Formulae used in the project management

This post has few formulae used in the project management. These are useful to get the real-time problems solved quickly.


Planned Value (PV) = Planned % complete * budget at completion(EIAC).

PERT formula is Estimate = (Optimistic +(Most Likely*4)+Pessimistic)/6

The formula for the number of channels is n*(n-1)/2, where n is is the number of stakeholders.

PMP Question and Answers 31-40

31. While having lunch with another project manager, he tells you that he underestimated the number of staff resources needed for his project by nearly 50%, but says he has plenty of reserves to cover the costs. During the next staff meeting, the same project manager says he has nothing new to report for his project and that all is progressing according to schedule. What do you do?
A. Double check your own resource estimates.
B. File a complaint with PMI.
C. Do nothing
D. Report this to the appropriate management
Answer: D, You must report this to the appropriate management. The other project manager has failed to follow proper project processes in failing to report this estimation error. Project managers are required to report errors and omission made by themselves or others, as per the PMI Code of Ethics and Professional Conduct.

32. The Control Procurements process ensures that the seller's performance meets contractual requirements and that the buyer performs according to the terms of the contract. This process is part of which process group?
A. Executing
B. Closure
C. Planning
D. Monitoring & Controlling
Answer: D, Control Procurements is part of the Monitoring and Controlling Process Group and is necessary for managing the contract and relationship between the buyer and seller.

33. One of the configuration management activities in the project involved capturing, storing and reporting configuration information needed to manage products and product information. This is known as:
A. Configuration status accounting
B. Configuration auditing
C. Configuration verification
D. Configuration identification
Answer: A, Configuration Status Accounting

34. The paint on the exotic cars that are manufactured in your plant is bubbling after about a year of application. What would be the BEST tool for your team to use to find potential causes of the peeling paint?
A. Defect Repair Review
B. Ishikawa Diagram
C. Control Chart
D. Inspection
Answer: B, All the choices are tools/techniques in quality control, however, the BEST choice would be the Ishikawa or Cause and Effect diagram.

35. You are assigned to prepare the Procurement management Plan for a project that involves setting up an org-wide supply chain management system. You are looking for a guideline on what type of contracts you can use and what type of contract forms are to be used for this project. Which source will help you obtain this?
A. Each project is unique so you will need to prepare the necessary documentation for this.
B. Department process repository
C. Organizational Process Assets
D. Integrated project plan
Answer: C, Organizational process assets provide existing formal and informal procurement-related policies, procedures, guidelines, and management systems that are considered in developing the procurement management plan and selecting the contract type to be used.

36. You are in charge of constructing the Ferris wheel in each town a carnival visits. However, this is something you have never done before and you are getting different opinions from others on how long it takes. Joe is new and has given you what you believe to be an optimistic estimate of 3 hours, Bill says it will take 10 hours, which seems too long to you and quite pessimistic. Lastly, Margie, who is the most experienced at this task is telling you it will take 8 hours. You are not sure who to believe, so you decide to do a PERT estimation, based on this you have determined it will take how many hours to assemble the Ferris wheel.
A. 7.5 hours
B. 8 hours
C. 21 hours
D. 7 hours
Answer: A, The PERT formula is Estimate = (Optimistic +(Most Likely*4)+Pessimistic)/6

37. You just found out that a major subcontractor for your project consistently provides deliverables late. The subcontractor approaches you and asks you to continue accepting late deliverables in exchange for a decrease in project costs. This offer is an example of:
A. Forcing
B. Smoothing
C. Confronting
D. Compromise
Answer: D, Both parties are giving up something, this is an example of Compromise.

38. You have your project team members record the time they spend on different activities during the day such as programming, electrical, HVAC, etc. This is an example of a tool and technique in what process?
A. Manage Communications
B. Direct and Manage Project Work
C. Monitor and Control Project Work
D. Manage Project Team
Answer: C, The Monitor and Control Project Work process tracks and reviews the project's progress.


