Answers to Review Questions

1. D. Make-or-buy analysis is determining whether it's more cost effective to purchase the goods or services needed for the project or more cost effective for the organization to produce them internally.

2. C. Firm fixed-price contracts have the highest risk to the seller and the least amount of risk to the buyer. However, the price the vendor charges for the product or service will compensate for the amount of risk they're taking on.

3. B. Either the buyer or the seller can write the SOW. Sometimes the buyer will write the SOW and the seller might modify it and send it back to the buyer for verification and approval.

4. A. The cost plus incentive fee contract reimburses the seller for the seller's allowable costs and includes an incentive or bonus for exceeding the performance criteria laid out in the contract.

5. D. The RAM and RACI charts are tools and techniques of this process.

6. C. Source selection criteria can be based on price alone when there are many vendors who can readily supply the goods or services. The question states that only three vendors make the machine, which means source selection criteria should be based on more than price.

7. A. Constraints can be anything that limits the option of the project team. Organizational structures, collective bargaining agreements, and economic conditions are all constraints that you might encounter during this process.

8. C. Fixed-price contracts can include incentives for meeting performance criteria, but the questions states the vendor helping with the programming task will be reimbursed for their costs and, depending on your satisfaction with their results, may receive an additional award. This describes a cost plus award fee contract.

9. A. RACI stands for responsible, accountable, consult, and inform.

10. B. Plan Procurements can directly influence the project schedule, and the project schedule can directly influence this process.

11. B. This is a cost-reimbursable contract that includes a fee as a percentage of allowable costs. This type of contract is known as a cost plus percentage of cost (CPPC) contract.

12. A. Design of experiments is a tool and technique of the Plan Quality process that provides statistical analysis for changing key product or process elements all at once (not one at a time) to optimize the process.

13. C. Philip Crosby devised the zero defects theory, meaning do it right the first time. Proper Plan Quality leads to less rework and higher productivity. Joseph Juran's fitness for use says that stakeholders' and customers' expectations are met or exceeded.

14. A. W. Edwards Deming conjectured that the cost of quality is a management problem 85 percent of the time and that once the problem trickles down to the workers, it is outside their control.

15. C. The benefits of meeting quality requirements are increased stakeholder satisfaction, lower costs, higher productivity, and less rework.

16. A. Internal failure costs are costs associated with not meeting the customer's expectations while you still had control over the product. This results in rework, scrapping, and downtime.

17. B. Quality metrics are an output of the Plan Quality process.

18. D. This is an example of design of experiments.

19. B. Six Sigma is a measurement-based strategy that focuses on process improvement and variation reduction by applying Six Sigma methodologies to the project.

20. C . Teaming agreements are an input of the Plan Procurements process.

Chapter

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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