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8/6/2019 Important Points to Remember for PMP Exam[1]
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Manager Styles
Coercive Immediate Compliance
Authoritative Providing Long term direction and Vision
Affiliative Creating Harmony
Democratic Building Commitment & Generating new IdeasPacesetting Accomplish tasks to high standards of excellence
Coaching Long term professional development of others
Forms of Power
Coercive Punishment - Is based on the idea in the mind of the person beinginfluenced that the person having the influence has the ability toinflict punishment or pain.
Reward Reward - Is based on the idea in the mind of the person beinginfluenced that the person having the influence has the ability to
administer some sort of reward.Legitimate By Position - Is based on the idea in the mind of the person being
influenced that the person having the influence has this influencebecause of the values of the person being influenced. In otherwords, the influenced person believes that the person influencinghas the right to do this through formal authority in the organization.
Referent By Personality - Is based on the idea in the mind of the personbeing influenced that the person having the influence has thisinfluence based on the person being influenced having a strongdesire to identify with the person influencing. A person who leadsothers by virtue of his or her charisma has this type of power.
Expert Special Knowledge & Ability - Is based on the idea in the mind ofthe person being influenced that the person having the influence hasthis influence based on special knowledge or ability. This specialknowledge or ability is believed to help the influenced achieve theirgoals.
Representative
Formal / Position The project manager has been assigned by senior management andis in charge of the project. Also known as positional power.
Conflict Styles
Avoiding The person seeks to avoid or postpone having to deal with conflict(often until more facts can be gathered, or one party has had time tothink it through)
Accommodating The person seeks to maintain the relationship with others bysubordinating his own position
Competing The person seeks to impose his will or solution on others, despitetheir misgivings or differing opinions
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Compromising The persons seeks to find a solution to the conflict by having eachof the parties make concessions
Collaborating The person seeks to find a solution by involving all parties affectedby the conflict.
Resolving Conflicts
Forcing Win-Lose -- One way to resolve a conflict is for one party to forcethe other to agree. This is the kind of conflict resolution thathappens when one person has power over another and exercises it.
Smoothing Loss Loss -- Temporary Smoothing minimizes the disagreementby making differences seem less important. This kind of resolutionoccurs when either one of the persons disagreeing or another personin the group attempts to make the differences smaller than theyseem.
Compromise Loss Loss -- Compromise is similar to smoothing. Using this type
of conflict resolution, each of the parties gives up something toreach a common ground. In this resolution the parties themselvesagree to give up on some points but not others. In doing this theyreach a common agreement that has relatively few points ofdisagreement.
Problem Solving /Confronting
Best Solution Win-Win
Withdrawal Yield Lose -- Temporary
Team Decisions
Individual Very Low Team Involvement One person actually makes thedecision
Minority Low Team Involvement A few of those involved in a situationmeet to consider the matter and make a decision, and this decisionis binding for all concerned
Majority Low Team Involvement - More than half of those involved in thesituation make a decision, and it is binding for all concerned.
Consensus Very high Team involvement - Consensus is needed for mostimportant decisions.
Concordance Complete and absolute - Concordance (100% commitment) is
needed for decisions of critical importance.
Influence and Leadership
Coercive Influence Is based upon the leaders capability to punish
Reward Influence Is based on the leaders ability to dispense rewards
Position Influence Is based upon the tendency of people to respond to individuals inhigher positions
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Expert Influence Is based upon your skill or experience which others may hold inhigh regard
InformationInfluence
Is based upon the information or knowledge you have thats notavailable to others
Personal Influence Is based upon your individual personality and charisma, and the
relationships you create
Motivation Models
Needs People are motivated to satisfy perceived needs
MASLOW
CLAYTON ALDERFER
Suggested that needs can be classified into 3 broad categories
Existence Needs include basic survival needs, bothphysiological and Safety needs
Relatedness Needs include all aspects of interpersonalrelationships Social Needs
Growth Needs include self-esteem and achievement of potential
Expectancy If a person does not believe it is possible to do something, or that noconsequence of value will occur to the person if that something is
done, then the person will not be motivated to act in the first place.Equity People wanted to be treated fairly, and will be motivated to restore
a feeling of equity if they are not treated fairly
Herzbergs Theory Hygiene agents These are not motivate people, absence ofthese will demotivate performance Job security, Paycheck,clean & safe working conditions, sense of belonging, civilworking relationships etc.,
Motivating Agents These are the elements that motivate
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the people to perform Responsibility, appreciation ofwork, recognition, chance to excel, education, otheropportunities other than financial rewards.
