt distinguish if an activity or EV is on the critical path a. EV Scope, b. PV Time, c. AC Cost 22. Portfolios are organized around business goals. All projects based on the ground of strategic plan 23. Take stern action against discrimination. Zero tolerance. you can pay for police protection if its a normal practice in that country). But if its illegal or unethical, even is common practice, dont do it. Report any criminal behavior 24. Seller audit reviews products being created and Procurement Audit is used to examine successes & failures and gather lessons learnt 25. Written communication is best for complex problems or deal with external partners 26. Major results of communication blockers is Conflict 27. Understand in the question that whether Risk has actually occurred or its just identified 28. If seller completes the work in SOW, then the contract is complete, but does not mean that contract is closed 29. One of the objectives of negotiation is to protect the relationships, preferred way to resolve contract dispute 30. Negotiation is done after the seller is selected during conduct procurement process 31. Cost of team training is Direct Cost, salary of corporate offices who not involve in project is indirect cost 32. EV Analysis is a great reporting tool 33. If PM wants to decrease costs, he should look at Direct & Variable costs 34. PMI PM processes are best practices, PM and project team have the responsibility to select what processes are suitable for a given project, so they should not be consistently applied to each project. Pay attention to word all , everything must, they are words indicting wrong answers 35. Constructive changes are contract changes which are construed from actions taken by either party, not from a change document. Also they are frequent cause of disputes and claims 36. Categories of cultures that Managers should master: a. National Culture, b. Organizational Culture, c. Functional Culture 37. Project Management Team is responsible to obtain stakeholders formal acceptance 38. SOW prepared by customer if it is an external project. Internal one it is prepared by the sponsor or initiator. Scope Statement by project mgt team 39. Quality policy needs be created when there are multiple organizations working

40. Outliers in Control charts (also called Shewhart chart or process behavior chart) are the singular movements outside the bandwidth between the upper and lower control limit, it indicates a special cause. (also called assignable cause contract to common or random causes) 41. Close project or phase should take place at end of each phase 42. 4 non M&C process have change requests as output: direct and manage project execution, manage project team, plan procurement and conduct procurement 43. Contract is in place if there is an offer & acceptance, it need not be signed or in writing 44. The major type(s) of standard warranty (ies) that are used in the business environment are express (specific promise) and implied (merchantability or habitability), not negotiated 45. Monte Carlo is used to determine the critically index (The percent of time a given activity will be on the critical path) for an activity in the schedule. Weakness of Monte Carlo Simulation is it considers those schedule risks for tasks which are in schedule network 46. EMV Analysis assumes Risk Neutrality 47. When a record is made of an actual measured quality characteristic, such as a dimension expressed with thousands of an inch, the quality is said to be expressed by variables 48. Weak Matrix is also called Project Coordinator Structure 49. NPV in a long term project measures the excess or shortfall of the cash flows through the project and to some time horizon during the life of the project result, after accounting for cost of financing 50. IRR (also called discounted cash flow rate of return, DCFROR or ROR) is a capital budgeting method the annualized effective compounded return which can be earned on the invested capital. The term internal refers to the fact that its calculation does not incorporate environmental factors (e.g., the interest rate or inflation) n more specific terms, the IRR of an investment is the discount rate at which the net present value of costs (negative cash flows) of the investment equals the net present value of the benefits (positive cash flows) of the investment 51. Discount rate is generally the appropriate cost of capital expressed as a percentage rate. It incorporates a judgment of uncertainty (riskiness) of the future cash flows 52. % complete can be determined by finding the achieved milestones within the work packages Formula is EV/BAC 53. Resource leveling is a Schedule Network Analysis Tool and NOT Schedule Compression Tool 54. Decision trees are best used for an illustration of how to see the interactions between decisions and the associated events 55. Product Scope completion is measured against Product Requirements 56. Influence Diagrams (used in risk identification): a. Graphical representation, b. Shows causal influences, c. Time ordering of events d. Other relation among variables and outcomes 57. No. of communication channels increases exponentially with each increase of stakeholders 58. NPV = (PV of all cash inflows) (PV of all cash outflows) 59. PV is Future value of payment discounted at a discount rate for delay in payment 60. QFD is used to determine critical characteristics for new product development 61. Laissez Faire Manager does not interfere with subordinates. They are largely un-supervised. Leads to anarchy 62. Duration is length of critical path and NOT sum of duration of all tasks 63. Force Majeure is Legally, and act of God event, such as an earthquake 64. Elapsed time includes non-working days 65. Individual levels of authority should match with their individual responsibilities and NOT competency to get best performance 66. Configuration mgt system is also used to apply technical & administrative directions