Project Management in Practice, Sixth Edition Test Bank

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Chapter 1: The World of Project ManagementTrue/False1.A primary purpose of forming projects is to assign the responsibility foraccomplishing some organizational task to a specific person or small group.Answer: TrueResponse:See section1.1Level: easy2.One of the few similarities between project management and general managementis that both exist in the well-defined organizational structure ofsuperior/subordinates in the overall organization.Answer:FalseResponse:See section1.2Level: medium3.Many recent developments in project management are being drivenbychanges inthe nature of the American workforce.Answer: FalseResponse:See section1.1Level: medium4.There has been agrowing use of projects to achieve an organization’s strategicgoalsAnswer: TrueResponse:See section1.1Level: medium5.While general managers have their authority limited to specific areas in theoverall organization, project managers have authority over any activity requiredby the project.

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Answer: FalseResponse:See section1.2Level: medium6.Projects are always carried out under conditions of uncertainty.Answer: TrueResponse:See section1.3Level: easy7.One cantrade-off time and cost when managing a project, but the project’stechnical specifications must be maintained exactly as the client initially specifies.Answer: FalseResponse:See section1.3Level: medium8.Nonnumeric project selection methods are only suitable if numeric methods arenotavailable.Answer: FalseResponse:See section1.5Level: medium9.When using financial methods for selecting projects, the payback period is thesimplest and best method to use.Answer: FalseResponse:See section1.5Level: medium10Rank-ordering a large number of projects can be done with a Q-sort.Answer:TrueResponse:See section1.5Level: medium

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11.A disadvantage of using the payback period method forselecting projects is that itcannot reflect the time-value of money.Answer: TrueResponse:See section1.5Level: medium12.A disadvantage of using the discounted cash flow method (or net present value)for selecting projects is that itignores all non-monetary factors associated with theprojectexcept risk.Answer: TrueResponse:See section1.5Level: medium13.A disadvantage of using scoring models rather than financial models for selectingprojects is that they cannotinclude the project’s profitability.Answer: FalseResponse:See section1.5Level: medium14.A PM doesnot need to understand why a project is selected for funding becausehe didnot initiate the process.Answer: FalseResponse:See section1.5Level: medium15.The main distinction between platform and breakthrough projects is that theformer usuallydepend on existing technology.Answer: TrueResponse:See section1.6

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Level: medium16.The main distinction between platform andderivative projects is that the latterdepend on existing technology.Answer: FalseResponse:See section1.6Level: medium17.One reason for the emphasis on project management is that tasks fit neatly intobusiness-as-usual.Answer: FalseResponse:See section1.1Level: easy18.Programs are subdivisions of projects.Answer: FalseResponse:See section1.1Level: easy19.Projects are subdivisions of programs.Answer: TrueResponse:See section1.1Level: easy20.Asimilarity between project management and general management is thetendency to “manage by exception.”Answer: FalseResponse:See section1.2

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Level: medium21.Project budgets are primarily modifications of budgets for the same activity in theprevious period.Answer: FalseResponse:See section1.2Level: medium22.In project management, superior-subordinate relationships are known and lines ofauthority are clear.Answer: FalseResponse:See section1.2Level: medium23.Having responsibility for the outcome of a project without the authority of rank orposition is common in project management.Answer: TrueResponse:See section1.2Level: medium24.Negotiating the purchase of a new car would typically be characterized aswin-win negotiation.Answer: FalseResponse:See section1.2Level: medium25.In project management, it is often necessary to trade-off one objective for another.Answer: TrueResponse:See section1.3Level: easy

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26.A project that is selected because it is necessary for continued operationsexemplifies a sacred cow.Answer: FalseResponse:See section1.5Level: medium27.The comparative benefits method is considered a nonnumeric project selectionmethod.Answer: TrueResponse:Seesection1.5Level: medium28.When using the weighted scoring model, the categories for each scale must be inequal intervals.Answer: FalseResponse:See section1.5Level: medium29.Scoring methods were developed to overcome some of thedisadvantages ofsimple financial profitability methods.Answer: TrueResponse:See section1.5Level: medium30.One limitation of scoring methods is that they can only incorporate quantitativedata.Answer: FalseResponse:See section1.5Level: medium

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31.As a rule of thumb, the number of factors included in a scoring model should beat least 10.Answer: FalseResponse:See section1.5Level: medium32.Projects success is not determined by the portfolio of projects in an organization.Answer: FalseResponse:See section1.6Level: medium33.R&D projects are oriented toward using newly developed technologies or existingtechnologies in a new manner.Answer: TrueResponse:See section1.6Level: medium34.Projects withdeliverables that are incrementally different from existing offeringsare classified as platform projects.Answer: FalseResponse:See section1.6Level: medium35.The project manager depends on legitimate authority to gain the cooperation of the manydepartments in the organization that may be asked to supply technology, information,resources and personnel to the project.Answer: FalseResponse:See section1.2Level: medium36.In the early years of a project when outflows usually exceedinflows, the NPV of theproject for those years will be positive.