Theory X Managers think that, the workers are lazy, and no trust on them,need micromanagement
Theory Y Self-led, motivated, and can accomplish new tasks proactivelyTheory Z Participative management style. Workers will be motivated by
sense of commitment, opportunity, and advancement. Workers inthis organization learn the business by moving to through the ranksof the company
Negotiations
Persuading Based on logic or fact; can be measured objectively
Bridging Offering of support; disclosing vulnerability
Disengaging Legitimate tactic; use to buy time or de-fuse tense situationsAsserting Based on personal beliefs, values and attitudes; very subjective
Attractive Making others share positive feelings, envision desirable outcomes
Avoiding Not legitimate; used when we are not comfortable about negotiatingthe issues
Team Development Stages
Forming When first formed, a team is just a group of individuals whohave been assigned to work together. Individuals tend to focus
on their own goals
Storming As teams begin actual work, they often go through a period ofconflict. This is natural: members are sorting out their roles anddifferences in opinion on work issues
Norming In the Norming Stage, the group starts to function as a team.Group norms are established and peer pressure tends to keepindividual behaviors within expectations. Team member roles
are clear and the team agrees on the right decision-making
technique for a given situation. Real work tasks are attackedand the group agrees on approaches and processes. Things get
done in a more definable, repeatable, predictable way.
Performing Successful teams move on to the Performing Stage when theireffort becomes focused. Members are dedicated to achieving
team goals. The team responds to opportunities quickly.
Leadership, responsibility and recognition are typically sharedamong team members. Members leverage the diversity of theirteam mates, and play to their individual strengths. A high level
of trust and trustworthiness abounds.
Adjourning /Mourning
Some teams, such as project teams and parallel teams, have ascheduled end. When the team has realized its goal, it is
disbanded. This final phase is called the Adjourning orMourning Stage. When a team's work is finished, members
may feel a sense of loss or disillusionment that affects their
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ability to be effective in their next assignment.
Benefit Measurement Methods
Murder Boards Murder boards are committees full of folks that ask every
conceivable negative question about the proposed project. Theirgoal is to expose strengths and weakness of the projectand killthe project if its deemed worthless for the organization to committo. Not a pleasant decision-making process.
Scoring Models(Weighted scoringmodels)
Scoring models (sometimes called weighted scoring models) aremodels that use a common set of values for all of the projects up forselection. For example, values can be profitability, complexity,customer demand, and so on. Each of these values has a weightassigned to themvalues of high importance have a high weight,while values of lesser importance have a lesser weight. The projectsare measured against these values and assigned scores by how well
they match to the predefined values. The projects with high scorestake priority over projects will lesser scores.
Benefit/CostRatios
Just like they sound, benefit/cost ratio (BCR) models examine thecost-to-benefit ratio. For example, a typical measure is the cost tocomplete the project, the cost of ongoing operations of the projectproduct, compared against the expected benefits of the project. Forexample, consider a project that will cost $575,000 to create a newproduct, market the product, and provide ongoing support for theproduct for one year. The expected gross return on the product,however, is $980,000 in year one. The benefit of completing theproject is greater than the cost to create the product.
Payback Period How long does it take the project to pay back the costs of theproject? For example, the AXZ Project will cost the organization$500,000 to create over five years. The expected cash inflow(income) on the project deliverable, however, is $40,000 perquarter. From here its simple math: 500,000 divided by $40,000 is12.5 quarters, or a little over three years to recoup the expenses.
Discounted CashFlow
Discounted cash flow accounts for the time value of money. If youwere to borrow $100,000 for five years from your uncle youd bepaying interest on the money, yes? (If not, youve got a greatuncle.) If the $100,000 were invested for five years and managed toearn a whopping six percent interest per year, compounded annually
itd be worth $133,822.60 at the end of five years. This is the futurevalue of the money in todays terms.
Net Present Value The net present value (NPV) is a somewhat complicated formula,but allows a more precise prediction of project value than the lumpsum approach found with the PV formula. NPV evaluates themonies returned on a project for each time period the project lasts.In other words, a project may last five years, but there may be areturn of investment in each of the five years the project is in
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existence, not just at the end of the project.
Time Period Cash Flow PresentValue
1 15,000.00 14,150.94
2 25,000.00 22,249.91
3 17,000.00 14,273.53
4 25,000.00 19,802.34
5 18,000.00 13,450.65
Totals $100,000.00 83,927.37
Investment 78,000.00
NPV $5,927.37
Internal Rate ofReturn
The last benefit measurement method is the internal rate of return(IRR). The IRR is a complex formula to calculate when the presentvalue of the cash inflow equals the original investment. Dont gettoo lost in this formulaits a tricky business and you wont needto know how to calculate the IRR for the exam. You will need toknow, however, that when comparing multiple projects IRRs,projects with high IRRs are better choices than projects with lowIRRs. This makes sense. Would you like an investment with a highrate of return or a lower rate of return?
