Question 1

For the seller of services, a Fixed Price plus Incentive contract is riskier than a Cost plus Fixed Fee contract.

Accepted Answer

The seller must complete the project in such a manner to achieve the incentive fee in this case. There is more variation in these incentives usually, which means there is more risk.
Key Take Away: In this case, increased risk can mean reward. Imagine a contract where the vendor is rewarded per day that the project is completed early. While there might be variation and thus "risk" in when the project is completed, the earnings could be substantially higher than just a fixed fee for project complete.

Question 2

Who has the cost risk in a fixed fee plus cost project?
A)The buyer of the project
B)The seller or team executing the project
C)The cost risk is shared
D)The project manager
E)None of the above

Accepted Answer

In a fixed fee plus cost project, the buyer has the cost risk. (Editor's note: An example is paying a handy man $500 to hang up your new TV. You would pay for costs such as the bracket and parking outside your Boston apartment, since there is zero public parking).
Key takeaway: While your vendor should realize that managing cost is important to your future relationship, it is best to put in provisions and incentives for a vendor to manage costs in such a relationship. While you might be tempted to avoid this type of deal, often it is not possible in projects that have uncertainty about resource needs.

Question 3

The procurement management plan is an input to:
A)Human Resource Planning
B)Cost Estimating and Budgeting
C)Plan Program Contracting
D)Plan Program Purchases and Acquisitions

Accepted Answer

The procurement management plan is an input to the Plan Program Contracting.
Key Takeaway: The procurement management plan specifies how procurement processes will be performed in the life of a program. This plan includes the types of contracts that will be used, indentifying prequalified sellers, procurement metrics to manage contracts and evaluate sellers, coordination with schedule and performance reporting, scheduled dates for deliverables, directions on developing and maintaining a contract WBS. The procurement management plan is an output of Plan Program Purchases and Acquisitions and then acts as an input to the Plan Program Contracting process.

Question 4

What is Quality?
A)The degree to which a product can be used without encountering its failure
B)The degree to which a set of characteristics of program deliverables and program objectives fulfill the requirements
C)The degree to which the wants, expectations, and needs of the program stakeholders are met
D)The degree to which customer satisfaction is reached.

Accepted Answer

Quality is the degree to which a set of characteristics of program deliverables and program objectives fulfill the requirements.
Key Takeaway: Quality refers to an item's inherent character. In the case of program deliverables, quality often refers to whether or not an item has a certain level of excellence and whether or not the program deliverables live up to the expectations of the program objectives and their requirements. Quality is used in the Quality Control process, which measures how close the program deliverables come to meeting the program objectives and what-if any-flaws the deliverables might have.

Question 5

Raymond Beetlebush is a program manager discussing the topic of risk with his colleagues. Which is NOT a true statement about risk?
A)Risks stem from uncertainty
B)All risks pose threats to a program
C)Risks must be managed both at the program level and at the projects level
D)Risks have impact on accomplishing the program objectives

Accepted Answer

The statement, "All risks pose threats to a program," is not a true statement about risk.
Key Takeaway: Risks are uncertain event that will either have a positive or negative effect upon the completion of a program or its subsidiary projects-if the event occurs. Risks come from uncertainty, they are managed at both the program and project level, and risks always impact whether or not a team can accomplish program objectives. Although some risks pose a threat to the program, some risks also have positive ramifications on a given program.

Question 6

Which of the following is NOT included in communication planning?
A)Provide the needed information to the stakeholders in a timely manner
B)Determine the information needs of the program stakeholder
C)Determine how information will be distributed
D)Determine who needs what information and when

Accepted Answer

Providing the needed information to the stakeholders in a timely manner is not included in communication planning.
Key Takeaway: The Communication Planning process is best remembered by the four Ws: what information is needed, when, who needs it, and who will deliver it. To do this, it will be necessary to know the program scope and the proper requirements to plan communication, such as information for the proper stakeholders and technology requirements of the organization. Although Communication Planning gathers relevant information about the stakeholders to determining what they will need, when, and how to deliver it, it is only planning for that. Actually providing the information to the relevant stakeholders is done at a later stage.

Question 7

Boris has identified some key risks in a new project he is leading. What are the acceptable ways to deal with this risk?
A)Say this risk is fine and do nothing.
B)Invest resources to monitor the specific risk.
C)Pay another contractor to execute a piece of the project that seems risky with a penalty if they fail.
D)Pay an insurer to compensate the company with a cash payment if the risk does not work out.

Accepted Answer

These are all acceptable options as long as the project manager has properly analyzed the risk and decided that it is the best decision. Corporations must take risk in order to be successful.
Key Takeaway: The first time most people get asked this question, they often think doing nothing is not an option. In some cases, risks are so small in their expected value that they should be ignored and accepted. So global thermonuclear holocaust may be a risk for your project, but it should probably just be accepted. In other cases, insurance or outsourcing may be too expensive, and there may be no possible mitigation strategies, so the project manager must decide with his or her stakeholders whether to accept the risk and proceed with the project.

