Deck 5: Estimating Project Times and Costs

Question 1

Past experience is almost always used primarily in the initial phases of estimating.

Answer 1

True

Question 2

Top-down estimates usually are derived from someone who uses experience and / or information to determine the project duration and total cost.

Answer 2

True

Question 3

One guideline to follow when estimating time, cost and resources is to use several people to make the estimate for a task.

Answer 3

True

Question 4

All task time estimates need consistent time units.

Question 5

Project estimates should be broken down into as much detail, and with as much accuracy, as possible.

Question 6

Phase estimating is used when a project cannot be rigorously defined because of the uncertainty of design or the final product.

Question 7

Organization culture can significantly influence project time and cost estimates.

Question 8

The project management structure chosen to manage the project will have little impact on the quality of estimates.

Question 9

If a project is internal to the company and relatively small, the bottom-up approach to estimating time and costs for the project is the best choice.

Question 10

The ideal approach to estimating project time and costs is to use both the top-down and the bottom-up approach.

Question 11

Cost, time, and budget estimates are the lifeline for control; they serve as the standard for comparison of the actual and the planned throughout the life of the project.

Question 12

The process of forecasting or approximating the time and cost of completing project deliverables is called planning.

Question 13

The salary of the project manager and her administrative assistant are classified as direct labor costs.

Question 14

Estimating the total cost of a project by multiplying each major function by a complexity factor is an example of the apportion method of estimating costs.

Question 15

After averaging out the underestimates and overestimates, a long-duration project is more likely to be on target than a short-term, small project.

Question 16

Estimates that are typically based on estimates of elements found in the work breakdown structure are called bottom-up estimates.

Question 17

If time and costs are important to a project the top-down approach to estimating time and costs for the project is the best choice.

Question 18

The consensus method of estimating costs is a bottom-up technique.

Question 19

As long as everyone in a project adds a little padding to reduce risk, the project duration and cost estimates will be more accurate.

Question 20

Estimating the total cost of a house by multiplying the total square feet by cost per square foot is an example of the apportion method of estimating costs.

Question 21

Work package estimates should include allowances for contingencies.

Question 22

Repetition of a task generally results in a reduction of labor hours each successive time a worker performs that task.

A) budgeting.
B) predicting.
C) estimating.
D) planning.
E) guesstimating.

Question 23

A project leader is forecasting how much money his department needs to support a new project. He estimates that two people and $25,000 in expenses will cover his needs. Because management typically insists on reducing forecasts by 20 percent, he increases his estimates to allow for that reduction. Which of the following factors is illustrated in this situation?

A) Padding estimates
B) Planning horizon
C) Project structure
D) People
E) Organization culture

Question 24

What is the relationship between organizational culture and estimating?

A) There is no relationship.
B) Cultural norms affect the accuracy of estimates.
C) Culture determines whether estimates are made.
D) Estimating alters cultural norms.
E) Estimating and culture are independent.

Question 25

Estimates are supposed to be based on normal conditions. While this is a good starting point, it rarely holds true in real life.

Question 26

Which of the following would best represent direct project costs?

A) Only labor
B) Only materials
C) Only equipment
D) Both labor and materials
E) Labor, materials and equipment

Question 27

Which of the following is a good condition for bottom-up estimating?

A) When the project involves strategic decision making
B) When the project is internal and small
C) When there is a fixed price contract
D) When there is high uncertainty involved in the project
E) When there is an unstable scope

Question 28

The salary of the project manager would be an example of what type of cost found in a project?

A) Labor
B) Direct
C) Direct project overhead
D) General and administrative overhead
E) Salary

Question 29

A good starting point for developing time and cost estimates is

A) past experience.
B) work packages.
C) task analysis.
D) time and motion studies.
E) work breakdown structure.

Question 30

Typical kinds of costs found in a project include all of the following EXCEPT

A) direct costs.
B) project overhead costs.
C) general and administrative overhead costs.
D) labor.
E) All of these are examples of costs found in a project.

Question 31

A home builder is collecting estimates for a house that he will have the funding to build in 12 months. Which of the following factors does he need to consider in regard to the quality of these estimates?

