PMP Prep-5th Ed-BMC Master-Oct 2013 PDF

Presents
PMP Certification Test Preparation

PMBOK Fifth Edition
PMP Prep: PMBOK 5th - 2013
The PMP Certification Test Preparation

Objectives
Provide a framework for structuring the Project
Management Body of Knowledge;
Identify the most generally accepted practices
within the discipline of project management;
Reveal Exam Tips;

Explain how to apply for and take the PMP exam
Page i
The World of Business Management Consultants

Bristol
Brussels
Houston
Istanbul
Singapore
Warsaw Moscow
Chicago
Bristol Frankfurt
Milan
Phoenix Washington DC
Atlanta
Lisbon
Vancouver
Seoul
Tokyo
Beijing Taipei
Shanghai
Hong Kong
Mumbai
Page iii
Our Learning Institutions
Page iv
Three Day Course Schedule
Day One
Introduction and overview
of PMI, PMP and PMBOK
Day Two
Planning Processes
(continued)
Day Three
Monitoring & Controlling
Processes
Closing Processes
Initiating Processes
Professional Responsibility
Executing Processes
Planning Processes
Practice Test
Preparing for the PMP
Practice Test
Sample Test
Page vii
Introduction and Overview of the PMP
Organization of this Workbook
The PMBOK Fifth Edition is organized by Knowledge Area.

We believe that people learn the same way
they work on-the-job: by project phases.
So, this Test Preparation workbook is organized

chronologically, start to finish, from Initiating a
project through to Closing the project.
Page 1
Organization is Chronological
Monitoring &
Controlling Processes
Planning
Processes
Closing
Processes
Initiating
Processes
Executing
Processes
Page 1
New Test and New PMBOK Edition
The PMBOK 5th Edition was released in January

2013. The test changed again on July 31, 2013.
A new Knowledge Area was introduced:
Stakeholder Management.
Page 2
The T&T CD ID is E1091

and Awards 11 PDUs
Qualification Requirements
PMTestOnline is C4070
and Awards 11 PDUs
Graduate, 4-Year Degree

A minimum of 4500 hours PM
experience within the past 8
years
+
Non-Graduate, or 2-Year Degree
35 contact hours
(PDUs) of PM
education
Eligibility to take
the PMP
examination

years
This Course ID is E1078

and Awards 24 PDUs
Page 2
PMBOK Fifth Edition and the New Test

The PMBOK Fifth Edition was introduced in January 2013, and the
new fifth edition test started on July 31, 2013.
The PMP examination consists of 200 questions, with a four hour
time limit
Thats 72 seconds (or 1.2 minutes) per question
This training course will give you everything you need,

with a little self-study, to pass the PMP examination
Visit www.pmi.org, download PMP Certification Handbook
Page 2
PMBOK 5th Edition PMP Test Domain Content
Project Initiation
Project Planning
Project Execution
Project Monitoring & Control
Project Closing
13%
24%
30%
25%
8%
To pass, you need to get a minimum of 122

questions correct out of 200 questions (61%)
Pass rate on the 4th Edition test is about 74%
Page 2
Apply to PMI to take the test,

Schedule a date with Prometric
Submit your application to Project Management Institute (PMI)
http://www.pmi.org/Certification/Project-Management-Professional-PMP.aspx
Log in with your User Name and Password
Follow the instructions
Schedule a test date with Prometric

http://www.prometric.com/PMI/default.htm
Control is through audit

http://www.pmi.org/info/PDC_PMPHandbook.pdf
PMI may audit when you pay your exam fee to PMI. If you cancel or reschedule
within 30 days of the test, there is a fee of $70; within 2 days, you forfeit the entire fee.
Candidates have three (3) opportunities to pass the exam in one year. If they
do not pass any, they must wait one (1) year from the date of the last attempt.
Page 3
Types of questions to expect

Questions requiring experience more than study
You are advised that a major purchased part on your project
will be delayed. What do you do?
A.
B.
C.
D.
Ignore it. It will go away

Notify your boss
Let the customer know about it and talk over options
Meet with the team and identify alternatives
D. Meet with the team and identify alternatives
Page 4

Information that does not matter (distractors)
Study show that every time you double the production of
widgets, unit cost goes down by 10%. Based on the study,
the company concludes that the production of 4,000 widgets
will cost $19,000. This illustrates:
A.
B.
C.
D.
Learning curve effects

Law of diminishing returns
The 80/20 rule
Bottoms up cost estimating
A. Learning curve effects
Page 4

Questions designed to make you make you think carefully
The theory optimum quality level is obtained when
Incremental revenue from product improvement equals
incremental cost to secure it comes from
A.
B.
C.
D.
Quality control analysis

Marginal analysis
Standard quality analysis
Conformance analysis
B. Marginal Analysis
Page 4

Questions using unfamiliar words and expressions
Parking places, corner office/door, and a key to the executive
bathroom are example of:
A.
B.
C.
D.
Perquisites
Overhead
Herzbergs motivators
Entitlements
A. Perquisites (aka Perks)
Page 5

Questions requiring understanding of the subject matter
Decomposing deliverables into smaller manageable activities
Is complete when:
A.
B.
C.
D.
Project justification has been established

Change requests have occurred
Cost and duration estimates can be developed for each work
element at this level
Each work element is found in the WBS dictionary
C. Cost and duration estimates can be developed

for each work element at this level
Page 5

Questions requiring study (memorization) more than
experience
Conflict resolution techniques that may be used on a project
include:
A.
B.
C.
D.
Withdrawing, compromising, controlling, and forcing

Controlling, forcing, smoothing, and withdrawing
Confronting, compromising, smoothing, and directing
Smoothing, confronting, forcing and withdrawing
D. Smoothing, confronting, forcing and withdrawing
Page 5

New thinking about a known topic
In a matrix organization, information dissemination is most

likely to be effective when?
A.Information flows both horizontally and vertically
B.The communication flows are kept simple
C.There is inherent logic in the type of matrix selected
D.Project managers and functional managers socialize
A. Information flows both horizontally and vertically
Page 6

Questions requiring calculation and knowledge of formulae
A project was estimated to cost $1.5 million and scheduled to last
six months. After three months, the earn value analysis shows
the following:
BCWP (EV) = $650,000
BCWS (PV) = $750,000
ACWP (AC) = $800,000
What are the schedule and cost variances?
A.
B.
C.
D.
SV = +$100,000 - - - CV = +$150,000
SV = +$150,000 - - - CV = -$100,000
SV = -$50,000 - - - - CV = +$150,000
SV = -$100,000 - - - -CV = -$150,000
D. SV=-S100,000 : CV=-$150,000
Page 6

Questions designed to take up your time
Youve been engaged to manage a project. The estimated cost of the
project is $1,000,000. The project sponsor has approved this amount.
Your earned value calculations indicate that the project will be
completed on time and under budget by $200,000. Based on your
calculation, your personal profit will decrease by $2,000. Given
estimated decrease in personal profit, what action should you take?
A.
B.
C.
D.
Invoice for the full $1,000,000 based on contract and to cover profit
Add tasks to improve the outcome and increase the actual project cost
Inform the end-user that you can add features to the project in order to
use the entire budget
Communicate the projected financial outcome to the project sponsor
D. Communicate the outcome to the project sponsor
Page 6

Questions using acronyms you need to understand
There are several different types of network analysis tools for
determining critical path. Which method for analysis is also called
Method of Moments?
A.
B.
C.
D.
GERT
CPM
PERT
Monte Carlo
C. PERT (Program Evaluation and Review Technique)
Extra
Mapping Process Groups to Knowledge Areas

Process Groups
Knowledge Areas
4. Project Integration
Management
Initiating
4.1 Develop Project Charter
Planning
4.2 Develop Project
Management Plan
Executing
4.3 Direct & Manage
Project Work
Monitoring &
Controlling
4.4 Mon/Ctrl Proj Work
4.5 Perform Integrated
Change Control
5. Project Scope
Management
5.1
5.2
5.3
5.4
Plan Scope Mgt.

Collect Requirements
Define Scope
Create WBS
5.5 Validate Scope

5.6 Control Scope
6. Project Time
Management
6.1
6.2
6.3
6.4
6.5
6.6
Plan Schedule Mgt.

Define Activities
Sequence Activities
Est. Activity Resources
Est. Activity Durations
Dev. Schedule
6.7 Control Schedule
7. Project Cost
Management
7.1 Plan Cost Mgt.

7.2 Estimate Costs
7.3 Determine Budget
8. Project Quality
Management
8.1 Plan Quality Mgt.
8.2 Perform Quality

Assurance
9. Project Human
Resource
Management
9.1 Plan Human

Resource Mgt.
9.2 Acquire Project Team

9.3 Develop Project Team
9.4 Manage Project Team
8.3 Control Quality
PMBOK 5th Edition,

Table 3-1, Page 61
10.1 Plan Communications

Management
11. Project Risk

Management
11.1 Plan Risk Management

11.2 Identify Risks
11.3 Perform Qualitative
Risk Analysis
11.4 Perform Quantitative
Risk Analysis
11.5 Plan Risk Response
12. Project Procurement

Management
12.1 Plan Procurement Mgt.
12.2 Conduct Procurements
12.3 Control Procurements
13.2 Plan Stakeholder

Management
13.3 Manage Stakeholder

Engagement
13.4 Control Stakeholder

Engagement
Page 17
13.1 Identify Stakeholders
4.6 Close Project

or Phase
7.4 Control Costs
10. Project
Communications
Management
13. Project Stakeholder

Management
Closing
10.2 Manage Communications
10.3 Control Communications
(47 Processes)
11.6 Control Risks
12.4 Close Procurements
Mind Maps: Integration
Handout
Mind Maps: Scope
Handout
Scope
Time
Handout
Mind Maps: Cost
Handout
Project
Quality
Management
Mind Maps: Quality
Handout
Mind Maps: Human Resource
Handout
Communication
Handout
Risk
Handout
Procurement
Handout
Stakeholders
So, what is a project?

A project is a temporary endeavor undertaken to create a
unique product, service or result.
A program is a group of related projects, subprograms,
and program activities managed in a coordinated way to
obtain benefits not obtainable from managing them
individually.
A portfolio is a collection of projects, programs, and
operations managed as a group to achieve strategic
objectives.
An operation is an organizational function performing the
ongoing execution of activities that produce the same
product or provide the same repetitive service
Page 7
The Triple Constraint, plus some.
PMBOK 5th Edition, Page 6
Resource
Scope
(Budget)
(Planned Results)
Schedule
(Time)
Page 8
Organizational Governance: Linkages

Strategic Planning
Management by Projects
Portfolio
Management
Management of
Operations
Program
Management
Project
Management
Processes,
Tools, Metrics
Page 8
Organizational Governance: Linkages

VISION
Mission
Organizational Strategy &

Goals
High-Level
Operations Planning
& Management
Project Portfolio
Planning &
Management
Management of On-Going
Operations
(recurring activities)
Management of Authorized
Programs & Projects
(projectized activities)
(producing value)
(increasing value production capability)
Organizational Resources
Page 9
Comparison: Project, Program & Portfolio

Organizational Project Management
Project
Programs
Portfolios
Scope
Projects have defined objectives. Scope is

progressively elaborated throughout the
project life cycle.
Programs have a larger scope and provide

more significant benefits.
Portfolios have an organizational scope

that changes with the strategic objectives
of the organization.
Change
Project managers expect change and

implement processes to keep change
managed and controlled.
Program managers expect change from

both inside and outside the program and
are prepared to manage it.
Portfolio managers continuously monitor

changes in the broader internal and
external environment.
Planning
Project managers progressively elaborate

high-level information into detailed plans
throughout the project life cycle..
Program Managers develop the overall

program plan and create high-level plans to
guide detailed planning at the component
level.
Portfolio managers create and maintain

necessary processes and communication
relative to the aggregate portfolio.
Management
Project managers manage the project team

to meet the project objectives.
Program managers manage the program

staff and the project managers; they
provide vision and overall leadership.
Portfolio managers may manage or

coordinate portfolio management staff, or
program and project staff that may have
reporting responsibilities into the aggregate
portfolio.
Success
Success is measured by product and project

quality, timeliness, budget compliance, and
degree of customer satisfaction..
Success is measured by the degree to

which the program satisfies the needs and
benefits for which it was undertaken..
Success is measured in terms of aggregate

investment performance and benefit
realization of the portfolio.
Project managers monitor and control the

work of producing the products, services,
or results that the project was undertaken to
produce.
Program managers monitor the progress of

program components to ensure the overall
goals, schedules, budget and benefits of the
program will be met.
Portfolio managers monitor strategic

changes and aggregate resources
allocation, performance results, and risk of
the portfolio.
Monitoring
Page 10
How do projects come about?
Projects can come about in the following ways:

Market demand
Strategic opportunity
Social need
Environmental
Customer request
Technological advance
Legal requirement
More on selection methods later
Page 10
The Project Management Office (PMO)

A PMO is an organizational structure:
standardizes project governance processes,
facilitates the sharing of resources,
develops methodologies, tools and techniques.
Responsibilities can range from providing support
functions to direct management of projects.
Projects supported by a PMO may not be related,
other than being managed together
Project Manager
focuses on specific project objectives
controls assigned project resources
manages the constraints
Page 12
PMOs
manages major program scope changes
optimizes shared resources across all projects
manages methodologies, standards, overall risk
Types of Project Management Offices (PMO)
Supportive. Consulting role , e.g., supplying templates, best practices,

training, computer information, and lessons learned from other projects.
Control from this type of PMO is low.
Controlling. Provide support and require compliance, e.g., PM methodologies,

specific templates-forms-tools, or conformance to governance.
Control from this type of PMO is moderate.
Directive. Control projects by managing projects.

Control from this type of PMO is high.
Exam
Tip
Page 12
Project-Based Organizations (PBO)
PBOs can be created by various organizations

(functional, matrix, projectized).
They can diminish hierarchy since work is measured by
results rather than position or politics.
PBOs do a majority of their work as projects rather

than as a function, but can have functional support
areas.
Page 13
Role of the Project Manager

Project Managers
Role is to achieve project objectives. Understanding tools and
techniques is not enough. It requires general management
skills, and:
Knowledge of project management,
Performance or accomplishment,
Personal behavior and effectiveness when performing
the project including attitude, personality characteristics,
and leadership.
Page 15
The Role of the PMBOK
Project Management
Body of Knowledge
PMBOK Guide
Interpersonal
Skills
General
Management
Knowledge and
Skills
Page 15
Application Area
Knowledge,
Standards and
Regulations
Understanding
the Project
Environment
Organizational Structures
Organizational
Structures
Project
Characteristics
PMBOK Fifth Edition, Page 22
Matrix
Functional
Weak Matrix
Balanced Matrix
Projectized
Strong Matrix
Project Managers
Authority
Little or None
Low
Low to
Moderate
Moderate to
High
High to
Almost Total
Resource
Availability
Little or None
Low
Low to
Moderate
Moderate to
High
High to
Almost Total
Functional
Manager
Functional
Manager
Mixed
Project
Manager
Project
Manager
Project
Managers Role
Part-Time
Part-Time
Full-Time
Full-Time
Full-Time
Project Management
Administrative Staff
Part-Time
Part-Time
Part-Time
Full-Time
Full-Time
Who Manages
the Budget?
Page 16
Organizational Influences
Exam
Tip
Exam questions deal with matrix forms.
Strong matrix:
Weak matrix:
Balanced matrix:
Tight Matrix:
Page 17
The balance of power rests with the project manager.

The balance of power rests with the functional manager.
The power is balanced between the functional and the project managers.
Beware here. It has nothing to do with the matrix organization. It refers to
locating the project teams offices in the same room. Watch for this one!
Organizational Structure
Chief
Executive
Functional Organization
Functional
Manager
Functional
Manager
Project
Coordination
Functional
Manager
Staff
Staff
Staff
Staff
Staff
Staff
Staff
Staff
Staff
Staff engaged in project activities
Page 18
Chief
Executive
Weak Matrix
Functional
Manager
Functional
Manager
Staff
Staff
Staff
Staff
Staff
Staff
Staff
Staff
Staff
Page 18
Functional
Manager
Project
Coordination
Chief
Executive
Balanced Matrix
Functional
Manager
Functional
Manager
Staff
Staff
Staff
Staff
Staff
Staff
Project
Manager
Staff
Staff
Page 19
Functional
Manager
Project
Coordination
Chief
Executive
Strong Matrix
Functional
Manager
Functional
Manager
Functional
Manager
Manager of Project
Managers
Staff
Staff
Staff
Project Manager
Staff
Staff
Staff
Project Manager
Staff
Staff
Staff
Project Manager
Page 19
Project
Coordination
Chief
Executive
Projectized
Project
Manager
Project
Coordination
Page 20
Project
Manager
Project
Manager
Staff
Staff
Staff
Staff
Staff
Staff
Staff
Staff
Staff
Chief
Executive
Composite
Functional
Manager
Functional
Manager
Functional
Manager
Manager of Project
Managers
Staff
Staff
Staff
Project Manager
Staff
Staff
Staff
Project Manager
Staff
Staff
Staff
Project Manager
Project B
Coordination
Page 20
Project A
Coordination
The Organization and its Environment

These are INPUTS to Processes
Organizational Process Assets (OPA)
OPA are assets available to the project team: (1) processes and
procedures, and (2) corporate knowledge bases. They include
plans, processes, policies, procedures, lessons learned, historical
information, schedules, risk data, and earned value data.
What have we got?
Enterprise Environmental Factors (EEF)
EEF are conditions not under the control of the team. They include
government or industry standards, organization culture,
infrastructure (facilities & equipment), human resources,
marketplace conditions, risk tolerance, politics, communication
channels, data bases, and PMIS.
What is out there?
Page 21
Stakeholders
Stakeholders are persons or organizations who may affect, be affected, or perceive that
that they are affected by a decision, activity or outcome of the project. They:
May be actively involved in the project or have interests affected by the project,
May exert influence over the project/team to satisfy strategic business objectives.
Project Governance is an oversight function aligned with the organizations governance
model and includes the project life cycle. Governance is alignment of the project with
stakeholders needs or objectives. It is critical to management of stakeholder
engagement, maximizing the value of project outcomes, and aligning projects to the
business strategy.
The Project Manager should manage the influences of stakeholders regarding project
requirements to ensure successful outcome.
Who are your stakeholders? Can you name them?

See PMBOK Fifth Edition, Pages 32-33
Pages 22-23
The Project Sponsor
The Project Sponsor is the person or group who

provides resources and support for the project
and is accountable for enabling success. The
sponsor promotes the project and serves as
spokesperson to management. They play a
significant role in project initiation and the
development of the initial scope and charter
Page 22
Project Life Cycle
Cost and Staffing Level
Starting
a Project
Organizing
and
Preparing
Project
Charter
Executing the Work
Project
Management Plan
Closing a
Project
Accepted
Deliverables
Archived
Project
Documents
Time
Page 24
Stakeholders Influence Over Project Performance
Concept
Planning
Execution
Close-Out
Value
Uncertainty (Risk)
Amount at Stake
Influence of Stakeholders
Time
Page 24
Process Groups are not Project Phases

Project Phases or Life Cycle
(Phase-end reviews of deliverables are called
Stage Gates, Phase Exits, or Kill Points)
INPUTS:
Requirements
Specification
Market
Knowledge
Basic
Concept
Technology
Appreciation
Departments
Expertise
Key Technical
Risks
Feasibility
Study
Laboratory
Model
IDEA
Basic
Concept
Requirements
Specification
Key Risk
Assessment
Marketing
Prototype
Documentation
Proof of
Principle
Proof of
Principle
Development
Production
Technology
Prototype
Product
Product
Quantity
Production
Documentation
Beta Test
Models
Trials
Production
Documentation
Production
User
Reaction
LAUNCH
Product
Quantity
Beta Test
Models
OUTPUTS:
Phased System Development Life Cycle (SDLC) to Launch
Page 25

Process Groups
Plan
Do
Walter Shewhart,
modified
by Edwards Deming
Act
Exam
Tip
PMBOK Fifth Edition, Pages 42-43
Check
Monitoring
Monitoring
&&
Controlling
Processes
Controlling
Processes
Planning
Planning
Processes
Processes
Closing
Processes
Processes
Initiating
Initiating
Processes
Executing
Executing
Processes
Processes
Links between Process Groups in a Phase
Page 26

Begin
Charter
Handover
End
Project Lifecycle
Phase 1
Page 26
Phase 2
Phase 3
Phase 4
Understand the Differences Between:

PMBOK Fifth Edition, Pages 42-46
Phase-to-Phase Relationships
Predictive Life Cycles

Iterative and Incremental Life Cycles
Adaptive Life Cycles
Page 26
Overview of Project Integration Chapter 4 of the PMBOK

by Knowledge Area
Page 28
4.1
Develop Project Charter
4.2
Develop Project Management Plan
4.3
Direct and Manage Project Work
4.4
Monitor and Control Project Work
4.5
Perform Integrated Change Control, and
4.6
Close Project or Phase
Initiating Process Group

by Chronology
Page 31

Process Groups
Knowledge Areas
Management
Initiating
Monitoring &
Controlling
Executing
Planning
4.2 Develop Project
Management Plan
Initiating
4.3 Direct & Manage
Project Work

Change Control
5. Project Scope
Management
5.1
5.2
5.3
5.4
Plan Scope Mgt.

Define Scope
Create WBS
5.5 Validate Scope

5.6 Control Scope
6. Project Time
Management
6.1
6.2
6.3
6.4
6.5
6.6
Plan Schedule Mgt.

Define Activities
Sequence Activities
Dev. Schedule
4.1
7.1 Plan Cost Mgt.

7.2 Estimate Costs
8. Project Quality
Management
8.2 Perform Quality

Assurance
9. Project Human
Resource
Management
9.1 Plan Human

Resource Mgt.

7.4 Control Costs
8.3 Control Quality
10. Project
Communications
Management

Management
11. Project Risk

Management

11.2 Identify Risks
Risk Analysis
Risk Analysis

Management

Management

Engagement

Engagement
Page 28
4.6 Close Project

or Phase
Develop Project Charter
7. Project Cost
Management

Management
Closing
11.6 Control Risks
Initiating Process Group

Initiation results in:
GO
NO GO
DECISION
Page 30
Initiation: Project Integration Management

Inputs
Project statement of work

Business case
Agreements
Enterprise environmental factors
Organizational process assets
Page 31
Tools &
Techniques
Outputs
Expert judgment
Facilitation techniques
Project charter

Develop Project Charter is the process of
developing a document that formally
authorizes the existence of a project
and provides the project manager with
the authority to apply organizational
resources to project activities.
The project manager is assigned early in
the project, during charter development.
ALWAYS before start of planning.
Page 31
Exam
Tip
Project
Initiation
Customer
Requirements
Problem
Opportunity
Business Need
Page 32
Commitment to go
ahead
Project Charter
Project Manager
assigned
Project
Planning

Input: Project Statement of Work (SOW)
States the Business Need and CostBenefit analysis in the Business Case.
What triggered the project?
Documents the characteristics of the
end product
Is progressively elaborated throughout
the project life cycle
Includes the Strategic Plan, a factor
when making project selection
decisions
Should describe both what the deliverable is and what it is not
With the project scope statement, the SOW protects against both scope
creep and feature creep
Page 32

Input: Business Case, Strategic Plan
PMBOK Fourth Edition, Page 75
Strategic planning analyzes an organizations strengths, weaknesses,

opportunities, and threats (SWOT) to determine long-range objectives and
strategies for reaching them. Strategic planning often involves predicting
future trends, including the need for new products and services.
Senior management considers

each projects contribution to the
strategic goals and its alignment
with the strategic plan before
deciding to undertake, continue,
suspend, or terminate projects
Page 33

Input: EEF and OPA
These are INPUTS to Develop Charter

Enterprise Environmental Factors (EEF)
Factors not under the control of the team that influence or
constrain the charter process. EEF include government or industry
standards, organization infrastructure, marketplace conditions, etc.
What is out there?
Organizational Process Assets (OPA)

OPA are standard processes, policies, and corporate knowledge:
lessons learned, historical information, templates and other
documents.
What have we got?
Page 33 & 34

Output: Project Charter
Exam
Tip
Page 35
How do projects come about?
Suggested
Projects
Page 35
Project Selection
Techniques
Net Present Value
Return on Investment
Internal Rate of Return
Benefit/Cost Ratio
Opportunity Cost
Selected
Projects
Project selection methods
Economic Models
Exam
Tip
Net Present Value: net economic value (per year) of a project in terms of
present-year monies.
A higher overall net present value is better within cash flow constraints.
Expected Present Value: Risk-adjusted NPV
Return on Investment (ROI): income divided by investment.
A higher ROI is better.
Payback Period: the amount of time it will take to recover the cost of the
project. A faster payback period is better.
Internal Rate of Return (IRR) or Hurdle Rate:
the rate of return for the investment in the
project. Organizations may have a minimum rate
of return (or hurdle rate).
A higher rate of return is better
Page 37
Project selection methods Economic Models

FV
Net Present Value (NPV)
=
(1+r)n
Where, FV = Future Value

r = Interest Rate
n = Number of Time Periods
Average Earnings After Tax

Return on Investment (ROI) =
Page 37
Average Investment
= ARR
(Accounting Rate of
Return)
Internal Rate of Return (IRR) :
Solve the NPV equation for r (hurdle rate)

when present value of cash in equals
present value of cash out (i.e., at breakeven)
Benefit Cost Ratio
Benefits should exceed costs. The higher

BCR wins.
Project selection methods Example Question

Opportunity Cost:
A has NPV of $45K, B has NPV of $75K,
what is the Opportunity Cost of selecting Project B?
Answer: $45K. Opportunity cost is what you gave up
when you made your selection
Exam
Tip
Page 37
Many things on the Exam are not in the PMBOK.

A lot of these are cost questions. Only Present Value
shows up on more than one question.
Exercise Net present Value
TIME PERIOD (YR)
Page 38
AMOUNT ($)
PRESENT VALUE AT
10% INTEREST RATE
50
45
100
83
300
225
Exercise Accounting Standards
Net Present
Value
IRR
Payback
Period
Benefit Cost
Ratio
Page 38
Which Project
Would You
Pick?
PROJECT A
PROJECT B
$95,000
$75,000
13%
17%
16 months
21 months
2.79
1.3
Project Selection Methods Weighted Scoring

Removes personal bias, is more objective, and considers
relative importance of different evaluation factors
n
1)
2)
3)
4)
5)
6)
Page 39
determine the evaluation factors

assign a numerical weight to each factor
rate the projects on each criterion
multiply each rating by its weighting
total the weighted ratings to compute an overall score
highest number project wins
Si = sijwj
j=1
Project Selection Methods Decision Models

$12,000
Decision Trees: Define all the possible

outcomes, the probability of each, and
its value. Choose the best alternative.
$10,000
$8,000
}
}
$10,200
$10,000
$12,000
Forced Choice: Decision makers

choose among alternatives, often by
pair-wise comparisons, selecting the
one preferred and discarding the rest.
Page 39
Initiation: Project Stakeholder Management

PMBOK Fifth Edition, Section 13.1, Page 393

Inputs
Project charter
Procurement documents
Page 40
Tools &
Techniques
Stakeholder analysis
Expert judgment
Meetings
Outputs
Stakeholder register
It is critical for project success to
identify the stakeholders early in the

project, and to analyze their levels of
interest, expectations, importance
and influence
Stakeholders should be classified
according to their interest,
involvement and influence in the
project
Who are your stakeholders? Make sure you can name them?
Page 40
Stakeholder Analysis
Tools and Techniques
Position people on the Power/Influence Grid

GU
Think about who is essential for support:
BG
high
Think about how to identify all stakeholders:

Brainstorming (free or structured)
Interviews
Past
Utilize the project team
Develop, Monitor, Focus, Stabilize
Power
Who are the most influential people?

