CAPM : Certified Associate in Project Management (PMI-100) : Part 34

CAPM : Certified Associate in Project Management (PMI-100) : Part 34

1. Which of the following response strategies are appropriate for negative risks or threats?

   • Share, Accept, Transfer, or Mitigate
   • Exploit, Enhance, Share, or Accept
   • Mitigate, Share, Avoid, or Accept
   • Avoid, Mitigate, Transfer, or Accept

   Explanation:

   11.5.2.1 Strategies for Negative Risks or Threats
   Three strategies, which typically deal with threats or risks that may have negative impacts on project objectives if they occur, are: avoid, transfer, and mitigate. The fourth strategy, accept, can be used for negative risks or threats as well as positive risks or opportunities. Each of these risk response strategies have varied and unique influence on the risk condition. These strategies should be chosen to match the risk’s probability and impact on the project’s overall objectives. Avoidance and mitigation strategies are usually good strategies for critical risks with high impact, while transference and acceptance are usually good strategies for threats that are less critical and with low overall impact. The four strategies for dealing with negative risks or threats are further described as follows:

   – Avoid. Risk avoidance is a risk response strategy whereby the project team acts to eliminate the threat or protect the project from its impact. It usually involves changing the project management plan to eliminate the threat entirely. The project manager may also isolate the project objectives from the risk’s impact or change the objective that is in jeopardy. Examples of this include extending the schedule, changing the strategy, or reducing scope. The most radical avoidance strategy is to shut down the project entirely. Some risks that arise early in the project can be avoided by clarifying requirements, obtaining information, improving communication, or acquiring expertise.
   – Transfer. Risk transference is a risk response strategy whereby the project team shifts the impact of a threat to a third party, together with ownership of the response. Transferring the risk simply gives another party responsibility for its management—it does not eliminate it. Transferring does not mean disowning the risk by transferring it to a later project or another person without his or her knowledge or agreement. Risk transference nearly always involves payment of a risk premium to the party taking on the risk. Transferring liability for risk is most effective in dealing with financial risk exposure. Transference tools can be quite diverse and include, but are not limited to, the use of insurance, performance bonds, warranties, guarantees, etc. Contracts or agreements may be used to transfer liability for specified risks to another party. For example, when a buyer has capabilities that the seller does not possess, it may be prudent to transfer some work and its concurrent risk contractually back to the buyer. In many cases, use of a cost-plus contract may transfer the cost risk to the buyer, while a fixed-price contract may transfer risk to the seller.
   – Mitigate. Risk mitigation is a risk response strategy whereby the project team acts to reduce the probability of occurrence or impact of a risk. It implies a reduction in the probability and/or impact of an adverse risk to be within acceptable threshold limits. Taking early action to reduce the probability and/or impact of a risk occurring on the project is often more effective than trying to repair the damage after the risk has occurred. Adopting less complex processes, conducting more tests, or choosing a more stable supplier are examples of mitigation actions. Mitigation may require prototype development to reduce the risk of scaling up from a bench-scale model of a process or product. Where it is not possible to reduce probability, a mitigation response might address the risk impact by targeting linkages that determine the severity. For example, designing redundancy into a system may reduce the impact from a failure of the original component.
   – Accept. Risk acceptance is a risk response strategy whereby the project team decides to acknowledge the risk and not take any action unless the risk occurs. This strategy is adopted where it is not possible or cost-effective to address a specific risk in any other way. This strategy indicates that the project team has decided not to change the project management plan to deal with a risk, or is unable to identify any other suitable response strategy. This strategy can be either passive or active. Passive acceptance requires no action except to document the strategy, leaving the project team to deal with the risks as they occur, and to periodically review the threat to ensure that it does not change significantly. The most common active acceptance strategy is to establish a contingency reserve, including amounts of time, money, or resources to handle the risks.

2. Identify Stakeholders is the process of identifying all of the people or organizations impacted by the project and documenting relevant information regarding their interests in, involvement in, and impact on the project:

   • manager.
   • success.
   • deadline.
   • scope.
   Explanation:

   Process: 13.1 Identify Stakeholders
   Definition: The process of identifying the people, groups, or organizations that could impact or be impacted by a decision, activity, or outcome of the project; and analyzing and documenting relevant information regarding their interests, involvement, interdependencies, influence, and potential impact on project success.
   Key Benefit: The key benefit of this process is that it allows the project manager to identify the appropriate focus for each stakeholder or group of stakeholders. 

