Index

AC, see actual cost accelerated depreciation, 99-101 acceptable quality level (AQL), 109 acceptance (of risk), 188 acceptance criteria, 27, 33 accounting equation, fundamental, 95 active acceptance, 188 activity definition process, 47-48 activity duration estimating, 47, 57-58 activity level, 31

activity on arrow diagramming (AOA),

49-50

activity on node network diagram, 50 activity sequencing process, 47-53 AOA diagramming used in, 49-50 Gantt/milestone charts used in, 50, 51 logical relationships in, 52-57 PDM used in, 51-53 actual cost (AC), 86-91 actual cost of work performed (ACWP), 86 addition rule (risk probability), 174-176 affinity diagramming, 186 agendas, meeting, 142-143 ''agreement,'' 193 Amazon.com, 172

American National Standards Institute

(ANSI), 1-2 analogous estimates, 80 analogy method, 167, 169 analysis questions, 219 Angoff modified technique, 219 ANSI, see American National Standards Institute

AOA diagramming, see activity on arrow diagramming Apollo Project, 5, 9, 30 application questions, 219

AQL (acceptable quality level), 109 Armstrong, Neil, 9 assembly-line work, 133 assets in fundamental accounting equation, 95 process, 21 assumptions, 22 attribute sampling, 108 average rate of return on investment, 36 —38 avoidance, risk, 187 award process, 197

BAC (budget at completion), 90 balanced matrix organization, 12, 122-123 balance sheet, 95, 97 barriers to communication, 147-148 baseline, 3 cost, 82

and risk management, 161 scope, 26-28 BCWP (budgeted cost of work performed), 86

BCWS (budgeted cost of work scheduled), 86

benchmarking, 117

benefit cost ratio, 93

beta distribution, 70, 363

bidding, 24-26

bids, 20

bill of material (BOM), 33 binomial distribution, 357, 358 blanket orders, 205 BOM (bill of material), 33 bottom-up estimates, 78-80 brainstorming, 163-164, 168 breakeven charts, 35-36 budget at completion (BAC), 90 budgeted cost of work performed (BCWP), 86

budgeted cost of work scheduled (BCWS), 86 budgeting cost, 82, 84 for risk, 189-190 buffering the schedule, 63-67 business needs statement, 20 buyer's risk, 109-111

calendars, 59, 66 capital, cost of, 98

CAS, see Columbia Assessment Service cash flow, 37, 38, 42-46 cash flow analysis, 35-46

average rate of return used in, 36-38 breakeven chart used in, 35-36 internal rate of return used in, 40, 42-46 present value of money used in, 37, 39-41 cause and effect diagrams, 110, 112 certification, 221-223 chain networks, 154, 155 chain of command, 151, 154, 155 change management, 16, 21, 33-34 changes, cost of, 27 charter, see project charter checklists, 116, 166-168 Chernobyl nuclear accident, 208 circular networks, 154 clients, 5

closing process group, 16

closing the project, 16, 217

Code of Professional Conduct, 211-212

coercive power, 135-136

co-location, 124

Columbia Assessment Service (CAS), 207, 213

commodities, 203-204 communications barriers to, 147-148

formal/informal, 150-151

improving, 148-149

and listening, 151-153

and management by walking around, 157

model of, 146-147

and networking, 153-158 and performance reviews, 157-158 verbal vs. written, 149-150 communications management, 144-159 definition of, 145 importance of, 145

lessons-learned documents for, 144-145 practice questions about, 274-280, 337-342 community, 208 comparative ranking, 184, 185 ''competent parties,'' 193 compound interest formula, 39 compromise conflict resolution, 139-140 conceptual estimates, 79 conditional probability, 176 confidentiality, 212 conflict resolution, 137-140 conflicts of interest, 212 ''consideration,'' 193 constraints, 22 contact, points of, 7 contingency budget, 82, 84, 189-190 continuous improvement, 116 contract administration, 198-199 contract life cycle, 194-198 award process of, 197 contract process of, 198 requirement process in, 195 requisition process in, 195-196 solicitation process of, 196-197 trade-off studies in, 197-198 contract management, 193-203