Constrained Optimization Methods
Linear Programming
Nonlinear Programming
Integer Algorithms
Dynamic Programming
Multi objective Programming
EAC Formulas
EAC = BAC / CPI Used if no variance from BAC or you will
continue at the same rate of spendingEAC = AC + ETC Used when original estimate is flawed
EAC = AC + (BAC EV) Used when current variances are atypical of thefuture
EAC = AC + ((BAC EV) / CPI) Used when variances are thought to be typical ofthe future
Sources of Power
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Legitimate Formal, position
Coercive Punishment
Reward Reward
Expert Expert
Referent Well Respected Person
Contingency Reserve Calculation
Risk Probability Impact:Cost Is Negative;Benefits Are Positive
Ex$V
A 20% $4000 $800
B 45% $3000 $1350
C 10% $2100 $210
D 65% $2500 $1625
Contingency ReserveFund
$865
Reasons for Conflict
1 Schedules
2 Priorities
3 Resources
4 Technical Beliefs
5 Administrative Policies & Procedures
6 Project Costs
7 Personalities
Project Endings
Addition Projects becomes Operations
Starvation Resources and Budget cuts
Integration Resources reassigned or redeployed to other projects
Extinction Successful end of the project
Quality Gurus
Crosby Zero Defect, Prevention or rework results
Juran Fitness for use, conformance
Deming Quality is a management problem (85%)
Kaizen Continuous improvement
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Utility Theory A technique that characterizes an individuals willingness to takerisk
Autocratic Project Manager Makes decisions without team input
Spending Plan - The project's spending plan is the plan for the flow of money to pay
for the project. Sum of years digits calculation depreciation 1+2+3+4+5 => 5+4+3+2+1 => 15
o After 2 years = 4/25 * Item Value
o This is a accelerated depreciation method
Learning Curve Average unit cost decreases as much units are produced
Mores Different standards of conduct in cultures
Frederick Taylor believed that work should be broken down into smaller pieces, andprocedures written to perform it.
Halo effect Assuming that a person can do other things well because he or she iscurrently exhibiting excellent performance
Referent Well respected person
Process A series of actions that brings about a result
Project Management process map A diagram that shows the usual location ofknowledge areas with in the processes
Privity Describes contractual relationships (Contractual, confidential informationbetween customer and vendor)
Liquidated damages An agreed-to penalty for missing a project milestone
Constructive change One party assumes that the other has the authority to makechanges
Types of dispute resolutions Negotiation, Mediation, Arbitration, Litigation Variance Square of Standard Deviation
Gold Plating Including enhancements that are not necessary to accomplish theobjective of the project.
Constrained Optimization Linear Programming
MBO Management by objectives
Attribute Sampling Determining if a product conforms to a specification or does not(GO NO-GO).
Force Majeure External risks like Earthquakes, Floods etc.,
SWOT Strengths, Weaknesses, Opportunities, Threats.
Ordinal Scales Low, High, Very high etc.,
Cardinal Scales 0.1, 0.3, 0.5, 0.9 etc.,
Distribution Types Uniform, Normal, Triangular, beta and log normal
Triangular Distribution Optimistic, Most Likely and Pessimistic.
Normal & Log Distribution Mean and Standard deviation
Sensitivity Analysis Which risks have the most potential impact on the project?
Risk Response Strategies Avoidance, Transfer, Mitigation, Acceptance
Risk Premium Company pays to third party for transferring the risk
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Active acceptance Developing a Contingency plan to execute, should a risk occur
Passive acceptance no action, leaving the project team to deal with the risk as theyoccur
Fallback plan if the risk has a high impact, or if the selected strategy may not fullyeffective (or is an additional contingency plan to use in the event that the first
contingency plan fails). Contingency allowances Amounts of time, money, or resources to account for know
risks.
Risk response Plan Also called Risk Register
Reports used to monitor and control the risks Issue Logs, Action-Item Lists,Jeopardy Warnings and Escalation Notices.
Project Closing Project postmortem
Project Portfolio management Is the process of choosing and prioritizing projectswithin an organization
Business Risk The risk of financial gain or loss
Pure Risk Risks that could threaten the safety of the individuals on the project
JIT Just in Time Decreases the inventory investments
Kaizen Technologies Small process and product improvements that are carried outon a continuous basis
Optimal quality when revenue from improvements equals the incremental costs toachieve the quality
Parkinsons Law Work expands so as to fill the time available for its completion.
Resource Leveling Smoothes out the project schedule so resources are not over-allocated. A result of this is that projects are often scheduled to last longer thaninitial estimates.
Sapir-Whorf Hypothesis An understanding of the local language, its implied
meaning, and colloquialisms allow individuals to have a deeper understanding of thepeople, their values and actions.
Culture Shock Initial disorientation a person first experiences when visiting acountry other than his own.
Ethnocentrism Happens when individuals measure and compare a foreignersactions against their own local culture. The locals typically believe their own cultureis superior to the foreigners culture.
Sixth domain (Professional Responsibilities) Ensure Integrity, Contribute to theknowledge base, Apply professional knowledge, Balance stakeholder interests,Respect differences.
Personal Literacy Understanding and valuing yourself
Social Literacy Engaging and challenging others Business Literacy Focusing and Mobilizing your organization
Cultural Literacy Valuing and leveraging cultural difference
Paralingual Used to describe the pitch and tone on ones voice
Exception Report When variance exceed a given limit
Bulls eye Used to trigger communication needs to management when EVM resultsfall with in the identified ranges
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Unilateral Contract Purchase Order.
Single source seller Only one seller the company wants to do the business with.
Letter of intent An organization intended to buy from a seller
Proposal Does not list the price to complete the work, but instead offers solutions tothe buyer for completing the project needs.
IFB Invitation for Bid Typically a request for sealed document that lists thesellers firm price to complete the detailed work.