   Inputs
   1. Project charter
   2. Procurement documents
   3. Enterprise environmental factors
   4. Organizational process assets
   Tools & Techniques
   1. Stakeholder analysis
   2. Expert judgment
   3. Meetings
   Outputs
   1. Stakeholder register

3. Which of the following is a tool or technique used in the Acquire Project Team process?

   • Networking
   • Training
   • Negotiation
   • Issue log
   Explanation:
   Process: 9.2 Acquire Project Team
   Definition: The process of confirming human resource availability and obtaining the team necessary to complete project activities.
   Key Benefit: The key benefit of this process consists of outlining and guiding the team selection and responsibility assignment to obtain a successful team.
   Inputs
   1. Human resource management plan
   2. Enterprise environmental factors
   3. Organizational process assets
   Tools & Techniques
   1. Pre-assignment
   2. Negotiation
   3. Acquisition
   4. Virtual teams
   5. Multi-criteria decision analysis
   Outputs
   1. Project staff assignments
   2. Resource calendars
   3. Project management plan updates

4. Which of the following change requests can bring expected future performance of the project work in line with the project management plan?

   • Corrective action
   • Defect repair
   • Preventative action
   • Probable action
   Explanation:

   4.3.3.3 Change Requests
   A change request is a formal proposal to modify any document, deliverable, or baseline. An approved change request will replace the associated document, deliverable, or baseline and may result in an update to other parts
   of the project management plan. When issues are found while project work is being performed, change requests are submitted, which may modify project policies or procedures, project scope, project cost or budget, project schedule, or project quality. Other change requests cover the needed preventive or corrective actions to forestall negative impact later in the project. Requests for a change can be direct or indirect, externally or internally initiated, and can be optional or legally/contractually mandated, and may include:

   – Corrective action—An intentional activity that realigns the performance of the project work with the project management plan;
   Preventive action—An intentional activity that ensures the future performance of the project work is aligned with the project management plan;
   – Defect repair—An intentional activity to modify a nonconforming product or product component;
   – Updates—Changes to formally controlled project documents, plans, etc., to reflect modified or additional ideas or content.

5. The cost benefit analysis tool is used for creating:

   • Pareto charts.
   • quality metrics.
   • change requests,
   • Ishikawa diagrams.
   Explanation:

   8.1.2.1 Cost-Benefit Analysis
   The primary benefits of meeting quality requirements include less rework, higher productivity, lower costs, increased stakeholder satisfaction, and increased profitability. A cost-benefit analysis for each quality activity compares the cost of the quality step to the expected benefit.

   8.1.3.3 Quality Metrics
   A quality metric specifically describes a project or product attribute and how the control quality process will measure it. A measurement is an actual value. The tolerance defines the allowable variations to the metric. For example, if the quality objective is to stay within the approved budget by ± 10%, the specific quality metric is used to measure the cost of every deliverable and determine the percent variance from the approved budget for that deliverable. Quality metrics are used in the perform quality assurance and control quality processes. Some examples of quality metrics include on-time performance, cost control, defect frequency, failure rate, availability, reliability, and test coverage.

6. Which of the following are three inputs to the risk register?

   • Risk register updates, stakeholder register, and quality management plan
   • Communication management plan, enterprise environmental factors, and activity duration estimates
   • Risk management plan, activity cost estimates, and project documents
   • Project scope statement, organizational process assets, and scope baseline

7. An input of the Create WBS process is:

   • requirements documentation.
   • scope baseline.
   • project charter.
   • validated deliverables.
   Explanation:

   5.2.3.1 Requirements Documentation
   Requirements documentation describes how individual requirements meet the business need for the project.
   Requirements may start out at a high level and become progressively more detailed as more about the requirements is known. Before being baselined, requirements need to be unambiguous (measurable and testable), traceable, complete, consistent, and acceptable to key stakeholders. The format of a requirements document may range from a simple document listing all the requirements categorized by stakeholder and priority, to more elaborate forms containing an executive summary, detailed descriptions, and attachments.
   Components of requirements documentation can include, but, are not limited to:
   – Business requirements, including:
   ○ Business and project objectives for traceability;
   ○ Business rules for the performing organization; and
   ○ Guiding principles of the organization
   • Stakeholder requirements, including:
   ○ Impacts to other organizational areas;
   ○ Impacts to other entities inside or outside the performing organization; and
   ○ Stakeholder communication and reporting requirements.
   • Solution requirements, including:
   ○ Functional and nonfunctional requirements;
   ○ Technology and standard compliance requirements;
   ○ Support and training requirements;
   ○ Quality requirements; and
   ○ Reporting requirements, etc. (solution requirements can be documented textually, in models, or both).
   Project requirements, such as:
   ○ Levels of service, performance, safety, compliance, etc.; and
   ○ Acceptance criteria.
   – Transition requirements.
   – Requirements assumptions, dependencies, and constraints.