How much will your project affect them?
How are they likely to react to your project?
Who is effected by the projects objectives?
AB
L
medium
CF
AR
JH
low
Resistor
Bystander
Change
Agent
Influence
Note: The 5th Edition lists several classification models:
Power/Interest Grid
Power/Influence Grid
Influence/Impact Grid
Salience Model
Understand the similarities and differences.
Pages 42 and 43
Planning Process Group
Page 45

Process Groups
Knowledge Areas
Management
Initiating
Planning
4.2 Develop Project
Management Plan
5. Project Scope
Management
5.1
5.2
5.3
5.4
Plan Scope Mgt.

Define Scope
Create WBS
6. Project Time
Management
6.1
6.2
6.3
6.4
6.5
6.6
Plan Schedule Mgt.

Define Activities
Sequence Activities
Dev. Schedule
24
Plans
7. Project Cost
Management
7.1 Plan Cost Mgt.

7.2 Estimate Costs
8. Project Quality
Management
9. Project Human
Resource
Management
9.1 Plan Human

Resource Mgt.
10. Project
Communications
Management

Management
11. Project Risk

Management

11.2 Identify Risks
Risk Analysis
Risk Analysis

Management

Management
Page 28

Management
Executing
4.3 Direct & Manage
Project Work
Monitoring &
Controlling
Planning

Change Control
Closing
4.6 Close Project
or Phase
4.2
Develop Project Management Plan
5.5 Validate Scope
5.1
Plan Scope Management
5.6 Control Scope
5.2
5.3
Define Scope
5.4
Create WBS 6.7 Control Schedule
6.1
Plan Schedule Management
6.2
Define Activities
6.3
Sequence Activities
6.4
Estimate Activity
Resources
7.4 Control
Costs
6.5
Estimate Activity Durations
6.6
Develop Schedule
8.2 Perform Quality
8.3 Control Quality
7.1
Assurance Plan Cost Management
Estimate
Costs
9.27.2
Acquire Project
Team
9.37.3
Develop Project
Team
Determine Budget
8.1
Plan Quality10.3
Management
Control Communications
9.1
Plan Human Resource Management
10.1 Plan Communications Management
11.6 Control Risks
11.2 Identify Risks
11.3 Perform Qualitative Risk Analysis
11.4 Perform Quantitative Risk Analysis
Plan Risk Response
12.211.5
Conduct Procurements
12.1 Plan Procurement Management
13.2
Plan Stakeholder
Management
Engagement
Engagement
Planning is Iterative
Although the constraints of text and page layout force us to

depict the planning process as a linear sequence of activities, this
is not true and probably should not be practiced as such in reality.
Planning is, in fact, an iterative activity. The various planning
processes interact with each other; later processes may cause you
to rethink the execution and output of earlier processes.
Replanning at phase gates is called progressive elaboration or
rolling wave planning.
Exam
Tip
Page 45
Planning is done by the Project Team
Project Planning
Dont over-plan and dont under-plan
(Your challenge is to match the degree of planning to the demands of the project).
Document, distribute, and maintain the plan

(Youre not the only one who is going to use the plan)
Page 46
Planning: Integration Management

4.2 Develop Project Management Plan
Inputs
Project charter
Outputs from other processes
Page 47
Tools &
Techniques
Expert judgment
Facilitation techniques
Outputs
Project management plan
4.2 Develop Project Management Plan

Develop Project Management
Plan is the process of defining,
preparing, and coordinating all
subsidiary plans and integrating
them into a comprehensive
project management plan.
It is the central document that
defines the basis of all project
work.
Page 47
The Project Management Plan

Input: Outputs from Other Processes
Output: The PM Plan
The other 23 planning processes are integrated to create the project
management plan. Updates to any plans require an update to the PM plan. Think
of the PM plan as a bucket into which all the other plans drip until it is full.

Define Scope
Create WBS
Define Activities
Sequence Activities
Estimate Activity Resources
Develop Schedule
Plan Cost Management
Estimate Costs
Pages 45 & 49
Determine Budget
Plan Quality Management
Plan Communications Management
Plan Risk Management
Identify Risks
Perform Qualitative Risk Analysis
Perform Quantitative Risk Analysis
Plan Risk Response
Plan Procurement Management
Plan Stakeholder Management

Subsidiary Plans
Documents that flow from these planning processes are called Subsidiary Plans.
These documents, also controlled by the Integrated Change Control process.
Scope Management Plan

Requirements Management Plan
Schedule Management Plan
Cost Management Plan
Quality Management Plan
Page 49
Process Improvement Plan

Human Resource Plan
Communications Management Plan
Risk Management Plan
Procurement Management Plan
Stakeholder Management Plan
Differentiation: PM Plan and Project Documents

Project Management Plan
Project Documents
Change management plan
Activity attributes
Project staff assignments
Communications management plan
Activity cost estimates
Project statement of work
Configuration management plan
Activity duration estimates
Quality checklists
Cost baseline
Activity list
Quality control measurements
Cost management plan
Activity resource requirements
Quality metrics
Human resource management plan
Agreements
Requirements documentation
Process improvement plan
Basis of estimates
Requirements traceability matrix
Procurement management plan
Change log
Resource breakdown structure
Scope baseline
Project scope statement
WBS
WBS dictionary
Change requests
Resource calendars
Quality management plan
Forecasts
Cost forecast
Schedule forecast
Risk register
Requirements management plan
Issue log
Schedule data
Risk management plan
Milestone list
Seller proposals
Schedule baseline
Source selection criteria
Schedule management plan
Procurement statement of work
Scope management plan
Project calendars
Team performance assessments
Stakeholder management plan
Project charter
Project funding requirements
Project schedule
Project schedule network diagrams
Work performance data

Work performance information
Work performance reports
Page 50
Planning: Project Scope Management

5.1 Plan Scope Management
Inputs

Project charter
Page 51
Tools &
Techniques
Expert judgment
Meetings
Outputs

Requirements management
plan
Project Scope Management

Ensures that the project includes all the work required,
and only the work required, for the project to complete
successfully. It defines and controls what is and is not in
the project (the positive and negative scope items).
If it is not in the scope, it is not in the WBS

The Scope Baseline includes:
1. Project scope statement (SOW)
2. Work breakdown structure (WBS)
3. WBS dictionary
Page 51

5.1.1 Inputs
Outputs of Previous Processes:

Project Charter
+
Always Inputs:
EEF
OPA
Page 52

5.1.3 Outputs
Part of the project management plan
Defines how the scope will be defined, developed,
controlled, and verified.
Requirements Management Plan
Also part of the project management plan
Describes how requirements will be analyzed,
documented, and managed
Includes configuration management, requirements
prioritization, metrics, and traceability.
Page 53
Planning: Scope Management
5.2 Collect Requirements

Inputs

Requirements Management
Plan
Stakeholder Management Plan
Project Charter
Stakeholder Register
Page 54
Tools &
Techniques
Interviews
Focus Groups
Facilitated Workshops
Group Creativity Techniques
Group Decision Making
Techniques
Questionnaires and Surveys
Observations
Prototypes
Benchmarking
Context Diagrams
Document Analysis
Outputs
Requirements traceability
matrix
5.2 Collect Requirements

Interviews
Focus Groups
Group Creativity Techniques
Group Decision Making Techniques
Questionnaires and Surveys
Observations
Prototypes
Benchmarking
Context Diagrams
Document Analysis
Page 48
Collecting Requirements is the process of

determining, documenting, and
managing stakeholders needs and
requirements to meet project objectives
Requirements include the quantified and
documented needs and expectations of
the sponsor, customer and other
stakeholders
Requirements must be detailed enough
to allow precise measurements during
Project Execution.
5.2.1 Collect Requirements

Tools and Techniques to define features and functions
Interviews: talk with all stakeholders, checklists

Focus groups: talk with prequalified stakeholders
Facilitated workshops: allow key cross-functional stakeholders to define
Exam
Tip
product/project features and to reconcile differences.

Joint Application Design/Development (JAD): software
Quality Function Deployment (QFD): new products, manufacturing
Voice of the Customer (VOC): when QFD collects client needs
Group creativity techniques (see list on next page)

Group decision making techniques
Questionnaires and surveys: written sets of questions
Observations: job shadowing
Prototypes: working model
Benchmarking: comparing to best practices
Context Diagrams: a scope model
Document Analysis: analyzing existing documentation
Pages 55-57
Exam
Tip
Tools and Techniques: Group Creativity Techniques
Brainstorming:
a technique to generate multiple ideas on requirements.

Does not include voting or prioritization., but is often
used with creative methods that do.
Nominal Group
Technique:
enhances brainstorming with a voting process

to rank the best ideas.
Delphi Technique:
questionnaires are sent to experts: anonymous.

responses are compiled, prioritized, and sent back.
A method for building consensus.
Idea/Mind Mapping:
a graphical method to consolidate brainstorm ideas

show commonality and differences: generate new ideas
Affinity Diagram:
gathering lots of ideas and sorting them into groups

analyze to identify patterns within data
Multicriteria Decision
Analysis:
uses a decision matrix to establish criteria (risk,

uncertainty, valuation), evaluate, and rank many ideas.
Page 56

Tools and Techniques: Group Decision-Making Techniques
Page 57
Unanimity:
everyone agrees. Example: Delphi Technique.
Majority:
more than 50% agree.
Plurality:
largest block in the group decides.
Dictatorship:
one person decides. Example: Forced Choice.

Outputs
Requirements
Documentation:
progressively elaborated
record: how each requirement meets the business
need. explicit, measurable, accepted in writing
Traceability Matrix:
a table linking requirements to their origin

traces then over the project life cycle a structure
for managing scope changes
Example Requirements Traceability Matrix
Page 58
5.3 Define Scope

Inputs

Project charter
Page 59
Tools &
Techniques
Expert judgment
Product analysis
Alternatives generation
Facilitated workshops
Outputs

Project documents updates
5.3 Define Scope

... process required to ensure that the project includes all the work
required, and only the work required, to complete the project successfully.
Documents the features and functionality of the product, service, or result
Exam
Tip
Page 59
Exam
Tip
Know and understand for exam

Objectives = Agreement by all parties
PMI-ism: give customer No more - No less
Controls what IS and what IS NOT in project
Giving the customer more than they ask for is Gold Plating. PMI does not
approve of Gold Plating.
Currently only 26% of projects succeed, concentrate on doing the agreed
scope of work.
You may see a variety of questions relating to this in Scope and Quality areas.
Requirements vs. Scope
Not all of the requirements identified in Collect

Requirements may be included in Define Scope.
Define Scope selects the final project requirements.
Scope is progressively elaborated. Detailed scope is
determined one iteration at a time.
Exam
Tip
Page 60
5.3.1 Define Scope

Inputs
t
rojec
e
the p ) and th t
W
c
s ar e
uisite work (SO the proje
q
re
re
of
d for
e
o P tement
e
e (n nalysis
s
sta
a
c
n
ta
ess
atio
busin st/ benefi or justific
o
ority
and c t purpos e ctiv es
auth
rojec ble obje anager,
P
ra
o
tm
easu
rojec
ct
je
o
o M signed p ibility
r
ts, p
s
s
o A d r espon quiremen
an
nes
el re d risks
v
to
e
s
-l
e
igh
mil
, an
o H scription dget and
de
ry bu s factors and their
a
m
um
ces
ons
o S tical suc
nizati
ri
orga
o C nctional
ns or
f sp o
n
u
o F rticipatio thority o
u
a
pa
d
n
a
am e
o N
+
+

Requirements Documentation
Always an Input:
OPA
There have been as many as 20 Input, Tools, and Output questions

on past tests (10%). We want you to get these right!
(One person had 40 ITO questions on his test)
Pages 60 & 61
5.3.2 Define Scope

Almost always a Tool:

Expert Judgment
Alternatives Generation
develop options using
brainstorming, lateral thinking,
alternatives analysis, etc.
key players reach understanding
of the project objectives and
their limits.
Product Analysis
Translate objectives
into deliverables
Page 61
5.3.2 Define Scope
Tools and Techniques: Product Analysis, Value Analysis Example
Cost/Benefit Analysis
Page 61
Benefits:
Costs:
increased revenue
capital assets
regulatory compliance
strategic positioning
liquid assets consumed

resources occupied
deferred opportunities
5.3.3 Define Scope
Outputs
Subject matter document:
Includes
Project Scope Statement
+
Documents Updates:
Requirements docs
Traceability matrix
Page 62 & 63
5.3.3 Define Scope

Exam
Tip
Remember the difference between the

Charter and the Scope Statement:
the charter contains high-level information,
the scope statement is a detailed description
of the scope elements.
See table 5-1, PMBOK Fifth Edition, Section 5.3, Page 124
Both are progressively elaborated throughout the project
Page 62
5.3 Define Scope
Sponsor
Scope
Statement
Product scope description

Acceptance criteria
Deliverables
Project exclusions
Constraints
Assumptions
Summary
Charter
Project
Manager
High level

5.4 Create WBS
Inputs

Page 64
Tools &
Techniques
Decomposition
Expert judgment
Outputs
Scope baseline
Project document updates
5.4 Create WBS

The Work Breakdown Structure is the process of subdividing project
deliverables into smaller, more manageable components.
It is a hierarchical decomposition of the total scope of work done by the
project team to satisfy the objectives and create the deliverables.
If it is not in the scope, it is not in the WBS, and vice versa.
This is called the 100% rule.
The Scope Baseline includes:
1. Project scope statement (SOW)
2. Work breakdown structure (WBS)
3. WBS dictionary
Exam
Tip
Page 64
5.4 Create WBS
At the lowest level of the WBS, work

can be properly scheduled, cost estimated,
monitored and controlled
The WBS is critical to project success
The WBS is very important
The lowest level WBS components are
called Work Packages
City Gentrification
Preparation
Work Packages
Page 67
Mark
Holes
Dig
Holes
Tree Planting
Plant
Trees
Landscaping
Fill
Holes
Lay Turf
Water
Soil
5.4.1 Create WBS
Inputs

+
Always Inputs:
Page 65
EEF
(industry WBS standards)
OPA
(procedures, templates, lessons

learned, files)
5.4.2 Create WBS
Decomposition
Decomposition is the subdivision of deliverables into smaller, more
manageable components until they are defined to the work package
level, where schedule and cost can be reliably estimated
without going to level that takes more effort to administer than is
worthwhile.
Decomposition may be difficult for work to be done far in the future,
so the team does rolling wave planning.
Parts of the WBS done by a supplier are known as the contract work
breakdown structure (CWBS). Each component in a WBS should be
assigned to a department, and sorting by organizational unit creates
an Organizational Breakdown Structure (OBS).
Page 66
5.4.2 Create WBS

Whole Project
001
Main Divisions
Activity
Deliverables
Work Packages
Page 67
100
200
210
220
230
221
222
231
240
300
250
251
310
252
320
321
400
330
322
410
411
420
412
5.4.2 Create WBS

Tools and Techniques: Example
Chronological
Typical
Project
Study
Concept
Prototype
Pilot
Production
Project
Management
Typical
Project
Functional
Sales
Page 67
Qualification
Product
Engineering
Purchasing
Quality
Control
Job Shop
Manufacturing
Department
Project
Management
5.4.2 Create WBS

Tools and Techniques: Example of WBS by Phase
Seagram
MIS
Project
Project
Definition
Page 68
Analysis
Design
Construction
Implementation
Functional
Requirements
Definition
Design &
Integration
User
Procedures &
Training
Training & User

Acceptance
Process &
Package
Evaluation
Installation
Program
Generation
& Testing
User Sign
Off
Analysis
Check Point
Design
Check Point
Development
Sign Off
Support
Project
Management
5.4.2 Create WBS
PMBOK Fifth Edition, Page 131-132
Outputs
Work not included in the WBS is outside the scope of the project.
This is called the 100% rule.
People who do the work must create their part of the WBS.
The work breakdown structure is a KEY document. It provide for

hierarchical summation of cost, schedule and resource
information, sometimes called rolling up the WBS.
Rules of thumb are applied to the size of a work package:
the 80-hour and 2-week rules.
Heuristics
Exam
Tip
Include all project work and all aspects of the project deliverables.
Remember, the scope of the project is always greater than the
scope of the product alone!
Page 69
5.4.2 Create WBS

Outputs, example of software to create WBS
Page 70
5.4.2 Create WBS

Outputs, The WBS Dictionary, PMBOK Fifth Edition, Page 132
WBS Dictionary
Controls what work is done,

when, by whom, for how much.
Created with help of the team
member.
Creating a WBS
(Post-It Note Process)
Who?
Est. Hours
Task A Specs. & Req.

Start Date
Page 70
Stop Date
Task Description
Project Title: ___________________________________
Task Title: ___________ Charge Number: ___________
Task Leader: _______________
Department: ________________
Project Manager: ____________
Task:
Scheduled Start: _____
Scheduled Completion: _____
Description: ___________________________________
______________________________________________
______________________________________________
______________________________________________
End Requirements: _____________________________
______________________________________________
______________________________________________
Budget:
Labor
_____________
_____________
_____________
Hours
Other Direct
________ _____________________
________ _____________________
________ _____________________
Work Package Completed: _______________________

Hours Expended: ________
Date Completed: ______
5.4.2 Create WBS

Do not confuse WBS with other breakdown structures
Page 71
WBS: a deliverable-oriented hierarchical decomposition of the work to

be executed by the project team to accomplish project objectives and
to create required deliverables.
OBS: Organizational Breakdown Structure: a hierarchical view of the

project organization showing how work packages relate to functional
departments in the performing organization, i.e., a departmental
breakdown for the project.
BOM: Bill of Material: a hierarchical tabulation of parts to fabricate a

manufactured product.
RBS: Risk Breakdown Structure: a hierarchical depiction of identified

risks arranged by risk category.
Resource Breakdown Structure (another RBS?): a hierarchical view of

resources by type used on the project.
5.4.2 Create WBS

OBS: Organizational Breakdown Structure
Project
Cost Accounts provide a

way to control how
functional organizations
to charge to projects.
Page 71
Comp. #1
Comp. #2
Assembly
Cost
Account
Cost
Account
Parts
Cost
Account
Cost
Account
Comp. #2
Electrical
Comp. #1
Production
Cost
Account
Cost
Account
Mechanical
Engineering
Company
Manufacturing
WBS Codes show

functional managers
exactly what their
people are doing on
the project.
Design
Cost
Account
Cost
Account
5.4.2 Create WBS

Outputs
Exam
Tip
W.B.S.
Phrases about WBS that have been answers on the

exam:
Graphical picture of the project
Identifies all tasks
Foundation upon which the project is built
Is VERY important
Page 72
Forces you to think through all aspects of the project
A WBS can be re-used for other projects
5.4.2 Create WBS

Outputs, WBS
The structure of the WBS should reflect the way the
project work will be performed and managed
The WBS should be broken down to the level of

detail needed to provide control of the work (80
hour and 2 week rules)
Smart PMs know they need to manage the pieces,
not the whole project.
Each element of the WBS should be given a unique
identifier that codes its position in the WBS and any
parent/child relationship among WBS elements
Each WBS element should have an associated deliverable or set of deliverables

that allow an indication of work progress and completion
Page 72
5.4.2 Create WBS

WBS Terminology
Chart of Accounts: a numbering system
used to monitor costs by category (e.g.,
labor, supplies, travel)
Code of Accounts: The collection of
unique identifiers for each WBS element
Cost Account: A code that allows a
functional group to charge for work on a
specific element of project work
Work Order: A request for a functional
group to work on a specific element of a
project
Work Package: An element of work or deliverable at the lowest level of the WBS
(relates to tasks or activities on most projects) -- may be subdivided into tasks or
activities by team members on larger projects.
Page 73
Planning: Project Time Management
6.1 Plan Schedule Management

Inputs

Project Charter
Page 74
Tools &
Techniques
Expert judgment
Analytical techniques
Meetings
Outputs
6.1 Plan Schedule Management
Plan Schedule Management is the process of establishing policies,

procedures, and documentation for planning, developing, managing,
executing and controlling the project schedule.
It defines how schedule contingencies will be reported and assessed.
Page 74
6.1.1 Plan Schedule Management
Inputs

(includes the Scope Baseline)
Project Charter
+
Always Inputs:
Page 74
EEF
(resource availability, scheduling

tool, commercial databases)
OPA
(reporting tools, lessons

learned, control tools, closure)

Expert Judgment
Analytical Techniques
(techniques to estimate and schedule the
project, PM software, fast track or crash,
risk assessment)
Meetings
(to develop the plan)
Page 75

Outputs

(model development, accuracy, units,
procedures, control thresholds,
performance measurement rules, report
formats, process descriptions)
Page 76
Planning: Project Time Management
6.2 Define Activities

Inputs

Scope baseline
Page 77
Tools &
Techniques
Decomposition
Rolling wave planning
Expert judgment
Outputs
Activity list
Activity attributes
Milestone list

Activity definition identifies specific actions at the work package level of the
WBS to produce the deliverables. Work packages have smaller elements
called schedule activities that have to be planned, i.e., estimated, scheduled,
executed and monitored & controlled, to meet project objectives.
The best way to think about activity definition is that the outputs are
ACTIONS to be done.
Page 77

City Gentrification
Preparation
Work Packages
Actions
Page 80
Mark
Holes
Dig
Holes
Tree Planting
Plant
Trees
Fill Holes
Landscaping
Lay Turf
Water
Soil
Check ground
Measure distances
Nail stakes
6.2.1 Define Activities

Inputs

Scope Baseline
(Scope Statement, WBS, and WBS
Dictionary)
+
Always Inputs:
EEF
(culture, commercial databases,
PMIS)
OPA
(lessons learned, processes,

templates, activity procedures)
Page 78

Decomposition
Subdividing work packages into actions or work effort
necessary to complete the deliverable of the work package.
These actions or work effort are sometimes called schedule
activities.
Rolling Wave Planning

(see next page)
Expert Judgment (Always a tool)
Page 78

Rolling Wave Planning

Rolling wave planning is progressive elaboration of the plan throughout the
project life cycle. Work accomplished in the near term is planned in detail at
a low level of the WBS, while work far in the future is planned at a higher
level of the WBS. Therefore, schedule activities can exist at various levels in
the project life cycle. For example, in the initiation stage where strategic
planning is done, activities might be kept at the milestone level. As each
project phase is completed, rolling wave planning means that the next phase
can now be planned in more detail as more is known about the detail
activities.
Page 78 & 79

Definitions
Exam
Tip
Sometimes PMP Candidates do not understand the

subtle distinction between an Activity Definition and a
Work Breakdown Structure (WBS). This may help:
Page 79
Activity Definition
Outputs are
ACTIONS TO BE DONE
W.B.S.
Outputs are
DELIVERABLES
(Tangible Items)

Outputs
City Gentrification
Preparation
Mark
Holes
Activity List
Page 80
Dig
Holes
Tree Planting
Plant
Trees
Fill Holes
Landscaping
Lay Turf
Water
Soil
1. Check ground
2. Measure distances
3. Nail stakes
Planning: Time Management
6.3 Sequence Activities

Inputs

Activity list
Activity attributes
Milestone list
Page 82
Tools &
Techniques
Precedence diagramming
method (PDM)
Dependency determination
Leads and lags
Outputs
Project schedule network

diagrams

Activity Sequencing
Activity sequencing means identifying and documenting logical relationships
among project activities. Think NETWORKS !
Accurate and complete activity sequencing is critical to developing schedules.
Schedule activities (actions) can be sequenced to develop the project schedule.
The project planning team should work together to clarify the sequence of
activities and dependencies. It is usually more effective to have the team do
some form of manual activity sequencing before turning to project
management software for scheduling.
Page 82

Activities are commonly sequenced using the Precedence
Diagramming Method (PDM) which allows finish-to-start,
finish-to-finish, start-to-start and start-to-finish
Finish-to-start is the most common type of relationship
There are three types of dependencies mandatory
dependencies, discretionary dependencies and external
dependencies
Lead and lag times add realism to the schedule (you Lead In
to fast track, and Lag out to add a gap between activities)
Page 82
6.3.1 Sequence Activities

Inputs

Activity List
(activities or actions to be sequenced)
Activity Attributes
(activities have durations, resources, and costs
associated and are used for schedule development)
Milestone List
(A significant event in a project. The list identifies all
milestones and if they are mandatory (contractual)
They have zero duration.

EEF and OPA
Page 83

Tools and Techniques, Precedence Diagramming Method (PDM)
Dependencies used in PDM

F-S
Activity B
Activity A
F-F
Activity C
S-S
Activity D
S-F
Page 84
Activity E

Tools and Techniques, Precedence Diagramming Method (PDM)
also called Activity on Node
Lead in
Lag out
Finish-to-Start (most often used)

Finish-to-Finish
Start-to-Start
Start-to-Finish (rarely used)
A-B; B-C; etc.

B-E
B-D
F-C
Start
Finish
D
Exam
Tip
No repetitive activities or conditional loops! No Dummies!