A) Padding estimates
B) Planning horizon
C) Project structure
D) People
E) Project duration

Question 32

Which of the following does NOT help describe a bottom-up estimating approach?

A) They are made by someone who uses experience and / or information from someone else to determine overall project cost and duration.
B) They establish low-cost, efficient methods for completing activities.
C) They typically come from the people actually doing the work and who are most knowledgeable about the task at hand.
D) Estimates are made at the work package level and then "rolled up" to determine estimates for major deliverables and for the project itself.
E) They can take place after the project has been planned in detail.

Question 33

Which of the following is NOT true in regard to the level of detail estimates should contain?

A) It will vary with the complexity of the project.
B) Detailed estimates are crucial to project success; therefore, an effort should be made to make estimates as detailed as possible for all projects.
C) The more detailed the estimate is the more the estimate will cost to create.
D) Inadequate detail might lead to estimates that fall short of their intended purpose.
E) Excessive detail means unproductive paperwork and unnecessary expenditures.

Question 34

A project manager is looking over the actual results of projects and comparing them to what was estimated. She notices that the projects that took six months or longer to complete were noticeably more off the estimates. Which of the following factors is she recognizing?

A) Padding estimates
B) Project duration
C) Project structure
D) People
E) Organization culture

Question 35

Accounting would be an example of which of the following costs typically found in a project?

A) Labor
B) Direct
C) Direct project overhead
D) General and administrative overhead
E) Salary

Question 36

Mega Projects often under deliver on expected benefits and cost more than expected.

Question 37

Which of the following is a good condition for top-down estimating?

A) Cost and time important
B) Fixed price contract
C) Customer wants details
D) Internal, small project
E) Large scale project involving several subcontractors

Question 38

General and administrative costs are usually allocated as a percent of the total of a direct cost which includes labor, materials, or equipment.

Question 39

Which of the following is NOT one of the factors that need to be considered to improve quality of estimates for project times and costs?

A) planning horizon
B) people
C) padding estimates
D) profit
E) project structure

Question 40

In practice, estimating processes are frequently classified as

A) top down / bottom up.
B) rough / polished.
C) precise / order of magnitude.
D) draft / final.
E) broad / specific.

Question 41

Refining estimates may be necessary for a number of reasons. For example, people working on prototype development needing time to interact with the design engineers after the design is completed is a good example of

A) hidden interaction costs.
B) things going wrong on a project.
C) normal conditions not applying.
D) changes in project scope.
E) the customer not being clear about their expectations.

Question 42

Which of the following is NOT one of the recommended guidelines for developing useful work package estimates?

A) Estimates should be made by those responsible for the work.
B) Use several people to estimate the same work.
C) Estimates should be based on normal conditions.
D) Estimates should include a normal level of contingency.
E) Estimates should be independent of other projects.

Question 43

When work package estimates are made by individuals most knowledgeable about the work being performed and these estimates are then "rolled up" to find estimated costs for major deliverables and the project itself, ____________ estimating is being used.

A) top-down
B) analogous
C) bottom-up
D) reference class
E) professional estimation

Question 44

Estimating can be challenged by

A) human nature.
B) political dynamics.
C) difficulty in predicting the future.
D) size of the project.
E) All of these alternatives are correct.

Question 45

The estimating factor that considers the prevailing belief in some firms that detailed estimating takes too much time and is not worth the effort is an example of the ___________ factor.

A) project complexity
B) planning horizon
C) people
D) organizational culture
E) padding estimates

Question 46

While it may be true that Mega Projects are by nature extremely difficult to estimate, another factor identified in the consistent pattern of estimating difficulties is:

A) unidentified risks.
B) deception.
C) economic downturn.
D) Both unidentified risks and economic downturn.
E) None of these alternatives is correct.

Question 47

Refining estimates may be necessary for a number of reasons. For example, resource shortages, in the form of people, equipment, or materials, can extend original estimates. This is a good example of

A) hidden interaction costs.
B) things going wrong on a project.
C) normal conditions not applying.
D) changes in project scope.
E) the customer not being clear about their expectations.