   Process: 5.4 Create WBS
   Definition: WBS is the process of subdividing project deliverables and project work into smaller, more manageable components.
   Key Benefit: The key benefit of this process is that it provides a structured vision of what has to be delivered.
   Inputs
   1. Scope management plan
   2. Project scope statement
   3. Requirements documentation
   4. Enterprise environmental factors
   5. Organizational process assets
   Tools & Techniques
   1. Decomposition
   2. Expert judgment
   Outputs
   1. Scope baseline
   2. Project documents updates

8. In Plan Risk Management, which of the management plans determines who will be available to share information on various risks and responses at different times and locations?

   • Schedule
   • Quality
   • Communications
   • Cost
   Explanation:

   Process: 11.1 Plan Risk Management
   Definition: The process of defining how to conduct risk management activities for a project.
   Key Benefit: The key benefit of this process is it ensures that the degree, type, and visibility of risk management are commensurate with both the risks and the importance of the project to the organization. The risk management plan is vital to communicate with and obtain agreement and support from all stakeholders to ensure the risk management process is supported and performed effectively over the project life cycle.

   Inputs
   1. Project management plan
   2. Project charter
   3. Stakeholder register
   4. Enterprise environmental factors
   5. Organizational process assets
   Tools & Techniques
   1. Analytical techniques
   2. Expert judgment
   3. Meetings
   Outputs
   1. Risk management plan

9. Under which type of contract does the seller receive reimbursement for all allowable costs for performing contract work, as well as a fixed-fee payment calculated as a percentage of the initial estimated project costs?

   • Cost Plus Fixed Fee Contract (CPFF)
   • Cost Plus Incentive Fee Contract (CPIF)
   • Firm Fixed Price Contract (FFP)
   • Fixed Price with Economic Price Adjustment Contract (FP-EPA)

10. Funding limit reconciliation is a tool and technique used in which process?

    • Control Costs
    • Determine Budget
    • Estimate Costs
    • Control Budget
    Explanation:

    7.3.2.5 Funding Limit Reconciliation
    The expenditure of funds should be reconciled with any funding limits on the commitment of funds for the project.
    A variance between the funding limits and the planned expenditures will sometimes necessitate the rescheduling of work to level out the rate of expenditures. This is accomplished by placing imposed date constraints for work into the project schedule.

    Process: 7.3 Determine Budget
    Definition:  The process of aggregating the estimated costs of individual activities or work packages to establish an authorized cost baseline.
    Key Benefit: The key benefit of this process is that it determines the cost baseline against which project performance can be monitored and controlled.

    Inputs
    1. Cost management plan
    2. Scope baseline
    3. Activity cost estimates
    4. Basis of estimates
    5. Project schedule
    6. Resource calendars
    7. Risk register
    8. Agreements
    9. Organizational process assets
    Tools & Techniques
    1. Cost aggregation
    2. Reserve analysis
    3. Expert judgment
    4. Historical relationships
    Funding limit reconciliation
    Outputs
    1. Cost baseline
    2. Project funding requirements
    3. Project documents updates

11. Exhibit A is an example of which of the following types of Sequence Activities?

    

    • Activity-on-arrow diagramming
    • Precedence diagramming
    • Project schedule network diagramming
    • Mathematical analysis diagramming

12. Inputs to the Plan Risk Management process include the:

    • cost management plan.
    • risk management plan,
    • activity list,
    • risk register.

13. Which of the following is an output of Define Scope?

    • Project scope statement
    • Project charter
    • Project plan
    • Project schedule
    Explanation:

    Process: 5.3 Define Scope
    Definition: The process of developing a detailed description of the project and product.
    Key Benefit: The key benefit of this process is that it describes the product, service, or result boundaries by defining which of the requirements collected will be included in and excluded from the project scope.