Often used for Three Point Estimates (PERT) and Critical Path Method
(CPM) analysis
Page 84

Tools and Techniques, Arrow Diagramming Method (ADM)
also called Activity on Arrow [ Not in Fifth Edition, may be on test ]
2
Start
Page 85
6
D
Finish
Finish-to-Start only (need additional nodes for leads and lags)

No repetitive activities or conditional loops
May use dummy activities
Nodes numbered, activities lettered, numbers above arrows are duration
Often used for Three Point Estimates (PERT) and Critical Path Method
(CPM) analysis
Exam
Tip

Tools and Techniques, Conditional Diagramming Method
Graphical Evaluation and Review Technique (GERT)
Not in the Fifth Edition, But has been on recent tests

Scrap
Rework
Manufacture
Inspect
Inspect
Package
Ship
Allows repetitive activities (looping back) and conditional branches

Combines features of flow diagrams and decision tree models
Not in Book

Tools and Techniques, Dependency Determination
Mandatory Dependencies (Hard Logic):

Dependencies based on technological constraints, such as not
being able to paint a wall before it is constructed
Discretionary Dependencies (Soft Logic):

Dependencies based on management preference, such as
delaying one task until another is completed in order to use
the same resources on both.
External Dependencies:
Dependencies based on external constraints such as a
required inspection before proceeding to the next activity.
Internal Dependencies:
Dependencies within the project teams control, such as
not testing a product until the product is fully assembled.
Page 86

Applying Leads and Lags

A lead allows acceleration of the successor activity (you
lead in to fast track a project).
For example, a team of technical writers can begin writing the
second draft of a large document 15 days before they finish
the first draft. When scheduling, this is accomplished with a
finish-start relationship and a 15 day lead time.
Exam
Tip
A lag directs a delay in the successor activity (you lag out to

allow a waiting time).
For example, you have to wait 10 days to discover infant
mortality of new semiconductor chips. This is accomplished
using a finish start relationship and a 10 day lag time.
Page 87

o A hammock is a summary level activity

representing a group of related
activities
o A subnet or fragnet is a sub-project of
a larger network diagram
o A hanger is an unintentional break in
the network diagram usually due to
omitting either activities or logical
relationships
Page 87

Outputs
Project Schedule Network Diagrams

(a graphical representation of activities showing
dependencies)
Project Documents Updates

(include activity lists and attributes, milestone list, and
risk register)
F-S
Activity B
Activity A
F-F
Activity C
S-S
Activity D
S-F
Page 88
Activity E
6.4 Estimate Activity Resources

Inputs

Activity list
Activity attributes
Resource calendars
Risk register
Page 89
Tools &
Techniques
Expert judgment
Alternative analysis
Published estimating data
Bottom-up estimating
Project management software
Outputs
Activity resource
requirements
Resource breakdown
structure
6.3 Estimate Activity Resources

Estimate Activity Resources is the
process of estimating the type and
quantities of material, human
resources, equipment or supplies
required to perform each activity.
There are five tools and techniques:
Expert judgment
Alternative analysis
Published estimating data
Bottom-up estimating
Page 89
6.3.1 Estimate Activity Resources

Inputs

Activity List
(Activities that need resources)
Activity Attributes
(data for estimating resources)
Resource Calendars
(periods when resources are available and skill level)
Risk Register
(shows events that impact resource availability)
Activity Cost Estimates

EEF and OPA
Pages 89-90

Inputs, Resource Calendars
Resource calendars document the time periods when
each team member can work on the project. To do this
we must have a good understanding of the persons
schedule conflicts, including holiday time and
commitments to other projects. We document active
and idle time for each person over the life of the project
and show the results in a project histogram. Resources
include people, material, equipment and facilities.
Page 78

Expert Judgment
Alternative Analysis
(Different people, skills, equipment, tools, make-buy)
Published Estimating Data

(data for estimating resources)
Bottom-Up Estimating
(Estimating at the bottom level of the WBS and adding
[aggregating] to the top. Yields best accuracy)
Project Management Software

(a scheduling tool helps plan, manage resource pools,
and develop resource estimates)
Pages 90-92

Alternative Analysis
Brainstorming: a method of joint creative thinking that first records and
considers all possible options/solutions without judgment before proceeding to
critical evaluation of the project/product requirements.
Nominal Group Technique: enhances brainstorming with a voting process to
rank the best ideas for further brainstorming or prioritization.
Delphi Technique: questionnaires are sent to a group of experts who provide
answers and are kept anonymous. Responses are compiled, prioritized, and
sent back for another round of requirements gathering. A method for building
consensus.
Idea/Mind Mapping: a graphical method of consolidating brainstorm ideas to
show commonality and differences and to generate new ideas.
Affinity Diagram: gathering large numbers of ideas and sorting them into
groups for review and analysis they help to identify patterns within data.
Post-It Note Process: A Method For Bottoms Up Estimating

The WBS dictionary describes the detailed content of the WBS work packages.
WBS Dictionary =
Task Description
(PMBOK 3rd Edition, Page 117)
Controls what work is done,

when, by whom, for how much.
Created with team members
help
Creating a WBS
(Post-It Note Process)
Who?
Est. Hours
Task A Specs. & Req.
Project Title: ___________________________________

Task Title: ___________ Charge Number: ___________
Task Leader: _______________
Department: ________________
Project Manager: ____________
Task:
Scheduled Start: _____
Scheduled Completion: _____
Description: ___________________________________
______________________________________________
______________________________________________
______________________________________________
End Requirements: _____________________________
______________________________________________
______________________________________________
Budget:
Labor
Hours
Other Direct
_____________ ________ _____________________
_____________ ________ _____________________
_____________ ________ _____________________
Work Package Completed: _______________________
Start Date
Page 91
Stop Date
Hours Expended: ________
Date Completed: ______

Outputs
Activity Resource Requirements
The output of resource planning is a set of resource requirements. The resource
requirements describe what types of resources are required and in what
quantities for each element of the WBS. The list of resource requirements will be
used for staff acquisition and procurement planning. Develop Schedule
determines when the resources are needed.
Resource Breakdown Structure

This is a hierarchical structure of identified resources, sorted by category and
type. When limited to people resources, it is sometimes referred to as a project
organization chart.

Updates include activity list, activity attributes, and resource calendars
Page 92
6.5 Estimate Activity Durations

Inputs
Activity list
Activity attributes
Resource calendars
Risk register
Page 93
Tools &
Techniques
Expert judgment
Analogous estimating
Parametric estimating
Three-point estimating
Group decision-making
techniques
Reserve analysis
Outputs

Estimates may be obtained in the

following ways:
Expert judgment
Three-point estimates
A contingency reserve (or time
reserve, or buffer) may be used to
account for schedule uncertainty
Page 93

Definition: Estimating the number of work periods needed to complete
each activity with estimated resources.
The team members should make the estimate.
Estimates: (1) amount of work to complete each activity, (2) number of
resources to be applied, and (3) number of work periods needed to finish
each activity.
Duration estimates are progressively elaborated.
Rolling Wave applies to duration estimating

Estimating duration includes elapsed time as well as work time.
Page 93
6.5.1 Estimate Activity Durations

Inputs
Pages 94-96

Activity list
Activity attributes
Resource calendars
Risk register
Tools and Techniques, Estimating Methods

Analogous Time Estimating (a form of expert judgment):
Estimating the time to do tasks or to do a current project by extrapolating
from actual cost of a previous project. Also called top-down time estimating.
Inexpensive but may also be inaccurate.
Parametric Time Estimating:

Using a statistical relationship to predict project times, e.g., activity
multiplied by productivity rate predicts time standards, or number of
drawings multiplied by labor hours per drawing calculates drawing duration.
Expert Judgment:
By the project team, or other experts, e.g., rolling up the
WBS time estimates to get a project total.
Who?
Task A
Reserve Analysis (Contingency):

Project Teams can incorporate additional
time into projects for schedule risk
contingency or buffer. Qual. (%) or Quant.
(Monte Carlo)
Page 98
Est. Hours
Start Date
Exam
Tip
Stop Date
People doing the work create time & cost estimates
Tools and Techniques, Analysis Methods

Critical Path Method (CPM)
One time estimate per task = most likely duration.

The emphasis is on controlling cost and leaving schedule flexible.
Used on ADM (AOA) diagrams, can have dummies.
Is used on PDM diagrams also, but they have no dummies
Three Point Estimates (PERT=Program Evaluation and Review Technique)
Sometimes
called Method
of Moments
te =
Sometimes
called Beta
Distribution
Pessimistic + Optimistic + (4 x Most Likely)
Pessimistic - Optimistic
Standard
=
Deviation
6
Page 98
Exam
Tip
Uses a weighted average to estimate activity and project durations.

Provides variance estimates for duration dates.
Emphasis is on controlling schedule and leaving cost flexible
Used on ADM (AOA) diagrams, can have dummies.
Is used on PDM diagrams also, but they have no dummies
Variance =
6

Tools and Techniques, Duration Estimates
o = most optimistic completion time

p = most pessimistic completion time
m = most likely completion time
te =
o + 4m + p
15
3-Point or
PERT
Analysis
16 17 18 19 20 21 22 23 24
6
(te) =
po
6
te 1 <=> 68% probability

te 2 <=> 95.5% probability
te 3 <=> 99.7% probability
Page 99
19 1days with 68% confidence

19 2 days with 95.5% confidence
Quantitative Estimate
Indication of Range
Indication of Confidence
Exercise
Calculate the following values using PERT
Task
Opt
Likely
Pess
PERT
Std. Dev
Variance
14
27
47
28.166
5.5
30.25
41
60
89
61.666
64
39
44
48
43.833
1.5
2.25
29
37
42
36.5
2.166
4.693
Assuming that the tasks listed above make up the entire critical path for the project,
how long will the project take? 170.2 days 10.1 days (add the variances and take square root)
Page 99
6.6 Develop Schedule

Inputs
Activity list
Activity attributes
Project schedule network diagrams
Resource calendars
Risk register
Enterprise environmental
factors
Organizational process
assets
Page 101
Tools &
Techniques
Schedule network analysis
Critical path method
Critical chain method
Resource optimization
techniques
Modeling techniques
Leads and lags
Schedule compression
Scheduling tool
Outputs
Schedule baseline
Project schedule
Schedule data
Project calendars
updates

Develop Schedule is the process of analyzing activity sequences, durations,
resource requirements and schedule constraints to create the project schedule
Schedule Network Analysis
A technique to generate the

project schedule employing
various analytical
techniques such as critical
path, critical chain, what-if
analysis and resource
optimization
Pages 103-105 & 110
Critical Path Method
Critical Chain Method
A method used to estimate

minimum duration and
flexibility in network paths.
Calculates theoretical early
and late start and finish
dates for all activities
without regard to resource
limitations, using forward
and backward pass analysis
Allows the team to place

buffers on any network
path to account for limited
resources and duration
uncertainties. The resourceconstrained critical path is
the critical chain. A project
buffer can be placed at the
end of the critical chain,
and feeding buffers can be
places on non-critical legs
that feed into the critical
chain.
Page 101
Determines planned start and finish calendar dates for project activities
Schedule development is iterative and continuously elaborated
Requires review of duration and resource estimates to create a schedule
Creates a baseline against which to track progress
6.6.2 Develop Schedule

Tools and Techniques, Schedule Network Analysis
Network analysis is a technique that generates the project schedule. It employs
a schedule model and includes CPM, critical chain method, what-if analysis and
resource optimization to calculate early and late start and finish dates.
Critical Path Method (CPM)

One time estimate per task = most likely duration.
The emphasis is on controlling cost and leaving schedule flexible.
Three Point Estimates (PERT=Program Evaluation and Review Technique)

Uses a weighted average to estimate activity and project durations.
Provides variance estimates for duration dates.
Emphasis is on controlling schedule and leaving cost flexible
te =
Pessimistic + Optimistic + (4 x Most Likely)
Standard
=
Deviation
6
Page 103
Variance =
6

Tools and Techniques, Critical Path Method (CPM)
CPM calculates early and late start and finish dates for activities using forward and
backward pass analyses through the network paths. The early and late start and
finish dates may not be the same on different network paths since total float may
be positive, negative, or zero. Total float provides schedule flexibility.
Critical paths have either zero or negative total float. The definition of Critical
Path is the longest addition of activity durations on a path from start to finish. It is
also defined as the shortest period of time in which the project can be completed.
Exam
Tip
The definition of Total Float is the total amount of time a schedule activity can be
delayed from its early start date without delaying the project finish date. CPM
calculates total float by determining the difference between early finish and late
finish dates, or early and late start dates. Also known as slack, float, or project
float.
Free Float is the amount of time a schedule activity can be delayed without
delaying the early start date of its successor.
Page 96
Slack Analysis
If you have a network with parallel paths and one leg has slack,
when you create the schedule, do you take the slack at the end
of that leg or at the start?
JIT
12 days
9 days
16 days
13 days
6 days
Slack
16 days
12 days
OR
6 days
Slack
9 days
13 days
When first laying out a schedule, put the slack at the end of
the shorter leg. It helps with resource leveling and recovery if
something happens to either of the two shorter legs during
execution. Dont schedule projects JIT.
Page 103
Example of Critical Path Method

2013 PMI. A Guide to the Project Management Body of Knowledge (PMBOK Guide), Fifth Edition
10
B
11
1
15
Path A, B, D = 25
16
Start
1
15
30
Finish
D
5
16
6
10
15
C
6
30
Path A, C, D = 30
15
Legend
Early
Early
Start Duration Finish
Activity Name
Late
Start
Total
Float
Late
Finish
Critical Path
Non-Critical Path
Page 105
3 Weeks
Sales Aids &

Brochure
Production
2 Weeks
Critical Path Method
Support
1 Week
Brochures
2 Weeks
0 Week
4 Weeks
0 Week
Training
Go/No Go
Decision
Advertising
Go/No Go
Launch
1 Week
2 Weeks
1 Week
Definition
Margin
Acceptance
5 Weeks
1 Week
Training
Program
Launch
4 Weeks
Stock
Profile
7 Weeks
The critical path is the longest addition of

durations over a network.
It is the shortest period of time the project can
be done.
A project may have more than one critical path
The critical path may change as the project
progresses
Critical Path may be found using CPM, ThreePoint, or Monte Carlo analyses.
Page 106
DBT Stocking &

Measuring Sys
12 Weeks
Sales
Calculate the Critical Path

1
2 days
Activity C
3
5
9
5
4
5
6
1 day
Activity D
5
7
number above the node is the earliest possible start date

number below the node is the latest possible start date
critical path is where earliest start date = latest start date
Page 106
Prep:
5
PMP
PMP
Prep:PMBOK
PMBOK
4th - 2013
Critical Path: Related terms

Early Start Date is the earliest date that uncompleted activities can be started given the
network logic and any schedule constraints
Early Finish Date is the earliest date that uncompleted activities can be finished given
the network logic and any schedule constraints
Late Start Date is the latest date that an activity can begin without compromising a
specified milestone (generally the project finish date)
Late Finish Date is the latest date than an activity can finish without compromising a
specified milestone (generally the project finish date)
Total Float is the amount of time an activity can be delayed from its scheduled start
date without delaying the project finish date, or violating a schedule constraint. Also
know as float, slack, or project float
Free Float is the amount of time an activity can be delayed without delaying the early
start of any following activities
Slack Time or Total Float = Late Finish Date - Early Finish Date, or Late Start - Early Start
Page 107
Calculating Critical Path and Float

Critical Path (C-E-F) = 24
Total Float in A-D-F = 14
Total Float in B-E-F = 9
Free Float of A = 0 (5-0-5)
Free Float of B = 2 (5-0-3)
Free Float of D = 14 (21-5-2)
0
9
TF = 14
FF = 14
5
19
3 3
B
12
0 12 12
C
0
Page 108
Free float: The

difference between
early start of
predecessor and early
start of successor,
minus the estimated
time of the predecessor
A
14
TF = 9
FF = 2
------ = Forward Pass

------ = Backward Pass
TF = 14
FF = 0
12
5
19
2 7
D
21
12 9 21
E
12
21 3 24
F
21
24
21
TF = 0
FF = 0
Exercise
(1) Draw the network diagram and find the critical path
Work
Package
Preceding
Activity
START
Estimate in
Months
0
START
START
D,A
F,E
(2) Find the slack of task A-F-B path, and of the D-E-G-H-C
path from the answer above.
END
C,B
Answer: A-F-B = 15 Months, D-E-G-H-C = 1 Month
Page 109
E
D
START
F
END
Answer: The critical path (project duration) is 33 months
Exercise: ADM
There may be 5-7 questions on network diagrams on the exam. Here is an example of a
form of question that has a table of information and four questions that relate to it:
B: (0 - 2)
C: (1 - 3)
(2 - 3)
E: (2 - 5)
D: (3 - 4)
F: (3 - 5)
G: (5 - 6)
Estimate
In Weeks
3
9
3
Dummy
2
2
1
4
H: (4 - 6)
Work Package
(Nodes)
A: (0 - 1)
C=3
A=3
0
B=9
D=2
3
Dummy
F=1
5
H=2
G=4
E=2
1. What tasks are on the critical path?

The critical path is B, E, G. (Note that 0, 1, 2, 3, 4, 5, and 6
are nodes in the AOA or ADM Diagram). Critical Path = 15
Weeks.
B-Dummy-F-G also becomes critical

2. If the duration of task F changes to 2 weeks, what is the effect on the project?
3. What task(s) must be completed before task D begins? Tasks A, B and C
4. If the management tells you to complete the project two weeks early, what is the project float?
Does the critical path change? Float is -2 weeks. No CP change unless Crashed or Fast Tracked
Page 109

Tools and Techniques, Critical Chain Method
Critical chain modifies the schedule to account for limited resources. Initially
the critical path of a network is calculated using activity duration estimates.
Then, resources are applied and the resulting schedule may be resource
limited. The critical chain method adds duration buffers that are non-work
activities. The planned activities are then scheduled to their latest start and
finish dates. Instead of managing total float, critical chain focuses on managing
the buffer durations and the resources applied to the planned activities.
Pages 110
Example of Critical Chain Method
Start
Activity A
Activity B
Feeding
Buffer
Activity C
Activity D
Activity E
Activity G
Feeding
Buffer
Activity F
Legend
Pages 110
Project
Buffer
Finish
Critical Chain Link

Non-Critical Link

Tools and Techniques, Resource Optimization: Leveling and Smoothing
The resource histogram is a time-phased display of the amount of

project work assigned to each resource (PMBOK Fourth Edition, Page 156)
Resource plans are best when resource requirements
increase and decrease without variations
Month 1
Month 2
Month 3
Scheduling Tool
Month 4
1.5
1.0
0.5
Product Manager
May be used at the individual or group level

May be used to detect over-allocation of resources
Avoid over-allocation, under-allocation, and peaks and valleys
Pages 111
Network Analysis and Resource Leveling

Critical Path: A-D-F
and
B-E-F
C
4
2
Start
3
1
Page 112
F
4 Days Slack
1
4
Work Force Required
Finish
Work Force Available

Each Day: 4 People
Work Force
Duration in Days
1
5
E
6
Days
2
Network Analysis and Resource Leveling

2
C
4
2
Start
Work Force
Page 112
1
4
1
B
Finish
1
5
2 Days Slack
E
6
10
Days

Tools and Techniques, What if Scenario Analysis
What-If analysis is the process of evaluating scenarios and their effect on schedule,
i.e., what if a major component delivery is delayed? It assesses effect of adverse
conditions on the project schedule and helps with response planning.
Simulations calculate multiple project durations with different activity assumptions.
They use three-point estimates (PERT) to determine duration uncertainty. The most
common simulation uses Monte Carlo analysis. Possible activity durations are defined
and used to calculate outcomes for the total project. Simulations are valuable for
analyzing the sensitivity of the project to changes and for addressing the impact of
uncertainty in the network logic, duration of activities, and availability of resources.
Pages 113
Applying Leads and Lags
A lead allows acceleration of the successor activity (you

lead in to fast track a project).
A lag directs a delay in the successor activity (you lag out to
allow a waiting time).
Pages 114
Exam
Tip

Tools and Techniques, Schedule Compression
If you cant change the scope, there are two ways to meet schedule constraints:
Fast Tracking
A technique where activities or phases normally done in sequence
are done in parallel for at least a portion of their duration. Fast
tracking may result in rework and increased risk.
Exam
Tip
Crashing
A technique used to shorten the schedule duration for the least
incremental cost by adding resources.
Page 114
Exercise
1. What option below would you select to save three months on the
project assuming that the tasks listed below represent critical path?
There is no answer. The answer depends on whether cost or risk is most important.
Task
F
A
H
G
C
Original
Crash
Duration Duration
in months in months
14
12
9
7
3
2
7
6
11
8
Time
Savings
2
2
1
1
3
Original
Cost
in $
10,000
17,000
25,000
14,000
27,000
Crash
Cost
in $
14,000
27,000
26,000
16,000
36,000
Extra
Cost
in $
4,000
10,000
1,000
2,000
9,000
Extra
Cost in $
per mth
2,000
5,000
1,000
2,000
3,000
Risk
Impact
HIGH
LOW
LOW
HIGH
NONE
2 Lets assume that time is of most importance followed by cost.

Such questions are on the exam. What would be your answer?
The answer would be to select tasks F and H for an additional cost of $5,000.
If risk is second to time in importance the answer would be to select task C for
an additional cost of $9,000. The exam will probably not include risk column
because risk (nor quality) is not considered when most people crash or fast track
their projects. Without a risk column, simply pick the least cost alternative
Page 116

Outputs, Project Schedule
The Project Schedule may be presented in tabular form, however its more
often presented graphically using milestone charts, bar charts or project
schedule network diagrams. The schedule baseline is a specific version of the
project schedule that is accepted and approved by the project team. It is a
component of the project management plan
Page 117

Outputs, Project Schedule
Example Schedules
Example: Bar Chart, Gantt Chart
ID
1
Nov 9, '97
Tas k Name
Mark Out Site
Dig Foundation A
Dig Foundation B
Concrete Foundation A
Concrete Foundation B
Com plete Base at A
Erect Plinth
Erect Tower A
Erect Tower B
10
Erect Span
Nov 16, '97

Nov 23, '97
Nov 30, '97
Dec 7, '97
Dec 14, '97
Dec 21, '97
F S S M T W T F S S M T W T F S S M T W T F S S M T W T F S S M T W T F S S M T W T
Example: Milestone Chart
Page 117
The Project Schedule

May be represented by a Gantt chart, an activity network
diagram, or a milestone chart
Indicates the planned start and finish dates for each WBS
element
May also indicate early start, late start, early finish, and
late finish dates for each activity
Name
Duration
1w
Definition
30d
Feasibility
1w
Brochures
2w
Margin
4w
Stock Profile
2w
Support
2w
Training
1w
Acceptance
0d
Go/No Go Decision
35d
Program Development
3w
Sales Aids & Brochure
4w
Advertising
Training
5w
7w
DBT Stock & Measure
0d
1w
Program Launch
12w
Sales
Page 118
Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
Sales Aids &

Brochure
Production
Month 7
Support
Brochures
Definition
Go/No Go
Decision
Training
Margin
Advertizing
Go/No Go
Launch
Acceptance
Training
Program
Launch
Stock
Profile
DBT Stocking &

Measuring Sys
Sales
Practice Test #1
Turn to page 387 in the workbook

There are 60 questions.
You have 72 minutes to complete
Answers are on page 404
Hint: Use scratch paper for answers,
so you can reuse the questions for practice
Page 387
Planning: Cost Management
7.1 Plan Cost Management

Inputs

Project charter
Page 119
Tools &
Techniques
Expert judgment
Meetings
Outputs

Plan Cost Management is the process that establishes policies, procedures,
documentation for planning, expending, and controlling project costs.
This is a component of the project management plan.
Inputs

Information to develop the Cost Management Plan:
Scope baseline
Schedule baseline
Other information
Project Charter
(Provides a summary budget)
EEF and OPA
Page 120

Expert Judgment
(Choosing options to fund the project: self-funding,
equity funding, or debt funding. Ways to finance
resources: make, buy, rent, or lease. Policies may
influence: ROI, payback period, internal rate of return,
discounted cash flow, and net present value.)
Meetings
Page 120

Outputs

units of measure,
level of precision,
level of accuracy (e.g., 10%),
organizational procedures (the WBS is a framework
for cost estimating),
control threshold (% deviation from the baseline
plan),
rules of performance measurement (EVM),
reporting formats (format and frequency of cost
reports),
process descriptions,
strategic funding, exchange rate fluctuations, and
cost recording.
Page 121
7.2 Estimate Costs

Inputs

Human resource mgt. plan
Scope baseline
Project schedule
Risk register
Page 122
Tools &
Techniques
Expert judgment
Bottom-up estimates
Three-point estimates
Reserve analysis
Cost of quality
Project management
software
Vendor bid analysis
Group decisionmaking
techniques
Outputs

Basis of estimates
7.2 Estimate Costs

Estimate Costs is the process of
developing an approximation of the
monetary resources needed to complete
project activities.
Usually they are expressed in monetary
terms, although other units of measure
such as person hours or staff days are
often used.
Costs include the resources to be charged
to the project which includes labor, but
may also include also materials,
equipment and facility fees and services.
Both direct and indirect costs should be
considered.
Page 123
7.2 Estimate Costs
Cost estimates are progressively elaborated during the course of the

project as additional detail becomes available. Accuracy increases
through the project life cycle.
For example, a project in the Initiation phase could have a rough
order of magnitude (ROM) estimate in the range of -25% to +75%.
Later in the project as more detail is known, estimates could narrow
to -5% to +10%.
Page 124
7.2.2 Estimate Costs

Inputs

(how project costs will be managed and controlled)
Human Resource Management Plan

(project staffing plan, personnel rates, rewards/recognition)
Scope baseline
(Scope statement, WBS, and WBS dictionary)
Project Schedule
(type and quantity of resources and time required to
complete the work)
Risk Register
(negative risks cause near-term costs to increase and project
schedules may be delayed)
EEF and OPA

Pages 123-125

Inputs
Should be determined per unit of use (e.g., hours, meters, kilos)

Salaries should be known at the individual or group rate
Components of labor rates may include:
base rate
tax burden if applicable (as a percentage of base rate)
benefit burden if applicable (fixed or percentage of base rate)
allocation for overhead (percentage of burdened rate)
Charge Rate = [(Base Rate) * (Burden)] * Overhead
i.e., Charge Rate = [($30/hr) * (1.3)] * 1.8 = $70/hr.
Page 123

Expert Judgment: consult with experts and obtain historical information.
Analogous Estimating: top-down estimating - a similar project is the basis of estimates
for the current one. It is most reliable when previous projects are similar.
Parametric Estimating: uses a statistical link between historical data and the current
project which is then used for calculation (e.g., cost per square foot).
Bottom-Up Estimating: the smaller the activity, the more accurate is the cost estimate.
Three-Point Estimates (PERT): a weighted average, more accuracy.
Ce =
o + 4m + p
6
Reserve Analysis: a contingency reserve may be used to account for cost uncertainty
Cost of Quality (COQ): determining costs incurred to assure quality
Project Management Software: simplifies cost estimating. Rapid alternatives evaluation

Vendor Bid Analysis: bids from suppliers help analyze what a project should cost
Group Decision-Making Techniques: Delphi or nominal group techniques improve cost
accuracy and the team commitment to cost estimates
Pages 126-129

Analogous Cost Estimating (a form of expert judgment):

Estimating cost of a current project by extrapolation from actual cost of
a previous project. Also called top-down estimating. Inexpensive but
may also be inaccurate.
Parametric Cost Estimating:

The quantities for specific work multiplied by the resource rate can
estimate cost (number of drawings times cost per drawing, cost per line
of code, cost per square foot for types of construction).
Bottom-Up Estimating:
Rolling up the WBS estimates to get a project total.
Who?
Est. Hours
Task A
Start Date
Page 128
Exam
Tip
People doing the work create time & cost estimates
Stop Date