RFP Request for Proposal Documents from Buyer to seller requesting informationon completing the work
RFI Request for Information Documents from Buyer to seller requestinginformation on completing the work
Letter Contract Use this for immediate work
NPV Net Present Value NPV assumes reinvestment at the cost of capital (Sumof Discounted Initial Investment)
IRR Internal Rate of return Discounted rate when NPV = 0 Reinvestment at theIRR rate
Common source of conflict during early phases of the project Priorities
Common source of conflict during Execution phase of the project Schedule
Time and Material (T & M) Unit price contracts
Depreciation Types Straight Line depreciation, Accelerated Depreciation (Sum ofYears digit and Double declining balances)
Sunk Costs These are all costs incurred prior to a decision point / Monies that havebeen spent on the project.
Opportunity Costs - Based on net present value, this is what you give up because youdid not select an alternate use for the money you are going to spend. Suppose youhave your money invested at 6 percent in a money market fund. If an alternate
opportunity comes along that promises a higher yield, then the opportunity cost of thenew investment is 6 percent. After all of the calculations to justify the project, it stillhas to beat 6 percent to be viable. If it seems a little simplistic, that's because it is!
PERT Program Evaluation and Review Technique Used where uncertainty in theduration of the activities.
SD (Pessimistic Optimistic) / 6
EV Expected Value = (O + 4M + P) / 6
Variance (SD)2
1 SD 68.26
2 SD 95.44
3 SD 99.73
6 SD 99.99
Free Float - This is the total time a single activity can be delayed without delaying theearly start of any successor activities.
Total Float - This is the total time an activity can be delayed without delaying projectcompletion.
Project Float - This is the total time the project can be delayed without passing thecustomer-expected completion date.
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Steps to find the SD for a total projecto Find EV for each activity and Sum all
o Find the SD by (P O) 6 formula
o Square the SD calculated in the previous step - Variance
o Sum all the SD squared
o Find Square root of the previous steps value This is the SD for the Project CPM & PERT Not considers the resource availability, that is why resource leveling
heuristics will come into picture
Risk Mitigation Is an effort to reduce the probability or impact of the risk to a pointwhere the risk can be accepted.
Contingency Budget This money is not assigned to specific project tasks and is setaside and available to fund the work that must be done if and when a risk occurs Required the Project manager approval
Management reserve Is similar to the contingency budget in that it is made availableto fund unknown risks when they occur. In order to prevent the inappropriate use ofthis budget, a person at a level above the project manager level must approve the useof these funds.
Risk Analogy If rain is the risko Avoidance Dont go outside, so that we never become wet
o Transfer Hire another party, so that he will go wet instead of you
o Mitigation Take an Umbrella
o Acceptance Go wet
Expected Value = Risk Probability x Risk Impact
Least conflict in Implementation Phase Conflict over personality Issues
Chart of Accounts Any numbering system that is used to monitor project costs bycategory such as labor, supplies, or materials etc.,
Net Cash Flow = Cash Flow In Cash Flow Out Blanket Order The price is based on the goods or services that will be sold over the
period of the blanket order. The seller has a long-term order from the buyer and caninvest in the means of production. The buyer has a stable price for the period of theblanket order. If the buyer does not buy all the goods or services that were promised,the price per unit is adjusted at the end of the contract. Since the inventory isdelivered as needed, the inventory carrying cost is of no consequence to the buyer.
Forward Buying The amount of goods required for a long period of time ispurchased and delivered at one time. There is a quantity discount for this type ofpurchase, but it has no effect on capital investment unless it would be to build a placeto store the goods. It will decrease transportation cost, increase inventory, prevent the
risk of future price increases, and increase the cost associated with obsolescence. RFB Request for Bid used when source selection will be price driven
RFP Request for Proposal Solution Driven
Staffing Plan The functional manager must have a staffing plan that allows him orher to know where the people in the functional organization are committed.
Theory X Type X managers think that all people are basically lazy and that unlessthey are threatened or in some way forced to do work, they will not do any work.
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These managers direct work to be done and do not allow very much participation inany decision making, because they feel that the participation by the workers wouldonly lead to less work being done. Useful for Extremely difficult project like inmilitary etc.,
Theory Y Type Y managers believe that people will do a good job for the sake of
doing it. They believe in participative management and sharing information with theworkers. These managers will also listen to problems that are brought up by theirstaff.
Ouchis Theory Z Stats that workers need to be involved with the managementprocess.
General Management Skill Leading, Communicating, Negotiating, ProblemSolving, Influencing
Marginal Analysis Marginal analysis studies the cost of the incrementalimprovements to a process or product and compares it against the increase in revenuemade from the improvements. For example, the price of the added feature may costthe company $7.50 per unit, but the amount of gained sales per year because of the
improvement will meet or exceed the cost of the improvement. Attribute Sampling Measure conformance to quality on a per unit basis
Variable Sampling Measure conformance to quality as a whole
Random Causes Determine expected variances of quality
Special Causes Determine anomalies to quality
Goldratts Critical Chain Theory Add buffer to the critical chains
Product scope measured against the Requirements
Project scope measured against the Project Plan
Law of diminishing returns At some point in the work, the duration to effort ratiobecomes saturated, and adding additional laborers will actually becomecounterproductive.