39. A tool that provides a visual representation of human resource allocation to a project, number of working hours and availability on the project is a:
A. Resource Histogram
B. Staff release plan
C. Resource Breakdown Structure(RBS)
D. Organization Breakdown Structure(OBS)
Answer: A, Resource Histogram, this bar chart illustrates the number of hours that a project, department or entire project team will be needed each week or month over the course of the project. The chart can include a horizontal line that represents the maximum number of hours available for a particular resource. Bars that extend beyond the maximum available hours indicate the need for a resource leveling strategy.

40. Three strategies that typically deal with negative risks or threats are:
A. Enhance, Share and Accept
B. Transfer, Exploit and Accept
C. Avoid, Transfer and Exploit
D. Avoid, Transfer and Mitigate
Answer: D, Four negative risk management strategies are: Avoid, Transfer, Mitigate and Accept.

PMP Question and Answers 21-30

21. The Manage Project Team process is part of what process group?
A. Planning
B. Executing
C. Monitoring and Controlling
D. Closing
Answer: B, The Manage Project Team process is part of the Executing process group

22. You have been assigned a project where you are responsible for building a condo complex in a resort town. The project is expected to take 2 years to complete. During your work breakdown structure meeting you have decomposed many deliverables into work packages and schedule activities, however, there are some work packages that will be occurring a year from now, so you have elected not to decompose those deliverables and work packages at this time. This is an example of what tool and/or technique?
A. Scope Creep
B. Poor Planning
C. Rolling Wave Planning
D. Time Delayed Decomposition
Answer: C, The correct answer is rolling wave planning. Rolling Wave Planning is a form of progressive elaboration and is used when the project management team does not have enough information for a phase or deliverable that will occur quite a long way into the future.

23. You are analyzing the risk in a project and decide to do a sensitivity analysis to determine which risks have the most potential impact on the project. You look at a tool to help compare the relative importance of variables that have a high degree of uncertainty to those that are more stable. One such tool is,
A. Beta Distribution
B. S-Curve
C. Control Chart
D. Tornado Diagram
Answer: D, A Tornado diagram is useful for comparing the relative importance of variables that have a high degree of uncertainty to those that are more stable.

24. You the project manager responsible for building a 100,000 sq.ft. data center. One of the scheduled activities in your plan is to install the Computer Room Air Conditioning(CRAC) units, however in order to start the installation of the units the raised floor in the data center must be completely installed first, so the units have something to be bolted on to. This is an example of what type of dependency?
A. External
B. Optional
C. Discretionary
D. Mandatory
Answer: D, This is an example of a mandatory dependency since the units will be bolted to the raised floor.

25. Daniel is managing the development of an e-commerce website for his organization. Daniel enjoys coercive powers and has assigned Julie, a project team member, to facilitate the team meetings. During any team meeting, Julie must?
A. Influence team members to support the project manager's decisions
B. Support the team members to challenge the project manager's decisions
C. Negotiate with team members to achieve the project objectives
D. Remain neutral and facilitate the meetings
Answer: D, Since the project manager enjoys coercive powers, it seems likely that he has assigned a neutral facilitator to facilitate the team meetings. Facilitation is a management skill. A good facilitator should always remain neutral in a meeting and help facilitate consensus when required.

26.Which of the following is not an example of a procurement document?
A. Tender Notice
B. Risk Register
C. Request for Proposal(RFP)
D. Invitation for Negotiation
Answer: B, The risk register is not a procurement document. Procurement documents are used to seek proposals from prospective sellers. Examples are Invitation for bid, Request for proposal, Request for Quotation, tender notice, Invitation for Negotiation and contractor initial response.

27. Alan is the project manager of a project with 6 stakeholders. If the number of stakeholders goes up to 8, how many additional channels does he have to manage?
A. 2
B. 14
C. 13
D. 28
Answer: C, Formula for the number of channels is n*(n-1)/2, where n is the number of stakeholders. Therefore in the present situation, the no. of channels are 6*(6-1)/2 = 15
In the new situation, where the no.of stakeholders are 8, the no.of channels are 8*(8-1)/2 = 28. Hence the additional number of channels to manage is = 28-15 = 13.

28. A co-worker mentions that another project manager regularly takes certain project resources to expensive dinners and expenses it to the company. However, this project manager does not recognize or reward the contributions of any other project resources. What should you do?
A. Do nothing.
B. Confront the project manager.
C. Implement a formal reward and recognition program on your own project.
D. Report this to the appropriate management.