3-Point
Analysis or
PERT
o = most optimistic cost estimate

p = most pessimistic cost estimate
m = most likely cost estimate
Ce =
o + 4m + p
(Ce) =
45 50 55 60 65 70 75 80 85 Hours
6
po
6
Ce 1 <=> 68% probability

Ce 2 <=> 95.5% probability
Page 128
40
60 5days with 68% confidence

Quantitative Estimate
Indication of Range
Indication of Confidence

Outputs, Accuracy of Estimates
AACE International Cost Classification Recommended Practices
Class
5
4
3
2
1
Name
Rough Order of Magnitude
(ROM)
Concept
End Usage
Concept Screening
Level of Project Accuracy

Definition Range
0 to 2%
L: -20 to -50%
H: +30 to +100%
Study or Feasibility
1 to 15%
L: -15 to -30%
H: +20 to +50%
These
come
up
often
on
the
exam,
but
are
easy
Exam
Budget/Authorization
Budget Authorization
10 to 40%
L: -10 to -20%
Tip
to answer onceoryou
memorize the numbers. H: +10 to +30%
Control
Definitive/Control
Control or Bid/Tender
30 to 70%
L: -5 to +15%
H: +5 to +20%
Detail/Bid/Tender
Check Estimate or
50 to 100% L: -3 to -10%
Bid/Tender
H: +3 to +15%
PMI, PMBOK
Order of Magnitude Estimates:
(Usually made during Initiation Phase)
Budget Estimate:
(Usually made during the Planning Phase)
Definitive Estimate:
(Roll up of WBS? Rule of 80 hours or two weeks?)
Page 130
-25% to +75%
-10% to +25%
-5% to +10%

Inputs
Scope baseline
Basis of estimates
Project schedule
Resource calendars
Risk register
Agreements
Page 131
Tools &
Techniques
Cost aggregation
Reserve analysis
Expert judgment
Historical relationships
Funding limit reconciliation
Outputs
Cost baseline
7.3.1 Determine Budget

Determine Budget is the process of aggregating estimated costs of individual activities or
work packages to establish an authorized cost baseline.
The cost baseline is the time-phased project budget, but excludes management reserves.
Inputs
Pages 131-132

Scope Baseline
Activity Cost Estimates
Basis of Estimates
Project Schedule
Resource Calendars
Risk Register
Agreements
Organizational Process Assets

Cost Aggregation: work package costs at the bottom of the WBS are summed
(aggregated) to the next level, then costs at this level are summed to higher levels,
etc. This is called rolling costs up the WBS to develop an overall cost budget.
Reserve Analysis: establishes both contingency reserves (unplanned changes due to
identified risks, known unknowns), and management reserves (unplanned changes to
Exam
project scope and cost, unknown unknowns). Reserves are NOT part of cost baseline,
Tip
and not part of earned value calculations, but are included in the budget.
Expert Judgment: budgeting information from prior, similar projects.
Historical Relationships: parametric analysis from historical sources can predict total
costs. Math models are used.
Funding Limit Reconciliation: funding limits may be set by the customer to which
spending must be reconciled. This might cause rescheduling and reallocation of
resources to regulate cash flow.
Pages 133-134

Outputs, Cost Baseline, or Performance Measurement Baseline (PMB)
Cost Baseline: a time-phased budget (either by period or cumulative over

the life of the project) used to measure, monitor and control project costs.
Cost
Cost Baseline
Exam
Tip
BAC
Cumulative
Planned Value (PV)
Spending Plans
and Cash Flow
Plans are special
types of Cost
Baselines
Monthly Planned
Value (PV)
Time
Page 134
Project Budget Components

Project
Budget
Management
Reserve
Cost
Baseline
Control
Accounts
Contingency
Reserve
Work Package
Cost Estimates
Activity
Contingency Reserve
Activity Cost
Estimates
Total
Amount
Project Budget Component

Page 135

Outputs: Funding Requirements and Management Reserve
Project Budget
Cost
Cost Baseline
Cumulative Planned
Value (PV)
BAC
Management
Reserve
Exam
Tip
Cash Flow
Funding
Expenditures
Time
Page 136

A Review
Think of the PM plan as a bucket into which all the other plans drip until it is full.

Define Scope
Create WBS
Define Activities
Sequence Activities
Develop Schedule
Estimate Costs
Pages 45 & 49
Determine Budget
Identify Risks
Plan Risk Response
Exercise
Make a list of items that go into a Project Plan in the spaces provided below :
Exercise
Make a list of items that go into a Project Plan in the spaces provided below :
Estimate Costs
Determine Budget
Collect requirements
Plan Quality
Define Scope
Develop HR Plan
Create WBS
Plan Communications
Define Activities
Identify Risks
Sequence Activities
Perform Qual. Risk Analysis
Perform Quant. Risk Analysis
Plan Risk Responses
Develop Schedule
Plan Procurement
Plan Stakeholder Mgt.

Chapter 8: Project Quality Management

Knowledge Area
Quality management processes include:
8.1 Plan Quality Management: The process of identifying quality requirements/standards
for the project and its deliverables, and documenting how the project will demonstrate
compliance.
8.2 Perform Quality Assurance: The process of auditing the quality requirements, and
results from quality control measurements, to ensure that appropriate quality
standards and operational definitions are used.
8.3 Control Quality: The process of monitoring and recording results from executing quality
activities to assess performance and recommend changes.
Quality management here is compatible with ISO (International Organization for Standardization) as well as
Shewhart, Deming, Juran, Crosby, FMEA (Failure Modes and Effects Analysis), Customer Satisfaction, The
Voice of the Customer, Prevention over Inspection, COQ (Cost of Quality), and Continuous Improvement
(Total Quality Management, Six-Sigma, maturity models), and Management Responsibility.
Quality is the degree to which a set of inherent

characteristics fulfill requirements
Page 139

Quality vs. Grade
Quality:
The degree to which a set of

inherent characteristics fulfill
requirements.
Grade:
Products that perform the same

function but have different technical
characteristics.
Exam
Tip
A product may be high quality (no obvious defects)

but low grade (limited number of features)
Page 139

Precision vs. Accuracy
Exam
Tip
Precision
Consistency.
Accuracy
Correctness.
Precision: repeated measurements have little scatter.

Accuracy: measured value is close to the true value.
Precision
Accuracy
Page 140
Note to Test Takers

Quality is one of the most heavily
tested areas on the examination.
Study it completely during your
preparations to take the test!
Page 141
Planning: Project Quality Management

8.1 Plan Quality Management
Inputs

Risk register
Page 142
Tools &
Techniques
Cost-benefit analysis
Cost of quality (COQ)
Seven basic quality tools
Benchmarking
Design of experiments
Statistical sampling
Additional quality planning
tools
Meetings
Outputs

Process improvement plan
Quality metrics
Quality checklists
8.1 Plan Quality Management
Plan Quality is the process of identifying

quality requirements and/or standards
for the project and its deliverables, and
documenting how the project will
demonstrate compliance.
The Quality Management Plan, which is
an output of this process, describes how
the project management team will
implement the quality policy and meet
the quality requirements.
Quality is planned, designed, and built into the project.
It is not inspected in.
Page 142
8.1.1 Plan Quality Management

Inputs
Project Management Plan, which includes:

Scope Baseline (Scope statement, WBS, and WBS dictionary),
Schedule & Cost Baselines, etc.
Risk Register
(stakeholder quality requirements)
EEF and OPA
Pages 142 & 143

Cost-Benefit Analysis: compares COQ with expected benefits.

Cost of Quality (COQ): investment in preventing non-conformance to requirements.
Seven Basic Quality Tools: (1) cause and effect diagrams, (2) flowcharts, (3)
checksheets, (4) Pareto diagrams, (5)histograms, (6) control charts, (7) scatter
diagrams.
Benchmarking: comparing to similar projects to identify best practices.
Design of Experiments: statistical: what factors influence project variables?
Statistical Sampling: inspecting part of a batch to qualify the whole population.
Additional Quality Planning Tools: brainstorming, force field analysis, nominal group
technique, quality management and control tools.
Meetings
Pages 144 - 151
8.1.2 Plan Quality

Tools and Techniques: Quality Definitions
Conformance to Requirements, Specifications and Fitness For Use:
This one phrase will help you to answer about 4 questions on the exam.
Memorize it!
The PM should perform careful needs analysis of the stakeholders which

become foundations of the Scope
Gold Plating:
Exam
Tip
PMI does not support giving the customer extras.
Gold Plating adds no value to the project.
Exam questions have the team members coming to the PM with impressions of what
the customer would like.
Prevention over Inspection

Note: There may be 15 or more questions relating to definitions and control charts
Page 143
8.1.2 Plan Quality

Tools and Techniques: Cost of Quality (COQ)
Cost of Conformance
Cost of Nonconformance
Prevention Costs
Internal Failure Costs
(Build a quality product)
(Failures found by project team)
Training
Documentation processes
Equipment
Time to do it right
Rework
Scrap
External Failure Costs
(Failures found by the customer)
Appraisal Costs
(Assess the quality)
Testing
Destructive testing loss
Inspections
Money spent to avoid failures

Page 145
Liabilities
Warranty work
Lost business
Money spent because of failures
Exam
Tip

Tools and Techniques: Flowcharting
Cause & Effect, Ishikawa or Fishbone Diagrams

People
Not Following
Procedures
Material
Methods
Lack of Training
CAUSES
Transport
IT System
EFFECT
Procedure
Process Flowchart
Design
Yes
Review
OK?
Proceed
No
Revise
Page 145-146

Tools and Techniques: Flowcharting, SIPOC Model
Suppliers
____________
____________
____________
Inputs
____________
____________
____________
Process
____________
____________
____________
Outputs
____________
____________
____________
Input
Supplier
Customers
____________
____________
____________
Output
Process
Requirements and
Feedback Loop
Customer
Requirements and
Feedback Loop
Requirements List
Measurements List
Requirements List
Measurements List
____________
____________
____________
_____________
_____________
_____________
_____________
_____________
_____________
_____________
_____________
_____________
Page 145-146
% contribution (or frequency of occurrence)
Tools and Techniques: Pareto Diagrams and Design of Experiments
80%?
Paretos Law:
Design of Experiments:
80/20 Rule
Which factors may influence

specific variables?
What If Analysis
source
Page 147

Tools and Techniques: Histograms
A histogram shows central tendency, dispersion,

and shape of a statistical distribution.
1.5
1.0
0.5
Page 147

Tools and Techniques: Control Charts
A chart of process performance over time used to

determine if the process is in control or out of control
UCL
3
99.7%
.
.
.
.
.
.
.. . . . . .. . . .
. .. . .. . .
.. . . .
.
.
..
.
.
2
95.5%
Expected
Variation
Out of Control
(Assignable Cause)
1
68%
Normal
Distribution
Curve
Mean
LCL
in control
normal distribution of outcomes
due to common causes of variation
inherent in the process
Page 148
out of control
rule of seven, trends, and cycles
due to special causes of variation
external to the process

Tools and Techniques: Control Chart
Hours recorded for this project

started on plan, but if the trend
continues, hours spent will drift
out of control.
Upper Spec. Limit

UCL
Plan or Mean
LCL
Lower Spec. Limit
Actual
Page 149

Tools and Techniques: Scatter Diagram
Page 149

Timecard Submission vs. Travel Days

Submission Days, Early (-), Late (+)
o o o o
o
o
o o o
o o o o
2
o
o o o o
o
5
0
0
-2
10
15
20
25
o
o
-4
o
-6
Total Travel Days in the Month
Page 150

Tools and Techniques: Seven Basic Quality Tools

Tools and Techniques: Statistical Sampling
a technique for accepting or rejecting a larger population

by choosing a part of the population for inspection ...
Statistical sampling can reduce the cost of QC on a project.
The validity of statistical sampling depends on an
appropriate choice of sample items and sample size.
Sample size increases exponentially as the level of desired certainty
increases and the acceptable level of error decreases.
Sampling strategies include single samples from a lot, multiple small
samples from a lot, and double sampling methods where the size of the
second sample depends on the results of the first sample.
All sampling strategies involve some risk of producer error (type I error)
where acceptable lots are rejected based on a non-representative sample
or consumer error (type II error) where unacceptable lots are accepted
based on a non-representative sample.
Page 150-151

Tools and Techniques: Additional Quality Planning Tools, Affinity Diagram
These include brainstorming, affinity diagrams, force field analysis, nominal

group techniques, matrix diagrams, flowcharts, and prioritization matrices.
Affinity Diagrams are useful for gathering large amounts of data (opinions, ideas etc.) and for organizing them into
groupings based on their relationship. An Affinity Diagram can help to identify patterns within data providing
recourse for further investigation or action.
Force Field Analysis looks at all the forces for and against a decision. In effect, it is a specialized method of
weighing pros and cons. You can plan to strengthen the forces supporting a decision, and reduce the impact of
opposition to it.
A nominal group technique is a structured process which identifies and ranks the major problems or issues that
need addressing.
Page 151
8.1.2 Plan Quality

Tools and Techniques: Additional Quality Planning Tools, Group Creativity

considers all possible options/solutions without judgment before
proceeding to critical evaluation of the project/product requirements.
Nominal Group Technique: enhances brainstorming with a voting process
to rank the best ideas for further brainstorming or prioritization.
Delphi Technique: questionnaires are sent to a group of experts who
provide answers and are kept anonymous. Responses are compiled,
prioritized, and sent back for another round of requirements gathering. A
method for building consensus.
Idea/Mind Mapping: a graphical method of consolidating brainstorm ideas
to show commonality and differences and to generate new ideas.
Affinity Diagram: gathering large numbers of ideas and sorting them into
groups for review and analysis they help to identify patterns within data.
Page 151

Outputs
Quality Management Plan

Process Improvement Plan
(process boundaries, configuration, metrics, and targets for
improved performance)
Quality Metrics
Quality Checklists
(stakeholder register, responsibility assignment matrix, WBS,
WBS dictionary, etc.)
Pages 152 & 153

Outputs: Update Responsibility Assignment Matrix (RACI Chart)
R
A
C
I
Pages 155
=
=
=
=
Responsible
Accountable
Consulted
Informed
Chapter 9: Plan Human Resource Management

Knowledge Area
Project Human Resource Management processes include:
9.1 Plan Human Resource Management: The process of identifying and documenting
project roles., responsibilities required skills, reporting relationships, and creating a
staffing management plan.
9.2 Acquire Project Team: confirming HR availability and obtaining the team to complete
project activities.
9.3 Develop Project Team: improving competencies, team members interaction, and team
environment to enhance performance.
9.4 Manage Project Team: tracking team member performance, providing feedback,
resolving issues, and managing change to enhance project performance.
Human resource management includes the processes

that organize, manage, and lead the project team
The project management team (core, executive, or
leadership team) is a subset of the project team
and is responsible for leadership activities.
Page 155
Exam
Tip
Planning: Human Resource Management
9.1 Plan Human Resource Management

Inputs

Page 156
Tools &
Techniques
Organization charts and

position descriptions
Networking
Organizational theory
Expert judgment
Meetings
Outputs
Human resource management

plan
9.1 Plan Human Resource Management

Plan Human Resource Management is the

process of identifying and documenting
project roles, responsibilities, required skills
and reporting relationships and creating a
staffing management plan
Page 156
9.1.2 Plan Human Resource Management

Tools and Techniques: Organization Charts and Position Descriptions
Hierarchical Chart
Project Organization Chart. shows project team members related to their work on
the project. Simply substitute the name of the team member into the box of the WBS
Banking
Protocols
Customer
Services
(TM #1)
Product
Planning
(TM #11)
Sales
(TM #12)
Information
Tech. and IS
(TM #2)
System Analysis
(TM #21)
System Design
(TM #22)
System
Development
(TM #23)
Pages 158-159
Operations
(TM #3)
Training
(TM #31)
Integration
Protocols
(TM #32)
Regulatory
(TM #4)
Project
Management
(PM)
Treasury
(TM #5)
Legal
(TM #41)
Global Trans.
Services
(TM #51)
Accounting
Relations
(TM #61)
Filing &
Documentation
(TM #42)
Cash
Management
(TM #52)
Audit &
Inspection
(TM #53)
Strategic
Planning
(TM #62)

Resource Breakdown Structure and Organizational Breakdown Structure
Resource Breakdown Structure breaks down projects by type of resource. It can

help track project costs and can contain categories other than human resources.
Organizational Breakdown Structure (OBS) is a depiction of the project

organization arranged to relate work packages to functional departments.
Pages 158-159

Organizational Breakdown Structure

Project
Cost Accounts provide a

way to control how
functional organizations
to charge to projects.
Page 159
Comp. #2
Assembly
Cost
Account
Cost
Account
Parts
Production
Comp. #1
Cost
Account
Cost
Account
Comp. #2
Electrical
Comp. #1
Cost
Account
Cost
Account
Mechanical
Engineering
Company
Manufacturing
WBS Codes show

functional managers
exactly what their
people are doing on
the project.
Design
Cost
Account
Cost
Account

Matrix Charts
Responsibility Assignment Matrix (RAM)
RAM (n.) a structure that relates the OBS to the WBS to ensure that
the scope of work components are assigned to a responsible person.
Tom
Bob
Gavin
Mary
Dave
PMI advocates that all roles and responsibilities on a project be

clearly assigned and be linked to scope and to the WBS.
Design
Lead
Support
Advise
Advise
Advise
Prototype
Support
Lead
Advise
Advise
Advise
Scale Up
Advise
Advise
Lead
Support
Support
Production
Advise
Advise
Advise
Lead
Support
Assembly
Advise
Advise
Advise
Support
Lead
R
A
C
I
=
=
=
=
Responsible
Accountable
Consulted
Informed
Often used for decision responsibilities or to resolve conflict.

Multiple RAMs at different levels of the project, also called LRCs.
Other responsibility charts: Resource Histogram, Resource Gantt
Chart - know these.
Page 160

Text-Oriented Forms
Position Descriptions
show team member
responsibilities,
authority,
competencies, and
qualifications
outlined in a text
document. These can
be used for
Performance
Evaluations
Page 161

Outputs

roles and responsibilities, project organization charts,
staffing management plan:
Staff Acquisition
Resource Calendars
Staff Release Plan
Training Needs
Recognition and Rewards
Compliance
Safety.
Pages 162-163
9.1.2 Develop Human Resource Plan

Outputs: Resource Calendars,
Resource Histogram is a time-phased display of

the amount of project work assigned to each resource
Page 163
May be used at the individual or group level

May be used to detect over-allocation of resources
Chapter 10: Project Communications Management

Knowledge Area
Project Communications Management processes include:
10.1
Plan Communication Management: the process of developing an

appropriate approach and plan for project communications based on
stakeholders information needs and requirements,
10.2
Manage Communications: the process of creating, collecting, distributing,

storing, retrieving, and disposition of project information.
10.3
Control Communications - the process of monitoring and controlling

communications throughout the entire project life cycle to ensure
information needs of stakeholders are met.
Project Communications Management includes the processes

required to ensure timely and appropriate generation, collection,
distribution, storage, retrieval, and disposition of project information.
Page 164
Planning: Project Communications Management

Inputs

Page 165
Tools &
Techniques
Communication requirements
analysis
Communication technology
Communication models
Communication methods
Meetings
Outputs
Communications
management plan

Communications Management is so
important that it is sometimes included
as a major WBS element
Typical
Project
Study
Page 165
Concept
Prototype
Qualification
Pilot
Production
Project
Management &
Communications
Plan
10.2.2 Plan Communications Management

Communications Requirements Analysis

Consider the following information as you plan your project
communications:
the project organization and stakeholder responsibility relationships
the functional departments involved in the project
the logistics: persons involved with the project and their locations
external information needs: communicating with external
stakeholders and the media
Communication Technology
Communications planning will be both enhanced and constrained by the
available communications technology.
urgency of need for the information
availability, ease of use, and cost of the technology
experience and expertise of the project staff and other stakeholders
life of the available technology relative to the length of the project
project environment. Does the team meet face-to-face or in a virtual
environment
Sensitivity and confidentiality of the information.
Pages 166-167

Plan Communications is the process of

determining the project stakeholder information
needs and defining a communication approach
The formula:
Channels =
N(N 1)
2
Reveals the number of possible channels

of communication in a group, where N is
the number of people in the group
Page 166-167

Try it .
If a project team of 5 people adds one
more person to the team, how many more
channels of Communication are there?
5 more
Page 167

Tools and Techniques: Communication Models
Sending
Thinking
The basic model of communication is the

send-receive model which includes:
Encoding (translating ideas to language),
Transmit Message (transmitting),
Medium (methods used to transmit)
Noise (disruptions), and
Decoding (translate for receiver)
Acknowledge (receipt of message)
Feedback (back to sender).
Hearing
Articulating
Transmitting
Listening
Receiving
Feedback !!
Page 168

Outputs: Communications Management Plan
The Communications Management Plan usually provides:
Page 169
Stakeholder communication requirements

Information to be distributed
Reason for the distribution
Time frame and frequency
Communication responsibilities
10.2.3 Plan Communications

Outputs: Communications Management Plan
documents a communication strategy for the project and describes:
Page 170

Which information flows from whom, when, via which media, and in what format.
Schedule and frequency for information collection and distribution.
Methods to convey information (memos, e-mail, press releases, etc.)
Resources for communication activities, including time and budget
Problem escalation procedure
Method for updating the communication plan
Flow charts of information flow
List of reports and meetings planned (schedule and attendees)
Communications constraints
Communications infrastructure for the project (who may talk to whom)
Chapter 11: Project Risk Management

Knowledge Area
Project Risk Management processes include:
11.1 Plan Risk Management: deciding how to approach, plan and execute risk management,
11.2 Identify Risks: which risks might affect the project and documenting their characteristics,
11.3 Perform Qualitative Risk Analysis: probability of occurrence and severity of impact,
11.4 Perform Quantitative Risk Analysis: numerically analyzing the effect of risks on
objectives,
11.5 Plan Risk Responses: developing options to enhance opportunities and reduce threats.
11.6 Control Risks: implementing risk response plans, tracking risks, monitoring residual risks,
ID new risks, and evaluating effectiveness throughout the project life cycle.
Project risk management includes the processes of

conducting risk planning, identification, analysis, response
planning, and monitoring and control on a project.
Page 171
Chapter 11: Project Risk Management

Project risk includes both threats to the projects objectives
(negative outcomes) and opportunities to improve on those
objectives (positive outcomes) - PMBOK Fifth Edition, page 310.
Uncertainty: An uncommon state of nature, characterized by
absence of information related to a desired outcome.
Risk Management: The process of identifying, analyzing and
responding to risk - maximizing positive events and minimizing
consequences of negative events.
Risk arises throughout a project and must be identified and
evaluated on a regular basis over the life cycle of the project.
Inputs to risk management process : All other planning processes,
including Create WBS and
Exam
Tip
Page 171
Planning: Project Risk Management

Inputs

Project charter
Page 173
Tools &
Techniques
Expert judgment
Meetings
Outputs

Plan Risk Management is the process of defining how to conduct
risk management activities for a project.
Risk planning should be commensurate with both the risks and the
importance of the project to the organization
Page 173
11.1.1 Plan Risk Management

Inputs

provides current state of risk-affected areas including
scope, schedule, and cost
Project Charter
high-level requirements
EEF and OPA
11.1.2 Tools and Techniques: Analytical Techniques, Expert Judgment, and Meetings
Pages 174-175
11.1.3 Plan Risk Management

Outputs
Risk Management Plan, includes:

Methodology: Approaches, tools and data sources.
Roles and Responsibilities: Team member ownership for risk activities.
Budgeting: Funds needed for contingency reserves and management reserves.
Timing: When processes will be done, reserves applied, and how risk appears in schedule.
Categories: Risk groupings. The RBS looks at sources of risk, IDs and categorizes them.
Thresholds: What is the trigger? Stakeholders have different thresholds of risk tolerance,
define them, and the must be agreed by all.
Define P/I Levels: Qualitative (low to high) or probabilities.
Risk Matrix: Likelihood-Severity, or Probability-Impact.
Stakeholder Risk Tolerances: Progressively elaborated.
Reporting Formats and Tracking: Document risk, auditing, defines content of risk register.
Page 176
11.2 Identify Risks

Inputs
Human resource mgt. plan
Scope baseline
Project documents
Procurement docs.
EEF
OPA
Page 177
Tools &
Techniques
Documentation reviews
Information gathering
techniques
Checklist analysis
Assumptions analysis
Diagramming techniques
SWOT analysis
Expert judgment
Outputs
Risk register
11.2 Identify Risks

Identify Risks is the process
of determining which risks
may affect the project and
documenting their
characteristics .
All project personnel should
be encouraged to identify
potential risks
Page 177
11.2.1 Identify Risks

Inputs

provides risk responsibilities, risk breakdown structure
Pages 178
Cost, Schedule, Quality, and HR Management Plans

Scope Baseline (scope statement, WBS, WBS dictionary)
Activity Cost and Duration Estimates
Project Documents (Charter, schedule, network, issue log)
Procurement Documents
EEF and OPA

Tools and Techniques: Information Gathering Techniques

considers all possible options/solutions without judgment before proceeding
to critical evaluation of the project/product requirements.
Delphi Technique: questionnaires are sent to a group of experts who provide
answers and are kept anonymous. Responses are compiled, prioritized, and
sent back for another round of requirements gathering. A method for
building consensus.
Interviewing: experienced stakeholders and SME can identify risks
Root Cause Analysis: Cause and Effect analysis to find causes and develop
prevention actions.
Page 179

Tools and Techniques: Checklist Analysis
Checklist Analysis:
Risk identification checklists are developed from previous
projects or lessons learned.
Lowest level of the WBS or RBS can be used as checklists.
Teams should explore items not on the checklist. It
should be pruned as it is progressively elaborated.
Review the checklist during project closure to incorporate
new lessons learned.
Page 180

Tools and Techniques: Assumption Analysis
Assumption: a factor in the planning process considered to be

true, real, or certain, without proof or demonstration:
resource, equipment, and facilities availability

external timelines
technology compatibility
interpretation of legal and regulatory constraints
Assumption Analysis: explores the accuracy of

assumptions and identifies risks to the project
from inaccuracy, inconsistency, or incompleteness,
Assumptions involve risk -- identify the risk!
Page 180

Tools and Techniques: Diagramming Techniques

People
Not Following
Procedures
Material
Methods
Lack of Training
CAUSES
Transport
Page 181
IT System
EFFECT
Procedure

An Influence Diagram is a visual representation of situations

showing causal influences, time ordering of events, or other
relationships among variables.
For example, Unit sales is a confluence point. What is the

probability that all activities leading into it and out of it will
happen at the scheduled time? It is a causal influence of risk.
Page 181

Influence Diagram
Project
Estimates
Risk
Condition
Project
Activity
Deliverables
Page 181

Outputs: Risk Register
Risk Register
a document where results of risk analysis and risk
response planning are recorded:
List of identified risks
EVENT may occur causing IMPACT
If CAUSE exists, EVENT may occur leading to EFFECT
List of potential responses
Page 182

Inputs

Scope baseline
Risk register
Page 183
Tools &
Techniques
Risk probability and impact

assessment
Probability and impact matrix
Risk data quality assessment
Risk categorization
Risk urgency assessment
Expert judgment
Outputs

is the process of prioritizing risks for
further analysis or action by assessing
or combining their probability of
occurrence and impact.
The Perform Qualitative Risk Analysis
assesses priority of identified risks
using probability/Impact or
likelihood of occurrence/severity
analysis to determine impact on
project objectives if the risks occur.
Probability
Impact
Page 183
11.3.1 Perform Qualitative Risk Analysis

Inputs

provides risk responsibilities, budget/schedule, P/I matrix,
stakeholder risk tolerance, etc.