Informal Communication Ad hoc conversations, Memos
Bulls eye Communication between PM to Management when variance crossessome level
Code of Accounts Any numbering system to uniquely identify each component ofthe WBS
Claim A request, demand, or assertion of rights by a seller against a buyer, or viceversa, for consideration, compensation, or payment under the terms of a legallybinding contract, such as for a disputed change.
Process Groups Initiation, Planning, Executing, Controlling and Closing
Knowledge Areas
Common Cause Random Cause A source of variation that is inherent in thesystem and predictable. On the control chart, it appears as part of the random processvariation (i.e., variation from a process that would be considered normal or notunusual), and is indicated by a random pattern of points within the control limits.
Special Cause A source of variation that is not inherent in the system, is norpredictable, and is intermittent. It can be assigned to a defect in the system. On acontrol chart, points beyond the control limits, or non-random patterns within thecontrol limits, indicate it.
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Control Comparing actual performance with planned performance, analyzevariance, assessing trends to effect process improvements, evaluating possiblealternatives, and recommending appropriate corrective action as needed.
Control Account Where scope, budget, actual cost, schedule are integrated andcompared to earned value for performance measurement.
CAP Cost Account Plan All the work to be done for Control Account. COQ Cost of Quality
o Prevention & Appraisal
Quality Planning
Quality Control
Quality Assurance (Training etc.,)o Failure costs
Rework
Components
Cost of warranty
Wastage
Loss of reputation etc.,
CPI = EV / AC
CPF / CPPC Cost-plus-Fee / Cost-plus-percentage-cost Cost and a fee (% ofcosts), which varies from With respect to Actual Cost.
CPFF Cost-plus-fixed-fee Cost and a Fixed fee
CPIF Cost-plus-incentive-fee Cost and a incentive fee (seller earns profit, if itmeets the performance)
Direct Costs Costs incurred for exclusive benefit of the projecto Salaries of full time project staff
Indirect Costs Generally calculated as % of direct costso Overhead costso General and administrative costs
o Cost of doing business
Salaries of mgmt indirectly involved in the project
Utilities
CV = EV AC
Critical Activity Any activity on the Critical Path
Critical Chain Method A schedule network analysis technique that modifies theproject schedule to account for limited resources
Data Date As-of date or time-now date
Develop Project Team The process of improving the competencies and interactionsof team members to enhance project performance.
EVM Earned Value Management Integrate the Scope, Schedule and Resourcesfor performance measurement
Effort Number of labor units required to complete a schedule activity or WBScomponent.
Duration Number of work periods required to complete a scheduled activity orWBS component.
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Exception Report Document that includes only major variations from the plan.
FMEA Failure Mode and Effect Analysis An analytical procedure in which eachpotential failure mode in every component of a product is analyzed to determine itseffects on the reliability of that component and, by itself or in combination with otherpossible failure modes, on the reliability of the product for all ways that a failure may
occur. For each potential failure, an estimate is made of its effects on the total systemand of its impact. In addition, a review is undertaken of the action planned tominimize the probability of failure and to minimize its effects.
FFP Firm-fixed-price Firm Fixed amount
FPIF Fixed-price-incentive-fee Fixed price + Fee (if seller meets the projectobjectives)
Fixed Price or Lump-Sum Contract Fixed Fee. It may also include incentives formeeting or exceeding the project objectives
Ground Rules A list of acceptable and unacceptable behaviors adopted by a projectteam to improve working relationships, effectiveness, and communication.
Imposed Dateso Start no earlier thano Finish no later than
Lag Plus (+)
Lead Minus (-)
Lowest Qualified Bidder A contracting process in which the lowest bid is acceptedafter meeting the minimum qualifications
Management by Exception A management technique that emphasizes attention toperformance behavior that falls outside of some predetermined range of normal orexpected outcomes. This technique is characterized by containment and conservatism.
Master Schedule A summary-level project schedule that identifies the major
deliverables and WBS components and key schedule milestones. Methodology A system of practices, techniques, procedures, and rules used by
those work in a discipline.
Milestone Schedule A summary level schedule that identifies the major schedulemilestones.
Near Critical Activity A schedule activity with low total float.
Network Open end A schedule activity with out any predecessor or successoractivities.
Objectiveo A strategic position to be attained
o Purpose to be achieved
o A result to be obtainedo A product to be produced
o A service to be performed
Path Convergence Merging of parallel schedule network paths into the same nodein the project schedule network diagram. Many predecessors for an Activity
Path Divergence Many successors for an activity. Opposite to Path convergence
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PMB Performance Measurement Baseline An approved integrated scope-schedule-cost plan for the project work against which project execution is comparedto measure and manage performance. Technical and Quality may also be included
Performance Reportingo Status Reporting
o Progress Measuremento Forecasting
Plan Contracting The process of documenting the products, services, and resultsrequirements and identifying potential sellers.
Planning Package A WBS component below the Control account with known workcontent but without detailed schedule activities.
Portfolio Collection of Projects/Programs grouped together to facilitate effectivemgmt of that work to meet the strategic business objectives.