Question 8

Flogsworth Wort always forgets the inputs to the Quality Planning process. Which is NOT an input to the Quality Planning process?
A)Product description
B)Program scope statement
C)Program cost of quality
D)Regulation and legislation

Accepted Answer

Program cost of quality is not an input of Quality Planning.
Key Takeaway: Quality planning is a process for setting parameters for how to identify a program's quality standards and how the group will meet these standards. Because these guidelines have such a huge impact on critical program activities, it is crucial for Quality Planning to take place early in the life span of a program-ideally, right after defining the scope. Input items to Quality Planning are: the program scope statement, detailed description of the product, and a list of environmental factors relating to the program.

Question 9

What are the four options for dealing with a risk?
A)Accept, mitigate, transfer and avoid
B)Accept, insure, transfer and avoid
C)Accept, mitigate, reduce and avoid
D)Situation, task, action, result
E)It's a trick question - there are only three and they are transfer, mitigate and avoid.

Accepted Answer

Accept, mitigate, transfer and avoid are the four acceptable ways of dealing with risk. Remember that mitigating and reducing are synonyms in risk management, and that insuring is a form of transferring risk.
Key takeaway: We want you to remember these four options and consider them each time you consider what to do with a risk. Our natural tendency is to avoid or mitigate, but sometimes that is just not possible.

Question 10

Quality checklists are which of the following?
A)Output of Quality Planning
B)Input to Quality Planning
C)Output of quality control
D)Input to quality assurance

Accepted Answer

Quality checklists are an output of Quality Planning.
Key takeaway: Quality checklists are used to check if a predetermined set of quality control guidelines or steps have been taken. These guidelines should be set in the Quality Planning process. Hence, quality checklists are an output of this process. The guidelines are then used in the Perform Quality Control process.

Question 11

Jordi Brahms is double checking to make sure he has all the inputs to the Risk Management Planning and Analysis process accounted for. Which of the following is NOT an input to the Risk Management Planning and Analysis process?
A)PWBS
B)Risk response plan
C)Program schedule
D)Program budget

Accepted Answer

Risk response plan is not an input to the Risk Management Planning and Analysis process.
Key Takeaway: The Risk Management Planning and Analysis process includes identifying program risks, a detailed risk analysis (both qualitative and quantitative), and effective risk-response planning. The most common risks arise from the program schedule and program cost. Because of this, the key input items for the Risk Management Planning and Analysis process are the program schedule, the PWBS, and the program budget.

Question 12

Marjory is a new program manager and she asks her boss Dixon what are the processes are in Program Risk Management? Dixon should say:
A)Risk Management Planning and Analysis, and Risk Response Planning
B)Risk Management Planning, Risk Identification, and Risk Analysis
C)Risk Management Planning, Risk Identification, Qualitative Risk Analysis, Quantitative Risk Analysis, and Risk Response Planning
D)Risk Management Planning and Analysis and Risk Monitoring and Control

Accepted Answer

Dixon should say Risk Management Planning and Analysis and Risk Monitoring and Control are the processes in Program Risk Management.
Key Takeaway: Risk management is one of the most important ways a program manager adds value.

Question 13

Insurance is a way of transferring risk.

Accepted Answer

Insurance is inherently about transferring risk. By aggregating individual risks into a pool, insurance companies can protect individual people and firms against risk. This is at a cost, of course.
Key Takeaway: There are other ways to transfer risk, such as putting clauses in contracts, but insurance is one of the most effective ways to manage risk. This is especially case for external risk, which should always be carefully analyzed.

Question 14

Which is NOT included in the input of the Communication Planning process?
A)PWBS
B)Communication management plan
C)Program Charter
D)Program scope statement

Accepted Answer

The communication management plan is not an input to the Communication Planning process.
Key Takeaway: The Communication Planning process is: what information is needed, when, who needs it, and who will deliver it. To do this, it will be necessary to know the program scope and the proper requirements to plan communication, such as information for the proper stakeholders and technology requirements of the organization. Hence, inputs to the Communication Planning process are: program scope statement, PWBS, the program charter, the program reporting and communication requirements, and a stakeholder analysis chart.

Question 15

Which of the following processes should be performed before all the rest?
A)Communication Planning
B)Risk Management Planning and Analysis
C)Quality Planning
D)Scope Definition

Accepted Answer

Of these processes Scope Definition should be performed first.
Key Takeaway: Scoping a program means to provide documentation to figure out what is and is not included in the program, meaning, to draw boundaries around the program. Defining the program scope brings together the program charter, preliminary scope statement, and the benefits realization plan. It literally defines what the scope of the program is and will be throughout the life of the program. Without defining the scope of a program, the rest of the standard program processes become moot.