Risk Register
EEF and OPA
Page 184

Tools and Techniques, Risk P/I Assessment
Risk Probability and Impact Assessment

Probability is the likelihood that a risk event will occur.
Impact is the effect (severity) on the objective (scope, schedule,
cost, quality, performance) if the risk event occurs.
These apply to specific risk events, not to the overall project.
High likelihood and high consequence defines a risk that must be
managed aggressively, or must be mitigated.
Risks with low P/I ratings will be included on a watch list.
Page 184

Tools and Techniques, Probability and Impact Matrix
Risk Probability and Impact Matrix

The risk matrix is one of the simplest and most effective tools
to analyze risk. It has probability (likelihood) on one axis and
impact (consequence or severity) on the other.
The scales can be either numeric or subjective.
The organization should determine the threshold
of risk that can be tolerated. This will determine:
high risk (red light),
moderate risk (yellow light), and
low risk (green light).
The score guides risk response actions.
Page 185

Tools and Techniques: P/I Matrix
Project risk includes both threats to the projects objectives (negative outcomes) and
opportunities to improve on those objectives (positive outcomes) - PMBOK 5th Edition, 331.
Exam
Tip
Probability
Threats
Opportunities
0.90 0.05 0.09 0.18 0.36 0.72 0.72 0.36 0.18 0.09 0.05
0.70 0.04 0.07 0.14 0.28 0.56 0.56 0.28 0.14 0.07 0.04
0.50 0.03 0.05 0.10 0.20 0.40 0.40 0.20 0.10 0.05 0.03
0.30 0.02 0.03 0.06 0.12 0.24 0.24 0.12 0.06 0.03 0.02
0.10 0.01 0.01 0.02 0.04 0.08 0.08 0.04 0.02 0.01 0.01
0.05 0.10 0.20 0.40 0.80 0.80 0.40 0.20 0.10 0.05
Impact (ratio scale) on an Objective
Page 185

Tools and Techniques: Risk Matrix
Risk Legend
Unacceptable
Must Mitigate
High
Managed
Controlled
Medium
Low
Identified, no
contingent plan
Low
Medium
High
Likelihood (Probability)
Page 186

Tools and Techniques:
Industry Guidelines
Page 196

Outputs: Project Documents Updates

Risk register
Assessments of P/I for each risk
Risk ranking
Risk categorization
Watch list for low probability risks
Assumptions log updates
Page 187

Inputs

Risk register
Page 188
Tools & Techniques
Data gathering and

representation techniques
Quantitative risk analysis and
modeling techniques
Expert judgment
Outputs

is the process of numerically analyzing the
effect of identified risks on overall project
objectives.
Perform Quantitative Analysis is used on
risks that have been prioritized by
qualitative analysis as substantially
impacting project objectives.
Page 188

Quantitative risk analysis
The Quantitative process analyzes priority risk events and assigns a
numerical rating. It also helps you make decisions in areas of uncertainty.
Quantitative Risk process uses techniques like Monte Carlo Simulation
and decision tree analysis to:
Quantify outcomes for the project and the probabilities.
Assess the probability of achieving project objectives

Identify priority risks by quantifying their contribution to overall
project risk.
Identify realistic cost, schedule, scope and quality targets, given the
project risks.
Determine the best project decision when some outcomes are
uncertain.
Page 188
11.4.2 Perform Quantitative Risk Analysis

Tools and Techniques: Data Gathering and Representation Techniques
Risk Interview
WBS Element
Optimistic
Most Likely
Pessimistic
Design
$4 M
$6 M
$10 M
Build
$16 M
$20 M
$35 M
Test
$11 M
$15 M
$23 M
Total Project
$31 M
$41 M
$68 M
Likelihood of completing the project at or below $41 million is

relatively low given the range and skew of the simulation results.
Page 190

Tools and Techniques: Data Gathering and Representation Techniques
Probability Distributions
3-Point
Analysis or
PERT
o = most optimistic cost estimate

p = most pessimistic cost estimate
m = most likely cost estimate
Ce =
o + 4m + p
(Ce) =
45 50 55 60 65 70 75 80 85 Hours
6
po
6
Ce 1 <=> 68% probability

Page 190
40
60 5 hours with 68% confidence

60 10 hours with 95.5% confidence
60 20 hours with 99.7% confidence
Beta Distribution

Tools and Techniques: Quantitative Risk Analysis and Modeling Techniques
Sensitivity Analysis
Sensitivity Analysis helps determine which risks have the most impact on a project. A typical display
of sensitivity is the tornado diagram, which compares the importance of variables having high
uncertainty to those that are more stable.
Expected Monetary Value

Expected Monetary Value (EMV) calculates average outcomes on uncertain future scenarios. The
EMV of opportunities will be positive values, where those of risks may be negative. That is, when
evaluating alternatives during project selection, EMV that is most positive (the higher number) is
probably the best outcome. However, when alternative risks are evaluated, perhaps the lower
number (minimum risk) is best.
Decision Tree Analysis

Decision Tree Analysis is a common use of EMV analysis. It incorporates the cost of each available
choice, the probabilities in each path, and the outcomes. Solving the decision tree provides the
EMV for each alternative. As said before, in selecting competing projects the higher number may
give the best payback, but in evaluating risk alternatives, the lower number may be best.
Pages 191-193

Sensitivity Analysis: Tornado Diagram
High
Risk 1
Variables
Low
Uncertainty
Risk 2
Risk 3
What is a Tornado Diagram?
The purpose of sensitivity analysis is to
identify which uncertainty variables have
the greatest impact on total value.
Why create a Tornado Diagram?
The tornado diagram helps identify
uncertainties with the highest economic
impact. (Risk-Adjusted NPV). 80% of the
total uncertainty can be discovered by using
the top 5-8 variables in the tornado diagram
Page 191
Uncertainty
at base
Values
Risk 4
Risk 5
(+) Positive Impact
(-) Negative Impact

Expected Monetary Value (EMV)
$ 12,000
$ 10,200
$ 10,000
$ 8,000
$ 10,000
$ 12,000
Select B for lowest Risk

Page 192
Exercise
A Decision Tree : a common use of EMV analysis
0.6
Flagship store in
new mall
(-$1,000,000)
0.8
Renovate existing
store
(-$250,000)
Stronger
competition
(-$50,000)
Initial business
surge
(+$50,000)
-$230,000
0.2
Page 192
Answer:
-$960,000
0.4
New store or
renovation?
Increased shopper
traffic
(+$100,000)
Dwindling shopper
traffic
(-$100,000)
Exercise
Exam
Tip
EMV is the second most-tested topic on the

exam after the process of risk management
1. Test yourself:
You are planning modifications to a product line. Below is the

complete assessment of risks on the project Calculate the EMV of
your budgets reserve.
Page 193
30% probability that parts delivery will be delayed at a cost of

$50,000.
20% chance that the parts will be $10,000 less expensive.
25% likelihood that two parts will have interference fit,

resulting in extra cost of $3,500.
30% chance that production will be simpler, saving us $2,500.
5% probability that design defects will cause $5,000 in rework.
- $13,375
+
-
Exercise
2. Test yourself on a decision tree:
What is the EMV of A and B?
B
A
Answer: $42K+$6K = $48K
Page 193

Modeling and Simulation
Monte Carlo Simulation

The most common simulation technique is Monte Carlo simulation.
Earlier in the workbook it was called What-If analysis, where a
computer is used to calculate a distribution of possible outcomes for
the total project.
For example, calculate multiple project durations with different sets
of activity assumptions and calculate a risk probability distribution.
For cost risk, simulations can use the WBS or cost breakdown
structure as its model.
For schedule risk, simulations use Precedence Diagramming Method

(PDM) models.
Page 193


Uses the network diagram (PDM) and Three-Point Estimates as models to
simulate schedule impacts on the project, and the WBS as its model using
Three-Point estimates to simulate cost impacts, then performs the project
several times to determine uncertainty.
Indicates schedule risk by estimating probability that each task will
be on the critical path.
Accounts for task convergence - calculates increased schedule risk

where paths in a network diagram converge into one task.
Stakeholders (team) estimate cost ranges for each WBS element.
Simulation shows probability of meeting the most likely budget
estimate.
Page 194

Modeling and Simulation, Cost Risk Simulation
100%
Total Project Cost (cumulative)
50%
25%
Probability
75%
Mean = $46M
12%
$50M
0%
$41M
$30 M
$38M
$47M
$56M
$65M
Cost
The project is only 12% likely to meet the 41 million most likely
cost estimate. If the organization wants 75% chance of success, $50
million is required (at contingency of 22%, [$50M-41M)/$41M]).
Page 194


Road Closed
30% Mean Probability
of Project Failure
Running out
of Gas
Monte Carlo Simulation,

Overall Project Risk
Getting Stuck
in Snow Drift
5% Chance That
Probability is 75%
Page 195
.25
.5
.75
1.0
.25
.5
.75
1.0

Risk Register Updates include:

Probability analysis of the project
confidence levels and distributions are used to calculate cost

and time reserves.
Probability of achieving cost and time objectives
Priority list of quantified risks

Trends in risk analysis results
11.5 Plan Risk Responses

Inputs

Risk register
Page 196
Tools &
Techniques
Strategies for negative risks

or threats
Strategies for positive risks
or opportunities
Contingent response
strategies
Expert judgment
Outputs

updates
11.5 Plan Risk Responses

Plan Risk Responses is the process of
developing options and actions to
enhance opportunities and to reduce
threats to project objectives
Page 196
11.5.2 Plan Risk Responses

Tools and Techniques: Strategies for Threats or Opportunities
Avoid
Eliminate the threat by eliminating the cause.
Transfer
Contract the risk out. Transfer it to a third party with incentives, penalties,
warranties, bonding, .. , purchase insurance.
Mitigate
Negative
Risk or
Threats
Effect the probability and/or the impact of the risk.
Exam
Tip
Exploit
Eliminate uncertainty of upside risk to ensure opportunity happens
Positive
Risk or
Opportunities
Share
Third party helps to capture the opportunity
Enhance
Opposite of Mitigation. Proactively target and reinforce the trigger to
achieve a positive opportunity.
Acceptance
Know about the risk, but decide to accept the consequences if failure
occurs.
Pages 197-199
Knowledge and Research

Perform tests & simulations. Consult experts. Start risk tasks as
early as possible within available slack.
Both

Outputs: Contingency Reserve, Part of the Risk Register
A provision in the project plan to mitigate cost and/or schedule risk
May be calculated as a percent of baseline to allow for overruns
May be established as a separate fund for unforeseen problems
May have many different (and application area specific) names:
management reserve
contingency
May be assigned to any level of the WBS
Exam
Tip
PMI recommends a
minimum total
reserve of 10%
Page 200

Risk Register Updates include:
Risk owners and their responsibilities,

Agreed response strategies,
Actions to implement from the response strategy,
Trigger conditions and warning signs of risk occurrence,
Budget and schedule activities to implement the response,
Contingency plans and triggers that call for their execution,
Fallback plans for inadequate risk responses,
Residual risks remaining after response has been taken, and those
that have been deliberately accepted,
Secondary risks that arise from implementing a risk response,
Calculated contingency reserves,
Other Documents Updates:
Page 201
Assumption log updates.

Technical documentation updates,
Change requests processed
Chapter 12: Project Procurement Management

Knowledge Area
12.1 Plan Procurement Management: Documenting purchase decisions,
specifying the approach, and identifying potential sellers.
12,2 Conduct Procurements: Obtaining seller responses, selecting a
seller, and awarding a contract.
12.3 Administer Procurements: Managing procurement relationships,
monitoring contract performance, and making changes and
corrections as needed.
12.4 Close Procurements: Competing each project procurement.
Plan Procurement Management includes the processes necessary to purchase
or acquire products, services, or results needed from outside the project
team. It includes contract management and change control processes, as well
as administering contracts and obligations under the contracts.
Page 202
Chapter 12: Project Procurement Management
Procurement Process
Plan
Purchases &
Acquisitions
Plan
Contracting
Make or
Buy
Page 202
RFP/RFQ
Issued
Request
Seller
Responses
Q&A
Select
Sellers
Proposal
Received
Contract
Administration
Contract
Award
Contract
Closure
Substantive
Completion
Planning: Plan Procurement Management

12.1 Plan Procurements
Inputs
Risk register
Project schedule
factors
assets
Page 203
Tools &
Techniques
Make-or-buy analysis
Expert judgment
Market research
Meetings
Outputs
Procurement management
plan
Procurement statement of
work
Make-or-buy decisions
Change requests
12.1 Plan Procurement Management

Plan Procurement Management is the

process of documenting project
purchasing decisions, specifying the
approach and identifying potential
sellers.
The plan procurements process involves

deciding whether to make-or-buy, the
consideration of potential sellers, and
the consideration of the risks involved
Page 202
12.1.2 Plan Procurement Management

Inputs: Organizational Process Assets
Contract Types
There are several contract types that may be used, and the contract type determines how the
risk is shared between the buyer and the seller.
Page 204-206
Fixed Price/Lump Sum Contracts:
Firm Fixed Price (FFP)

Fixed Price Incentive Fee (FPIF)
Fixed Price with an Economic Price
Adjustment (FP-EPA)
Cost Reimbursable Contracts:
Cost Plus Fixed Fee (CPFF)

Cost Plus Incentive Fee (CPIF)
Cost Plus Award Fee (CPAF)
Unit Price or Time & Materials Contracts (T&M)

Contracts are risk mitigation tools
Other professionals may handle the contract, but contracts
should not be created before the PM is assigned
Match the contract type to the type of project
Contract type will determine the balance of financial risk between
the buyer and the supplier.
Page 204-207
Fixed Price (or Lump Sum) Type Contracts:

Used on well specified projects for which costs can be accurately
estimated. Cost risk is on the supplier. (includes FFP, FPIF, FP-EPA)
Cost Reimbursable Type Contracts:
Exam
Tip
Used on development projects for flexibility. Cost risk is on the buyer, so

establish administrative & reporting systems to allow both buyer and seller
visibility into costs. (Includes CPFF, CPIF, CPAF)
Time & Materials Type Contracts:

Used on projects where the deliverables are well defined, repetitive units
but the quantities are not yet known (e.g., identical pieces of equipment, or
labor hours and associated material costs includes overhead and burden)
Page 207

Inputs: Organizational Process Assets
100%
0%
FFP
Client, Customer
or Buyer
FPEPA
On the exam, contract

questions are written
from the buyers
perspective
FPAF
FPIS
FPIF
RISK
RISK
CPIF
CPAF
CPFF
Contractor
or Seller
0%
Page 208
CS
COST
100%
12.1.2 Plan Procurements
Inputs: OPA
US Federal Acquisition Regulations (FAR 16.104)
FFP
Firm Fixed Price: A negotiated fixed price to produce the good or service.
FPEPA
Fixed Price with Economic Price Adjustment: Unstable market or labor
FPAF
conditions, price can be adjusted up or down with a ceiling
Fixed Price Award Fee: award amount related to a subjective judgment

of the quality of the contractor's performance.
FPIS
Fixed Price Incentive (Successive Targets): Contains production point (s)
FPIF
Fixed Price Incentive (Fee or Firm Target): target profit, and profit sharing
CPIF
Cost Plus Incentive Fee: positive profit incentives are negotiated.
CPAF
Cost Plus Award Fee: Award fee is earned for performance, quality,
CPFF
Cost Plus a Fixed Fee: Level of effort is unknown, fee is expressed as
CS
COST
Page 208
at which either a firm target and final profit formula can be negotiated.
formula are negotiated into contract, profit is adjusted upon contract completion.
timeliness, and cost effectiveness and can be earned in whole or in part.

percentage of estimated cost at time contract is awarded.
Cost Sharing: Development or research projects, contractor sees a commercial
benefit which they accept in lieu of fee.
Cost: Typically for R&D with nonprofit organizations, educational institutions,
and facilities contracts.

Tools and Techniques: Budget Implications
Page 209

Tools and Techniques: Profit or Fees for Different Contracts
Page 209

Tools and Techniques: Point of Total Assumption
Page 209
Exam
Tip
Is on the exam
Exercise
Incentive Fee Calculation
You may have to calculate both the Fee and the Final Price for the Exam!
Cost Plus Incentive Fee Calculation
Fee
Target cost
Target fee
Target price
$210,000
$ 25,000
$235,000
Sharing ratio
Actual cost
80/20
$200,000
$210,000 - $200,000 = $10,000 x 20% = $2000

$25,000 target fee + $2,000 = $27,000 fee
Final
Price
Page 210
$200,000 + $27,000 = $227,000

Make-or-Buy Analysis
A general management technique to determine whether work is best done by the project
team or purchased from an outside source. Considerations such as capability, risk, budget and
schedule are all considered as well as whether to purchase, lease or rent
Expert Judgment
Experts may be used in several areas. Technical experts will assess capability, inputs and
outputs. Purchasing experts will generate the criteria to select appropriate sellers, and legal
experts will focus on terms, conditions and issues
Market Research
Capabilities of industry and seller must be researched by information gained at conferences,
on-line, and other sources. Leverage mature technologies while balancing the risks with other
less mature technologies.
Meetings
Information exchange with potential bidders can benefit the project.
Page 206

Outputs: Procurement Management Plan, and
Procurement Statement of Work
A narrative description of products or services to be supplied under contract.
Provides the basis of agreement between buyer and supplier
Sufficient detail to allow prospective suppliers to determine
whether or not they can comply
Sufficient latitude for creative solutions only if appropriate
Each procurement requires a separate SOW. But one SOW
may cover many items in a single procurement
May be revised as the procurement progresses
Should be clear, concise, and unambiguous
May be developed by the project team or
supporting offices (or even the seller)
depending on policy and ability
Your best defense against procurement scope creep!

Page 211

Outputs: Procurement Documents
Procurement documents from the buyer:
TECHNICALLY-DRIVEN CONTRACTS:
Request for Proposal (RFP) - requests a detailed proposal on how the

work will be done, who will do it, . . . , basically a Project Execution Plan
from the contractor or seller.
PRICE-DRIVEN CONTRACTS:
Invitation for Bid (IFB, or RFB) - requests one price to do all the work.
Request for Quotation (RFQ) - Requests a price quote per item, per hour
charges, etc.
Procurement Terminology is not universal
Page 212

Outputs: Source Selection Criteria
Examples of source selection criteria are:

Understanding
of need
Life-cycle cost
Technical
capability
Risk
Management
approach
Technical
approach
Warranty
Financial
stability
Production
capacity
Business size
and type
Past
performance
of sellers
References
Intellectual
property rights
Proprietary
rights
Exam
Tip
The Contracting Officer or Administrator is the one with authority to change the contract
The Project Manager must understand the contract and manage its completion
The exam tests conflicts that arise between the two
Page 212
Notes on procurement for the exam

The exam questions are always from the buyers
perspective
Different words are sometimes used (vendor,
owner, contractor, subcontractor etc.)
A contract is a formal agreement
All requirements should be specifically stated in
the contract
Changes must be in writing and formally
controlled
The US Government backs all contracts by
providing a court system (this is a US exam)
Page 213
Planning: Project Stakeholder Management

13.2 Plan Stakeholder Management

Inputs

Page 314
Tools &
Techniques
Expert judgment
Meetings
Outputs
Stakeholder management
plan
Plan Stakeholder Management is the

process of developing management
strategies to engage stakeholders
throughout the project life cycle,
based on the analysis of their needs,
interests, and impact on project
success.
It allows the project manager the

develop ways to engage stakeholders
in the project, to manage their
expectations, and to achieve the
project objectives.
Page 214

Tools and Techniques: Analytical Techniques
Engagement Level of Stakeholders

Engagement level of the stakeholders can be classified as follows:
Page 216
Unaware. of project and potential impacts

Resistant. Aware of project and impacts, and resistant to change
Neutral. Aware of project yet neither supportive nor resistant
Supportive. Aware of project/impacts and supportive to change
Leading. Aware of project/impacts and actively engaged in
ensuring success.

Tools and Techniques: Analytical Techniques
Stakeholder Engagement Assessment Matrix

Stakeholder
Stakeholder 1
Stakeholder 2
Unaware
Resistant
Neutral
Supportive Leading
D
C
Stakeholder 3
D
DC
Legend: C = Current Engagement

D = Desired Engagement
Exam
Tip
Page 216

Outputs: Stakeholder Management Plan
This plan identifies the management strategies required to engage

stakeholders.
Desired engagement levels of key stakeholders,
Scope and impact of change to stakeholders,
Interrelationships and overlap between stakeholders,
Stakeholder communication requirements for the current phase,
Information to be distributed to stakeholders (language, format,
content, level of detail),
Timing and frequency for distributing the information,
Method for updating the stakeholder management plan as the
project progresses.
Page 217
Executing Process Group

Page 219

Process Groups
Knowledge Areas
Management
Initiating
Executing
5. Project Scope
Management
Planning
4.2 Develop Project
Management Plan
5.1
5.2
5.3
5.4
4.3
Executing
4.3 Direct & Manage
Project Work
Plan Scope Mgt.

Define Scope
Create WBS
Direct and Manage6.1Project

Plan Schedule Mgt.
Work
6.4 Est. Activity Resources
8.2 Perform Quality Assurance
6.5 Est. Activity Durations
6.6 Dev. Schedule
9.2
Acquire
Project
Team
7. Project Cost
7.1 Plan Cost Mgt.
Management
7.2 Estimate Costs
9.4
8. Project
Quality Manage Project Team
Management
9.1 Plan Human
9. Project Human
Resource
Resource Mgt.
Management
10. Project
Communications
Management
Management
Engagement
11. Project Risk
Page 28
4.6 Close Project

or Phase
7.4 Control Costs
8.2 Perform Quality

Assurance
8.3 Control Quality

11.6 Control Risks
11.2 Identify Risks

Risk Analysis
Risk Analysis

Management
Management

Change Control
Closing
5.5 Validate Scope

5.6 Control Scope
6. Project Time
Management
Management
Monitoring &
Controlling

Management

Engagement

Engagement
Executing: Integration Management
4.3 Direct and Manage Project Work

Inputs

Approved change requests
Page 220
Tools &
Techniques
Expert judgment
Project management
information system
Meetings
Outputs
Deliverables
Change requests
updates

Direct and Manage Project Work
is the process of leading and performing
the work defined in the project
management plan and implementing
approved changes to achieve the
projects objectives
Page 220

The activities of Direct and Manage Project Work include:
Page 220
Perform activities to accomplish project objectives,

Create deliverables,
Provide, train, and manage team members
Obtain materials, equipment, and facilities,
Implement methods and standards,
Establish communication channels,
Generate project date: cost schedule, technical, quality, and status to
facilitate forecasting,
Issue change requests and manage approved changes
(corrective action, preventative action, defect repair),
Manage risks and risk responses,
Manage sellers and contractors,
Manage stakeholders and their engagement, and
Collect and document lessons learned
4.3.1 Direct and Manage Project Work

Inputs: The Project Management Plan
The other 23 planning processes are integrated to create
the project management plan. Updates to any plans
require an update to the PM plan. Think of the PM plan as
a bucket into which all the other plans drip until it is full.
Page 221

Define Scope
Create WBS
Define Activities
Sequence Activities
Develop Schedule
Estimate Costs
Determine Budget
Identify Risks
Plan Risk Responses

Expert Judgment
Expertise is provided by the project manager and the PM team, and
additional knowledge can be gained from a variety of sources inside
and outside of the organization.
PM Information System (PMIS)
The PMIS provides access to tools: scheduling tool, work authorization system,
configuration management system, information collection/distribution system, reporting
on key performance indicators (KPI), and interfaces to online automated systems.
Meetings
Meetings can include information exchange, brainstorming, option evaluation, or
decision making. Meetings are most effective when face-to-face. Virtual meetings (audio
or video-conferencing) require additional preparation and organization to be as effective
as face-to-face.
Page 222

Outputs
Deliverables
Any product, result or service identified in the PM Plan produced during project execution.
Work Performance Information

Status of project activities is routinely collected. It includes schedule progress, deliverable
status, quality requirements met, costs incurred, estimates to complete, lessons learned,
and resources used.
Change Requests
Changes are requested to expand or reduce scope, modify policies/procedures, costs,
budgets, quality, or schedules. They also include corrective action, preventative action,
defect repair, and document updates.
PM Plan Updates
Requirements, schedule, cost, quality, HR, communications, risk, procurement, and the
project baselines.
Project Document Updates: requirements, logs, risk register, and stakeholder register.
Page 223
Executing: Quality Management

Inputs

Process Improvement plan
Quality metrics
Quality control measurements
Project documents
Page 224
Tools &
Techniques
Quality management and

Control tools
Quality audits
Process analysis
Outputs
Change requests
updates
Project document updates
updates

Perform Quality Assurance is
the process of auditing the
quality requirements and the
results from quality control
measurements to ensure
appropriate quality standards
and operational definitions
are used
Page 224
8.2.2 Perform Quality Assurance

Tools and Techniques: Quality Management and Control Tools
The Tools for Quality Planning should be used for Quality Assurance
Page 225
Benefit/Cost Analysis
Cost of Quality (COQ)
Control Charts
Benchmarking
Design of Experiments (DOE)
Statistical Sampling
Proprietary Methods
Flowcharting
Brainstorming
Force Field Analysis
Nominal Group Techniques
Matrix Diagrams
Priority Matrixes

Tools and Techniques: Quality Management and Control Tools
In Addition, Use the Seven Quality Management and Control Tools

Affinity Diagrams
Process Decision Program
Charts (PDPC)
Interrelationship Digraphs
Tree Diagrams
Page 225
Prioritization Matrices
Activity Network Diagrams
Matrix Diagrams
The Seven Quality Management and Control Tools

PDPC
Affinity Diagram
No
Tree Diagrams
Yes
No
Yes
Interrelationship Digraph
No
No
Prioritization Matrices
Network Diagrams
PDM
Start
Finish
D
ADM
Start
C
Finish
FF
Matrix Diagrams
Page 226

Tools and Techniques: Quality Audits
Quality Assurance (QA): the process of auditing quality requirements, and the
results from quality control (QC) measurements, to ensure quality standards and
operational definitions are used..
Quality assurance involves Quality Audits, and is done in Execution Processes.
Quality Control (QC): a process of monitoring and recording results (both product
and project management) of executing quality activities to assess performance and
to recommend necessary changes. Involves identifying ways to remove the causes of
quality defects.
Quality control involves inspection and requires an understanding of sampling
strategies, tolerances, and the causes of variation in a process. It is done in the
Monitoring and Controlling Processes.
Pages 227

Tools and Techniques: Quality Audits
. . a structured review (audit) of the projects quality management

activities to determine if they comply with organizational and project
policies, processes, and procedures.
Quality audits may be random or scheduled
Quality audits may be performed internally or externally
Quality audits
Identify best practices and gaps or shortcomings
Share good practices with similar projects in the organization
Proactively assist to improve processes and raise team productivity
Contribute audit results to lessons learned archives.
Page 228
Practice Test #2

Page 416
Executing: Human Resource Management


Inputs
Human resources management

plan
Organization process assets
Page 230
Tools &
Techniques
Pre-assignment
Negotiation
Acquisition
Virtual teams
Multi-criteria decision
analysis
Outputs

Resource calendars
updates

Acquire Project Team is the process of
confirming human resource availability
and obtaining the team necessary to
complete project activities
Page 230
9.2.1 Acquire Project Team

Inputs: Project Management Plan, that includes:

defining positions, skills, and competencies
project organization charts
when team members are needed
EEF and OPA
Page 231

The project manager should effectively negotiate and influence others who
are in a position to provide the required human resources for the project
Pre-Assignment
Project team members are selected in advance, perhaps where the project is part of
a proposal
Negotiation
The project manager may need to negotiate with functional managers or other
project managers to gain the staff required
Acquisition
Hiring or subcontracting team members from outside sources. This may involve
outsourcing work to another organization
Virtual Teams
Teams where the members may not be able to meet face-to-face because of
geographic or mobility limitations. Communication planning becomes increasingly
important in a virtual team environment
Pages 232-233

Multi-Criteria Decision Analysis

Criteria are used to rate potential team members. The criteria are weighted by
considering relative importance within the team.
Is the team member available to work in the time period needed?