Mitigation Preventive Action
Procedure A series of steps followed in a regular definitive order to accomplishsomething
Process A set of interrelated actions and activities performed to achieve a specifiedset of products, results or services
Procurement Documentso IFB
o Invitation for negotiations
o RFI Request for various pieces of information related project
o RFQ Price quotations for standard products/items
o RFP
o Seller responses
Project life cycle is a subset of Product life cycle
Product scope The features and functions that characterize a product, service orresult
Project A temporary endeavor undertaken to create a unique product, service, orresult
Project Life Cycle Sequence of Phases
Project Phases Collection of logically related project activitieso Generally Completed in sequence, may overlap
o Project phase is not a Project management Process group
Project Scopeo Major deliverables
o
Project objectiveso Project assumptions
o Project Constraints
o Statement of Work
o Justification
Punchlist The items remaining to be completed after a final inspection
Quantitative Risk Analysis The process of numerically analyzing the effect onoverall project objectives of identified risks
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Total Float in Resource-Limited Schedule Late Finish Date of CPM Resource-limited finish date
Retainage A portion of contract payment that is withheld until contract completionto ensure full performance of the contract terms
Rolling Wave Planning A form of progressive elaboration planning where work to
be accomplished in the near term is planned in detail at a low level of the workbreakdown structure, while the work far in the future is planned at a relatively highlevel of WBS
Schedule compression Shortening the project schedule duration without reducingthe scope
SPI = EV/PV
Scope changes A scope change almost always requires an adjustment to ProjectCost or schedule.
Scope Creep Adding features and functionality without addressing the effects ontime, costs and resources, or without customer approval
Sensitivity Analysis Used to help determine which risks have the most potential
impact on the project by keeping all other uncertain elements at their baseline value. Should-Cost Estimate An estimate of the cost of a product or service used to
provide an assessment of the reasonableness of a prospective sellers proposed cost.
SMCI Standardize, Measure, Control, and Improve
Solo source A type of procurement where only one supplier is asked to bid.
Specification Limits These are on either side of the mean, of the data plotted on acontrol chart meets the customers requirements for a product or service. This areamay be greater than or less than the area defined by the control limits
___________________________________ Upper Specification Limit
----------------------------------------------------- Upper Control Limit
================================ Mean----------------------------------------------------- Lower Control Limit____________________________________ Lower Specification Limit
Subnet / Fragment A subdivision of a project schedule network diagram, usuallyrepresenting a subproject or a work package
Three-Point Estimate Estimate using Optimistic, Most Likely and Pessimistic
Threshold A cost, time, quality, technical, or resource value used as a parameter,and which may be included in product specifications. Crossing the threshold shouldtrigger some action, such as generating an exception report.
Tight Matrix A system in which each project has an assigned work area, andemployees sit together in that area while they are working on the project, eventhrough they do not report to the same supervisor
Time & Material It is a hybrid of Fixed price and Cost reimbursement
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o Cost Reimbursement Because full value of the contract is not known at the
time of award and have no definitive endo Fixed price Unit rates are preset by the buyer and seller
TCPI To complete performance indexo (BAC EV) / (BAC AC)
o Remaining work / Remaining Budget Toolbox meeting A regular meeting of field supervisors and workers to review
important work issues; particularly those pertaining to safety
TQM Total quality management A common approach to implementing a qualityimprovement program within an organization.
Trait A distinguishing feature of the persons character
Triggers Risk symptoms Warning signs
Triple Constraint Scope, Cost and Time
Two-Envelop system It has two phaseso Firms qualification
o
Pricing Value Engineering A creative approach used to optimize project life cycle costs,
save time, increase profits, improve quality, expand market share, solve problems,and/or use resources more effectively
VAC = BAC EAC
Variance Threshold A predetermined range of normal outcomes that is determinedduring the planning process and sets the boundaries within which the team the teampractices management by exception
Voice of customer A planning technique used to provide products, services, andresults that truly reflect customer requirements by translating those customerrequirements into appropriate technical requirements for each phase of the project
product development War Room A room used for project conferences and planning, often displaying
charts of cost, schedule status, and other key project data
WBSo A deliverable-oriented hierarchical decomposition of the work to be executed
by the project team to accomplish the project objectiveso Total Scope of the project
o Each descending level will provide the detailed information
o Decompose till Work Packages
o Both Internal deliverables and External Deliverables
WBS Directory A document that describes each component of WBS and include foreach WBS component
o Brief description of the scope / SOW
o Defined deliverables
o List of associated activities
o List of Milestones
o Responsible organization
o Start and End Dates
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o Resources Required
o Estimate of Cost
o Charge Number
o Contract information
o Quality Requirements
o Technical references Reassignment Plan A reassignment plan improves morale because resources know
their next assignment prior to the conclusion of their activity or scheduled end date onthe project.
Crosby Zero Defect
Juran Fit for use
Deming 85% of cost of quality is management problem
Distribution Represents the Probability and Impact of the risk to the projectobjectives
Performing Stage Self actualization Stage
Fait accompli tactics One party claims the issue under discussion has already beendecided and cant be changed.