Question 48

The pattern of improvement identified from a worker having performed a task multiple times is known as a

A) reduced failure rate.
B) optimistic estimate.
C) learning curve.
D) successive improvement.
E) both reduced failure rate and successive improvement.

Question 49

When someone uses experience and / or information from others to determine the project duration and total cost, ____________ estimating is being used.

A) top-down
B) experiential
C) bottom-up
D) reference class
E) professional estimation

Question 50

Refining estimates may be necessary for a number of reasons. For example, design flaws being revealed after the fact, extreme weather conditions, and accidents occurring are good examples of

A) hidden interaction costs.
B) things going wrong on a project.
C) changes in project scope.
D) normal conditions not applying.
E) uncertain, unstable requirements.

Question 51

An external view of a Mega Project based upon the outcome of similar projects undertaken in the past is known as:

A) Pareto Charting.
B) The Monte Carlo Method.
C) Reference Class Forecasting.
D) Big Data Analysis.
E) White elephant.

Question 52

The estimating factor that considers the decreasing accuracy of estimates as one forecasts activities that are further into the future is known as ____________.

A) project complexity
B) planning horizon
C) people
D) organizational culture
E) padding estimates

Question 53

Large projects that have long time horizons and a very high complexity can be referred to as

A) mega projects.
B) high risk.
C) white elephants.
D) mega projects or white elephants.
E) None of these alternatives is correct.

Question 54

The bottom-up approach for estimating times and costs that uses costs from past projects that were similar to the current project is known as

A) detailed WBS work package estimates.
B) template method.
C) function point method.
D) time-phased cost estimates.
E) phase estimating.

Question 55

The estimating factor that considers the tendency to overestimate project time and cost in order to improve the likelihood of meeting the estimates is known as the ___________ factor.

A) project complexity
B) planning horizon
C) people
D) organizational culture
E) padding estimates

Question 56

Refining Estimates may be necessary for a number of reasons. For example, a manager getting further into a project and obtaining a better understanding of what needs to be done to accomplish a project and meet the needs of the customer is an example of

A) hidden interaction costs.
B) things going wrong on a project.
C) normal conditions not applying.
D) changes in project scope.
E) there is never a good reason to refine estimates.

Question 57

Benefits of Reference Class Forecasting include

A) acts as a reality check.
B) helps to avoid unsound optimism.
C) provides a basis for contingency funds.
D) leads to improved accountability.
E) All of these alternatives are correct.

Question 58

The estimating factor that considers the skill level of participants doing the estimating is known as the ___________ factor.

A) project complexity
B) planning horizon
C) people
D) organizational culture
E) padding estimates

Question 59

Companies are using which of the following for improving the estimating process for future projects?

A) Adjusting estimates based on individual forecasting abilities
B) Benchmarking and using the experience of other companies
C) Using time and motion studies
D) Creating historical databases of previous projects
E) Establishing an estimating training course for all employees

Question 60

Reasons why estimating time and cost are important include all of the following EXCEPT

A) to schedule work.
B) to determine how long the project should take and cost.
C) to develop cash flow needs.
D) to determine how well the project is progressing.
E) to help establish a project selection process.

Question 61

A(n) __________ is something that is a valuable but burdensome possession.

A) mega-project
B) white elephant
C) yacht
D) vacation home
E) concorde

Question 62

Project managers typically use ________, also called analogous estimating or the ______ method when there is a past history of similar projects and rough-cut estimates are needed for strategic purposes two-to-five years out because, as estimating methods go, it is faster and less expensive.

A) top-down, apportion
B) bottom-up, range estimating
C) bottom-up, learning curve
D) top-down, phase estimating
E) top-down, range estimating

Question 63

Costs that are not directly related to a specific project, such as advertising, accounting, and senior management's salary, are classified as _____________ costs.

A) general and administrative overhead
B) direct
C) direct project overhead
D) fixed
E) coordination

Question 64

The preferred method for situations involving strategic decision making, projects with a high degree of uncertainty, and projects with an unstable scope is the ___________ approach to estimating project time and costs.