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Answer:FalseResponse:See section1.5Level: mediumMultiple Choice37.Which of the following isnota trend in project management?a) achieving strategic goalsb)improving project effectivenessc) quasi projectsd) reductive projectse) achieving routine goalsAnswer: dResponse:See section1.1Level: medium38.Which of the followingcriteriacan be included in scoring models for selectingprojects?a)potential profitability of the projectb) potential impact on the firm’s competitive positionc) the organization’s ability to market the output of a projectd) All of the above can be includede) only a and b aboveAnswer: dResponse:See section1.5Level: medium39.If the initial investment is a project is $100,000 and the expected annual net profitfor the project is $20,000, the payback period is:a) One fifth of a yearb) 4 yearsc) 5 yearsd) 10 yearse) insufficient information todetermine the payback period

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Answer: cResponse:See section1.5Level: medium40.Which of the following isnota characteristic of a project?a) They are uniqueb) They are routinec) They have specific due dated) Theyhave a specific deliverablee) They have a purposeAnswer: bResponse:See section1.1Level: medium41.“Blue Sky” projects area)R & D projectsb)Platform projectsc)Breakthrough projectsd)Derivative projectse)High risk projectsAnswer:aResponse:See section1.6Level: medium42.Searching for the third alternative is most closely associated witha) win-win negotiationb) project planningc) project budgetingd) the three goals of a projecte) the weighted scoring modelAnswer: aResponse:See section1.2Level: medium

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43.Which of the following isnotrelated to the three goals of a project?a) timeb) datac) scheduled) coste) performanceAnswer: bResponse:See section1.3Level: medium44.Projects thatbegin with a slow start, have quick momentum in the middle, andhave a slow finish are said to follow which type of lifecycle?a) J-shaped lifecycleb) L-shaped lifecyclec) an exponential growth lifecycled) an S-shaped lifecyclee) an X-shaped lifecycleAnswer: dResponse:See section1.4Level: medium45.Which of the following is a numeric project selection method?a) comparative benefitsb) payback periodc) Q-sort methodd) operating/competitive necessitye) sacred cowAnswer: bResponse:See section1.5Level: medium46.A matrix that illustrates the magnitude of both product and process changesresulting from a project is calleda) the aggregate project planb) the product-process matrixc) the aggregate master production schedule

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d) the balanced scorecarde) the R&D project portfolioAnswer: aResponse:See section1.6Level: medium47.The ________________________ attempts to link the organization’s projectsdirectly to the goals and strategy of theorganization.a) the product-process matrixb) the balanced scorecardc) the action pland) project portfolio processe) the work breakdown structureAnswer: dResponse:See section1.6Level: medium48.Rebus Inc., a game development company, had gained critical success with itsvideo game Authority Online a year ago. The game's publisherwanted Rebus toundertake a project to revitalize the game's salesby updatingthe graphics andreleasingit for a new platform. Thistype of project isan example ofa(n)_____.a)derivative projectb)R&D projectc)platform projectd)breakthrough projecte) sacred cow projectAnswer:aResponse:See section1.6Level:difficult49.Ultor is a mediacompanythat specializes increatingprint advertisementsforlocal businesses. Lately,it hasbeen undertaking requests for multimedia projectsthat are new toit.In this scenario, Ultor is most likely accepting _____.a) derivative projectsb) R&D projectsc) platform projectsd) breakthrough projectse) sacred cow projects

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Answer:cResponse: See section 1.6Level: difficult50.RestrumCorp.is a company that delivers lunchto working professionalsthroughdelivery drivers.Ithasrecently undertaken a project that will allowitto usedrones to deliver meals to its customers.Restrum's new projectcan be categorizedasa(n)_____.a)derivative projectb) R&D projectc)blue-sky projectd)breakthrough projecte) sacred cowprojectAnswer:dResponse: See section 1.6Level: difficult51.Alchemax Inc.islooking to undertake a projectthat requires an initial fixedinvestment of $200,000 and is expected to return a net cash inflow of $50,000each year. The paybackperiod for this project will be _____ years.a)2b)7c)4d)9e) 5Answer:cResponse:See section1.5Level:difficult52.OuroborosConstruction started the construction of a house for a client. The initialplanning of the project took longer than expected. Once plans were finalized, itdid not take long to erect the structure, and it was done much before schedule.However, it took a lot of time to give the finishing touches to the house, and itwas a long time before the house was completed.Theproject in this scenario hasa(n)_____.a)J-shaped life cycleb)X-shaped life cyclec)S-shaped life cycled)L-shaped life cyclee)O-shaped life cycleAnswer:c

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Response:See section 1.5Level: difficult53.OmicoreSoftworks, a software development firm,undertook a projectthat involveddevelopinga bespoke accounting software for a firm.The project initiated with theproject manager spending some time to identify the correct resources. Once thiswas done, the process of writing the program began. Most of the time was spenton debugging and ensuring that the software worked to theclient'sspecification.The project in thisscenario has a(n)_____.a) J-shaped life cycleb) X-shaped life cyclec) S-shaped life cycled) L-shaped life cyclee) O-shaped life cycleAnswer:aResponse: See section 1.5Level: difficult54Baketolife,asmallbakerythatspecializes in wedding cakes,undertooka projectthatrequired the creation of a large five-tier cake.While themixturefor the cakewaseasy tomakeand took less than half a day to prepare, the size of the cakemeant that a lot of timewas spent ensuring that each cake was cooked all the waythrough.The project in this scenario has a(n)_____.a) L-shaped life cycleb) X-shaped life cyclec) S-shaped life cycled) J-shaped life cyclee) O-shaped life cycleAnswer: dResponse: See section 1.5Level: difficult55.Which of the following is an example of win-losenegotiation?a)Buying a car from a second-handcardealershipat the asking price.b)Discussing a problem with all parties concerned and finding a middle groundc)Carrying on an argument over a petty issue that can be easily resolvedd)Agreeing to share resourcesforthe benefit of all involved in different projectse)Disagreeing with a project idea while not providing an alternativeAnswer:aResponse:Seesection1.2

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Level:difficult56.Which of the following is an example of win-winnegotiation?a) Buying a car from a second-hand car dealershipat the asking priceb) Forcibly using resourcesallocated to another departmentc) Keeping resources that could be used by another team busyin unnecessarytasksd) Agreeing to share resourcesforthe benefit of all involved in different projectse)Carrying on an argument over a petty issue that can be easily resolvedAnswer: dResponse: See section 1.2Level: difficult57.Which of the following is an example of lose-losenegotiation?a) Buying a car from a second-hand car dealershipat the asking priceb) Taking time off from a project to help another teamc)Disagreeing with a project idea while not providing an alternatived) Agreeing to share resourcesforthe benefit of all involved inaprojecte)Discussing a problem with all parties concerned and finding a middle groundAnswer:cResponse: See section 1.2Level: difficultShort Answer58.Briefly explain what a project is.Answer:A projectis a temporary endeavor undertaken to create a unique productor service. It is specific,timely, usually multidisciplinary, and typically conflictridden. Projects are parts of overall programs and may be broken down into tasks,subtasks, and further if desired. Current trends in project management includeachieving strategic goals, achieving routine goals, improving projecteffectiveness, virtual projects, and quasi-projects.Response: See section 1.1Level: medium59.What are the major trends in project management?Answer:Many recent developments in project management are beingdriven by

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quickly changing global markets, technology, and education. The most importantof these recent developments are covered below.Achieving Strategic Goals: There has been a growing use of projects to achievean organization’s strategic goals, and existing major projects are screened to makesure that their objectives support the organization’s strategy and mission. Projectsthat do not have clear ties to the strategy and mission are not approved.PMOs for Improving Project Effectiveness: A variety of efforts are being pursuedto improve the process and results of project management, whether strategic orroutine. These efforts are typically being led by a formal Project ManagementOffice that provides training in project management skills and techniques such asthe use of phase gates,agilemanagement, earned value, critical ratios, and othersuch approaches; continually evaluates and helps improve the organization’sproject management “maturity”; educates project managers about the evolvingancillary goals of the organization; and generally helps oversee the organization’sportfolio of programs and projects.Virtual Projects: With the rapid increase intheglobalization of industry, manyprojects now involve global teams whose members operate in different countriesand different time zones, each bringing a unique set of talents to the project. Theseare known as virtual projects because the team members may never physicallymeet before the team is disbanded and another teamisreconstituted. Advancedtelecommunications and computer technology allow such virtual projects to becreated,and helps team members completetheir workandprojectssuccessfully.Quasi-Projects: Led by the demands of the information technology/systemsdepartments, project management is being extended into areas where the project’sobjectives are not well understood, time deadlines unknown, and/or budgetsundetermined. This ill-defined type of project is extremely difficult to conduct andto date has often resulted in setting an artificial due date and budget, and thenspecifying project objectives to meet those limits. However, new tools for thesequasi-projects are now being developed—agile management, prototyping, phase-gating, and others—to help these projects achieve results that satisfy the customerin spite of the unknowns.Response: See section 1.1Level: medium60.To what extent can the three goals of a project be traded-off for one another?Answer:The two primary roles ofaproject manager(PM)are to manage trade-offs among three interrelated objectives and to manage risks. The threeinterrelated objectives are: (1) meet the budget, (2) finish on schedule, and (3)generate deliverables that satisfy the client. Since we live in an uncertain world,as work on the project proceeds, unexpected problems are bound to arise. These

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