Budget updates leads to cost rebaselining
Scope change Any changes to the agreed-upon WBS
Product scope change leads to Project scope change
Scope changes leads to Schedule Revisions, but not always
Schedule variance of critical path activities will affect the project schedule and needcorrective action.
When revisions are necessary establish a new schedule baseline
Budget Updates The cost baseline is changed as a result of budget updates to reflectthe new cost estimates. Significant updates to budget leads to rebaselining
Contract Closeout Do the followingo Completing and settling the terms of the contract
o Work described in the contract was completed accurately and satisfactorily
o Product Verification
o Formal acceptance notice to seller
Procurement audito used for lessons learned
o It examines the procurement process for areas of improvements (from
Procurement Planning to Contract Administration)o Used by buyer & seller, as an opportunity for improvements
Contract file
o Indexed for easy reference
o Which in turn store in project archives (Administrative Closure)
Administrative Closureo At the end of each phase / At the end of the project
o Verifies and documents the project outcome
Product Documentationo Requirement documents
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o Specifications
o Plans
o Technical documents
o Electronic files
o Drawings etc.,
Project Archives (Administrative Closure)o Performance Management Documentation
o Product Documentation
o Other Documents
o Contract documents (contract file, which is output from Contract Closure)
o Electronic Database
o Electronic Documents
o Should be Indexed
Project Closure & Formal acceptanceo Verifying the product of the project that meets all the requirements
o Obtain formal acceptanceo Kicks off the warranty period
Post-implementation audits Examine the project from beginning to end and look atwhat went right and what went wrong
Decomposition Stepso Identify Major Deliverables
o Decide if adequate cost and duration estimates can be developed
o Identify constituent components of the deliverables
o Verify the correctness of decomposition
WBS Updates also called refinements
Learning Curve The cost per unit decreases the more units workers complete, this isbecause workers learn as they complete the required work.
Variable Costs Costs that vary depending on the conditions within the project
Fixed Costs Costs that remain the same throughout the project
Communication Channels N(N-1) / 2
Marginal Analysis The cost of the incremental improvements to a process orproduct and compares it against the increase in revenues made from theimprovements.
Assignable Cause - When a value is out of control (in control charts).
Project Recordso Memos
o Correspondenceo E-mails
o Other project relevant information
Project Reports Formal communications ono project activities
o Status
o Conditions
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o Management
o Customers
o Policies
Project Presentation Useful in providing information too Customers
o Managemento The project Team
o Other stakeholders
Project life cycle Collectively the project phases Serves to define beginning andend of the project
Project phase Dividing the project to improve management control and provide forlinks to ongoing operations
Strategic Plano Program
Project
Phase Conclusion marked by a review of key deliverablesand project performance to date. These reviews are calledphase exits, stage gates, or kill points
o Deliverable
Phase sequencing Generally involves some form of technology transfer or handoff
o Requirements Design
o Construction Operations
o Design Manufacturing etc.,
Product Life Cycleo Project Life Cycle subset of Product life cycle
Subproject Life Cycle
Managing stakeholder expectations may be difficult because stakeholders often havevery different objectives that may come into conflict. Differences betweenstakeholders will be resolved in favor of customer.
High Risk taking organizations Aggressive, Entrepreneurial
PMO Providing support functions to project managers in the form of training,software, templates etc., to actually being responsible for the results of the project.
General Management skillso Finance & accounting
o Sales & Marketing
o Research & Development
o Manufacturing & Distributiono Strategic Planning
o Tactical Planning
o Operational Planning
o Organizational Structures
o Organizational behavior
o Personnel administration
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o Compensation
o Benefits
o Career Paths
o Motivation
o Delegation
o Supervisiono Team Building
o Conflict Management
o Personal Time Management
o Stress Management
Leadershipo Project
o Technical
o Team
Negotiating
o Arbitrationo Mediation
Internationalizationo Time zones differences
o National & regional Holidays
o Travel Requirements
o Face-to-Face meetings
o Logistics of teleconferencing
o Volatile Political differences
Processes A series of actions bringing about a resulto Project management processes
o Product oriented processes
Project Management Softwareo Aids integration within a project
Project management Methodology
o Hard tools Project Management Software
o Soft tools Meetings etc.,
Project Selection Methods Decision Models, Calculation method
Chartero Business Need
o Product Description
Product Analysiso Product breakdown analysis
o Systems Engineering
o Value Engineering
o Value Analysis
o Function Analysis
o Quality function deployment
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Alternative Identificationo Brainstorming
o Lateral Thinking
Project Objectives Quantifiable criteria that must be met for the project to beconsidered success. Must include
o Costo Schedule
o Quality
Scope Management Plan Include the followingo Expected Stability
o Identification & Classification
Decomposing the deliverables will give the following advantages Critical to projectsuccess
o Improve accuracy of coat, duration, and resource estimate
o Define baseline for performance measurement and control
o
Clear responsibility assignment Product Documentation
o Plans
o Specifications
o Technical documentation
o Drawings etc.,
Inspectionso Reviews
o Product reviews
o Audits
o Walk-throughs
Mandatory Dependencies That are inherent in the nature of the work being done(Physical Limitations) Hard Logic
Discretionary Dependencies Best Practices Preferred Logic, Preferential logic,Soft logic
