TheMidtermExam-MGT-354-v1

Project Management MGT-354 Page No. 1 Kh. Abuosba, Winter 2013 The Business School

Project Management The Midterm Exam 200 Marks

MGT.354 Winter 2013

The Business School

Student Name: ______________________________

Student ID No.: _____________________________

Duration: 120 Minutes

Information and Instructions:

- Write your name and Humber ID exam booklet as well as the Scantron form.

o True or False Questions are to be marked as A or B on the form.

o You are required to answer your questions on the exam booklet.

o You will be given Enough Time to copy your answers of questions 2 and 3 to the

Scantron form.

Question No. Marks

Q.1 [40 Marks ]

Q.2 [40 Marks ]

Q.3 [40 Marks ]

Q.4 [ 20 Marks ]

Q.5 [ 20 Marks ]

Q.6 [ 20 Marks ]

Q.7 [ 20 Marks ]

Total Mark:


Q.1 Define each of the following Terms ......... 40 Marks

1. Project::___________________________________________________________

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2. Net Present Value::_____________________________________________________

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3. Payback Method::________________________________________________________

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4. Implementation Gap::___________________________________________________

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5. Project Portfolio::_______________________________________________________

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6. Balanced Matrix::_______________________________________________________

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7. :Project Office:__________________________________________________________

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8. :Slack:___________________________________________________________

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9. Project Charter::_________________________________________________________

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10. :Scope Statement:________________________________________________________

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11. Work Package::_________________________________________________________

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12. Work Breakdown Structure::_____________________________________________

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13. :Priority Matrix:_______________________________________________________

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14. Activity:__________________________________________________________

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15. Delphi Method::________________________________________________________

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16. Learning Curves::_______________________________________________________

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17. Padding Estimates:_______________________________________________________

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18. Critical Path::________________________________________________________

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19. :Risk:_______________________________________________

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20. Transferring Risk:____________________________________________

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Q.2 Mark each of the following statement as ( ) if it is true or ( X ) if it is false:40 Marks

[.On the form, mark your answers as either A or B]

1

The problem in many organizations is not with formulating strategies but with

implementing the strategies.

2

. If a proposed project does not meet one of the designated "must" objectives it is

immediately removed from consideration.

3

Many organizations find they have three different kinds of projects in their

portfolio, compliance, operational, and marketing.

4

The first step in the Strategic Management Process is to review and define the

organizational mission.

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Project estimates should be broken down into as much detail than and with as

much accuracy as possible.

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Reviewing and revising the organization's mission is best achieve through the use

of a SWOT analysis

7

The ideal approach to estimating project time and costs is to use both the top-

down and the bottom-up approach.

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The NPV financial model measures the time it will take to recover the project

investment

9

Since a construction company builds many buildings the projects after the first

building do not fit the definition of a project.

10

The apportion method is a top-down approach that uses the pooled experience of

senior and/or middle managers to estimate the total project duration and cost.

11 An activity includes only one work package.

12 The first stage in the Project Life Cycle is the Concept stage.

13 The two approaches used to develop project networks are AOA and AON

14 Lags can be used to constrain the start and finish of an activity

15 A common rule of thumb in the world of high-tech product development is that a

six-month project delay can result in a 33 percent loss in product revenue share.

16 Generally, people working on several projects at the same time are more efficient

than having several people working part-time on the same projects

17 One of the defining characteristics of project management is that the projects are

not confined to a single department but involve several departments and

professionals

18 Because of its flexibility, project management is equally useful in ongoing,

routine work as well as unique, one-time projects.

19 Statements of project scope are sometimes referred to as Work Breakdown

Structure (WBS).

20 In general, work packages should not exceed 10 work days.


Q.3 Select a, b, c, or d for each correct answer..40 Marks

21. The highest element in the hierarchical breakdown of the WBS is

A. A work package

B. Sub deliverables

C. A cost account

D. Major deliverables

E. The project

22. The highest element in the hierarchical breakdown of the WBS is

A. A work package

B. Sub deliverables

C. A cost account

D. Major deliverables

E. The project

23. Statements of project scope are sometimes referred to as Statements of Work or Project

Charters. Which of the following represents an activity on an AOA project network?

A. An arrow

B. A line

C. A node

D. Both A and B are correct

E. A, B, and C are all correct

24. The laying pipe example in the text illustrates the concept of

A. Laddering

B. Hammock activities

C. Critical path

D. Concurrent engineering

E. Forward pass

25. The forward pass in project network calculations determines the

A. Earliest time's activities can begin

B. Earliest time's activities can be finished

C. Duration of the project

D. Both A and B are correct

E. A, B, and C are all correct


26. ________ activities must be completed immediately before a particular activity.

A. Merge

B. Burst

C. Predecessor

D. Successor

E. Critical

27. Which of the following is not one of the basic rules to follow when developing project

networks?

A. An activity cannot begin until all preceding activities have been completed

B. Each activity must have a unique identification number

C. Conditional statements are allowed but looping statements are not allowed

D. An activity identification number must be larger that that of any preceding activities

E. Networks flow from left to right

28. A/an _________ activity has more than one dependency arrow flowing from it.

A. Parallel

B. Critical path

C. Burst

D. Merge

E. Independent

29. An activity that has more than one dependency arrow flowing into it is termed a(n)

A. Parallel activity

B. Critical path

C. Burst activity

D. Merge activity

E. Independent activity

30. Information to develop a project network is collected from the

A. Organization breakdown structure

B. Work breakdown structure

C. Budget

D. Project proposal

E. Responsibility matrix


31. Which of the following would be the best method for projects where the final product is

not known and the uncertainty is very large?

A. Function point

B. Template

C. Learning curve

D. Phase estimating

E. Apportion

32. Learning curves are more likely to apply in situations where most of the costs are

A. Materials

B. Labor

C. Overhead

D. Evenly spread over materials, labor, and overhead

E. All of these are equally likely situations for learning curves

33. Laura is forecasting the time and cost of developing an intranet for a new customer. Her

department has completed six such intranets for customers during the last two years.

Although the proposed system is about the same size as the others she estimates that it

will take about 10 percent less time and money. Which of the following methods is she

using?

A. Ratio

B. Template

C. Apportion

D. Function point

E. Learning curve

34. Jose is forecasting project time and cost for constructing a new building by multiplying

the total square footage by a given dollar amount. Which of the following methods is he

using?

A. Ratio

B. Template

C. Apportion

D. Function point

E. Learning curve


35. Which of the following methods is not considered a top-down approach to estimating

project time and cost?

A. Ratio

B. Template

C. Apportion

D. Function point

E. Learning curve

36. ______ estimates are most likely to use low cost, efficient methods.

A. Apportion

B. Ratio

C. Top-down

D. Bottom-up

E. All of these are equally likely

37. Which of the following is a good condition for top-down estimating?

A. Cost and time important

B. Fixed price contract

C. Customer wants details

D. Internal, small project

E. All of these are good conditions for top-down estimating

38. Which of the following is a good condition for top-down estimating?

A. Cost and time important

B. Fixed price contract

C. Customer wants details

D. Internal, small project

E. All of these are good conditions for top-down estimating

39. Janet is forecasting how much money her department needs to support a new project. She

estimates that two people and $25,000 in expenses will cover her needs. Because

management typically insists on reducing forecasts by 20 percent, she increases her

estimates to allow for that reduction. Which of the following factors is illustrated in this

situation?

A. Padding estimates

B. Planning horizon

C. Project structure

D. People

E. Organization culture


40. In which of the following stages is it determined what the project will entail, when it will

be scheduled, whom it will benefit, and what the budget will be?

A. Conceptualizing

B. Defining

C. Planning

D. Executing

E. Delivering


Q.4 Payback Period 20 Marks

XYZ Company want to determine which of two project alternatives is the more attractive

investment opportunity by using a payback period approach. XYZ have calculated the initial

investment cost of the two projects and the expected revenues they should generate for them is

shown below. Which project should they invest in?

Initial Outlay and Projected Revenues for the two projects

Project A Project B

Revenues Outlays Revenues Outlays

Year 0 500,000 500,000

Year 1 50,000 75,000

Year 2 150,000 100,000

Year 3 350,000 150,000

Year 4 600,000 150,000

Year 5 500,000 900,0000

- Bonus (4 marks): what is the Rate of Return of both projects?


Q.5 Learning Curve 20 Marks

In an IT project, there is a database tuning activity by a DBA. According to the schedule, this

activity needs to be repeated five times during the project period. The activity is estimated to be

performed for the first time in 150 hours by the DBA. The learning rate is estimated to be 80%.

- What is the estimated performance times for the 2nd, 3rd, 4th, and 5th times?

- Using the Learning Curve Cumulative Values, what is the cumulative hours required to

repeat the task 5 times.


Q.6a For the sequence of activities listed below of Project-XYZ, create a complete project

network diagram and determine critical path:

15 Marks

Activity Description Preceding Activity Duration (Weeks)

A Scope Documentation 2

B Project Planning A 3

C Buy Materials B 8

D Prototype Design C 3

E Prototype Analysis C 6

F Prototype Implementation D, E 5

G Testing of Prototype F 4

H Presenting Prototype to Customer G 2

Q.6b What is the difference between free slack and total slack? 5 Marks


Q.7a What are the major differences between managing negative risks versus positive risks

(opportunities)? (10 Marks)

Q.7b Explain the difference between budget reserves and management reserves. (10 Marks)

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