Is the team members cost within the budget constraints?
Have the people done similar work before? Done it well?
Does the team member have the required competence?
Does the team member know the customer, worked on similar
projects, understand PM?
Skills.
Can they use project tools, or have appropriate training?
Attitude.
Can the team member work with others in a cohesive team?
International Factors. What is the location of the team member, time zones,
communication skills?
Pages 233
Availability.
Cost.
Experience.
Ability.
Knowledge.


Inputs

plan
Resource calendars
Page 235
Tools &
Techniques
Interpersonal skills
Training
Team-building activities
Ground rules
Co-location
Recognition and rewards
Personnel assessment tools
Outputs
Team performance
assessments
factors updates
Develop Project Team is the process of

improving the competencies, team
interaction and the overall team
environment to enhance project
performance.
Teamwork is a critical factor for project
success, and developing effective project
teams is one of the primary responsibilities
of the project manager
Exam
Tip
Page 235
9.3.2 Develop Project Team

Interpersonal Skills:
soft skills
Training:
activities designed to improve competencies of the
project team members
Team-Building Activities:
should be designed to help individual team members
work together effectively and establish good working
relationships.
Pages 236-237

Tools and Techniques: Team Building Activities
Bruce Tuckman: The Five Stages of Team Development
Forming:
Team meets, learns about the project, understands

roles, but is independent, not open
Storming:
Team addresses project and methodology and must

be open in this phase or it can become destructive.
Norming:
Team works together, adjusts behaviors that are

supportive, and trust develops
Performing:
Team performs as well organized unit and works

through issues smoothly and effectively
Adjourning:
Team completes the work, celebrates their success,

and moves on from the project.
Page 238

The proper use of most project management tools & techniques

contribute to teambuilding, but PMI defines Team Building Activities as
actions taken specifically and primarily to improve team performance.
Facilitated off-site workshops
Inter-personal skills development
training and workshops
Communications training
(including listening skills)
Conflict resolution
Psychological preference
indicators such as Myers-Briggs
Physical challenge workshops
Planned team outings
Standing agenda item at review
meetings
Shared space, publicity, and
symbols to create a team identity
Page 238

Other Tools and Techniques
Ground Rules: Discussing ground rules allows team

members to discover values important to one another, to
set clear expectation for team behavior, and to share their
commitment to the rules
Co-location: Physically locating team members in the same
physical location enhances team communication and
performance
Recognition and Rewards: Promote and reinforce desired
behaviors, and only desired behavior should be
rewarded.
What gets measured, gets done
Page 239

Tools and Techniques: Recognition and Rewards
Exam
Tip
Herzbergs
Motivators
1.
2.
3.
4.
5.
6.
Achievement
Recognition
Work Itself
Responsibility
Advancement
Growth
Self Actualization = Achievement

Maslows
Hierarchy
of Needs
Self Esteem = Recognition

Social
Safety
Physiological
Page 239 & 241

A persons motivation and effectiveness

are influenced by three needs:
Exam
Tip
Page 239
McClellands
Theory of
Needs
Achievement
Affiliation
Power

prized assignments
responsibility
presentation opportunities
training opportunities-growth
flexible scheduling/days off
Recognition of achievement
better offices, new
equipment
bonuses, trips
promotions, pay raises
Be sure the link between performance and reward is

clear, explicit, timely, and achievable.
Be sure to reward desired behaviors more than
recovery from the results of undesired behaviors.
Consider cultural factors such as individualism vs.

collectivism in choosing rewards and giving
recognition (team vs. personal).
Page 240

Outputs: Team Performance Assessments
Position Descriptions
show team member
responsibilities,
authority,
competencies, and
qualifications outlined
in a text document.
Performance
Assessments
improvements in
individual skills
Improvements in
team behaviors
improvements in
project
performance
reduced staff
turnover rate.
Page 240


Inputs

plan
Team performance assessments
Issue log
Page 242
Tools &
Techniques
Observation and conversation

Project performance appraisals
Conflict management
Outputs
Change requests
updates
factors updates
updates

Manage Project Team
is the process of tracking team
member performance, providing
feedback, resolving issues and
managing team changes to
optimize project performance
Team members are accountable both to their

functional manager and to their project manager.
Exam
Tip
Page 242
Effective Management of the dual reporting relationship

is the responsibility of the Project Manager
9.4.1 Manage Project Team

Inputs:

responsibilities, project organization, staffing management
plan.
Project Staff Assignments

Team Performance Assessments
Issue Log
Work Performance Reports
project status, project forecasts, schedule/cost/quality
control, scope validation, future HR requirements

OPA
Page 242-243

Tools and Techniques: Project Performance Appraisals, Roles and Responsibilities
Exercise
Fill in the last column with PM (Project Manager), T (Team member) or SM (Senior/Functional
Management) as to who is most appropriate to solve the problem listed under the situation
column. Understanding of these questions will help with your with your Situation Questions:
Situation
Page 245
Two project team members are having a disagreement -
There is a change to the overall project deliverables
A boss is trying to pull a team member off the project to do other work
The project manager does not have the authority to get things done
There are not enough resources to complete the project
The team is unsure of what needs to happen when
A task needs more time and will cause the project to be delayed
A tasks needs more time without causing the project to be delayed
Who Solves the

Problem
(PM/T/SM)?
T
SM
T
SM
SM
PM
SM
PM

Tools and Techniques: Project Performance Appraisals, Roles and Responsibilities
Exercise
Page 245
A team member is not performing -
SM
10
The team is not sure who is in charge of the project
SM
11
There is a talk that the project may be no longer needed
12
Senior management provides an unrealistic schedule requirement
13
The team is in conflict over priorities between tasks
14
The project is behind schedule
15
A team member determines that another method is needed to complete the

task within its scope of work -
SM
SM
PM
PM
T

Tools and Techniques: Powers of a Project Manager
Expert:
Reward:
Formal:
Referent:
Penalty:
Powers of the P.M.
How Earned?
recognition by others
giving rewards to others
power based on the position
refer to authority of management
ability to penalize team members
On your own
PMs Position
PMs Position
Others Position
PMs Position
Exam
Tip
Principles of Project Management, PMI, ISBN: 1-880410-30-3
Page 246

Tools and Techniques: Conflict Management
Conflict Resolution
Best to Worst
1.
2.
3.
4.
5.
Collaborate/Problem Solving:
Compromise/Reconcile:
Withdraw/Avoid:
Smooth/Accommodate:
Force/Direct:
solving the real problem

solutions that satisfy all parties
retreating or postponing a decision
emphasis on agreement rather than differences
one viewpoint at the expense of another
Exam
Tip
Principles of Project Management, PMI, ISBN: 1-880410-30-3
Page 246

Factors for Conflict Resolution
Importance and intensity of conflict
Time pressure to resolve
Position taken by persons involved
Motivation to resolve, long and short term

Exam
Tip
Page 246

Sources of Conflict
(order of priority)
Exam
Tip
1. Schedules
2. Project priorities
3. Resources
4. Technical opinions
5. Admin. Procedures
6. Cost
7. Personality
Principles of Project Management,

PMI, ISBN: 1-880410-30-3
Page 247

Tools and Techniques: Interpersonal Skills
The Fourth Edition was the first time the soft skills have been given
special recognition by PMI in the guidebook.
Exam
Tip
Page 247
Please refer to Appendix X3 in the Fifth Edition for a listing of

interpersonal skills important to project management. PMI said these
skills were too large to cover in-depth in the PMBOK. This makes it a ripe
source for questions on the fifth edition test.

Tools and Techniques: Leadership
Leadership focuses team efforts toward a common goal. Leaders get

things done through other people. They develop trust and respect, not
fear and submission.
Page 248

Performance Impact
Tools and Techniques: Leadership, the Team Performance Curve
High-Performance
Team
Real
Team
Working
Group
Potential
Team
PseudoTeam
Team Effectiveness
Katzenbach and Smith

The Wisdom of Teams
Page 249

A high performing team is:

A small group of people
with complimentary skills
committed to a common
purpose, performance
goals and methods
for which they hold
themselves accountable
and take the risk of
conflict
Page 236 and 249

Tools and Techniques: Communication and Influencing
Communication
Communication is one of the biggest contributors to project success or failure.
Exam
Tip
Geert Hofstede: Cultural Dimensions (national cultural differences)

Myers Briggs: Personality Test
The Sender-Receiver Model (mentioned earlier)
Conflict resolution is part of communication (mentioned earlier)
Influencing
Lead by example, follow through with commitments

Clarify how decisions will be made
Use a flexible style, adjust to the situation (Situational Leadership)
Apply your power skillfully and cautiously
Influence: What you think you have until your try to use it Joan Welsh
Page 250

Tools and Techniques: Decision Making
Decision Making Styles
Factors Affecting Style
Command
Consultation
Consensus
Random (coin flip)
Time constraints
Trust
Quality
Acceptance
Exam
Tip
Six-Phase Problem Solving Model

1.
2.
3.
4.
5.
6.
Page 251
Problem Definition: explore, clarify, and define the problem

Solution Generation: brainstorm solutions and discourage early decisions
Ideas to Actions: define evaluation criteria, rate pros/cons, select one
Solution Plan: involve team for acceptance and commitment
Evaluation Plan: implement, analyze, evaluate, lessons learned
Evaluation Outcome: was the problem solved? Goals achieved?

Tools and Techniques: Negotiation
Negotiating Skills and Behaviors

1.
2.
3.
4.
5.
6.
7.
Page 250-251
Exam
Tip
Analyze the situation

Differentiate between wants and needs by both parties
Focus on interests and issues, not positions
Ask high and offer low (but be realistic). Do you have a BAFO?
When making a concession, act like you are yielding something of
value. Dont just give in.
Both parties should feel like they won (win-win). Never let the
other party leave feeling they have lost.
Do a good job of active listening and articulating

Tools and Techniques: Appendix X3, Covey, Dinsmore, Levin, Verma
Seven Habits of Highly Effective People

Stephen R. Covey, 2004
Exam
Tip
Habit 1: Be Proactive: Principles of Personal Choice

Habit 2: Begin with the End in Mind: Principles of Personal Vision
Habit 3: Put First Things First: Principles of Integrity & Execution
Habit 4: Think Win/Win: Principles of Mutual Benefit
Habit 5: Seek First to Understand, Then to be Understood
Habit 6: Synergize: Principles of Creative Cooperation
Habit 7: Sharpen the Saw: Principles of Balanced Self-Renewal
(The Eighth Habit: From Effectiveness to Greatness;
Find your voice and inspire others to find theirs)
Page 252

Tools and Techniques: Trust Building
Trust Building
Open and direct communications to resolve problems
Inform all stakeholders when commitments are at risk
Engage directly with the team, ask a lot of questions

Be direct and explicit about what you need or expect
Do not withhold information
Be receptive to innovation
Look beyond your own interests
Demonstrate true concern for others
Page 253
Exam
Tip
Executing: Communications Management


Inputs
Communications management
plan
Page 255
Tools &
Techniques
Communication technology
Communication models
Information management
systems
Performance reporting
Outputs
Project communications
PM plan updates
updates

Manage Communications is the
process of creating, collecting,
distributing, storing, retrieving,
and the ultimate disposition of
project information in
accordance with the
Communications Management
Plan.
Page 255
10.2.1 Manage Communications

Inputs: Includes the Communications Management Plan
Communication Management Plan
describes how communications will be planned,
structured, monitored and controlled.
Which information flows from whom, when, via which media, and in what format.
Schedule and frequency for information collection and distribution.
Methods to convey information (memos, e-mail, press releases, etc.)
Resources for communication activities, including time and budget
Problem escalation procedure
Method for updating the communication plan
Flow charts of information flow
List of reports and meetings planned (schedule and attendees)
Communications constraints
Communications infrastructure for the project (who may talk to whom)
Performance Reports
Organizes and summarizes information on project
status and progress
May have different reports for different stakeholders,
each to the level of detail and in the format and
frequency appropriate to the stakeholder
Includes cost, schedule, quality and scope accomplishment and variance
information
Reports the results of variance analysis, trend analysis, and earned value
analysis. Generally involves charts such as bar charts (e.g., Gantt charts)
and S-curves (e.g., earned value charts) to summarize data and facilitate
reporting by exception.
Caution: Ensure a consistent data date,

ideally from a common set of data
Performance Reports
Purpose of Performance Reports:
to detect problems in time to take corrective or preventive
action
to reduce customer and management anxiety
to share project information within the project team
Guidelines for Performance Reports:

keep the report short, matching its length to
the projects complexity and the audiences
needs
use a consistent template and format
use visual elements such as charts and graphs
Criteria for Performance Reporting:

gives timely, complete, and accurate information
doesnt add more administrative overhead than
its worth
is acceptable and useful to all participants
gives warning of problems in time for preventive
or corrective actions
is easily understood by those who have a need to
know
More on these reports later . . .

Page 256

Communication Technology
Technology can vary from project-to-project and throughout the life
cycle of the same project. The team must ensure that the technology is
appropriate for the information being communicated.
Communication Models
The choice of communication model must be appropriate for the project
and any barriers (noise) are identified and managed.
Communications Methods
Methods to communicate can take place through many media. Effective
and efficient use of each requires appropriate communication skills:
Written and oral, listening and speaking
Internal (in the project) and external (client, public)
Formal (reports) and informal (memos, e-mail, IM, telecon)
Vertical (up/down the org.) and horizontal (with peers)
Page 257

Information Management Systems
A variety of tools are available for managing and distributing information:
Hard copy documents: letters, memos, reports, and press releases
Electronic communication media: e-mail, fax, IM, voice mail, telephone, video, web
conferencing, web sites, web publishing, FTP sites, intranet
Electronic PM tools: web interfaces for scheduling , PM software, Skype, meeting software,
virtual office software, portals, and collaborative work management tools.
Performance Reporting
This is collecting and distributing performance information (status reports, progress
measurements, and forecasts). It includes periodic analysis of baseline versus actual data to
communicate progress and to forecast project results. Simple reports show percent complete
or status dashboards (scope, schedule, cost, quality). More elaborate reports may include:
Analysis of past performance
Analysis of forecasts (including time and cost)
Status of risks and issues
Work completed during the period
Work to be completed during the next period
Summary of changes approved, etc.
Page 258
Executing: Procurement Management

Inputs

Seller proposals
Project documents
Make-or-buy decisions
Procurement statement of work
Page 260
Tools &
Techniques
Bidder conferences
Proposal evaluation
techniques
Independent estimates
Expert judgment
Advertising
Procurement negotiations
Outputs
Selected sellers
Agreements
Resource calendars
Change requests
updates
Conduct Procurements is the

process of obtaining seller
responses, selecting a seller and
awarding a contract.
It may involve developing a short

list of qualified sellers which are
then subject to further
information
Page 260
12.2.1 Conduct Procurements

Inputs
Understand the following Inputs for the test:

Procurement Management Plan: How procurement processes will be managed
Procurement Documents:
Used to request proposals from sellers, audit trail
Source Selection Criteria:
Used to rate and scope proposals
Seller Proposals:
Evaluated to select the successful seller
Project Documents:
Risk Register and contract decisions on risk
Make-or-Buy Decisions:
Will the work be done internally or be acquired?
Procurement Statement of Work: Clearly stated goals and requirements
OPA:
Company supplier lists
Pages 260-261

Bidder Conferences Assembling all

prospective vendors in a single meeting, with
information disseminated and individual bids
later received
Proposal Evaluation Techniques
Comparison of alternative proposals on the
basis of vendor responses. Weighted Scoring
is a commonly used technique
Independent Estimates Use of an outside
professional to provide a benchmark
estimate of costs in advance of receiving
proposals
Expert Judgment Experts from various
disciplines may be used to evaluate and
advise on proposals
Pages 262-263
Weighting System
Removes personal bias, is more objective, and considers
relative importance of different evaluation factors
1) determines the evaluation factors
2) assigns a numerical weight to each factor
3) rates the prospective sellers on each criterion
4) multiplies each rating by its weighting
5) totals the ratings to compute an overall score
Typical factors include technical,

management, and cost factors
Avoid overly complicated rating models

Advertising Advertising in selected
newspapers or trade publications.
Government may require advertising of
certain kinds of contracts.
Analytical Techniques evaluate readiness of
a seller, examine past performance for risks.
Procurement Negotiations The project
manager may not be the lead negotiator in
many cases, but will provide technical and
project clarification.
Pages 263-264

Tools and Techniques: Procurement Negotiations
undertaken to clarify structure, requirements,

and contract terms so that mutual agreement on
contract terms can be reached prior to signing.
responsibilities and authorities (Who Will Negotiate?)

pricing, payments, and payment schedules
penalty terms
deliverables -- specifications, quantities, quality, timing
applicable laws, standards, regulations, and other requirements
technical and management approaches
copyright and ownership issues; data rights
Ethical Negotiations: each party is honest with the other,
regardless of expectations related to future work.
Page 264

Outputs
Selected Sellers:
Sellers who are competitive and have
negotiated a draft contract
Agreements:
A legal agreement between Buyer and Seller,
mutually binding. It includes many
requirements and terms that you should
remember, including Incoterms and ADR.
Read this section carefully.
Page 265

Outputs: Types of Contracts

Exam
Tip
Used on development projects for flexibility. Cost risk is on the buyer, so

establish administrative & reporting systems to allow both buyer and seller
visibility into costs. (Includes CPFF, CPIF, CPAF)

Page 266
Executing: Stakeholder Management

13.3 Manage Stakeholder Engagement

Inputs
Stakeholder management plan

Communications management
plan
Change log
Page 268
Tools &
Techniques
Management skills
Outputs
Issue log
Change requests
updates
updates
13.3 Manage Stakeholder Engagement

Manage Stakeholder Engagement is the
process of communicating and working with
stakeholders to meet their needs, address
issues as they occur, and foster stakeholder
engagement in project activities throughout
the project life cycle.
Managing stakeholders increases the
likelihood of project success by ensuring
they clearly understand project goals,
objectives, benefits, and risk.
Test items in this process are Inputs/Tools and Techniques/Outputs, and
understanding the issues and change logs.
The Project Manager (PM) is responsible for engaging and managing

stakeholders.
Pages 268
Monitoring & Controlling Process Group

Page 273

Process Groups
Knowledge Areas
Management
Initiating
4.4
7. Project Cost
Management
8. Project Quality
Management
9. Project Human
Resource
Management
10. Project
Communications
Management
11. Project Risk
Management
4.5
5.5
5.6
6.7
7.4
8.3
10.3
11.6
12.3
13.4

Management
Management
Page 28
Executing
Monitoring and Controlling
5. Project Scope
Management
6. Project Time
Management
Planning
4.2 Develop Project

Management Plan
5.1
5.2
5.3
5.4
4.3 Direct & Manage

Project Work
Plan Scope Mgt.

Define Scope
Create WBS

Change Control
Closing
4.6 Close Project
or Phase
5.5 Validate Scope

5.6 Control Scope
Manage and Control

Mgt.
6.1 Plan Schedule
Project
Work
Activities
6.3 Sequence
Perform
Integrated
6.4 Est. Activity Resources
6.5 Est. Activity Durations
Change
Control
6.6 Dev. Schedule
Validate
Scope
7.1 Plan Cost
Mgt.
7.2 Estimate Costs
Control
Scope
7.3 Determine
Budget
8.2 Perform Quality
8.1 Plan Quality
Mgt.
Control
Schedule
Assurance
9.1 Plan Human
Control
Costs
Resource Mgt.
Control Quality 9.4 Manage Project Team
Management
Control
Communications
11.1 Plan Risk
Management
Control
Risks
11.2 Identify Risks
11.3 Perform
Qualitative
Control
Procurements
Risk Analysis
Control
Stakeholder
Risk Analysis
Engagement
Management
Monitoring &
Controlling

Engagement
7.4 Control Costs
8.3 Control Quality
11.6 Control Risks

Engagement
M&C: Integration Management
4.4 Monitor and Control Project Work

Inputs

Schedule forecasts
Cost forecasts
Validated changes
Page 274
Tools &
Techniques
Expert judgment
Project management
information system
Meetings
Outputs
Change requests
updates
Monitor and Control Project

Work is the process of tracking,
reviewing and reporting the
progress to meet the
performance objectives defined
in the project management plan.
Control includes determining
corrective action, preventative
action or defect repair and
following up on actions taken to
resolve performance issues
Page 274

Taken together, the controlling processes monitor project progress and performance
against the plan and provide the appropriate response to deviations from plan. These
responses frequently require changes to the project plan; hence, project planning,
project execution, and project control form a triad of process groups that are
repeated throughout the project life cycle at each phase gate.
Project monitoring and control is more than earned value

Many project management technicians and some inexperienced project managers
equate project control with earned value. While earned value is an essential part of
project control, it is only a part. Fully integrated project control draws from several
knowledge areas and calls upon all of the leadership, communication, and negotiation
skills of the project manager.
Project monitoring and control is more than data collection

Another common, practical problem is confusing data collection with project control.
Project control is more than just collecting data about project performance; it also
requires analyzing the data, evaluating the meaning of the data and any variances,
taking appropriate corrective actions, and related record keeping.
Page 273

This process is part of Project Integration Management knowledge area,
along with Integrated Change Control. This process involves monitoring
all processes: initiating, planning, executing, and closing.
Monitoring &
Controlling Processes
Planning
Processes
Closing
Processes
Initiating
Processes
Executing
Processes
Page 274
4.4.1 Monitor and Control Project Work

Inputs: The Project Management Plan (Another Reminder)

Page 275

Define Scope
Create WBS
Define Activities
Sequence Activities
Develop Schedule
Estimate Costs
Determine Budget
Identify Risks
Plan Risk Response

Other Inputs:
Schedule Forecasts
using schedule variance (SV) and schedule performance index
(SPI) to compute estimate to complete (ETC)
Cost Forecasts
using cost variance (CV) and cost performance index (CPI) to
compute estimate at completion (EAC)
Validated Changes
collected data is analyzed and transformed into work
performance information
EEF and OPA
Page 275-276

Status of deliverables
Implementation of change requests
Forecasts: variance, trend, and earned value
information, estimates at completion (EAC),
schedule forecasts, index information
(SPI, CPI, TCPI).
Generally involves Gantt charts and S-curves.
Includes cost, schedule, quality and scope
accomplishment and variance information
Page 276

Expert Judgment
regression analysis, grouping methods
causal analysis root cause, FMEA, trends, etc.
Validated Changes
PMIS and Meetings
Page 277
M&C: Integration Management
4.5 Perform Integrated Change Control

Inputs

Change requests
Page 279
Tools &
Techniques
Expert judgment
Meetings
Change control tools
Outputs

Change log
updates

Perform Integrated Change Control
is the process of reviewing all
change requests, approving
changes and managing changes to
deliverables, organizational process
assets, project documents and the
project management plan; and
communicating their disposition.
Sometimes a Change Control Board
(CCB) is responsible for approving
or rejecting changes, as approved
by the customer or sponsor.
Configuration Control focuses on the specification of deliverables and
processes.
Change Control focuses on changes to project documents, deliverables or
baselines.
Page 279-280

Change Control System
A set of procedures that describes how modifications to the

project deliverables and documentation are managed and
controlled, including:
Page 280
requesting changes
reviewing the implications of changes requests
approving or rejecting changes
communicating changes
maintaining a change log - comprehensive list of changes
4.5.2 Perform Integrated Change Control

Tools and Techniques: Configuration Management
A set of processes and procedures to ensure that the

documentation of the product and the actual
product remain consistent with each other:
Exam
Tip
Glossary Definition:
The configuration management system is a collection of procedures used
to identify and document the functional and physical characteristics of a
product or component. It:
controls changes to these characteristics,
records/reports each change,
audits the products to verify conformance to requirements.
documentation, tracking, and approval levels
validates the impact, and
communicates them to stakeholders.
Page 281

Inputs: Work Performance Reports
Reports of interest include:

resource availability,
schedule/cost data,
earned value management (EVM) reports, and
Burnup or burndown charts.
A burnup chart tracks how much
work is done.
Page 281
A burndown chart tracks how much

work remains on your project and
whether or not you will hit the deadline.