A) top-down
B) experiential
C) bottom-up
D) reference class
E) professional estimation

Question 65

The top-down method for estimating project time and cost that uses weighted variables based on major parameters and is frequently used in the development of software is known as the ____________ method.

A) ratio
B) consensus
C) apportion
D) function point
E) learning curves

Question 66

Estimates should be made based on ___________ conditions, efficient methods, and a normal level of resources.

A) abnormal
B) above normal
C) standard
D) normal
E) average

Question 67

Costs that are associated with time devoted to the coordination in meetings and briefings as well as time necessary to resolve disconnects between tasks are known as ____________ costs.

A) direct
B) interaction
C) general and administrative (G&A) overhead costs
D) things go wrong
E) coordination

Question 68

Mega projects are large-scale, complex ventures that typically cost _______ or more and take many ______ to complete.

A) $1 million, months
B) $10 million, quarters
C) $1 billion, years
D) $10 billion, years
E) $500,000, months

Question 69

The salary of the project manager and temporary rental space for the project team would be classified as __________ costs.

A) general and administrative overhead
B) direct
C) direct project overhead
D) fixed
E) interaction

Question 70

A way to improve estimates on future projects is to collect and archive data on past project estimates and actuals. Creating ___________ for estimating is a way to achieve this goal.

A) time and cost databases
B) history databases
C) estimating and forecasting databases
D) structured databases
E) Any of these alternatives are correct.

Question 71

The information necessary to conduct a bottom-up estimate of project time and cost starts with the ___________.

A) level 4 elements of the WBS
B) milestones
C) work package
D) planning horizon
E) level 5 elements of the PBS

Question 72

The preferred method for situations where the cost and time estimates are important, in a fixed contract situation, and when the customer wants a lot of detail is the ___________ approach to estimating project time and costs.

A) top-down
B) experiential
C) bottom-up
D) reference class
E) professional estimation

Question 73

The approach to estimating project time and cost that begins with an overall estimate for the project and then refines estimates for various stages of the project as it is implemented is known as ____________.

A) range estimating
B) parametric procedure
C) template method
D) phase estimating method
E) WBS method

Question 74

Consider a five-mile-long railroad tunnel. Tunnel experts and advocates estimate the total cost to be $200 million. What is the reference class for this project? But reference class projects in this area have been over-budget by 30%. So, what should the actual revised budget number be for this proposed five-mile tunnel project?

A) Past bridge projects, $230 million
B) Past tunnel projects, $260 million
C) Past highway projects, $200 million
D) Past building projects, $230 million
E) Past construction projects, $230 million

Question 75

A project estimator is working on estimates for a project that is very similar to a previous project, in that it has many of the same features and those features have similar costs. Each feature or deliverable will represent the same percentage of the total cost as it did for the previous project. He is using the _________ method of top-down estimating.

A) ratio
B) consensus
C) apportion
D) function point
E) learning curves

Question 76

The top-down method of estimating project time and costs that is useful for projects requiring the same task, group of tasks, or product repeated several times, especially if it is labor intensive, is the ______________.

A) ratio
B) consensus
C) apportion
D) function point
E) learning curves

Question 77

The estimating approach that is best to use on projects where there is an unusual amount of uncertainty surrounding the project and when it is impractical to estimate times and costs for the entire project is known as ___________.

A) range estimating
B) parametric procedure
C) template method
D) phase estimating method
E) WBS method

Question 78

The bottom-up method of estimating where work package time and costs for past projects are used as a starting point for a new project and adjustments are made based on differences in the new project is known as the ___________.

A) range estimating
B) parametric procedure
C) template method
D) phase estimating method
E) WBS method

Question 79

Project costs such as labor and materials are typically classified as ___________ costs.

A) general and administrative overhead
B) direct
C) direct project overhead
D) fixed
E) interaction

Question 80

The top-down method of estimating when the pooled experience of senior and / or middle managers are used to estimate the total project duration and cost is the _________ method.

A) ratio
B) consensus
C) apportion
D) function point
E) learning curves