and contract administration, 198-199 and life cycle of contract, 194-195 and make-or-buy decision, 194 practice questions about, 291-298, 349-353 contract process, 198 contracts cost-plus, 201-203 with customer, 19 definition of, 193

fixed-price, 199-201 reasons for using, 192 as risk response plan, 188 terms used in, 193 time-and-material, 203 types of, 199 contractual WBS (CWBS), 33 control charts, 113, 115-116 control estimates, 79 control estimating, 81-83 controlling the project, 216-217 corrective action, 190 cost(s)

of changes, 27

and make-or-buy decision, 194 price vs., 23-26 during project phases, 14-15 of quality, 105-107 and requirement process, 195 cost baseline, 82 cost budgeting, 82, 84 cost control, 84-101

cumulative reporting used in, 85-86 data collection problems in, 87, 88 and depreciation, 98-101 earned value reporting used in, 84-94 examples of, 88-91 financial measures for, 93, 95-97 reporting work complete for, 88 cost estimating, 79-83 analogous, 80 bottom-up, 79-80 control, 81-83 parametric, 80-81 top-down, 79 cost management, 77-102 budgeting for, 82, 84 controls for, 84-101 estimating for, 79-83 importance of, 77-78 and life cycle of project, 78 practice questions about, 245-254,

318-323 WBS used in, 78-79

cost performance index (CPI), 91-92 cost-plus award-fee contracts, 202 cost-plus contracts, 201-203 cost-plus fixed-fee contracts, 202 cost-plus incentive-fee contracts, 203 cost-reimbursable contracts, see cost-plus contracts cost variance (CV), 90 CPI, see cost performance index CPM, see critical path method crashing a schedule, 62 Crawford slip, 23, 165, 168 ''creeping elegance,'' 32 Critical Chain (Eliyahu Goldratt), 75 critical chain theory, 74-76 criticality index, 74

critical path method (CPM), 61-62, 68, 69

cultural differences, 211

cumulative reporting, 85-86

customer, 18-19

CV (cost variance), 90

CWBS (contractual WBS), 33

data collection, 87, 88 decision trees, 180-183 decoding, 147 defects, costs of, 106-109 definitive estimates, 79 delegation, 132 deliverables, 14, 27, 222 Delphi technique, 164, 168 Deming, Edward, 107 Deming's fourteen points, 107 dependencies, 49 depreciation, 98-101 accelerated, 99-101 straight-line, 99 Depression Era, 126 design, job and work, 132-135 diagramming for quality control, 110, 112-117 of relationships, 56-57 of risk identification, 167, 169

difficulty rating, 219

discretionary dependencies, 49

dissatisfiers, 131-132

distance conferencing, 150

distorted perceptions, 147

distractions, eliminating, 153

distrusted sources, 147-148

documentation reviews, 163

domains (of project management), 213-218

double declining balances, 101

duplicate activities, 65

duration of activity, 57-58

EAC, see estimate at completion earned value (EV), 86-91 earned value reporting, 84-94 calculations for, 90-94 as cumulative reporting, 85-86 data collection problems in, 87, 88 examples of, 88-91 parameters for, 86-87 ease, putting speaker at, 152-153 economic adjustment, 200-201 economic value added (EVA), 97-98 education requirement, 221-22 efficiency, 127 effort, 57

elementary schools, 129 e-mail, 149, 150 encoding, 146 environment, 4 environmental factors, 21 environmental responsibilities, 211 estimate at completion (EAC), 92-93 estimates, 15-16

estimate to complete (ETC), 93, 94 estimating activity duration, 47, 57-58 cost, 79-83 ETC, see estimate to complete ethical responsibilities, 208 ethnic differences, 211 EV, see earned value