Inputs: Change Requests are NOT Change Orders
Change Requests: oral or written, formal or informal, may or may not

be implemented
Change Orders: formal request for change to approved project plan;

typically used for projects performed under contract
Exam
Tip
Beware of the Constructive Change Order -- an oral or written

communication from a perceived authority that the project team may
(possibly legally) respond to as equivalent to a written change order.
A Functional Manager wants to make a change in the project. What is the first
thing a PM should do?
A Senior Manager decides the scope of work should be changed. What is best
to do?
Answer: Evaluate the impact on the project. Meet with the team to discuss
alternatives, before deciding to use reserves and meet with management.
The Exam lists incorrect choices, like: meet with the customer first or meet
with management first The correct answer is evaluate first
Page 282

Tools and Techniques: Change Control Meeting
Approved or Rejected Change Requests
In some projects, changes are controlled by a Change Control Board (CCB),

And implemented by the Project Team
A Change Control Board (CCB) is:
A formally chartered group responsible for reviewing, evaluating,
approving, delaying, or rejecting changes to the project, and for recording
and communicating such decisions.
Page 283
Reviews and approves or rejects change requests

May also be responsible for defining the change request process,
communicating change decisions, and managing the implementation
of approved changes.
Power and responsibilities should be reviewed and agreed to by
stakeholders
M&C: Scope Management

5.5 Validate Scope
Inputs

Verified deliverables
Page 285
Tools &
Techniques
Inspection
techniques
Outputs
Accepted deliverables
Change requests
Work performance
information
5.5 Validate Scope

PMBOK Fourth Edition, Page 123
Validate Scope
is the process of
formalizing acceptance
of the completed
project deliverables.
Scope validation is
different from quality
control in that
validate scope is
primarily concerned
with the acceptance of
the deliverables
Page 285
5.5.3 Validate Scope

Outputs: Accepted Deliverables
These have all been answers on the test:

Customer feedback on a more detailed basis
Done at the end of each Project Phase
Results in formal acceptance

Exam
Tip
The questions on the exam are vague on Scope Validation.

Read them carefully.
One question asks for: the key aspect of scope validation
Answer: customer acceptance of project efforts.
The answer does not involve correctness of the work.
Page 287
M&C: Scope Management
5.6 Control Scope

Inputs

Page 288
Tools &
Techniques
Variance analysis
Outputs
Work performance
information
Change requests
updates
updates
5.6 Control Scope

Control Scope is the process
of monitoring the status of the
project and product scope and
managing changes to the
scope baseline
Uncontrolled changes are
often referred to as Scope
Creep.
Page 288
5.6.1 Control Scope

Inputs
The primary inputs to Control Scope are:

The project management plan includes the following to control scope:
Page 288
The scope baseline

Change management plan
Configuration management plan
Requirements management plan
5.5.2 Control Scope

Tools and Techniques: Variance Analysis
a comparison of actual results to planned results for the purpose of early

problem detection ...
Cost, schedule, scope, and quality variances
are most typical but they can also include
resources and risk variances.
Both positive and negative variances need
analysis
Should involve an evaluation of cause and
impact
Becomes an input to change control process
for generating corrective actions
Pages 290
5.5.2 Control Scope

Outputs: Work Performance Information
Pages 291
M&C: Time Management

Inputs

Project schedule
Project calendars
Schedule data
Page 292
Tools &
Techniques
Performance reviews
Project management
software
Resource optimization
techniques
Modeling techniques
Leads and lags
Schedule compression
Scheduling tool
Outputs
Work performance
information
Schedule forecasts
Change requests
updates
assets updates

Control Schedule is the process
of monitoring the status of
project activities to update
project progress and manage
changes to the schedule baseline
to achieve the plan
Page 292
6.7.1 Control Schedule

Inputs
The inputs to Control Schedule are:

Project schedule
Project calendars
Schedule data
OPA
To control schedule, the project management plan includes:

The schedule management plan
The schedule baseline
Page 292

Tools and Techniques: Performance Reviews
PV = Planned Value (was BCWS) (1)

EV = Earned Value (was BCWP) (2)
AC = Actual Cost (was ACWP) (3)
(1)
(2)
(3)
requires a performance baseline

requires a way to measure value of
work completed (earned value)
requires a way to collect actual
costs at work package level
AC
Actual Cost
Cost,
Hours,
or Work
Products
PV
Planned Value
SV
Schedule
Variance
CV
Cost
Variance
EV
Work Performed
(Earned Value)
Time
t When Planned
t Actual
Pages 294-295

Tools and Techniques: Variance Analysis

analysis
impact
Pages 294-295

Tools and Techniques: Corrective Action
Changes to align future project performance with the project plan.

Corrective actions should be based on what-if evaluations and may
be the result of formal replanning. Corrective actions complete the
loop between project control and project execution:
* Taking action to expedite schedules, such
as assigning more or different resources or
overlapping tasks
* Delaying a purchase to protect cash flow
* Invoking planned risk responses when risk
events occur
Page 294

Tools and Techniques: Trend Analysis
a tool that uses mathematical

techniques to forecast future
outcomes based on past results
may be used to monitor quality

(product), cost and schedule
performance of a project
provides a high-level overview that

indicates whether or not more
detailed information is needed
Page 295
The Rule of Seven: 7 data

points all above or below the
mean, or all increasing or
decreasing, indicate a trend

Tools and Techniques: Project Management Software
Page 206

Tools and Techniques: Resource Optimization Techniques
The resource histogram is a time-phased display of the amount of

project work assigned to each resource (PMBOK Fifth Edition, Page 189-190)
Resource plans are best when resource requirements
increase and decrease without variations
Month 1
Month 2
Month 3
Month 4
1.5
1.0
0.5
Product Manager
Page 296

Tools and Techniques: Modeling Techniques
Page 297

Tools and Techniques: Schedule Compression
Activity
A
B
C
Normal Normal
Time
Cost
4 wks
3 wks
2 wks
12,000
6,000
4,000
Crash
Time
Crash
Cost
Crash
(wks)
2 wks
2 wks
1 wks
15,000
7,000
5,500
2 wks
1wks
1 wks
Crash Cost
Total
Crash Cost per week
3,000
1,000
1,500
1,500
1,000
1,500
Fast Tracking
Paralleling - Activities or phases normally be done in sequence are performed in
parallel for at least a portion of their duration. fast tracking can result in rework and
increased risk.
Exam
Tip
Crashing
A technique to shorten the schedule duration for the least incremental cost by adding
resources. Works only for activities on the critical path. May result in increased risk
and/or cost.
Page 298
M&C: Cost Management
7.4 Control Costs

Inputs

Page 300
Tools &
Techniques
Earned Value Management

Forecasting
To-complete performance
index (TCPI)
Performance reviews
Reserve analysis
Outputs
Work performance
information
Cost forecasts
Change requests
updates
assets updates
7.4 Control Costs

Control Costs is the process of
monitoring the status of the
project to update the project
costs and managing changes to
the cost baseline
Page 300
7.4.1 Control Costs

Inputs: Project Management Plan (Cost Management Plan & Cost Baseline)
A time-phased budget (either by performance period or summed cumulatively
over the life of the project) used to monitor and control project costs.
Cost
Cost Performance Baseline

Exam
Tip
BAC
Cumulative
Planned Value (PV)
Spending Plans
and Cash Flow
Plans are special
types of Cost
Baselines
Monthly Planned
Value (PV)
Time
Page 301
7.4.1 Control Costs

Inputs: Project Funding Requirements and Management Reserve
Project Budget
Cost
EAC (forecasted cost)
Cost Baseline
Cumulative Planned
Value (PV)
BAC
}
Management
Reserve
Exam
Tip
Cash Flow
Funding
Expenditures
Time
Page 302
7.4.1 Control Costs

Inputs: Work Performance Data
Organizes and summarizes information on project

status and progress
It includes data on activities that have started , their

progress, and which deliverables have been finished
Includes cost, schedule, scope accomplishment and variance information
Includes data on costs authorized and costs incurred
Caution: Ensure a consistent data date,

ideally from a common set of data
Page 302
7.4.2 Control Costs

Tools and Techniques: Earned Value Management (EVM)
Exam
Tip
Earned value management (EVM), also known as earned

value technique (EVT) compares Earned Value (EV or BCWP)
to both Planned Value (PV or BCWS) and Actual Cost (AC or
ACWP) to analyze cost control, resource management, and
production. Cost control determines the cause of a variance,
its magnitude, and if corrective action is needed.
CV at the end of a project is BAC minus total actual cost. SV

at the end of a project is zero, because all of the planned
values will have been earned.
CPI and SPI are efficiency indicators.
Page 303 & 305
7.4.2 Control Costs

Definition of Terms
PV
Planned Value
Value of work planned to be done at any point in time.
AC
Actual Cost
How much did we spend to get the work done at a point in time?
EV
Earned Value
Planned value of the work we completed at any point in time.
BAC
Budget at Completion
How much did we budget for the whole project?
EAC
Estimate at Completion
Given our progress, what is our forecast of the total project cost?
ETC
Estimate to Complete
How much more do we estimate the job will cost?
VAC
Variance at Completion
How much over/under budget will we be?
Page 304
Tools and Techniques: Earned Value Management (EVM) - Equations

CV
Cost Variance
CV = EV AC
Negative = Over budget,

Positive = Under budget
SV
Schedule Variance
SV = EV PV
Negative = Behind schedule,

Positive = Ahead of schedule
CPI
Cost Performance Index
CPI =
SPI
Schedule Performance
Index
SPI = EV
PV
EAC
Estimate at Completion
(4 formulas)
EAC =
Definition:
At this time in the project,
what is the forecast of
total project cost?
Page 304
EV
AC
BAC
CPI
Less than 1.0 = Over budget

Greater than 1.0 = Under budget
Less than 1.0 = Behind schedule
Greater than 1.0 = Ahead of schedule
Used when EV trend is typical (CPI will be the
same for the rest of the project)
EAC = AC + (BAC-EV)
Used when EV trend is atypical (CPI will

change to follow the planned rate, or PV line)
EAC = AC + ETC
Actual cost plus bottom-up estimate to

complete by the team. (plan is no longer valid,
re-estimate the plan)
EAC = AC + (BAC-EV)
(CPI x SPI)
Used when both CPI and SPI influence the

remaining work. Assumes negative cost
performance and need for firm schedule.
7.4.2 Control Costs

Tools and Techniques: Earned Value Management (EVM) - Equations
ETC
Estimate to Complete
ETC = EAC - AC
The expected cost to finish all the remaining

work. If work is proceeding on plan, use this
this to calculate the work remaining
ETC= Re-estimate
Bottom up re-estimate by the team
TCPI = BAC-EV
BAC-AC
Less than 1.0 = Easier to complete

Greater than 1.0 = Harder to complete
(Value of work remaining divided by the value
of the budget remaining)
TCPI
Based
on
BAC
Based
on
EAC
Cost efficiency that must

be maintained to
complete the project on
plan (BAC).
TCPI = BAC-EV
EAC-AC
Cost efficiency that must

be maintained to
complete the current EAC.
VAC
Page 305
VAC = BAC-EAC
Variance at Completion
Less than 1.0 = Easier to complete

Greater than 1.0 = Harder to complete
(Value of work remaining divided by
calculated estimate to complete, ETC)
At the end, how much more or less than plan
will we have spent?
7.4.2 Control Costs

Work Products
Money
$3,000
Hours
300
EAC
Deliverables.
30
Projected
Overrun
$2,000
200
20
Cost
Variance
(CV)
$1,000
100
BAC
AC
PV
(Baseline)
Schedule Variance (SV)
10
EV
0
1
Weeks
Page 307
7.4.2 Control Costs

Tools and Techniques: EVM, The Easy Way to Remember It
Page 307
EV (BCWP) comes first in every formula.
If it is a variance - it is EV minus something
If it is an index - it is EV divided by something
If the question relates to cost - use AC
If the question refers to schedule - use PV
Negative is either behind schedule or over budget

( For example: CV = -30% = over budget)
Positive is either ahead of schedule or under budget
Exercise
Project Status at the end of Week 2

Task A
Task B
Task C
100% complete
25% complete
0% complete
Dimensions of Project Performance
AC = 140 hours
AC = 80 hours
AC = 0 hours
Try It:
Schedule Variance
-50 hours
____________
Cost Variance
-70 hours
____________
Cost at Completion
(Typical)
Cost at Completion
(Atypical)
PV
Planned Value
AC
Actual Cost
EV
Earned Value
Schedule Variance =
EV - PV
Cost Variance
EV - AC
EVc/ACc
CPIc
Estimated (Cost)
at Completion
(EAC): Typical
733 hours
____________
570 hours
___________
ACc
Estimated (Cost)
at Completion =
(BAC-EVc)]
CPIc
ACc + (BAC-EVc)
(EAC): Atypical
WBS
Cum. Hrs.
500
EVc
= 150 hours
200 hours
SV = - 50 hours
PVc =
EVc = 150 hours

ACc = 220 hours
CV = - 70 hours
50
400
50
A
100
300
Task A
Task B
Task C
100 Hrs
200 Hrs
200 Hrs
PV
BCWS
100
B
200
100
Cost at Completion
(Atypical)
100
100
Cost at Completion
(Typical)
1
Page 308
= 220 + (500 -150)

= 570 hours
2
3
Time, weeks
= 220 + [(500-150)/(150/220)]
= 733 hours
= BAC/CPI
7.4.2 Control Costs

Tools and Techniques: Forecasting
EAC Based on ETC by the Team
EAC = AC + Bottom-Up ETC
EAC Forecast where Future Work is at Same Rate of Work Shown in the Baseline Budget
Past costs were atypical, and future work will be at the same rate of expenditure as in the baseline budget.
EAC = AC + (BAC - EV)
EAC Forecast where Future Work will not Change from Actual
Past costs were typical of what will happen in the future.
EAC = BAC/CPI
Same as:
EAC = AC + [(BAC EV)]/CPI]
EAC Forecast where Future Work be Modified by both CPI and SPI
Future work will be at the same rate of expenditure as in the original baseline budget, but is modified by
both of the indexes. It assumes the project is in a cost overrun situation and there is a requirement to meet
a firm schedule commitment. It is useful when schedule is a factor affecting future work. The weighting of
CPI and SPI can be varied according to the PMs judgment (80/20, 50/50, etc.)
EAC = AC + [(BAC EV)/(CPI x SPI)]
Page 309
7.4.2 Control Costs

Tools and Techniques: To-Complete Performance Index (TCPI)
TCPI is used to determine if the BAC or the EAC can be reasonably achieved
It measures future cost performance needed achieve either a target BAC or

target EAC. Calculate the reasonableness of BAC first. If it is obvious that the
BAC is no longer viable, the project manager should consider the
reasonableness of achieving the forecasted EAC.
To Achieve a Target EAC
To Achieve a Target BAC

TCPI (BAC) =
TCPI (BAC) =
Page 310
Work Remaining
Funds Remaining
TCPI (EAC) =
BAC - EV
EAC - AC
BAC - EV
BAC - AC
7.4.2 Control Costs

The TCPI is compared to the cumulative CPI to determine if a target EAC is

reasonable, e.g., within plus/minus 0.05 of the cumulative CPI (some
management groups allow plus/minus 0.10). If a TCPI delta exceeds 0.05, the
target EAC may be overly optimistic. If a TCPI delta is lower than 0.05, the target
EAC may be overly conservative.
Given a TCPI of 1.1, the simple definition is: for every dollar spent from here to
the end of the contract, a dollar and ten cents worth of budgeted work must be
completed (or earned) to achieve the target EAC. Likewise a TCPI of 0.95 means:
for every dollar spent from here to the end of the contract, only 95 cents worth
of budgeted work must be completed or earned.
Page 310
7.4.2 Control Costs

To-CompletePerformance
Performance Index
Index
To-Complete
Status Date
+
TCPI (BAC)
Baseline Plan
1.00
TCPI (EAC)
Pages 310
Cumulative CPI
M&C: Quality Management
8.3 Control Quality

Inputs

Quality metrics
Quality checklists
Deliverables
Project documents
assets
Page 315
Tools & Techniques
Seven basic quality tools

Statistical sampling
Inspection
review
Outputs
Quality control
measurements
Validated changes
Verified deliverables
Change requests
updates
assets updates
8.3 Control Quality

Perform Quality Control is
the process of monitoring
and recording results of
executing the quality
activities to assess
performance and
recommend necessary
changes
Page 315
8.3.1 Control Quality

Inputs: Are straight forward, read them, but remember:
Quality Assurance (QA): the process of auditing quality requirements, and the
results from quality control (QC) measurements, to ensure quality standards and
operational definitions are used..
Quality assurance involves Quality Audits, and is done in Execution Process.
Quality Control (QC): a process of monitoring and recording results (both product
and project management) of executing quality activities to assess performance and
to recommend necessary changes. Involves identifying ways to remove the causes of
quality defects.
Quality control involves inspection and requires an understanding of sampling
strategies, tolerances, and the causes of variation in a process. It is done in the
Monitoring and Controlling Process.
Pages 316

The first seven (7) Tools & Techniques in this section are
called the Seven Basic Tools of Quality - know these for the
test!
Exam
Tip
Page 319
Cause and Effect Diagram

Control Charts
Flowcharting
Histograms
Pareto Diagrams
Checksheets
Scatter Diagram

Tools and Techniques: Cause and Effect Diagram
People
Not Following
Procedures
Material
Methods
Lack of Training
CAUSES
Transport
Page 319
IT System
EFFECT
Procedure

A chart of process performance over time used to

determine if the process is in control or out of control
UCL
3
99.7%
.
.
.
.
.
.
.. . . . . .. . . .
. .. . .. . .
.. . . .
.
.
..
.
.
2
95.5%
Expected
Variation
Out of Control
(Assignable Cause)
1
68%
Normal
Distribution
Curve
Mean
LCL
in control
normal distribution of outcomes
due to common causes of variation
inherent in the process
Page 320
out of control
rule of seven, trends, and cycles
due to special causes of variation
external to the process

Hours recorded for this project

started on plan, but if the trend
continues, hours spent will drift
out of control.
Upper Spec. Limit

UCL
Plan or Mean
LCL
Lower Spec. Limit
Actual
Page 321

Tools and Techniques: Flowcharting
Process Flowchart
Yes
Design
Review
Proceed
OK?
No
Revise
Page 321
% contribution (or frequency of occurrence)
Tools and Techniques: Pareto Charts
Pareto Diagram:
80%?
a histogram, ordered by
frequency of occurrence, that shows the percent
contribution of each category of identified cause to
the overall quality defects in a product or process.
Pareto Analysis:
Pareto diagrams help

project teams identify the vital few factors that
account for most quality problems from the more
numerous trivial many factors.
Paretos Law:
Design of Experiments:
80/20 Rule
Which variables have influence

over the outcome.
What If Analysis
source
Pages 321-322

Tools and Techniques: Run Chart

techniques to forecast future
outcomes based on past results
indicates whether or not more
detailed information is needed
Page 322


Page 323

Tools and Techniques: Statistical Sampling
a technique for accepting or rejecting a larger population

by choosing a part of the population for inspection ...
Statistical sampling can reduce the cost of QC on a project.
The validity of statistical sampling depends on an
appropriate choice of sample items and sample size.
Sample size increases exponentially as the level of desired certainty
increases and the acceptable level of error decreases.
Sampling strategies include single samples from a lot, multiple small
samples from a lot, and double sampling methods where the size of the
second sample depends on the results of the first sample.
All sampling strategies involve some risk of producer error (type I error)
where acceptable lots are rejected based on a non-representative sample
or consumer error (type II error) where unacceptable lots are accepted
based on a non-representative sample.
Page 324

Tools and Techniques: Inspection Techniques
An evaluation of whether or not the project results

conform to the latest specifications and requirements ...
Types of Inspection :
measuring
examining
auditing
testing
acceptance testing
reviewing
walk-throughs
Inspection generally takes place throughout

the projects lifecycle. Be sure to plan for it
accordingly and to include it in the WBS.
Page 325
M&C: Communications Management


Inputs

Project communications
Issue log
Page 328
Tools &
Techniques
systems
Expert judgment
Meetings
Outputs
Work Performance
information
Change requests
updates
assets updates

Control Communications is the
process of monitoring and
controlling communications
throughout the entire project
life cycle to insure the
information needs of the
project stakeholders are met.
Page 328
10.3.1 Control Communications

Inputs: Work Performance Data
Earned Value Management: Test Yourself

How much work is done so far?
How much work did we plan to have done so far?

When do we now estimate the project will be done?
How much have we spent for what weve achieved?
How much did we plan to spend for what weve achieved?
How much do we now estimate the project will cost to complete?
Page 329
10.3.3 Control Communications

Outputs: Work Performance Information
Earned Value Management: The Data
Variance Analysis
PV = Planned Value (was BCWS) (1)
EV = Earned Value (was BCWP) (2)
AC = Actual Cost (was ACWP) (3)

(1) requires a performance baseline

(2)
(3)
requires a way to measure value of

work completed (earned value)
requires a way to collect actual
costs at work package level
AC
Actual Cost

analysis
impact
Cost,
Hours,
or Work
Products
Total
Variance
PV
Planned Value
SV
Schedule
Variance
CV
Cost
Variance
EV
Work Performed
(Earned Value)
Time
t When Planned
t Actual
Trend Analysis
Page 332

techniques to forecast future outcomes
based on past results


indicates whether or not more detailed
information is needed

M&C: Risk Management
11.6 Control Risks

Inputs

Risk register
Page 335
Tools &
Techniques
Risk reassessment
Risk audits
Variance and trend analysis
Technical performance
measurement
Reserve analysis
Meetings
Outputs
Work performance
information
Change requests
updates
assets updates
11.6 Control Risks

Control Risks is the process of
implementing risk response
plans, tracking identified
risks, monitoring residual
risks, identifying new risks
and evaluating risk process
effectiveness throughout the
project
Page 335
11.6.1 Control Risks

Inputs
The Risk Management Plan Includes:

Methodology: Approaches, tools and data sources.
Roles and Responsibilities: Team member ownership for risk activities.
Risk Register
Budgeting: Funds needed for contingency reserves and management reserves.

Timing: When processes will be done, reserves applied, and how risk appears in schedule.
Sources of risk, potential risk event, and risk symptoms
Categories: Risk groupings. The RBS looks at sources of risk, IDs and categorizes them.
Opportunities to pursue, opportunities to ignore
Thresholds: What is the trigger? Stakeholders have different thresholds of risk tolerance,
define them, and the must be agreed by all.
Threats to respond to, threats to accept
Planned risk responses and how contingencies will be implemented
Define P/I Levels: Qualitative (low to high) or probabilities.
Risk reserves
Risk Matrix: Likelihood-Severity, or Probability-Impact.
Responsibilities for risk management
Stakeholder Risk Tolerances: Progressively elaborated.
Plan for ongoing risk identification,

quantification, and response development
Reporting Formats and Tracking: Document risk, auditing, defines content of risk register.
Work Performance Reports

Purpose of Performance Reports:
to detect problems in time to take corrective or preventive
action
to reduce customer and management anxiety
to share project information within the project team
Guidelines for Performance Reports:

keep the report short, matching its length to
the projects complexity and the audiences
needs
use a consistent template and format
use visual elements such as charts and graphs
Page 335-236
Criteria for Performance Reporting:

gives timely, complete, and accurate information
doesnt add more administrative overhead than
its worth
is acceptable and useful to all participants
gives warning of problems in time for preventive
or corrective actions
is easily understood by those who have a need to
know

Tools and Techniques: Variance and Trend Analysis
Variance Analysis

analysis
impact
Page 338
Trend Analysis

techniques to forecast future outcomes
based on past results


indicates whether or not more detailed
information is needed


Tools and Techniques: Reserve Analysis
A provision in the project plan to mitigate cost and/or schedule

risk
May be calculated as a percent of baseline to allow for overruns
May be established as a separate fund for unforeseen problems
May have many different (and application area specific) names:
management reserve
contingency
May be assigned to any level of the WBS, or RBS cause.
Exam
Tip
PMI recommends a
minimum total
reserve of 10%
Pages 339

Outputs: Updates and Change Requests
Implementing contingency plans or workarounds

requires change to the project plan.
Workaround is defined as a response to a threat
that has occurred, for which a prior response had
not been planned or was not effective.
Change requests can include corrective and
preventive actions.
Change Control System

A set of procedures that describes how modifications to
the project deliverables and documentation are managed
and controlled, including:
requesting changes
reviewing the implications of changes requests
approving or rejecting changes
communicating changes
maintaining a change log - comprehensive list of changes
Exam
Tip
Was on
my test
Contingency =
Pre-Planned
Pages 339
Exam
Tip
Exercise
Risk Monitoring and Control
The exam often asks questions such as:

What do you do with non-critical risks?
Answer: Document and revisit frequently
Would you select only one risk response strategy?
Answer: No, a combination of choices
What risk activities would you do during Execution?

.
Answer: Watch for non-critical risks that

become more important
What is most important to address in team meetings? Answer: Risk

How would risk be addressed in team meetings?
Answer:
Status of risks?, Any new

risks?, Any change to the
order of importance?
Which are more frequent, contingency plans

or workarounds?
Answer:
With proper risk management

Workarounds become less
frequent than contingency plans.
M&C: Procurement Management

Inputs

Agreements
Page 341
Tools &
Techniques
Contract change control
system
Procurement performance
reviews
Inspections and audits
Performance reporting
Payment systems
Claims administration
Records management
system
Outputs
Work performance
information
Change requests
updates
assets updates

Control Procurements is the
process of managing
procurement relationships,
monitoring contract performance
and making changes and
corrections to contracts as
appropriate
Page 341
12.3.1 Control Procurements

Inputs
Procurement Statement of Work
Match Contract Type to the Project
A narrative description of products or services to be supplied under contract.
Provides the basis of agreement between buyer and supplier

Sufficient detail to allow prospective suppliers to determine
whether or not they can comply
Sufficient latitude for creative solutions only if appropriate
Each procurement requires a separate SOW. But one SOW

may cover many items in a single procurement
May be revised as the procurement progresses
Should be clear, concise, and unambiguous
May be developed by the project team
or supporting offices (or even the seller)
depending on policy and ability
Your best defense against procurement scope creep!
Pages 342-343

Exam
Tip
Used on development projects for flexibility. Cost risk is on the buyer,

so establish administrative & reporting systems to allow both buyer and
seller visibility into costs. (Includes CPFF, CPIF, CPAF)


Inputs: Approved Change Requests
Change Requests/ Change Orders / Constructive Change Orders -know the differences
Use the Change Control System and Change Control Board
Approved / Unapproved -- document all changes

Re-plan and update the documentation (including risk)
Contractors may use change orders to get well
Page 343

Tools and Techniques: Contract Change Control System
Contract Change Control System

Defines the process by which the contract can be modified. It is
part of the Integrated Change Control system, and includes
paperwork, tracking systems, dispute resolution conditions, and
approval levels for authorization.
If the buyer terminates the contract for cause, convenience, or
default, it is done in accordance with the termination and change
control sections of the contract.
Contract changes usually also involve changes in either contract
pricing or schedule or both. Disputed changes may require
mediation or legal resolution.
Page 345

Tools and Techniques: Contract Change Control System
Example
Contract Change Control System
modifying the contract
Note:
Exam questions - How is project control different in a contracted

environment? Answers may include:
When working under a contract, the PMs success depends not solely on
success of team members, but on the culture and procedures of the buyers company.
Page 348
: A Process for
(PMBOK Fourth Edition, Page 338)
You need to deal with a different companys set of procedures

It is not as easy to see the problems
A greater reliance on reports to determine if a problem exists
A greater reliance on relationships between Buyer and Sellers PMs.