and surveillance to support the audit of products or components to verify conformance to requirements 67. It is WBS and NOT Scope statement that represents the project & product work including project management work 68. Spending more on conformance costs will reduce the expenditure on non-conformance costs 69 Negotiation tactics: Attacks, personal insults, good guy/bad guy, deadline, limited authority, missing man, fair and reasonable, delay, extreme demands, withdrawal (walk away), and fait accompli (an established fact) 70. Change process steps: Evaluate the impact, create options, get internal approval, and get customer buy-in. 71. Special provision is contract changes to address a particular projects risks, requirements, legal, or other issues 72. Approved change requests leads to Scope baseline updates 73. PM also acts as an interface between customer and functional managers 74. Templates can be used to identify typical schedule milestones and it also has standard activity list 75. 50/50 rules: 50% of project is considered complete at start and 50% at finish; 20/80 rule: 20% of project is considered complete at start and 80% at finish, 0/100 rule: No progress credit is given until activity is finished

76. Original duration of an activity is the activity duration that was assigned and not updated as the progress of the activity is reported 77. Risk urgency combined with risk ranking determined from Prob Impact Matrix to give a final risk severity rating 78. Normal, Beta, Triangle distribution of risk analysis: a. X axis shows possible values of time & cost b. Y axis shows relative likelihood 79. Procurement Audit covers from Plan Procurements to Administer Procurements to identify success & failures 80. Project Management team should have a working knowledge of statistical quality control, especially sampling and probability to evaluate output of quality control 81. Verify scope includes reviewing deliverables with customer or sponsor 82. Initial communication about team member performance should preferably be informal oral 83. Bid peddling: Using existing bid details to solicit additional bids; bid shopping: Using existing lowest bid to solicit additional, lower bids. 84. Process configuration is a graphical description of processes with identified interfaces to facilitate analysis 85. Mgt by objectives aligns: a. Project goals with org goals b. Project goals with individual goals c. Project goals with goals of other sub units of Org 86. Salience Model describes classes of stakeholders based on: a. Power, b. Urgency, c. Legtimacy 87. Additional funding is always provided by Sponsor and NOT customer 88. PM need not be a subject matter expert 89. Estimate Activity Resources is closely coordinated with Estimate Costs process 90. Facilitated workshops: a. Builds trust, b. Fosters relationships, c. Reconcile stakeholders differences d. Improve communications in participants 91. Schedule data contains: a. Resource Histograms, b. contingency schedule, c, alternative schedule, d. cash flow projections, e. order & delivery schedules 92. David Mc Cleland theory called Achievement Motivation theory says that managers are motivated by: a. Need for Achievement, b. Need for Power, c. Need for Affiliation 93. configuration management is the set of procedures developed to ensure that project design criteria are met 94. situational leadership by Paul Hersey and Ken Blanchard; Telling, selling, participating, delegating 95. passive risk acceptance is deal with risks only when it occurs 96. 5 whys is a tool for root cause analysis (used in risk ID) 97. project manager is the role model for ethic conduct 98. work authorization system is part of EEF that defines how work is assigned to people 99. a. high-context culture: A message has little meaning without an understanding of the surrounding context b. 360 degree review 100. Statement of work has three main elements: business needs, product scope and strategic plan 101. extrinsic motivator; rewards, gift, money 102. EEF and OPA must be consider for every process even they are not explicitly list as input. DOP provide guidance and criteria for tailoring the orgs processes to the specific project needs, EEF may constrain project management options. 103. CSOW: A Statement of work that has been formally agreed upon by both parties and is therefore part of a Contract 104. team development stage is defined by Bruce Tuckmann (forming......) 105 Sink Node: It is a node in a Network logic diagram which has multiple predecessors 106. Constructive change is any unauthorized change made to the contract by either party 107. Sensitive analysis (a tool for quantitative risk analysis) is always displayed in Tornado diagram 108. Quality is free and Zero defect concept is said by Philip Crosby, plan-do-check-act (Deming circle or Shewhard circle) is originated by Shewhart and modified by Deming, Josep Juran advocated 80/20 principle (adopted to quality from Pareto), top management involvement, "fitness for use", continue improvement process Kaizen 109. Workaround (also refer to winging in) is an unplanned response to a risk that has occurred, it is determined in the monitoring and control process group. Fallback plan is used when original risk response plan doesnt work well 110. A change on a project must be documented and approved through integrated change control process 111. Communication and people (interpersonal) skill are the major tools to manage stakeholders expectation 112. Process analysis is a quality insurance tool. Root cause analysis may be employed during process analysis