Question 16

Which of the following processes uses Regulations and legislation as an input?
A)Risk Identification
B)Quality Planning
C)Communication Planning
D)Risk Response Planning and Analysis

Accepted Answer

Regulations and legislation are included in the input to Quality Planning.
Key Takeaway: Quality Planning is a process that identifies which quality standards are relevant to the project at hand and determines how to meet them. The input to the Quality Planning process includes: environment factors, including legislation, product description, and the program scope statement.

Question 17

The Project Management Information System acts as a/an ____ to many program and project management processes.
A)Tool and technique
B)Output
C)Input
D)QA

Accepted Answer

The Project Management Information System, or PMIS, acts as a tool and technique to many program and project management processes.
Key Takeaway: The Project Management Information System (PMIS) is an information system that gathers, combines, and stores various outputs of the project management processes. PMIS also controls changes to any of the important project documents. PMIS contains mostly automated tools and is used throughout the life cycle of a project, from initiation to closing.

Question 18

Lori Honorboundstadter told her junior program manager, Finnley Jones, to use the experiment design technique for this process. Which process is Ms. Honorboundstadter most likely referring to?
A)Procurement Planning
B)Risk Management Planning
C)Quality Planning
D)Communication Planning

Accepted Answer

Ms. Honorboundstadter is most likely referring to using the experiment design technique for Quality Planning.
Key Takeaway: Quality Planning is a process that identifies which quality standards are relevant to the project at hand and determines how to meet them. The tools and techniques used to perform the Quality Planning process include: experiment design, flowcharting, program cost of quality, cost-benefit analysis, and benchmarking. Experiment design is a statistical method that can be used to identify the factors that might influence a set of certain variables for a product or a process in production or under development.

Question 19

Howie Dix is planning risk management for his program Ventriloquism Is Easy. Which of the statements below is FALSE?
A)A risk register is an input to both qualitative risk analysis and quantitative risk analysis.
B)Quantitative risk analysis can be performed only on the risks on which the qualitative risk analysis has already been performed.
C)An updated risk register is the output of both qualitative risk analysis and quantitative risk analysis.
D)Qualitative risk analysis is usually performed before the quantitative risk analysis.

Accepted Answer

"Quantitative risk analysis can be performed only on the risks on which the qualitative risk analysis has already been performed" is a false statement.
Key Takeaway: Qualitative risk analysis looks at the potential risks of a program and determines the probability that a given risk will occur and the impact that risk will have upon the program deliverables if it should occur. The results of the qualitative risk help to prioritize which risks will then go to quantitative analysis. Quantitative risk analysis uses a numerical technique to analyze the effects that a given risk will have upon program deliverables if the risk should occur. Although qualitative risk analysis is usually performed before the quantitative risk analysis, it does not have to be performed first.

Question 20

Secondary risks are:
A)Risks that result from responses to the originally identified risks
B)Residual risks
C)Risks which have medium or low priority
D)Risks that have been mitigated

Accepted Answer

Secondary risks are risks that result from responses to the originally identified risks.
Key Takeaway: A secondary risk is a risk that comes about when carrying out a response plan for another risk.

Quiz 1: Program and Project Management

For the seller of services, a Fixed Price plus Incentive contract is riskier than a Cost plus Fixed Fee contract.

Who has the cost risk in a fixed fee plus cost project?

The procurement management plan is an input to:

What is Quality?

Raymond Beetlebush is a program manager discussing the topic of risk with his colleagues. Which is NOT a true statement about risk?

Which of the following is NOT included in communication planning?

Boris has identified some key risks in a new project he is leading. What are the acceptable ways to deal with this risk?

Flogsworth Wort always forgets the inputs to the Quality Planning process. Which is NOT an input to the Quality Planning process?

What are the four options for dealing with a risk?

Quality checklists are which of the following?

Jordi Brahms is double checking to make sure he has all the inputs to the Risk Management Planning and Analysis process accounted for. Which of the following is NOT an input to the Risk Management Planning and Analysis process?

Marjory is a new program manager and she asks her boss Dixon what are the processes are in Program Risk Management? Dixon should say:

Insurance is a way of transferring risk.

Which is NOT included in the input of the Communication Planning process?

Which of the following processes should be performed before all the rest?

Which of the following processes uses Regulations and legislation as an input?

The Project Management Information System acts as a/an ____ to many program and project management processes.

Lori Honorboundstadter told her junior program manager, Finnley Jones, to use the experiment design technique for this process. Which process is Ms. Honorboundstadter most likely referring to?

Howie Dix is planning risk management for his program Ventriloquism Is Easy. Which of the statements below is FALSE?

Secondary risks are: