Information Technology Project Management 8th edition Kathy Schwalbe

Information Technology Project Management 8e Kathy Schwalbe

ISBN-10:1285452348 ,ISBN-13:978-1285452340

Chapter 7: Project Price Management

True / False

1. Overrun is the extra proportion quantity by which estimates exceed precise prices.

a.

True

b.

False

ANSWER:

False

RATIONALE:

Suggestions: Overrun is the extra proportion or greenback quantity by which precise prices exceed estimates.

POINTS:

1

DIFFICULTY:

Problem: Simple

REFERENCES:

p.264

LEARNING OBJECTIVES:

INFO.SCHW.14.48 – LO: 7-1

NATIONAL STANDARDS:

United States – BUSPROG: Technology

TOPICS:

The Significance of Project Price Management

KEYWORDS:

Bloom’s: Information

2. The first output of the planning value administration course of is a change request.

a.

True

b.

False

ANSWER:

False

RATIONALE:

Suggestions: The primary output of the planning value administration course of course of is a price administration plan. Planning value administration entails figuring out the insurance policies, procedures, and documentation that shall be used for planning, executing, and controlling challenge value.

POINTS:

1

DIFFICULTY:

Problem: Simple

REFERENCES:

p.266

LEARNING OBJECTIVES:

INFO.SCHW.14.48 – LO: 7-1

NATIONAL STANDARDS:

United States – BUSPROG: Technology

TOPICS:

The Significance of Project Price Management

KEYWORDS:

Bloom’s: Information

3. IT challenge managers should be capable of current and focus on challenge info each in monetary and technical phrases.

a.

True

b.

False

ANSWER:

True

RATIONALE:

Suggestions: Most members of an organization’s govt board have a greater understanding of monetary phrases than IT phrases, and are extra concerned about finance. Due to this fact, IT challenge managers want to have the ability to current and focus on challenge info each in monetary phrases and technical phrases.

POINTS:

1

DIFFICULTY:

Problem: Simple

REFERENCES:

p.266

LEARNING OBJECTIVES:

INFO.SCHW.14.49 – LO: 7-2

NATIONAL STANDARDS:

United States – BUSPROG: Technology

TOPICS:

Primary Rules of Price Management

KEYWORDS:

Bloom’s: Information

4. Project managers should conduct money circulation evaluation to find out internet current worth.

a.

True

b.

False

ANSWER:

True

RATIONALE:

Suggestions: Money circulation evaluation is a technique of figuring out the estimated annual prices and advantages for a challenge and the ensuing annual money circulation. Project managers should conduct money circulation evaluation to find out internet current worth.

POINTS:

1

DIFFICULTY:

Problem: Simple

REFERENCES:

p.269

LEARNING OBJECTIVES:

INFO.SCHW.14.49 – LO: 7-2

NATIONAL STANDARDS:

United States – BUSPROG: Technology

TOPICS:

The Significance of Project Price Management

KEYWORDS:

Bloom’s: Information

5. Intangible prices will be simply measured in financial phrases.

a.

True

b.

False

ANSWER:

False

RATIONALE:

Suggestions: Intangible prices or advantages are tough to measure in financial phrases. Conversely, tangible prices or advantages can simply be measured in {dollars}.

POINTS:

1

DIFFICULTY:

Problem: Simple

REFERENCES:

p.269

LEARNING OBJECTIVES:

INFO.SCHW.14.49 – LO: 7-2

NATIONAL STANDARDS:

United States – BUSPROG: Analytic

TOPICS:

Primary Rules of Price Management

KEYWORDS:

Bloom’s: Information

6. When deciding what tasks to put money into or proceed, one ought to embody sunk prices.

a.

True

b.

False

ANSWER:

False

RATIONALE:

Suggestions: Sunk value is cash that has been spent previously. When deciding what tasks to put money into or proceed, one mustn’t embody sunk prices.

POINTS:

1

DIFFICULTY:

Problem: Average

REFERENCES:

p.270

LEARNING OBJECTIVES:

INFO.SCHW.14.49 – LO: 7-2

NATIONAL STANDARDS:

United States – BUSPROG: Analytic

TOPICS:

Primary Rules of Price Management

KEYWORDS:

Bloom’s: Comprehension

7. It can be crucial for challenge managers to concentrate on oblique prices as a result of they are often simply managed.

a.

True

b.

False

ANSWER:

False

RATIONALE:

Suggestions: Direct prices will be straight associated to creating the services of the challenge. Project managers ought to concentrate on direct prices as a result of they are often managed.

POINTS:

1

DIFFICULTY:

Problem: Average

REFERENCES:

p.269-270

LEARNING OBJECTIVES:

INFO.SCHW.14.49 – LO: 7-2

NATIONAL STANDARDS:

United States – BUSPROG: Analytic

TOPICS:

Primary Rules of Price Management

KEYWORDS:

Bloom’s: Comprehension

8. If an essential provider goes out of enterprise, administration reserves will be put aside to cowl the ensuing prices.

a.

True

b.

False

ANSWER:

True

RATIONALE:

Suggestions: Management reserves permit for future conditions which can be unpredictable. For instance, if a challenge supervisor will get sick for 2 weeks or an essential provider goes out of enterprise, administration reserves might be put aside to cowl the ensuing prices.

POINTS:

1

DIFFICULTY:

Problem: Average

REFERENCES:

p.270

LEARNING OBJECTIVES:

INFO.SCHW.14.49 – LO: 7-2

NATIONAL STANDARDS:

United States – BUSPROG: Analytic

TOPICS:

Primary Rules of Price Management

KEYWORDS:

Bloom’s: Comprehension

9. Contingency reserves are often known as unknown unknowns.

a.

True

b.

False

ANSWER:

False

RATIONALE:

Suggestions: Contingency reserves permit for future conditions that could be partially deliberate for. They’re generally known as recognized unknowns.

POINTS:

1

DIFFICULTY:

Problem: Simple

REFERENCES:

p.270

LEARNING OBJECTIVES:

INFO.SCHW.14.49 – LO: 7-2

NATIONAL STANDARDS:

United States – BUSPROG: Analytic

TOPICS:

Primary Rules of Price Management

KEYWORDS:

Bloom’s: Information

10. A price administration plan can embody organizational procedures hyperlinks, management thresholds, and course of descriptions.

a.

True

b.

False

ANSWER:

True

RATIONALE:

Suggestions: Generally, a price administration plan contains degree of accuracy, organizational procedures hyperlinks, course of descriptions, management thresholds, and guidelines of efficiency measurement, amongst others.

POINTS:

1

DIFFICULTY:

Problem: Simple

REFERENCES:

p.271

LEARNING OBJECTIVES:

INFO.SCHW.14.50 – LO: 7-3

NATIONAL STANDARDS:

United States – BUSPROG: Technology

TOPICS:

Planning Price Management

KEYWORDS:

Bloom’s: Information

11. A budgetary estimate is probably the most correct of the three kinds of estimates.

a.

True

b.

False

ANSWER:

False

RATIONALE:

Suggestions: A definitive estimate supplies an correct estimate of challenge prices. It supplies particulars for purchases and estimates precise prices.

POINTS:

1

DIFFICULTY:

Problem: Simple

REFERENCES:

p.272

LEARNING OBJECTIVES:

INFO.SCHW.14.51 – LO: 7-4

NATIONAL STANDARDS:

United States – BUSPROG: Technology

TOPICS:

Estimating Prices

KEYWORDS:

Bloom’s: Information

12. Budgetary estimates are made even earlier than a challenge is formally began.

a.

True

b.

False

ANSWER:

False

RATIONALE:

Suggestions: Budgetary estimates are made one to 2 years previous to challenge completion.

POINTS:

1

DIFFICULTY:

Problem: Simple

REFERENCES:

p.272

LEARNING OBJECTIVES:

INFO.SCHW.14.51 – LO: 7-4

NATIONAL STANDARDS:

United States – BUSPROG: Technology

TOPICS:

Estimating Prices

KEYWORDS:

Bloom’s: Information

13. Definitive estimates are made one 12 months or much less previous to challenge completion.

a.

True

b.

False

ANSWER:

True

RATIONALE:

Suggestions: Definitive estimates are made one 12 months or much less previous to challenge completion. They supply an correct estimate of challenge prices.

POINTS:

1

DIFFICULTY:

Problem: Simple

REFERENCES:

p.272

LEARNING OBJECTIVES:

INFO.SCHW.14.51 – LO: 7-4

NATIONAL STANDARDS:

United States – BUSPROG: Technology

TOPICS:

Estimating Prices

KEYWORDS:

Bloom’s: Information

14. Estimates ought to change into extra correct as time progresses.

a.

True

b.

False

ANSWER:

True

RATIONALE:

Suggestions: Estimates are often performed at numerous levels of a challenge and may change into extra correct as time progresses.

POINTS:

1

DIFFICULTY:

Problem: Simple

REFERENCES:

p.273

LEARNING OBJECTIVES:

INFO.SCHW.14.51 – LO: 7-4

NATIONAL STANDARDS:

United States – BUSPROG: Technology

TOPICS:

Estimating Prices

KEYWORDS:

Bloom’s: Information

15. Supporting particulars for an estimate embody the bottom guidelines and assumptions utilized in creating the estimate.

a.

True

b.

False

ANSWER:

True

RATIONALE:

Suggestions: Along with creating value estimates for your complete challenge and exercise value estimates, it’s also essential to offer supporting particulars for the estimates and updates to challenge paperwork. The supporting particulars embody the bottom guidelines and assumptions utilized in creating the estimate, an outline of the challenge used as a foundation for the estimate, and particulars on the fee estimation instruments and strategies used to create the estimate.

POINTS:

1

DIFFICULTY:

Problem: Simple

REFERENCES:

p.273

LEARNING OBJECTIVES:

INFO.SCHW.14.51 – LO: 7-4

NATIONAL STANDARDS:

United States – BUSPROG: Technology

TOPICS:

Estimating Prices

KEYWORDS:

Bloom’s: Information

16. Analogous estimates are known as activity-based costing.

a.

True

b.

False

ANSWER:

False

RATIONALE:

Suggestions: Analogous estimates are additionally known as top-down estimates. Such estimates use the precise value of a earlier, related challenge as the idea for estimating the price of the present challenge.

POINTS:

1

DIFFICULTY:

Problem: Simple

REFERENCES:

p.273

LEARNING OBJECTIVES:

INFO.SCHW.14.51 – LO: 7-4

NATIONAL STANDARDS:

United States – BUSPROG: Technology

TOPICS:

Estimating Prices

KEYWORDS:

Bloom’s: Information

17. Analogous estimates are probably the most correct method to estimate prices.

a.

True

b.

False

ANSWER:

False

RATIONALE:

Suggestions: Analogous estimates requires a great deal of professional judgment and is usually less expensive than different strategies. Nevertheless, it’s also much less correct.

POINTS:

1

DIFFICULTY:

Problem: Simple

REFERENCES:

p.273

LEARNING OBJECTIVES:

INFO.SCHW.14.51 – LO: 7-4

NATIONAL STANDARDS:

United States – BUSPROG: Technology

TOPICS:

Estimating Prices

KEYWORDS:

Bloom’s: Information

18. In a bottom-up estimate, the scale of the person work gadgets is among the elements that drives the accuracy of the estimates.

a.

True

b.

False

ANSWER:

True

RATIONALE:

Suggestions: The dimensions of the person work gadgets and the expertise of the estimators drive the accuracy of the estimates. Utilizing smaller work gadgets will increase the accuracy of the fee estimate as a result of the folks assigned to do the work develop the fee estimate as a substitute of somebody unfamiliar with the work.

POINTS:

1

DIFFICULTY:

Problem: Simple

REFERENCES:

p.274

LEARNING OBJECTIVES:

INFO.SCHW.14.51 – LO: 7-4

NATIONAL STANDARDS:

United States – BUSPROG: Technology

TOPICS:

Estimating Prices

KEYWORDS:

Bloom’s: Information

19. Parametric fashions are dependable when the fashions are versatile when it comes to the challenge’s dimension.

a.

True

b.

False

ANSWER:

True

RATIONALE:

Suggestions: Parametric fashions are most dependable when the historic info used to create the mannequin is correct, the parameters are readily quantifiable, and the mannequin is versatile when it comes to the challenge’s dimension.

POINTS:

1

DIFFICULTY:

Problem: Average

REFERENCES:

p.274

LEARNING OBJECTIVES:

INFO.SCHW.14.51 – LO: 7-4

NATIONAL STANDARDS:

United States – BUSPROG: Technology

TOPICS:

Estimating Prices

KEYWORDS:

Bloom’s: Comprehension

20. One of many the explanation why challenge value estimates are inaccurate is as a result of human beings are biased towards underestimation.

a.

True

b.

False

ANSWER:

True

RATIONALE:

Suggestions: One of many the explanation why challenge value estimates are very inaccurate is as a result of human beings are biased towards underestimation. It’s thus essential for challenge managers and high administration to overview estimates and ask essential questions to verify the estimates will not be biased.

POINTS:

1

DIFFICULTY:

Problem: Average

REFERENCES:

p.275

LEARNING OBJECTIVES:

INFO.SCHW.14.51 – LO: 7-4

NATIONAL STANDARDS:

United States – BUSPROG: Technology

TOPICS:

Estimating Prices

KEYWORDS:

Bloom’s: Comprehension

21. It can be crucial for challenge managers to grasp that each value estimate is exclusive.

a.

True

b.

False

ANSWER:

True

RATIONALE:

Suggestions: Each value estimate is exclusive, simply as each challenge is exclusive.

POINTS:

1

DIFFICULTY:

Problem: Simple

REFERENCES:

p.275

LEARNING OBJECTIVES:

INFO.SCHW.14.51 – LO: 7-4

NATIONAL STANDARDS:

United States – BUSPROG: Technology

TOPICS:

Estimating Prices

KEYWORDS:

Bloom’s: Information

22. Figuring out the funds entails allocating the challenge value estimate to particular person work gadgets over time.

a.