CPM Deterministic
GERT Probabilistic
PERT Weighted average Use when there is a uncertainty in the activity duration also called Method of moment analysis
Supporting Details (Schedule development output) includeso Resource Histograms
o Alternative Scheduleso Schedule contingency reserves
Revisions Changes to the schedule start and end dates
Cost budgeting It includes cost of financing
Spending Plan Cash-flow forecast to measure disbursements
Quality Managemento Proprietary Approaches
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Deming
Juran
Crosby etc.,o Non proprietary
TQM
Continuous Improvement etc., Quality management plan provides
o Input to Overall Project plan
o Quality Control
o Quality Assurance
o Quality Improvement
Operational Definitions Also called Metrics
In an even distribution any date in the distribution will have the same probability asany other date in the distribution
Human Resources Management Effective use of stakeholders including sponsors,
customers, partners, individual contributors, and others Organizational planning done as part of earliest project phases, but should review
regularly throughout the project to ensure continued applicability
Technical Interfaceso Within the Phases
o Between the phases
Constraints (Organizational Planning inputs)o Organizational Structure
o Collective bargaining agreements Contractual agreements with unions or
employee groups may require certain roles or reporting relationshipso Preferences of the project management Team if the members of project
management team have had success with certain structures in the past, thenthey are likely to advocate similar structure in the future
o Expected staff assignments How the project is organized is often influenced
by the competencies of specific individuals
Templates (Organizational Planning T&T) Use the following from earlier projectso Roles and responsibility definitions
o Reporting Relationships
Staffing management Plan Includeo When and how human resources will be bought onto and taken off of the
project teamo
Resource Histogramso Particular attention should be paid to how project team members will be
released when they ate no longer needed on the project
Reduce cost by reducing or eliminating the tendency to make workto fill the time between this assignment and the next
Improve morale by reducing or eliminating the uncertainty about thefuture employment opportunities
Supporting details (Organizational Planning output)
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o Organizational Impact
o Job descriptions Position descriptions
o Training Needs
Characteristics of potential available staff memberso Previous Experience
o Personal Interestso Personal Characteristics
o Availability
o Competencies & Proficiency
Individual development (managerial & Technical) is the foundation necessary todevelop the team
Team development often complicated when team members are accountable to both afunctional manager and the project manager. Effective management of this dualreporting relationships is often a critical success factor for the project, and isgenerally the responsibility of the Project Manager
Team Development occurs through out the project
War room Where the team congregates and posts schedules, updates etc.,
Direct & indirect costs for training are generally paid by the performing organization
Communications planning is done as part of the earliest project phases. However, theresults of this process should be reviewed regularly throughout the project and revisedas needed to ensure continued applicability
Communication Technology influencing factorso The immediacy of the need for information
o The availability of technology
o Expected staff assignments
o The length of the project
Responsibilities of Sendero Making the information clear, unambiguous, and complete, so that the
receiver can receive it correctlyo Conforming that it is properly understood
Responsibilities of Receivero Making sure that information is received in its entirety and understood
correctly
Project Recordso Correspondence
o Memos
o
Documents describing the project etc., Project Reports Formal project reports on the project status and/or issues
Performance Reporting How resources are being used to achieve project objectives.Generally provide information on Scope, Schedule, Cost, and Quality. (Also Risk andProcurement). Reports can be prepared comprehensively or on an exception basis
EV Analysis Integrates Scope, Cost (or Resources) and Schedule.
Common formats of performance reportso Bar Charts (also called Gantt Chart)
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o S-Curve Display cumulative EV Analysis data
o Histograms
o Tables
Administrative Closure functionso Collecting Project records
o Ensure they reflect final specificationso Analyzing project success
o Effectiveness
o Lessons Learned
o Arching the information for future use
o Perform at the end of every phase and at the end
o Update the skills in the staff pool database
Project Closure (Administrative Closure output)o Customer formally accepted the project results, and deliverables
o Requirements of the performing organization (Staff evaluations, Budget
Reports, Lessons learned) Risk Management Plan includes the following
o Methodology
o Roles and Responsibilities
o Budgeting
o Timing
o Scoring Interpretation
o Thresholds
o Reporting Formats Describes the content and format of the risk response
plan.o Tracking Document all facets of risk activities will be recorded for the
benefit of the current project, future needs, and lessons learned. Documents ifand how risk processes will be audited
Risk Categorieso Technical, Quality or Performance
o Project Management Risks
o Organizational Risk
o External Risks
Information gathering techniqueso Brainstorming
o Delphi technique
o Interviewingo SWOT Analysis
Diagramming Techniqueso Cause-and-effect
o Flow charts
o Influence Diagram
Simulation
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o Cost risk Analysis Use WBS
o Schedule risk Analysis Use PDM
Contested Changes Changes that can not be agreed upon in a Contract
Needs Analysis Feasibility Study
Most organizations have documented policies and procedures specially defining who
can sign such agreements on behalf of the organization, typically called a delegationof procurement authority