113. Alternative analysis is a tool used in develop schedule 114. The point of total assumption is at which the seller assumes the costs. In a fixed price contract, this is the point where the costs have gotten so large that the seller basically runs out of money from the contract and has to start paying the costs 115. A risk owner is a person who is responsible for the response plan for the risk 116. Technical leadership is not of primary importance in project management 117. Fait acccomplis is decisions made earlier which limit the options for decision making 118. Participative leadership is best suited for optimizing team performance in projects 119. Time and money are not considered as project resources 120. Assumption analysis is a valuable tool and technique of Risk Identification 121. Letter of intent is a precontract agreement that establishes the intent of a party to buy products or services 122. S-curve is the graph that describes the typical growth of earned value during the course of the project 123. Network templates which contain only portions of a network are often referred to as subnetwrok or fragmented network 124. A summary activity in a network logic diagram is often referred to as a Hammock activity 125. management by objectives is the process of establishing clear and achievable objectives, measuring their achievement, and adjusting performance in accordance with the results of the measurement 126. Configuration management is the set of procedures developed to ensure that project design criteria are met. 127. Learning curve theory emphasizes that in producing many goods average unit cost decreases as more units are produced 128. Lump sum contracts offer sellers the greatest profit potential (also risk) 129. Common formats for Performance Reports are, bar charts (also called Gantt Charts, most widely used, also used in schedule), S-curves, histograms and tables etc 130. Understanding cultural differences is the first step towards an effective communication amongst the project team 131. Refinements are considered updates for the WBS 132. a key aspect of quality control is project wide focus 133. Phase end review of projects is also referred to as Phase Exits, Kill Points or Stage gate 134. The influence of standards and regulations for a project is NOT always known 135. Life cycle costing is the concept of considering both development and operating costs when evaluating project alternatives 136. Analogous estimate is a top-down approach, most widely used 137. The transitional actions at the end of a project which links the project to the ongoing operations of the performing organization is defined in the project life cycle definition 138. A team organized to support a critical skill resource has a team structure known as surgical (not in PMBOK V4) 139. Subjective measurement is one that is measured by reference to a standard that is internal to the system 140. A data flow diagram (used in PMBOK 4) is also known as a work flow diagram 141. Contested changes where the buyer and seller cannot agree on compensation are also called appeals, claims or dispute. If the involved parties cannot solve a claim, it may be handled in accordance with alternative dispute resolution (ADR) following procedures in the contract, Negotiation is the preferred way to settle a claim. 142. A statistical method for identifying which factors may influence specific variables of a product or process under development or in production is design of experiments, changing multiple variables rather than one at a time 143. Verify Scope is the process of formalizing acceptance of the completed project deliverables 144. Contract is also known as an agreement, a purchase order, or a Memorandum of Understanding, it doesn't have to be in writing, it doesnt have to be signed 145. Informal reporting or advisory relationships are an example of organizational project interface 146. Binging contract is legally created if there is an offer, acceptance, performance and consideration. 147. The basic decision making styles normally used by project managers include coin flip (random), command, consult, and consensus (not rational choice theory, also choice theory, used for modeling social and economic behavior). 148. Matrix organization is best for bring shared resources together working on something new. Project organization is best for project done remotely 149. Group problem solving usually take more times than individual 150. A performance bond (by an insurer) should always provide 100% of the contract value 151. Standard type of communication includes oral (verbal), written and nonverbal (facial expressions, eye contact, gestures, posture and body language) 152. Lack of a communication device is not a communicating barrier, culture difference, motivation difference or education differences are. 153. Statements such as Its never been done before: or It will cost a fortune are examples of communication

blockers 154. In the Monte Carlo technique the critically index is the percent of time a given activity will be on the critical path 155. Contingency reserve is your fund for known-unknowns. That means youve already identified the risk; you just dont know how much it will impact your project. This can be estimated based on the sum of all of your risks expected values. Management reserve is for the unknown-unknowns. Basically, you didnt even identify the risk until it has occurred. This may be derived from using percentage of the overall project budget. 156. The four part of communication model is sender, message, medial and receiver 157. Two party conflict management is a lose-lose approach 158. at Scratch bargaining stage of the negotiation meeting, the points of concession are identified (probing, scratch bargaining, agreement and closure) 159. 7 management & planning tools (TQM): affinity diagram (also group creativity tools), interrelationship diagram, tree diagram, matrix diagram, prioritization diagram, process decision program chart, activity network diagram 160. RDU stands for remaining duration 161. Two point Delphi calculation: (best+worst)/2 162. the smallest unit of time used in scheduling the project is known as calendar unit 163. The successful project managers spend most of their time talking with personal (selected from planning with their personnel, planning with top management, studying project objective and talking with personnel) 164. Acceptance sampling (statistic sampling: attribute (more common) and variable) is the most efficient means of product quality inspection among acceptance sampling, 100% inspection and variable lot inspection 165. Constructive team role include initiate, encourage and gate keeper 166. to evaluate the worst case for the project, only negative risk should be considered. 