Question 1

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.

Accepted Answer

At any level of management, the detail of an estimate should be no more than necessary and sufficient.Otherwise time and money are wasted.

Question 2

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.

Accepted Answer

Interaction costs are hidden in estimates.According to the guidelines, each task estimate is supposed to be done independently.However, tasks are rarely completed in a vacuum.Work on one task is dependent upon prior tasks, and the hand-offs between tasks require time and attention.For example, people working on prototype development need to interact with design engineers after the design is completed, whether to simply ask clarifying questions or to make adjustments in the original design.

Question 3

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

Accepted Answer

The salary of the project manager would be an example of the direct project overhead cost.The cost is linked to the project, but cannot be directly linked to a work package.

Question 4

Which of the following top-down methods is used when projects closely follow past projects in regard to features and costs of those features, and result in costs being assigned by percentages to major segments of the project?
A)Apportion
B)Function point
C)Phase estimating
D)Learning curve
E)Consensus

Accepted Answer

Apportionment is used when projects closely follow past projects in features and costs.Given good historical data, estimates can be made quickly with little effort and reasonable accuracy.This method is very common in projects that are relatively standard but have some small variation or customization.

Question 5

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 choices are examples of costs found in a project.

Accepted Answer

Typical costs found in a project include direct costs, which consist of labor, materials and equipment, direct project overhead costs and general and administrative overhead costs.

Question 6

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

Accepted Answer

Direct project costs can be clearly chargeable to a specific work package.These costs represent real cash outflows as the project progresses; therefore they are usually separated from overhead costs.They include labor, materials and equipment costs.

Question 7

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)Normal conditions not applying.
D)Changes in project scope.
E)None of these are correct.

Accepted Answer

Design flaws are revealed after the fact, extreme weather conditions occur, accidents happen, and so forth.Although you shouldn't plan for these risks to happen when estimating a particular task, the likelihood and impact of such events need to be considered.

Question 8

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

Accepted Answer

Some organizations have large estimating departments of professional estimators-e.g., Boeing, Kodak, IBM-that have developed large time and cost databases.

Question 9

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.

Accepted Answer

Estimates should be made by the individuals responsible for the work, should involve several people with relevant experience and knowledge of the tasks, should be made based on normal conditions and should not include any allowances for contingencies, should be created with consistent time units, and should be independent of other projects.

Question 10

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.

Accepted Answer

If the project is similar to past projects, the costs from past projects can be used as a starting point for the new project.Differences in the new project can be noted and past times and costs adjusted to reflect these differences.

Question 11

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)Both Mega Projects and White Elephants.

Accepted Answer

Both terms can be used; the question is to whether or not there is value realized from the project.If no real value, it is definitely a white elephant.

Question 12

Benefits of Reference Class Forecasting include
A)Acting as a reality check.
B)Helps to avoid unsound optimism.
C)Provides a basis for contingency funds.
D)All of these choices.

Accepted Answer

There are other benefits as well which include reduction of human bias, forcing executives to focus on empirical information, and improved accountability.

Question 13

Estimating can be challenged by
A)Human Nature.
B)Political dynamics.
C)Difficulty in predicting the future.
D)All of these choices.

Accepted Answer

The challenge that every project manager faces is that without solid estimates, the credibility of the project plan is eroded - and solid estimates can be very difficult to obtain in a number of cases.

Question 14

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.

Accepted Answer

The deception may be intentional or unintentional.

Question 15

The pattern of improvement identified from a worker having performed a task multiple time is known as a
A)Reduced Failure Rate.
B)Optimistic Estimate.
C)Learning Curve.
D)Both Reduced Failure Rate and Learning Curve.

Accepted Answer

Learning curves can be calculated over time, thus giving a project manager (or any management team for that matter)insight into how long it will take new team members to become productive.

Question 16

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.

Accepted Answer

Estimates are not important to help establish a project selection process.This process should be established before the project was selected.

Question 17

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.

Accepted Answer

Estimates are supposed to be based on normal conditions.While this is a good starting point, it rarely holds true in real life.This is especially true when it comes to the availability of resources.Resource shortages, whether in the form of people, equipment, or materials, can extend original estimates.

Question 18

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.

Accepted Answer

As he or she gets further and further into the project, the manager obtains a better understanding of what needs to be done to accomplish the project.This may lead to major changes in project plans and costs.Likewise, if the project is a commercial project, changes often have to be made midstream to respond to new demands by the customer and/or competition.

Question 19

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.

Accepted Answer

This method is put forward by Flyvbjerg as a leading way to mitigate overall project risk for this class of project.

Question 20

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

Accepted Answer

Accounting is an example of a cost that is carried out for the duration of the project and cannot be linked to a specific work package or even the project itself.These costs are called general and administrative overhead.

Quiz 5: Estimating Project Times and Costs

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

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

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

Which of the following top-down methods is used when projects closely follow past projects in regard to features and costs of those features, and result in costs being assigned by percentages to major segments of the project?

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

Which of the following would best represent direct project costs?

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

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

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

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

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

Benefits of Reference Class Forecasting include

Estimating can be challenged by

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:

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

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

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

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

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

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