Answer: D, The rules of the organization must be applied without favoritism or discrimination. Rewarding only certain project resources and ignoring others is unfair and unprofessional. The code of ethics and professional behavior not only prohibit this behavior, but it also requires that project managers report violations by other project managers to the appropriate management.

29. When a project is performed under the contract, the contractual provisions will generally be considered as ______________ for the project.
A. Constraints
B. Exclusions
C. Deliverables
D. Provisions
Answer: A, When a project is performed under the contract, the contractual provisions are generally considered as constraints for the project as they are the limiting factors.

30. During a work breakdown structure meeting, you have decomposed the deliverables into work packages and created your WBS dictionary. However, you now want to decompose the work packages to assist you in estimating, executing and control the project. These decomposed work packages are called?
A. Work Packages can't be decomposed into smaller units
B. Activities
C. Milestones
D. Control Accounts
Answer: B, Activities represent the effort needed to complete a work package and are an output of the Define Activities process. During this process, the work packages are further decomposed into project activities.

PMP Question and Answers 11-20

11. You are a project manager for a major golf club manufacturer. Your team is working on developing a new line of golf clubs for the upcoming season. It was planned that you will meet with the stakeholders after the first few production sets were ready and allow them to try the clubs. You are reviewing how effective this type of stakeholder meeting is. Why would this type of meeting take place?
A. To aid in performance testing of the product
B. To further engage stakeholders in the project
C. To smooth out any issues that may exist with stakeholders
D. To allow the stakeholders to audit the product
Answer: C, The Control Stakeholder Engagement process monitors stakeholder relationships.

12. You are a project manager overseeing the development of a new console video game and are currently involved in the Monitor and Control Project work process. A working beta of the game is supposed to be available in the next two weeks to demo at an investor's conference. However, it is behind schedule due to problems that occurred when adding bonus content. Which option is the BEST course of action?
A. Continue as scheduled and demo the product that is available
B. Obtain the latest performance reports to verify the status of development
C. Issue a change request to minimize the scope for the release
D. Initiate a change request to have extra resources removed from the project
Answer: C, You should analyze the situation with the project management team and determine a solution. By doing this, you and the team will realize that it was only after the bonus content was added that the project began to have issues. For the conference, you may determine it would be in the best interest to disable the features that are causing problems, thus minimizing the scope. This way the investors can see a working beta, but not be distracted by fancy features that may or may not work. To do this, a change request would need to be issued to disable the features causing the problems.

13. You are managing a project that is overseeing the expansion of a local car dealership that specializes in performance vehicles. The project has been scheduled to take 16 weeks. The total cost of the project is set at $500,000. At the seven week mark of the project, it has been determined that the project is one week behind schedule, and the cost so far is $250,000. At this point, which option represents the planned value of the project?
A. $218,750
B. $62,500
C. $31,250
D. $187,500
Answer: A, Solution can be calculated with the formula Planned Value (PV) = Planned % complete * budget at completion(EIAC).
By dividing the current point in the schedule, which is week seven, by the total number of weeks in the project, which is 16 weeks, we can calculate planned % complete. The result is 7/16 = 0.4375 or 43.75%. By multiplying this value with the EIAC we get the PV = 0.4375 * $500,000, which is $218,750.

14. You are currently involved in controlling procurements on a mission critical project for your organization. A seller has been contracted to provide a high load winch system. The winch that was to be supplied was rated at 1,000 pounds, but it is currently unavailable and will be replaced with the 1,200 pound model. This will result in a change to the contract. Who would be eligible to make a change of the contract?
A. The project management office
B. The function manager of the contracting company
C. The CEO of the contracted company
D. The procurement office
Answer: D, As contracts are formal and legally binding documents that use specialized and technical language, only qualified individuals should prepare them. These qualified individuals include the contracting officer, procurement office, and legal counsel. A project manager would not be considered a contracting officer.

15. You are managing a construction project that is creating a new set for a talk show. The show is set to premiere next month. The backdrop is nearing completion. However, the main stage is only 50% complete. You move a few of the human resources to the main stage team. Which technique did you use?
A. Scheduling tool
B. Adjusting leads and lags
C. Resource levelling
D. Schedule compression
Answer: C, Resource leveling is a technique that is used to allot the proper amount of resources to a specific task. Since one task is nearing completion, and another task is only half done, resources could be moved from the task that all tasks can be more aligned with the schedule.

16. You are the project manager on an IT project that is performing decision analysis and resolution to identify the best possible solution. There is a 10% chance that a component you are going to upgrade will be difficult to integrate and cost $3,000 in rework and delays. There is also a 50% chance that the component will save $5,000 in time and effort that would have been used to build the component from scratch. What is the expected monetary value for these two possibilities?
A. $3,300
B. $7,500
C. $2,200
D. $8,000
Answer: C, The expected monetary value(or EMV) of the problems integrating the component is the probability(10%) times the cost ($3,000), but do not forget that since it is a risk, that number should be negative. So it's EMV is 10% * $3,000 = -$300. The savings from not having to build the component from scratch is an opportunity. It has an EMV of 50% * $5,000 = $2,500. By adding them up we get -$300 + $2,500 = $2,200.

17. Schedule is represented in different ways. You are a project manager on a construction project and want to view the scheduled activities in such a way that it is easy to view the start and end dates of each activity. Which tool is the best fit for this scenario?
A. PERT chart
B. GANTT chart
C. Precedence diagram
D. Network diagram
Answer: B, GANTT chart shows activity start and end dates as well as expected durations but do not usually show dependencies. This is also called as Bar charts.

18. What is the critical path of the project? Refer to the network diagram provided in the image above.
A. ABEGH
B. ABDFH
C. ACGH
D. ABEFH
Answer: A, Critical path is the list of activities that have zero total float.

19. Which executing processes can result in change results?
A. Conduct procurements, Acquire Project Team and Manage Stakeholder Engagement
B. Manage Communications, Manage Project Team and Perform Quality Assurance
C. Perform Quality Assurance, Direct and Manage Project Work and Develop Project Team
D. Direct and Manage Project Work, Conduct Procurements and Manage Stakeholder Engagement
Answer: D, Change requests can result from the following executing processes.
- Direct and Manage Project Work
- Conduct Procurements
- Manage Stakeholder Engagement

20. Which option describes the MAIN purpose for creating a management reserve?
A. Create a reserve for unidentified risks when the project that will occur
B. Create a reserve for unidentified risks when the project that may or may not occurs
C. Create a reserve for identified risks when the project that will occur
D. Create a reserve for identified risks when the project that may or may not occurs
Answer: B, A management reserve is used to create a reserve for unidentified events that may or may not occur during the project. Management can use their experience to determine the prudence to provide a reserve for unknown events that are uncertain to occur. This type of event is sometimes described as an unknown.

PMP Question and Answers 1-10

1. You are thinking of purchasing a software product from a relatively young organization. They have been in business less than 2 years. This is a cutting edge financial product that would put you at least 18 months ahead of all competitors in your market space. However, your concern is that if you purchase software from them, there is a possibility that they may go out of business and you would lose the investment in the software. You ask the company to outright purchase the software code, but the company has rejected this as an option. What is your BEST option moving forward if the company's survivability is an issue?
A. Contract it as a work made for hire
B. Set up a code escrow arrangement
C. Offer to buy the company
D. Look for viable alternatives

Answer: B, A code escrow arrangement will protect the seller and the buyer. If the seller goes out of business, the buyer will have access to the code for continuing support of the product. Otherwise, the code stays in escrow.

2. you have identified a number of defects related to a component needed for a project deliverable. The project manager has asked you to determine the impact of each defect in a meaningful way. What should you do?
A. Create a histogram
B. Create a scatter diagram
C. Create a run chart
D. Create a central chart

Answer: A, Creating a histogram can help you determine the impact of each defect by quantitatively charting the results as bars. The longer or higher the bar, the greater the impact of the defect.

3. Helen, Irene and John make up an organization's review committee for a project they are working on. They have received responses from various vendors to the procurement document package and are formally reviewing prospective vendors according to their capabilities to successfully complete the conditions of the contract. They have been authorized to select vendors prior to senior management approval. Which action is the review committee currently undertaking?
A. Bidder conference
B. Approved change requests review
C. Documentation review
D. Proposal evaluation

Answer: D, The review committee is formally evaluating proposals to the procurement document package submitted by vendors and selecting a vendor. This evaluation is done prior to getting approval from senior management.

4. You are creating the budget for a project you are managing and you need to review the assumptions related to the activity costs. Which item is the BEST source of this information?
A. Reserve analysis
B. Project funding requirements
C. The risk register
D. Basis estimates

Answer: D, The basis of estimates is a documented record of how you arrived at activity cost estimates. This is important because it identifies any assumptions made. For example, the cost of a required resource could be based on the availability of the resource at a particular time.

5. You are a project manager for a major tire distributor, and you are monitoring your team's performance for the summer tire campaign project. You are currently involved in the control communications process. Which information is distributed as part of this process?
A. Resource calendars
B. SWOT analysis
C. Work performance information
D. Activity resource requirements

Answer: C, The control communications process deals with gathering and distributing information to the required individuals. This information includes information such as forecasts, variances, and project status.

6. You are a project manager for a small consulting company. You are tasked with completing a project to integrate three new servers into the customer's current server infrastructure, as well as retire two of the servers being replaced. You are performing this project under contract, and are currently in the close procurements process. All outstanding claims and issues have been addressed. Which following BEST describes what you currently need to document?
A. procurement audits
B. Stakeholder feedback
C. Formal acceptance
D. Final project report

Answer: C, The project manager is the individual responsible for documenting the formal acceptance of the work specified in the contract. In cases where a project is carried out under contract, the task of documenting formal acceptance should be completed during the close procurements process. This would only occur after all outstanding claims and disputes have been settled.

7. You are the project lead overseeing a project to create a new wireless media streaming device. An LCD display was used that does not match the original project scope. During a stakeholder meeting, the customer expresses that they are upset and the screen should be changed. Your CEO is worried about the costs associated with the replacement of the screens and believes the product is fine as it is. Functional managers are concerned about the additional time it will take the workers to replace the screens and suggest a revised model slightly after product release. Other upper management suggests releasing a standard version with the current LCD and a deluxe model with another LCD. As the manager, you need to settle this dispute. It whose favor should this dispute be resolved?
A. Upper management
B. The customer
C. Functional managers
D. your CEO

Answer: B, Always Dispute favor to the customer.

8. You are managing new staff members who are working on a particular procurement. On your personal schedule for the day, you have a meeting set up to meet with the new staff. You arrive in the meeting room to discover that no staff members have arrived. After waiting thirty minutes, you leave to attend another meeting. The next day you meet with a couple of members from the staff and ask why they did not show up at the meeting. They mentioned that they were not aware that they had to attend any meetings. Which documents should have outlined the meeting requirement?
A. Project charter
B. Procurement statement of work
C. Resource calendar
D. Project statement of work

Answer: B, The procurement statement of work needs to clearly outline all the work required for the procurement, including required meetings.

9. You are the project lead overseeing a project to create a new wireless media streaming device. The working model has been created and you are meeting with the customer to ensure that it meets the requirements. Upon inspection, the customer informs you that the LCD output screen does not meet the specifications. Which result from this problem is MOST likely to occur?
A. A change request
B. A close project or phase
C. A contract change
D. An administration claim

Answer: A, Inspection, as described in this scenario, is plan of the validation scope process. In the event that the customer is not satisfied with the results of a project after an inspection, a change request to fix the issue is submitted.

10. You have completed the planning of your project and project work is being carried out. Which activity should you be doing while executing the project?
A. Watching out for non-critical risks increasing in importance
B. Checking the variation of the results with the scope baseline
C. Checking the compliance of each work product
D. monitoring payments made to the sellers

Answer: A, Watching out for non-critical risks increasing in importance would be considered a risk response activity. Managing risks and implementing risk response activities is part of the Direct and Manage Project work process, which is part of Executing Process Group.