167. Negotiating a change to an existing contract is always something a buyer shouldnt do 168 Forward buying is the process of buying items in anticipation of their needs and get some protection against the item will run out and have quantity discount. In procurement word, it is called stock out. It will decrease transportation cost due to ship in large quantities. The down side is that item may become useless before it runs out. 169 Blanket order is a form of forward buying, it allows the buyer to take a quantity discount without actually take delivery. The buyer agrees to buy all the materials needed during a specified period of time. At the end of the blanket order, prices are adjusted for the actual amount of material delivered. 170 The equivalent of cost-reimbursable contracts is frequently termed cost-plus contract 171. This is no output plan called risk response plan, it is included in the risk register 172. Split order is a work of dividing work among two or more vendor of an item needed, to reduce the risks that parts are not delivered on time or with unacceptable quality. But will increase cost due to less quantity discount 173. Always listen to what the project sponsor says, no matter how bad it is to the project 174. if you have little experience in managing a project but is assigned one, refer to historical information for help 175. Manual Forecasting of cost of remaining work is is the BEST way to make an accurate forecasting of ETC 176. Reserve analysis is used in both estimate cost and develop budget, but not used in cost control 177. Root cause analysis is related to process analysis and risk identification (information gathering tech) 178. Develop Project Management Plan in integration management uses inputs from the largest number of of other PMBoK processes 179. Qualitative numbers may also be measured numerically, so the primary distinction between qualitative and quantitative numbers is that qualitative numbers cannot be meaningfully added together. For example, if two one gallon pails of water are poured into a two gallon container, the density of water in the two gallon container remains at 1.0 180. In stakeholder analysis, Care should be taken to avoid wasting resources on unnecessary information or inappropriate technology. The tipping word in this question that makes it false is ...include ALL information 181. In a multi-cultural environment, it is critical to establish a corporate culture that facilitates learning and communication 182. Project life circle costing considers project, operational and maintenance cost over a period of time 183. The success of any project depends primarily on customer satisfaction 184. Historical records during close-out are useful to predict trends and highlight problems for future projects 185. The definitive terms of a contract are written during the award phase 186. A supplier has withdrawn from your project. A new supplier has been retained. His labor forces are due to arrive at the job site tomorrow. You should : a. Meet with the supplier and his forces and establish yourself as the authority in charge. b. Bring your team in for introductions and establish a communications exchange c. Bring out the communication management plan d. Bring out the project plan. Answer: A

187. A new project manager is about to begin creating the project's scope of work. One stakeholder wants to add many items to the scope of work. Another stakeholder only wants to describe the functional requirements. The project is important for the project manager's company but a seller will do the work. Which of the following would you advise the project manager to do?: a. The scope of work should be general to allow the seller to make its own decisions. b. The scope of work should be general to allow clarification later. c. The scope of work should be detailed to allow clarifications later. d. The scope of work should be as detailed as necessary for the type of project. Answer: D 188. A project management professional can compare earned value performance data to all of the following project management tools EXCEPT: 1. Critical path analysis; 2, Technical performance metrics, 3 Risk mitigation plans; 4, Forecasted final costs and schedule estimates. Answer: 4 (?) 189. Your new product development project has resulted in a highly successful new product. The property, equipment, materials, and personnel of your project are now being integrated into the functional organization. Your project is being terminated by: 1. Extinction; 2 Addition; 3 Integration, 4 Starvation; Answer: 3 190. The types of power that have substantial influence on both subordinates and upper management are: 1 Formal & expert; 2 Reward & penalty; 3 Expert & referent;4 Formal & referent; Answer: 3 191. The pillars of quality is do it right the first time and process improvement 192. The Zero defect concept (by Philip Crosby) is a performance standard for management and is used by management to communicate to all employees that everyone should do things right the first time 193. The three forms of legitimate power are formal, reward and penalty 194. PMI suggests which of the following behaviors as part of contract negotiations: Probing, scratching, and small Bites 195. Project risk is characterized by three factors: Risk event, risk probability and the amount at stake (impact) 196. A typical project manager spends 75 to 90% time communicating formally and informally 197. Convergent thinking is means putting the different pieces of a topic back together in some organized, structured and understandable fashion, opposite to brainstorming and divergent thinking 198. Team building is most likely difficult in matrix organization 199, cost baseline is a time-phased budget for the project. 