    Inputs
    1. Scope management plan
    2. Project charter
    3. Requirements documentation
    4. Organizational process assets 
    Tools & Techniques
    1. Expert judgment
    2. Product analysis
    3. Alternatives generation
    4. Facilitated workshops
    Outputs
    1. Project scope statement
    2. Project documents updates

14. The correct equation for schedule variance (SV) is earned value:

    • minus planned value [EV – PV].
    • minus actual cost [EV – AC].
    • divided by planned value [EV/PV],
    • divided by actual cost [EV/AC].
    Explanation:
    • Schedule variance. Schedule variance (SV) is a measure of schedule performance expressed as the difference between the earned value and the planned value. It is the amount by which the project is ahead or behind the planned delivery date, at a given point in time. It is a measure of schedule performance on a project. It is equal to the earned value (EV) minus the planned value (PV). The EVM schedule variance is a useful metric in that it can indicate when a project is falling behind or is ahead of its baseline schedule.
    The EVM schedule variance will ultimately equal zero when the project is completed because all of the planned values will have been earned. Schedule variance is best used in conjunction with critical path method (CPM) scheduling and risk management.
    Equation: SV = EV – PV

15. After Define Activities and Sequence Activities, the next process is:

    • Estimate Activity Resources.
    • Estimate Activity Durations.
    • Develop Schedule.
    • Control Schedule.
    Explanation:

    6. Project Time Management

    6.1 Plan Schedule Management
    6.2 Define Activities
    6.3 Sequence Activities
    6.4 Estimate Activity Resources
    6.5 Estimate Activity Durations
    6.6 Develop Schedule
    6.7 Control Schedule

16. Which risk response strategy is common for both positive and negative risks?

    • Share
    • Accept
    • Mitigate
    • Transfer

17. Risk responses reflect an organization’s perceived balance between:

    • risk taking and risk avoidance.
    • known risk and unknown risk.
    • identified risk and analyzed risk.
    • varying degrees of risk.

18. The three processes of Project Cost Management are:

    • Estimate Costs, Control Schedule, and Control Costs.
    • Estimate Costs, Determine Budget, and Estimate Activity Resources.
    • Determine Budget, Control Schedule, and Estimate Activity Resources.
    • Estimate Costs, Determine Budget, and Control Costs.
    Explanation:
    7. Project Cost Management
    7.1 Plan Cost Management
    7.2 Estimate Costs
    7.3 Determine Budget
    7.4 Control Costs

19. Which of the following is an output of the Conduct Procurements process?

    • Project statement of work
    • Selected sellers
    • Risk register updates
    • Teaming agreements
    Explanation:

    12.2.3.1 Selected Sellers
    The selected sellers are those who have been judged to be in a competitive range based upon the outcome of the proposal or bid evaluation, and who have negotiated a draft contract that will become the actual contract when an award is made. Final approval of all complex, high-value, high-risk procurements will generally require organizational senior management approval prior to award.

    Process: 12.2 Conduct Procurements
    Definition: The process of obtaining seller responses, selecting a seller, and awarding a contract.
    Key Benefit: The key benefit of this process is that it provides alignment of internal and external stakeholder expectations through established agreements.

    Inputs
    1. Procurement management plan
    2. Procurement documents
    3. Source selection criteria
    4. Seller proposals
    5. Project documents
    6. Make-or-buy decisions
    7. Procurement statement of work
    8. Organizational process assets
    Tools & Techniques
    1. Bidder conference
    2. Proposal evaluation techniques
    3. Independent estimates
    4. Expert judgment
    5. Advertising
    6. Analytical techniques
    7. Procurement negotiations
    Outputs
    1. Selected sellers
    2. Agreements
    3. Resource calendars
    4. Change requests
    5. Project management plan updates
    6. Project documents updates

20. The technique of subdividing project deliverables into smaller, more manageable components until the work and deliverables are defined to the work package level is called:

    • a control chart.
    • baseline.
    • Create WBS.
    • decomposition.
    Explanation:
    5.4.2.1 Decomposition
    Decomposition is a technique used for dividing and subdividing the project scope and project deliverables into smaller, more manageable parts. The work package is the work defined at the lowest level of the WBS for which cost and duration can be estimated and managed. The level of decomposition is often guided by the degree of control needed to effectively manage the project. The level of detail for work packages will vary with the size and complexity of the project. Decomposition of the total project work into work packages generally involves the following activities:
    – Identifying and analyzing the deliverables and related work;
    – Structuring and organizing the WBS;
    – Decomposing the upper WBS levels into lower-level detailed components;
    – Developing and assigning identification codes to the WBS components; and
    – Verifying that the degree of decomposition of the deliverables is appropriate.