True

b.

False

ANSWER:

True

RATIONALE:

Suggestions: Figuring out the funds entails allocating the challenge value estimate to particular person materials sources or work gadgets over time. These materials sources or work gadgets are based mostly on the actions within the work breakdown construction for the challenge.

POINTS:

1

DIFFICULTY:

Problem: Average

REFERENCES:

p.281

LEARNING OBJECTIVES:

INFO.SCHW.14.52 – LO: 7-5

NATIONAL STANDARDS:

United States – BUSPROG: Technology

TOPICS:

Figuring out the Price range

KEYWORDS:

Bloom’s: Information

23. The challenge administration plan and challenge funding necessities are inputs of the method of controlling prices.

a.

True

b.

False

ANSWER:

True

RATIONALE:

Suggestions: The challenge administration plan, challenge funding necessities, work efficiency information, and organizational course of belongings are inputs for controlling prices.

POINTS:

1

DIFFICULTY:

Problem: Simple

REFERENCES:

p.282

LEARNING OBJECTIVES:

INFO.SCHW.14.53 – LO: 7-6

NATIONAL STANDARDS:

United States – BUSPROG: Technology

TOPICS:

Controlling Prices

KEYWORDS:

Bloom’s: Information

24. The formulation for variances and indexes begin with EV, the earned worth.

a.

True

b.

False

ANSWER:

True

RATIONALE:

Suggestions: The formulation for variances and indexes begin with EV, the earned worth. Variances are calculated by subtracting the precise value or deliberate worth from EV, and indexes are calculated by dividing EV by the precise value or deliberate worth.

POINTS:

1

DIFFICULTY:

Problem: Average

REFERENCES:

p.284

LEARNING OBJECTIVES:

INFO.SCHW.14.53 – LO: 7-6

NATIONAL STANDARDS:

United States – BUSPROG: Technology

TOPICS:

Controlling Prices

KEYWORDS:

Bloom’s: Comprehension

25. If value variance is a optimistic quantity, it implies that performing the work prices greater than deliberate.

a.

True

b.

False

ANSWER:

False

RATIONALE:

Suggestions: Price variance (CV) is the earned worth minus the precise value. If value variance is a unfavourable quantity, it implies that performing the work prices greater than deliberate. If value variance is a optimistic quantity, performing the work prices lower than deliberate.

POINTS:

1

DIFFICULTY:

Problem: Average

REFERENCES:

p.284

LEARNING OBJECTIVES:

INFO.SCHW.14.53 – LO: 7-6

NATIONAL STANDARDS:

United States – BUSPROG: Technology

TOPICS:

Controlling Prices

KEYWORDS:

Bloom’s: Comprehension

26. A unfavourable schedule variance implies that it took lesser than deliberate to carry out the work.

a.

True

b.

False

ANSWER:

False

RATIONALE:

Suggestions: A unfavourable schedule variance implies that it took longer than deliberate to carry out the work, and a optimistic schedule variance implies that the work took much less time than deliberate to carry out.

POINTS:

1

DIFFICULTY:

Problem: Average

REFERENCES:

p.284

LEARNING OBJECTIVES:

INFO.SCHW.14.53 – LO: 7-6

NATIONAL STANDARDS:

United States – BUSPROG: Technology

TOPICS:

Controlling Prices

KEYWORDS:

Bloom’s: Comprehension

27. If the fee efficiency index (CPI) is lower than 100%, the challenge is underneath funds.

a.

True

b.

False

ANSWER:

False

RATIONALE:

Suggestions: If the CPI is lower than one or lower than 100%, the challenge is over funds. However, if the CPI is larger than a number of than 100%, the challenge is underneath funds.

POINTS:

1

DIFFICULTY:

Problem: Average

REFERENCES:

p.284

LEARNING OBJECTIVES:

INFO.SCHW.14.53 – LO: 7-6

NATIONAL STANDARDS:

United States – BUSPROG: Technology

TOPICS:

Controlling Prices

KEYWORDS:

Bloom’s: Comprehension

28. A schedule efficiency index of 1 implies that the challenge is on schedule.

a.

True

b.

False

ANSWER:

True

RATIONALE:

Suggestions: The schedule efficiency index (SPI) is the ratio of earned worth to deliberate worth; it may be used to estimate the projected time to finish the challenge. A schedule efficiency index of 1 means the challenge is on schedule.

POINTS:

1

DIFFICULTY:

Problem: Average

REFERENCES:

p.284

LEARNING OBJECTIVES:

INFO.SCHW.14.53 – LO: 7-6

NATIONAL STANDARDS:

United States – BUSPROG: Technology

TOPICS:

Controlling Prices

KEYWORDS:

Bloom’s: Comprehension

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