200. Project schedule is not used to determine the budget 201. In term of earned value reporting, a project is considered complete when BAC = EV 202. Characteristics of the convergence learning styles are 1) good problem solver, 2) make decision easily 3) good at deductive reasoning 4) good at delineating problems and 5 generally very logic 203. Information is facts or figures ready for communication uses 204. When team member report some information by oral, project manager should respond in oral communication 205. Audio, visual and tactile (perception by touch) are the media used to present information 206. The three principal interests in maintaining good document control are: Effective communication, ability to reconstruct why decisions were made, and historical value 207. the most likely date will be earlier than the expected value date. Bu using most likely date, there is a 50% chance the project will be late. 208. The best way to make an accurate ETC is manual forecasting of remaining work 209. Reserve analysis is used in 4 processes: estimate activity duration, estimate cost, determine budget and monitor and control risks 210. Alternative /identification analysis is used in 2 processes: define project scope and estimate activity resources. Tools for alternative analysis/identification is brainstorming and lateral thinking 211. Contract negotiation is the process of clarifying and developing a mutual agreement on the structure and requirements of the contract. 212. Project scope is defined as the entire work required creating the project deliverable, while product scope is defined as features and functions that characterize a product, service or result to be delivered by the project 213. Assumption is factor considered to be true without verification, but they must be documented clearly and validated at various stages if project because they represent risks, 214. Change the duration of activity not on a critical path may not need to go through the integrated change control 215. Critical path method is to develop schedule for given resources, critical chain method factors in the uncertainty of the resources, and resource leveling more resources around to meet the needs (may change duration/ schedule). In an ideal world, only critical path method is enough. Both chain and path are network diagram analysis methods 216. Nominal group technique has two goals; make the decision quickly and take everyones opinion into account 217. Stakeholder risk tolerance (part of EEF) is an important input to direct and manage project execution process and help project team to rank the project risks and develop risk response plan

218. The input to perform quality assurance process comes from three processes: direct and manage plan execution (WPI), plan quality (management plan, process improvement plan, and quality matrices) and perform quality control process (QC measurement) 219. A fallback plan is to be implemented if the initial contingency plan is ineffective in responding to the risk event. It is usually used for risks with a high impact. 220. What-if scenarios analysis is to review various scenarios to bring schedule aligned with the plan or calculate multiple project duration with different set of assumptions 221.The only process in the Monitoring and Control Process Group dont generate change request is the Performed Integrated change control process, it generates change request status. 222. CMMI Capability Maturity Model Integration is quality model developed by Carnegie Mellon University 223. QFD (Quality function deployment, facilitate workshop/QM model) starts by collecting VOC (voice of customers) 224. Marginal Analysis refers to looking for the point where the benefits or revenue to be received from improving quality equals the incremental cost to achieve that quality 225. 1 sigma 68%, 2 sigma, 95% 3 sigma 99.7%, 6sigma 99.99985% 226. Definite estimate (cost or duration) is the most expensive one and should have an accuracy of 10%. At the early project stage, rough order of magnitude (ROM) is most widely used which has +-50% accuracy 227. Strategic planning is also called top-down planning 228. Self-acturazalition focus on individual potential development, and self-esteem behavior include participate in professional activity and conferences, academic accomplishment 229. Quality checklist is output of plan quality, input to quality control, but not input to quality insurance 230. back charge is the cost of corrective action taken by the purchaser. 231. Breadboarding is the creation of an experimental device to determine the feasibility of an idea 232. Advantage of centralized contracting is to increase company expertise in contracting 233. A heuristic is best described as a rule of thumb 234. The "halo effect" refers to the tendency to move people into project management because they are good in their technical fields. 235. A cost performance index (CPI) of 0.89 means the project is only getting 89 cents out of every dollar invested. 236. What type of contract do you not want to use if you do not have enough labor to audit invoices? Cost plus 237.Burst is network arrow fork to multiple successors 238. Gannet chart is a special bar chart, best for presentations 239. chart of account is Account list used by accounting to track costs of projects or parts of project. 240.Cost funnel: Early estimates have a wide range (+/- 50% / ROM) an later, definitive estimates have a tighter (+/10%, PMI suggests) range or -5% to 10%, or -10% to 15%, Budget Estimate is -10% to +25% 241.Rule of 7: If 7 consecutive data points appear on one side of the mean, the process is out of control.