EVA, see economic value added even distribution, 357, 358 exam questions, 218—221 executing process group, 16 executing the project, 16, 216 expectancy theory, 129 expected value, 71, 81-83, 178-180 experience requirement, 221-223 expert interviews, 165-166, 168 expert power, 136-137 external dependencies, 49

fallback plan, 188 fast tracking, 49, 62-63 feeder chains, 75-76

FF relationship, see finish-finish relationship

50-50 rule, 88

final phase of project, 15

financial measures, 93, 95-97

financial ratios, 96

finish-finish (FF) relationship, 54-55 finish-start (FS) relationship, 52 firm fixed-price contracts, 200 fishbone diagrams, 110, 112 fixed-price contracts, 199-201 fixed-price plus economic-adjustment contracts, 200-201 fixed-price plus incentive contracts, 201 flexibility, 123

flowcharts, 110

forcing conflict resolution, 138, 139 Ford, Henry, 9, 133 formal communications, 150 formulas, 220 forward buying, 204

free and open communications model, 155, 156

free float, 68, 75 frequency histogram, 74 FS (finish-start) relationship, 52 functional managers, 121-125 functional organizations, 9-11 fundamental accounting equation, 95

Gantt charts, 2, 50, 51 General Motors, 172 Goal, The (Eliyahu Goldratt), 75 goals, 4

''Go'' gauge, 108 Goldratt, Eliyahu, 74-76 on feeder chains, 75, 76 on price, 23 grade, quality vs., 103-104 grouping of risks, 185-186 Guide to the Project Management Body of Knowledge (PMBOK), 2 on communications management, 145 on earned value parameters, 86 on goal of project, 103 on quality assurance, 105 on quality management, 104 on risk events, 161

hard dependencies, 49 Hertzberg, Fredrick, 131 Hertzberg's motivation/hygiene theory, 131-132

hierarchy of needs theory, 129-131 human resources management, 118-143 and leadership, 137-140 in matrix organizations, 121 -123 and meetings, 140-143 motivation function of, 125-135 and organization chart, 121 personnel/personal evaluations functions of, 124-125 and power, 135-137 practice questions about, 265-273,

330-336 and project schedule, 120 roles/responsibilities of, 119-120 and staffing plan, 120, 121 and training plan, 120, 121 hygiene factors, 131 -132

incentives, 201, 203 income statement, 95, 96

indexes, 91-92

individual competence, 209-210

industrial revolution, 125

informal communications, 150-151

information flows, 134

initial phase of project, 14

initiating process group, 15-16

initiation of project, 19-22, 214, 215

inspection, 108-111

insurance, 187-188

intelligence tests, 129

interest, showing, 153

interest rates, 42-46

internal deliverables, 14

internal rate of return on investment (IRR),

International Organization for Standardization (ISO), 1, 218, 221 Internet, 150

IRR, see internal rate of return on investment Ishikawa, Kaoru, 110

ISO, see International Organization for Standardization ISO 9001: 2000, 1, 218, 221 issue log, 144-145

It's Not Luck (Eliyahu Goldratt), 23, 75

job design, 132-135 job enlargement, 133 job enrichment, 134

justifications, project, see project justifications kaizen, 116-117 Kennedy, John F., 9 key points, 149 key stakeholders, 22-23 knowledge areas, 16, 17 knowledge base, 21, 209 known risks, 161, 189-190

labor cost, 87, 88 lags, 56, 64 language, 211

''lawful purpose," 193 leadership, 137-140 leads, 56

learning curve theory, 125-126 legal responsibilities, 208 legitimate power, 136 lessons-learned documents, 144-145 liabilities, 95 life cycle, 14-15

of contracts, 194-198 of project, 2-4, 78 life cycle costing, 93 life cycle costs, 4 listening, 151-153 logical precedence diagram, 57 logical relationships, 52-57 diagramming of, 56-57 finish-finish, 54-55

finish-start, 52 and leads/lags, 56 start-finish, 55-56 start-start, 52, 54 lump-sum contacts, see fixed-price contracts make-or-buy decision, 194 management by walking around, 157 management information systems, 21 management reserve, 84, 190 managers in functional organizations, 9-11 in matrix organizations, 11-12 mandatory dependencies, 49 Manhattan Project, 5 Maslow, Abraham, 129-131 material cost, 87 matrix organizations, 11 -12

and performance reviews, 157-158 project managers in, 121-123 McGregor, Douglas, 137 McGregor's theory of X and Y managers, 137 mean value, 70

meeting management, 140-143 Meeting Planners International, 209

meetings, 141-142 memos, 142

Microsoft PowerPoint, 150 milestone charts, 51 mitigation, 189

monitoring and control, risk, 190 monitoring and control process group, 16 Monte Carlo simulation, 73-74 motivation, 7, 125-135 in Depression era, 126 expectancy theory of, 129 Hertzberg's theory of, 131-132 importance of, 125-127 in industrial revolution, 125 and job/work design, 132-135 Maslow's hierarchy of need theory of,

129-131 in post-World War II, 127 procedures vs., 127-129 and scientific management, 125-126 and supervisory style/delegation, 132 in World War II, 126 motivation/hygiene theory, 131-132 multiplication rule, 176-178

NASA, 9

needs, hierarchy of, 129-131

net operating profit after taxes (NOPAT), 96,

97, 100 net present value, 40 net profit, 96 networking, 153-156 ''No go'' gauge, 108 nominal group technique, 165, 168 NOPAT, see net operating profit after taxes normal distribution, 70, 359-362 note taking, 143

objectives, 4, 142

OBS, see organizational breakdown structure order of magnitude estimate, 28 organizational breakdown structure (OBS), 33, 121

organizational factors, 21 organizational knowledge base, 21 organizational process assets, 21 organization chart, 121 organizations, 7—12 functional, 9-11 matrix, 11-12 projectized, 7-9 overbidding, 24-26 owner's equity, 95

parametric estimates, 80-81

Pareto, Vilfredo, 110

Pareto charts, 110, 113, 114

passive acceptance, 188

PDM, see precedence diagramming method

PDUs (professional development units), 224

perceiving, 147

performance reviews, 124-125, 157-158 personnel administration, 21, 124-125 PERT analysis, see program evaluation and review technique physical environment, 4 physiological needs, 130-131 planned value (PV), 86-91 planning project, 16, 215-216 quality management, 104-105 risk management, 162 risk-response, 186-190 planning process group, 16 PMBOK, see Guide to the Project Management

Body of Knowledge PMI, see Project Management Institute PMO, see project management office PMP exam, 207, 213-224 PMPs, see Project Management Professionals Poisson distribution, 359 Polaris Missile Program, 68 political environment, 4 portfolio management, 3 post-World War II era, 127 power, 135-137

precedence diagramming method (PDM),

51-53

preliminary estimates, 79 preliminary project justification, 16 present value of money, 37, 39-41 prevention, costs of, 106 price, cost vs., 23-26 probability and impact matrix, 170, 171 probability distributions, 357-363 beta, 363

binomial, 357, 358 even, 357, 358 normal, 359-362 Poisson, 359 probability of risk, 172-178 problem-solving conflict resolution, 140 procedures, motivation vs., 127-129 process assets, 21 process groups, 16-17 procurement management, 203-206 with blanket orders, 205 of commodities, 203-204 with forward buying, 204 practice questions about, 291-298,

349-353

with split orders, 205-206 of unique products/services, 204 product, quality of, 104 product scope, 26

professional development units (PDUs), 224 professional responsibility, 207-212,

217-218

balancing stakeholders' interests (task 4),

and code of conduct, 211-212 environmental (task 5), 211 individual competence (task 3), 209-210 knowledge base (task 2), 209 legal/ethical (task 1), 208 practice questions about, 299-302,

354-355

program, project vs., 3

program evaluation and review technique

"progressive elaboration," 3, 4, 16 project(s)

cost of, 78-79 definition of, 2 end of the, 3-4 environment of, 4 life cycle of, 14-15 life of, 2-4 limited resources of, 5 program vs., 3 quality of, 104 scope of, 3 teams for, 4-5 project charter, 16, 19-21 project finish events, 57 projectized organizations, 7-9 project justifications, 34-46

average-rate-of-return method of, 36-38 breakeven charts used in, 35-36 internal-rate-of-return method of, 40,

42-46

present-value-of-money method of, 37,

39-41

project management, 1 -17 advantages of, 6 -7 case example of, 5-6 definition of, 2 domains of, 213-214 growth of, 1 and life cycles, 14-15 manager's role in, 13 organizing for, 7-12 PMO for, 12-13 processes of, 14-17 terms used in, 2-5 Project Management Code of Professional

Conduct, 211-212 Project Management Institute (PMI), 1, 187188, 207, 208, 213, 218 joining, 223-224 membership in, 1 Web site of, 224

project management office (PMO), 12-13 Project Management Professional (PMP) Role

Delineation Study, 207, 208, 213 Project Management Professionals (PMPs) CAS analysis of, 207 certification of, 221-223 number of, 1 recertification of, 224 project managers and communication, 152 in matrix organizations, 121 -123 roles/responsibilities of, 13, 119-120 skills of, 13

see also human resources management project office, 12 project schedule, 120 project scope, 26 project selection methods, 22 project start events, 57 project team and customer, 18-19 as organizational asset, 21 PV, see planned value qualified sellers lists, 197 qualitative risk analysis, 170, 171 quality, grade vs., 103-104 quality assurance, 104, 105 quality circles, 134-135 quality control, 104, 107-117 with benchmarking, 117 with cause and effect diagrams, 110, 112 with checklists, 116 with control charts, 113, 115-116 with flowcharts, 110 with kaizen, 116-117 with Pareto charts, 110, 113, 114 with run charts, 116 with sampling inspection, 108-111 quality management, 103-117 assurance function of, 105 control function of, 107-117

and cost of quality, 105-107 planning process of, 104-105 practice questions about, 255-264, 324-329 quality plan, 104-105 quality planning, 104-105

ranking of problems, 113, 114

RBS, see resource breakdown structure

RBS (risk breakdown structure), 33

RCA, 166

recall questions, 219

recertification, 224

referent power, 136

regulation, 2

relevance (of message), 148

repetition (of key points), 149

representative power, 137

request for proposal (RFP), 20, 196

request for quote (RFQ), 196

requirement process, 195

requirements list, 26

requisition process, 195-196

research, 209

resource availability, 66

resource breakdown structure (RBS), 33, 121

resource cost rates, 80

resource histogram, 66-67

resource requirements, 66

resource scheduling, 65-67

responsibility, see professional responsibility responsibility-accountability matrix, 119-120

return on assets (ROA), 96, 97

return on sales (ROS), 96

reverse resource allocation scheduling, 67

reward power, 135-136

RFP, see request for proposal

RFQ, see request for quote risk(s)

buyer's vs. seller's, 109-111 definition of, 160 known vs. unknown, 161 and scope development, 28

risk assessment, 169-183 decision trees in, 180-183 and expected value, 178-180 qualitative risk analysis for, 170, 171 and risk impact, 178 and risk probability, 172-178 and risk tolerance, 170-172 risk avoidance, 187

risk breakdown structure (RBS), 33, 162 risk events, 161, 163-169 risk identification, 163-169 analogy method of, 167 brainstorming used for, 163-164 checklists for, 166, 167 comparison of techniques for, 168-169 Crawford slip process of, 165 Delphi technique for, 164 diagramming techniques for, 167 documentation reviews used for, 163 expert interviews for, 165-166 nominal group technique for, 165 recording of, 169 root-cause, 166 SWOT analysis for, 166, 167 risk impact, 178 risk management, 160-191 assessment process of, 169-183 charter description of, 21 identification process of, 163-169 monitoring and control process of, 190 planning process of, 162 practice questions about, 281-290, 343-348

processes of, 162

quantification process of, 183-186 response planning process of, 186-190 timing of, 161 risk management planning, 162 risk monitoring and control, 190 risk probability, 172-178 addition rule in, 174-176 multiplication rule in, 176-178 risk quantification, 183-186

risk response planning, 186-190 acceptance strategy of, 188 avoidance strategy of, 187 and budgeting, 189-190 contract strategy of, 188 mitigation strategy of, 189 strategies for, 186-187 transfer strategy of, 187-188 risk tolerance, 21, 170-172 risk transfer, 187-188 ROA, see return on assets rolling wave planning, 16, 48 root cause identification, 166 ROS (return on sales), 96 rule of seven, 115-116 run charts, 116

safety, 212 satisfiers, 131

schedule control, 47, 68-76 CPM used in, 68, 69 critical chain theory of, 74-76 Monte Carlo simulation for, 73-74 PERT used in, 68, 70-73 schedule development, 47, 58-67 adjustments in, 62-63 buffering in, 63-67 conventions used in, 59, 60 float in, 61-62 for resources, 65-67 schedule performance index (SPI), 91-92 schedule variance (SV), 90 scientific management, 9, 125-127 scope and quality, 103 and risk management, 161 scope baseline, 26-28 scope definition, 18 scope description, 20 scope management, 18-46 and baseline, 26-28 and change management, 33-34 constraints/assumptions addressed in, 22

and cost vs. price, 23-26

and initiation of project, 19-22

practice questions about, 227-234,

305-310 and project justifications, 34-46 project selection methods section of, 22 and stakeholders, 22-23 and verification, 33 WBS used in, 28-33 scope of project, 3 scope verification, 33 security, 131 self-actualization, 131 seller's risk, 109-111 sensitivity analysis, 184, 185 SF relationship, see start-finish relationship sign-off, 27, 28 simplicity (of message), 148 situational questions, 218 skills, 8 slack, 61

smoothing conflict resolution, 139 social environment, 4 socialization need, 131 solicitation process, 196-197 SOW, see statement ofwork span of activity, 58 specialists, 8

SPI, see schedule performance index split orders, 205-206 sponsors, 5

SS relationship, see start-start relationship staffing plan, 120, 121 stakeholders, 5, 7

balancing interests of, 210 community as, 208 expectations of, 103-104 and life cycle of project, 15 and scope baseline, 27 and scope management, 22-23 standard deviation, 71 standards, 1, 2

start-finish (SF) relationship, 55-56

start-start (SS) relationship, 52, 54 statement of work (SOW), 20, 192-193 statistical sampling, 109 straight-line depreciation, 99 strengths, weaknesses, opportunities, and threats (SWOT) analysis, 166, 167 strong matrix organization, 12, 121-122 subjective probability, 174 summarizing, 153 sum of the years' digits, 100 sunk cost, 93, 95 supervisory style, 132 supply and demand, 203-204 SV (schedule variance), 90 SWOT analysis, see strengths, weaknesses, opportunities, and threats analysis symbols, 146, 147 systems management approach, 15

task 1, 208 task 2, 209 task 3, 209-210 task 4, 210 task 5, 211 task level, 31

tasks of professional responsibility, 208-210 Taylor, Frederick, 9, 133 teams, 4-5, 18-19

ten-person guideline (for meetings), 141

termination, 9

test criteria, 27-28

theory of X and Y managers, 137

thinking, 146

time-and-material contracts, 203 time management, 47-76

activity definition process of, 47-48 activity duration estimating process of, 57-58

activity sequencing process of, 48-57 definition of, 47

practice questions about, 235-244, 311-317

processes of, 47

schedule control process of, 68-76 schedule development process of, 58-67 timing of cost information collection, 77 of risk management, 161 top-down estimates, 79 trade-off studies, 197-198 traditional organizations, 9-11 training plan, 120, 121 transfer of risk, 187-188 transmission errors, 148 transmitting, 147 trust, 211 truthfulness, 212 tutorial, 220 type X managers, 137 type Y managers, 137

underbidding, 24-26 understanding, communication and, 147, 152 uniqueness, 4

unique products/services, 204 unknown risks, 161, 190 U.S. Navy, 68, 150-151 U.S. Treasury bills, 42

vendor conferences, 196-197 vendors, 196-197 verbal communications, 148-150 video projection, 150 virtual teams, 124

WACC (weighted average cost of capital), 98 walking around, management by, 157 WBS, see work breakdown structure weak matrix organization, 12, 122 weighted average cost of capital (WACC), 98 wheel network, 155 withdrawal conflict resolution, 140 "workaround," 62, 190

work breakdown structure (WBS), 28-33 in activity definition process, 47-48 in cost management, 78-79 definition of, 29 dictionary used in, 32 organizational, 33 resource, 33 risk, 33

systems approach to, 31-32

work breakdown structure dictionary, 32

work calendar, 66

work complete, 88

work design, 132-135

work package, 29, 31, 48

World War II era, 126

written communications, 142, 149-150

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Project Management Made Easy

Project Management Made Easy

What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.

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