Tools and Techniques: Claims Administration
Claims Administration
Contested changes and constructive changes are those where the
buyer and seller cannot agree on payment for the change, or
cannot agree that the change even occurred. These become claims,
disputes, or appeals.
If not settled by the parties, it may be subject to dispute resolution
procedures in the contract, e.g., arbitration dispute resolution
(ADR), and can be started either before or after contract closure.
The preferred method of settlement is negotiation.
Page 345

EXERCISE
CONTRACT INTERPRETATION WHICH WINS
In each line, circle the item that would win in a dispute over contract interpretation !
Contract Language
OR
A memo describing changes after the contract is signed
Contract Language
OR
A memo signed by both parties before the contract is signed that

describes what was agreed to during negotiations
Contract terms and conditions
OR
Scope of work
Common definition
OR
The intended meaning (without supplying a definition)
Industry use of the term
OR
Common use of term
Special provisions
OR
General provisions
Typed over wording on contract
OR
A handwritten comment on the contract that is also initialed
Numbers
OR
Words
Detailed terms
OR
General terms
It depends on the Order of Precedence Clause in the contract !
Page 350
M&C: Project Stakeholder Management

13.4 Control Stakeholder Engagement

Inputs

Issue log
Project documents
Page 351
Tools &
Techniques
systems
Expert judgment
Meetings
Outputs
Work performance
information
Change requests
updates
assets updates
13.4 Control Stakeholder Engagement

Control Stakeholder
Engagement is the process of
monitoring overall project
stakeholder relationships and
adjusting strategies and plans for
engaging stakeholders. This
process will increase the
efficiency and effectiveness of
engaging stakeholders as the
project evolves.
The Project Manager (PM) is
responsible for engaging and
managing stakeholders.
Page 351
13.4.2 Control Stakeholder Engagement

Tools and Techniques: Information Management Systems
Information Management Systems

A variety of tools are available to the PM for capturing and
distributing information on cost schedule and performance.
Reports can be consolidated from several systems for
distribution.
Examples are table reporting, spreadsheet analysis, and
presentations. Dashboard graphics can be used for visual
presentation of project performance
Page 352
Closing Process Group
Page 355

Process Groups
Knowledge Areas
Management
Initiating
5. Project Scope
Management
Planning
4.2 Develop Project
Management Plan
5.1
5.2
5.3
5.4
Executing
Closing
4.3 Direct & Manage

Project Work
Plan Scope Mgt.

Define Scope
Create WBS
Monitoring &
Controlling
Change Control
5.5 Validate Scope
5.6 Control Scope
6.2
6.3
6.4
6.5
6.6
Define Activities
Sequence Activities
Dev. Schedule
7. Project Cost
Management
7.1 Plan Cost Mgt.

7.2 Estimate Costs
8. Project Quality
Management
8.2 Perform Quality

Assurance
9. Project Human
Resource
Management
9.1 Plan Human

Resource Mgt.

7.4 Control Costs
8.3 Control Quality
10. Project
Communications
Management

Management
11. Project Risk

Management

11.2 Identify Risks
Risk Analysis
Risk Analysis

Management

Management

Engagement

Engagement
Page 28
4.6 Close Project

or Phase
4.6 Close Project or Phase

Mgt.
6.1 Plan Schedule
12.4
Close Procurements
6. Project Time
Management

Management
Closing
11.6 Control Risks
Closing: Integration Management

Inputs

Accepted deliverables
Page 355
Tools &
Techniques
Expert judgment
Meetings
Outputs
Final product, service or result

transition
updates

Close Project or Phase is
the process of finalizing
all activities across all of
the Project Management
Process Groups to
formally complete the
project or phase
Page 355

The PM reviews all information from previous phase
closures to ensure that all work has been done and
objectives have been met. The scope baseline (scope,
WBS and WBS dictionary) is reviewed to ensure
completion.
If a project is terminated before completion, procedures
are established to investigate and document why the
action was taken.
Stakeholders are engaged in the process.
Page 355
4.6.1 Close Project or Phase

Inputs: The Project Management Plan (Another Reminder)

Page 356

Define Scope
Create WBS
Define Activities
Sequence Activities
Develop Schedule
Estimate Costs
Determine Budget
Identify Risks
Plan Risk Response

Inputs: Accepted Deliverables
These have all been answers on the test:

Customer feedback on a more detailed basis
Done at the end of each Project Phase (not PM phase)
Results in formal acceptance

Exam
Tip
The questions on the exam are vague on Scope Validation.

Read them carefully.
One question asks for: the key aspect of scope validation
Answer: customer acceptance of project efforts.
The answer does not involve correctness of the work.
Page 357

Outputs: Final Product, Service, or Result Transition
Final Product, Service, or Result Transition

The output of Close Project or Phase is the transition of
what the project was authorized to produce. If it is a
phase closure, it is the intermediate product, service or
result of that phase. Formal acceptance includes
receiving a formal statement that the requirements of
the project or phase have been met.
Pages 358

Outputs: Organizational Process Assets Updates
Organizational Process Assets Updates

Closure will include storage of project documentation using the configuration
management system. OPA updated during closure include:
Project Files
Assemble a complete set of project records from all processes for archiving, and updating
historical databases. Examples include: the PM plan, scope, cost, schedule, calendars, risk
registers, change documents, risk responses, and risk impact.
Project or Phase Closure Documents

Documentation showing project completion (or termination) and transfer of deliverables.
During closure, the PM reviews closure documents from all prior phases, acceptance
documents from Validate Scope and the contract to ensure that all requirements are
completed.
Historical Information
Lessons learned are transferred to archives for future use. This can be information on issues
and risks as well as techniques that worked well and can be applied to future projects.
Pages 359
Closing: Project Procurement Management


Inputs

Page 360
Tools &
Techniques
Procurement audits
Procurement negotiations
Records management system
Outputs
Closed procurements
updates

Close Procurements is the
process of completing each
procurement.
Contract closure involves
verification that all the work and
deliverables produced under
contract were acceptable.
In multi-phase contracts, the

term of the contract may only
apply to the end of each phase,
and this process would close
phase-end contracts.
Page 360

Contract closure involves verification that all the work and
deliverables produced under contract were acceptable. It also
involves updating records to as-built and archiving this information
for future use. In multi-phase contracts, this process closes phaseend contracts.
Early termination of a contract (or a portion) can result from mutual
agreement of the parties or from default of one of the parties, or for
convenience of the buyer. Rights and responsibilities of the parties
are controlled by the terminations clause.
Buyer may have the right to terminate all or part of a contract for
cause or convenience at any time, but buyer may have to
compensate seller for preparations, partial completions, and
completed/accepted work
Page 360
12.4.2 Close Procurements

Tools and Techniques: Procurement Negotiations
Negotiation is the primary goal for settling

disputes
If this cannot be achieved, use Alternative
Dispute Resolution (ADR) Mediation or
Arbitration
Litigation is the LEAST desirable option.
Page 327
4.6 and 12.4

Close Project/Phases and Close Procurements
Be prepared for as many as sixteen questions on these topics:

Inputs and Outputs
How Close Project is similar/different from Close Contract
(Close Procurements has similar work to Close Project, but
with more attention on documentation, completion of files
and verification/acceptance.)

One More Time: It was on my examination twice
Plan Communications is the process of

determining the project stakeholder information
needs and defining a communication approach
The formula:
Channels =
N(N 1)
2
Reveals the number of possible channels

of communication in a group, where N is
the number of people in the group
Page 166-167
Page 365
was introduced into the
PMBOK in version in its third
edition. It requires project
managers to consider legal and
ethical issues, and at all times
to focus on professionalism and
advancement of the profession
of project management
Page 365
Think about Legal, ethical and professional behavior when
answering exam questions
You will be challenged with multiple situational questions
Read PMI Member Ethical Standards: Member Code of Ethics and
Member Standards of Conduct, PMP Code of Professional Conduct
Follow the law, follow bylaws and cooperate on ethics investigations
The PMI prefers that ethics be handled through infractions without
resorting to formal procedures
Focus on professionalism, integrity, responsibility, selfimprovement, fairness, honesty and communication
Balance stakeholders interests
Read Pages 365-366 Carefully
Clarifying Information
Pages 365-66
Code of Professional Conduct 2006
CHAPTER 1. VISION AND APPLICABILITY
1.1
Vision and Purpose
As practitioners of project management, we are committed to doing what is right and honorable. We set high
standards for ourselves and we aspire to meet these standards in all aspects of our livesat work, at home, and
in service to our profession.
This Code of Ethics and Professional Conduct describes the expectations that we have of ourselves and our fellow
practitioners in the global project management community. It articulates the ideals to which we aspire as well as
the behaviors that are mandatory in our professional and volunteer roles.
The purpose of this Code is to instill confidence in the project management profession and to help an individual
become a better practitioner. We do this by establishing a profession-wide understanding of appropriate
behavior. We believe that the credibility and reputation of the project management profession is shaped by the
collective conduct of individual practitioners.
We believe that we can advance our profession, both individually and collectively, by embracing this Code of
Ethics and Professional Conduct. We also believe that this Code will assist us in making wise decisions, particularly
when faced with difficult situations where we may be asked to compromise our integrity or our values.
Our hope that this Code of Ethics and Professional Conduct will serve as a catalyst for others to study, deliberate,
and write about ethics and values. Further, we hope that this Code will ultimately be used to build upon and
evolve our profession.
1.2
Persons to Whom the Code Applies
The Code of Ethics and Professional Conduct applies to:

1.2.1 All PMI members
1.2.2 Individuals who are not members of PMI but meet one or more of the following criteria:
.1 Non-members who hold a PMI certification
.2 Non-members who apply to commence a PMI certification process
.
.3 Non-members who serve PMI in a volunteer capacity.
Page 367
CHAPTER 2. RESPONSIBILITY
2.1 Description of Responsibility
Responsibility is our duty to take ownership for the decisions we make or fail to make, the actions we take or fail
to take, and the consequences that result.
2.2 Responsibility: Aspirational Standards

As practitioners in the global project management community:
2.2.1 We make decisions and take actions based on the best interests of society, public safety, and
the environment.
2.2.2 We accept only those assignments that are consistent with our background, experience, skills,
and qualifications.
2.2.3 We fulfill the commitments that we undertake we do what we say we will do.
2.2.4 When we make errors or omissions, we take ownership and make corrections promptly.
When we discover errors or omissions caused by others, we communicate them to the
appropriate body as soon they are discovered. We accept accountability for any issues resulting
from our errors or omissions and any resulting consequences.
2.2.5 We protect proprietary or confidential information that has been entrusted to us.
2.2.6 We uphold this Code and hold each other accountable to it.
Page 369
2.3 Responsibility: Mandatory Standards
As practitioners in the global project management community, we require the following of
ourselves and our fellow practitioners:
Regulations and Legal Requirements
2.3.1 We inform ourselves and uphold the policies, rules, regulations and laws that
govern our work, professional, and volunteer activities.
2.3.2 We report unethical or illegal conduct to appropriate management and, if
necessary, to those affected by the conduct.
Ethics Complaints
2.3.3 We bring violations of this Code to the attention of the appropriate body for
resolution.
2.3.4 We only file ethics complaints when they are substantiated by facts.
2.3.5 We pursue disciplinary action against an individual who retaliates against a
person raising ethics concerns.
Page 370
CHAPTER 3. RESPECT
3.1 Description of Respect
Respect is our duty to show a high regard for ourselves, others, and the resources entrusted to us.
Resources entrusted to us may include people, money, reputation, the safety of others, and natural
or environmental resources.
An environment of respect engenders trust, confidence, and performance excellence by fostering
mutual cooperation.
3.2 Respect: Aspirational Standards
3.2.1 We inform ourselves about the norms and customs of others and avoid engaging in
behaviors they might consider disrespectful.
3.2.2 We listen to others points of view, seeking to understand them.
3.2.3 We approach directly those persons with whom we have a conflict or disagreement.
3.2.4 We conduct ourselves in a professional manner, even when it is not reciprocated.
3.3 Respect: Mandatory Standards
As practitioners in the global project management community, we require the following of
ourselves and our fellow practitioners:
3.3.1 We negotiate in good faith.
3.3.2 We do not exercise the power of our expertise or position to influence the decisions or
actions of others in order to benefit personally at their expense.
3.3.3 We do not act in an abusive manner toward others.
3.3.4 We respect the property rights of others.
Page 371
CHAPTER 4. FAIRNESS
4.1 Description of Fairness

Fairness is our duty to make decisions and act impartially and objectively. Our conduct must be free from
competing self interest, prejudice, and favoritism.
4.2 Fairness: Aspirational Standards

4.2.1
We demonstrate transparency in our decision-making process.
4.2.2
We constantly reexamine our impartiality and objectivity, taking corrective action as appropriate.
4.2.3
We provide equal access to information to those who are authorized to have that information.
4.2.4
We make opportunities equally available to qualified candidates.
4.3 Fairness: Mandatory Standards

As practitioners in the global project management community, we require the following of ourselves and our
fellow practitioners:
Conflict of Interest Situations

4.3.1 We proactively and fully disclose any real or potential conflicts of interest to the appropriate
4.3.2
Page 372
stakeholders.
When we realize that we have a real or potential conflict of interest, we refrain from engaging in
the decision-making process or otherwise attempting to influence outcomes, unless or until:
we have made full disclosure to the affected stakeholders; we have an approved mitigation
plan; and we have obtained the consent of the stakeholders to proceed.
Favoritism and Discrimination
4.3.3 We do not hire or fire, reward or punish, or award or deny contracts based on personal
considerations, including but not limited to, favoritism, nepotism, or bribery.
4.3.4 We do not discriminate against others based on, but not limited to, gender, race, age, religion,
disability, nationality, or sexual orientation.
4.3.5 We apply the rules of the organization (employer, Project Management Institute, or other
group) without favoritism or prejudice.
Page 373
CHAPTER 5. HONESTY
5.1 Description of Honesty
Honesty is our duty to understand the truth and act in a truthful manner both in our communications and in
our conduct.
5.2 Honesty: Aspirational Standards

5.2.1 We earnestly seek to understand the truth.
5.2.2 We are truthful in our communications and in our conduct.
5.2.3 We provide accurate information in a timely manner.
5.3 Honesty: Mandatory Standards
As practitioners in the global project management community, we require the following of ourselves and our
fellow practitioners:
5.3.1 We do not engage in or condone behavior that is designed to deceive others, including but
not limited to, making misleading or false statements, stating half-truths, providing information
out of context or withholding information that, if known, would render our statements as
misleading or incomplete.
5.3.2 We do not engage in dishonest behavior with the intention of personal gain or at the expense
of another.
Page 373-274
Read Pages 375-377 Carefully
History of the Standard
Glossary
Pages 375-377
P.M.P Code of Professional Conduct
I. Responsibilities to the Profession
A. Compliance with all organizational rules and policies.
1. Responsibility to provide accurate and truthful representations concerning all information directly or
indirectly related to all aspects of the PMI Certification Program, including and not limited to the following:
examination applications, test item banks, examinations, answer sheets, candidate information, and
professional development program reporting forms.
2. Upon a reasonable and clear factual basis, responsibility to report possible violations of the professional code
of conduct by individuals in the field of project management.
3. Responsibility to cooperate with PMI concerning ethics violations and the collection of related information.
4. Responsibility to disclose to clients, customers, owners, or contractors, significant circumstances that could be
construed as a conflict of interest, or an appearance of impropriety.
B. Candidate/Certificant Professional Practice.

1. Responsibility to provide accurate, truthful advertising and representations concerning qualifications,
experience, and performance of services.
2. Responsibility to comply with laws, regulations, and ethical standards governing professional practice in the
state/province and/or country when providing project management services.
C. Advancement of the Profession.

1. Responsibility to recognize and respect intellectual property developed or owned by others, and to otherwise
act in an accurate, truthful, and complete manner, including, all activities related to professional work and
research.
2. Responsibility to support and disseminate the professional code of conduct to other PMI certificants.
Page 378
P.M.P Code of Professional Conduct
I. Candidate/Certificant Responsibilities to Customers and the Public
A. Qualifications, experience, and performance of professional services.
1. Responsibility to provide accurate and truthful representations to the public in advertising,
public statements, and in the preparation of estimates concerning costs, services, and
expected results.
2. Responsibility to maintain and satisfy the scope and objectives of professional services,
unless otherwise directed by the customer.
3. Responsibility to maintain and respect the confidentiality of sensitive information obtained
in the course of professional activities or otherwise where a clear obligation exists.
B. Conflict of interest situations and other prohibited professional conduct.
1. Responsibility to ensure that a conflict of interest does not compromise legitimate interests
of a client or customer, or influence/interfere with professional judgments.
2. Responsibility to refrain from offering or accepting inappropriate payments, gifts, or other
forms of compensation for personal gain, unless in conformity with applicable laws or
customs of the country where project management services are being provided.
Page 378
Professional responsibility
Types of Questions to Expect
You are building a water treatment facility. Routine tests indicate
that there are contaminants in the water but that they have an
extremely low risk of causing sickness. As a project manager you
should:
A. Inform the public that a detailed examination has been ordered
to determine the extent to which the problem exists
B. Do nothing because there is an extremely low risk except for
some effects on small children or the elderly
C. Tell the public there is no problem, except for small children and
the elderly who should boil their water before drinking it
D. Educate the public about the advances in water treatment
technology and the industry efficiency and safety record
A. Inform the public
A KEY activity to defining
customer satisfaction is to define:
A. Business Use
B. Requirements
C. Product Specificity
D. Change Control
B. Requirements
When it appears that a design error will interfere with technical
performance objectives, the PREFERRED response is to:
A. Decrease the performance value to equal the assessed value
B. Develop alternative solutions to the problem
C. Increase the specified value to set a new performance goal
D. Reduce the overall technical complexity of the project
B. Develop alternative solutions to the problem
What is the MOST effective practice to ensure that cultural and
ethical differences do not impede the success of your multi-national
project?
A. Co-Locating
B. Training
C. Forming
D. Teaming
B. Training
Negotiating across international cultures involves mutual
interdependence between parties. The negotiations MUST be
conducted in an atmosphere of:
A. Mutual trust and cooperation
B. Generalities and vagueness
C. Sincerity and compassion
D. Uncertainty and caution
A. Mutual trust and cooperation
PMP Certification Test Preparation
New Test and New PMBOK Edition
The PMBOK 5th Edition was released in January

2013. The test changed again on July 31, 2013.
A new Knowledge Area was introduced:
Stakeholder Management.
Page 2
The T&T CD ID is E1091

and Awards 11 PDUs
Qualification Requirements
PMTestOnline is C4070
and Awards 11 PDUs
Graduate, 4-Year Degree

years
+
Non-Graduate, or 2-Year Degree
35 contact hours
(PDUs) of PM
education
Eligibility to take
the PMP
examination

years
This Course ID is E1078

and Awards 24 PDUs
Page 2
PMBOK Fifth Edition and the New Test

The PMBOK Fifth Edition was introduced in January 2013, and the
new fifth edition test started on July 31, 2013.
The PMP examination consists of 200 questions, with a four hour
time limit
Thats 72 seconds (or 1.2 minutes) per question
This training course will give you everything you need,

with a little self-study, to pass the PMP examination
Visit www.pmi.org, download PMP Certification Handbook
Page 2
PMBOK 5th Edition PMP Test Domain Content
Project Initiation
Project Planning
Project Execution
Project Monitoring & Control
Project Closing
13%
24%
30%
25%
8%
To pass, you need to get a minimum of 122

questions correct out of 200 questions (61%)
Pass rate on the 4th Edition test is about 74%
Page 2
Apply to PMI to take the test,

Schedule a date with Prometric
Submit your application to Project Management Institute (PMI)
http://www.pmi.org/Certification/Project-Management-Professional-PMP.aspx
Log in with your User Name and Password
Follow the instructions
Schedule a test date with Prometric

http://www.prometric.com/PMI/default.htm
Control is through audit (when you pay)

http://www.pmi.org/info/PDC_PMPHandbook.pdf
PMI may audit when you pay your exam fee to PMI. If you cancel or reschedule
within 30 days of the test, there is a fee of $70; within 2 days, you forfeit the entire fee.
Candidates have three (3) opportunities to pass the exam in one year. If they
do not pass any, they must wait one (1) year from the date of the last attempt.
Page 3
Taking the PMP examination

Ensure you
have the
required
experience
Ensure you
have 35
PDUs
AND
Join the
PMI (if you
havent)
Send in
your
application
Schedule
exam at
Prometrics
Study
hard for
about 2
weeks
Take the
exam
and pass
www.pmi.org
Complete a
PMP Prep
course
Applying to Take The Exam
Apply using the PMI web site.

http://www.pmi.org/Certification/Project-Management-ProfessionalPMP.aspx
Using the PMI web site to complete the application is fast and easy. Turn
around to approval is normally just a few days, but it may take a little
longer.
Sometimes your test center may not have an opening for a few weeks.
On the computerized test, the questions are in English, but pop-up screens
will aid you in understanding the question in your native language. This
feature must be requested by you in your application.
In some countries, the test may be given on paper, in English, not in your
native language.
Number of Questions:
200
Time for the Exam:
4 Hours
To Pass: you must get about 122 of 200 questions correct About 61%
Questions are randomly generated, 4-option, multiple choice.
Questions not answered are wrong - answer all questions.
Dont be surprised if some long questions are early in the exam

and you get behind on time.
Breaks are allowed, but extra time is NOT allotted for them.
In most test centers you must sign out and sign back in, which takes time
Page 345
Reasons people fail the exam

They do not read all the questions
correctly
They do not read all the choices in
each question
They are too nervous
They have not studied enough or use
source books other than the PMBOK
They believe they can rely purely on
experience
They have not taken a PMP prep
course like this one
Page 346

Go to the test center before the day of your test, find where it is, look at the
testing room, talk to the administrator.
Bring your PMI authorization e-mail or letter to the test site.

Bring a picture identification.
PMI has recently decided not to allow any personal calculators in the testing
room. A pop-up calculator is available on the computer. If that is awkward for
you to use, ask the administrator to provide a calculator for you.
You will be given scrap paper, pencils, and in some test centers, earplugs.
All personal items will be safely stored for you and cannot be taken into the test
room.
Page 346

Upon entering the test room, you will be given 15 minutes to use the computer
tutorial and to become familiar with the commands. You can mark questions on
the computer and return to the marked questions later, or you can review
every question.
Use the entire 15 minutes to write information you need to remember on the
scratch paper.
You will see one question on the screen at a time.
Many people finish the exam ahead of the 4-hour limit and return to marked
questions for review/correction.
When you finish the exam or when the time limit is expired, your answers are
immediately graded. The computer tells you if you pass. A temporary
certificate is printed at the test center, and you immediately become a PMP.
PMI will post a formal certificate to you later.
If you do not pass, PMI will be notified and will send you information about
retaking the exam. See PMIs website about the additional fee.
Page 346
Hints on Test Questions
Choices like A or B and never and always have been removed.
Watch out for distractors - choices that are true, but not the best answer.
There are about 45 to 75 what should you do in this situation questions.
Most people feel unsure about 50 of the 200 questions.
You must be familiar with PMI-specific definitions. A big trick to success on the exam is to try to
use PMIs perspective, not your experience. If that does not work, then use your training and life
experiences.
Read the last sentence of each question first. What is the question asking?
Read ALL FOUR answers, without making a choice.
Read the whole question. Understand the topic and descriptors. Read the last sentence AGAIN,
then eliminate two of the four answers.
Read the last sentence AGAIN, then pick the best of the two remaining answers.
About 8 to 12 questions deal with PMBOK step-by-step processes and the input/output to
processes.
There have been less than 8 earned value questions on the exam in the last three years.
Use all the exam time; do not leave early unless you have reviewed each question twice.
Page 347
Practice Test #3
CONGRATULATIONS !!!
You have just completed more
than the entire PMP Test!
You have done 228 questions
Page 403
Let us know when you pass, and

Send us surprises you remember !

PMP Prep-5th Ed-BMC Master-Oct 2013 PDF

Enviado por

Dados do documento

Descrição original:

Título original

Direitos autorais

Formatos disponíveis

Compartilhar este documento

Compartilhar ou incorporar documento

Opções de compartilhamento

Você considera este documento útil?

Este conteúdo é inapropriado?

Direitos autorais:

Formatos disponíveis

PMP Prep-5th Ed-BMC Master-Oct 2013 PDF

Enviado por

Direitos autorais:

Formatos disponíveis

Presents

PMP Certification Test Preparation

PMP Prep: PMBOK 5th - 2013

The PMP Certification Test Preparation

Reveal Exam Tips;

PMP Prep: PMBOK 5th - 2013

The World of Business Management Consultants

PMP Prep: PMBOK 5th - 2013

Our Learning Institutions

PMP Prep: PMBOK 5th - 2013

Three Day Course Schedule

Preparing for the PMP

PMP Prep: PMBOK 5th - 2013

Introduction and Overview of the PMP

PMP Prep: PMBOK 5th - 2013

Organization of this Workbook

The PMBOK Fifth Edition is organized by Knowledge Area.

So, this Test Preparation workbook is organized

PMP Prep: PMBOK 5th - 2013

PMP Prep: PMBOK 5th - 2013

New Test and New PMBOK Edition

The PMBOK 5th Edition was released in January

PMP Prep: PMBOK 5th - 2013

The T&T CD ID is E1091

Graduate, 4-Year Degree

A minimum of 7500 hours PM

This Course ID is E1078

PMP Prep: PMBOK 5th - 2013

PMBOK Fifth Edition and the New Test

Thats 72 seconds (or 1.2 minutes) per question

This training course will give you everything you need,

Visit www.pmi.org, download PMP Certification Handbook

PMP Prep: PMBOK 5th - 2013

PMBOK 5th Edition PMP Test Domain Content

To pass, you need to get a minimum of 122

PMP Prep: PMBOK 5th - 2013

Apply to PMI to take the test,

Schedule a test date with Prometric

Control is through audit

PMP Prep: PMBOK 5th - 2013

Types of questions to expect

Ignore it. It will go away

D. Meet with the team and identify alternatives

PMP Prep: PMBOK 5th - 2013

Types of questions to expect

Learning curve effects

A. Learning curve effects

PMP Prep: PMBOK 5th - 2013

Types of questions to expect

Quality control analysis

PMP Prep: PMBOK 5th - 2013

Types of questions to expect

A. Perquisites (aka Perks)

PMP Prep: PMBOK 5th - 2013

Types of questions to expect

Project justification has been established

C. Cost and duration estimates can be developed

PMP Prep: PMBOK 5th - 2013

Types of questions to expect

Withdrawing, compromising, controlling, and forcing

D. Smoothing, confronting, forcing and withdrawing

PMP Prep: PMBOK 5th - 2013