Project Fundamentals

1. A project is a temporary endeavor. Projects are unique and non-repetitive. Building a road is an example of a project. The process of building a road takes a finite amount of time, and produces a unique product. Operations on the other hand are repetitive. Delivering mail every day is an example of operation. 2. The characteristics associated with a project are - unique purpose, temporary in nature, require resources (often from various domains), should have a primary sponsor and/or customer, and involves uncertainty. 3. Project management is the application of knowledge, skills, tools, and techniques to project activities in order to meet project requirements 4. A program consists of a related group of projects. Projects are finite where as programs are ongoing and continuous. Programs may be repetitive and cyclic. In some cases Project Management is a subset of Program Management. The project manager may report to the program manager in such cases. A portfolio consists of multiple programs. 5. A subproject is a subset of a project. Subprojects can be subcontracted. Technical or Functional Manager may be in charge of a subproject. 6. Type of organization - This is an important concept to understand for the PMP exam. The type of organizations in decreasing order of Project Manager's authority are o Projectized o Strong Matrix o Weak Matrix o Functional Project Manager has maximum authority in a Projectized organization and least authority in a Functional organization. In Functional organizations staff is organized based upon their specialty, such as engineering or sales. In these organizations, functional managers are responsible for specialized departments like marketing. In Functional organization, the role of Project Manager is limited. In Projectized organization, PMs have more authority and independence. All the persons in the project team report to the Project Manager. Real situations are a mixture of functional and projectized organizations. These mixed situations are called matrix organizations. Strong matrix organizations have characteristics of projectized organizations. Weak matrix organizations have characteristics of functional organizations. 7. Leadership style varies from autocratic to democratic. Shared leadership involves team members taking most of the decisions. It encourages team development. 8. Project Management consists of nine Knowledge Areas. These are o Project Integration Management o Project Scope Management o Project Cost Management o Project Time Management o Project Risk Management o Project Quality Management o Project HR Management o Project Communication Management o Project Procurement Management Each Knowledge area has further Processes. There are a total of 44 processes. Each process has inputs, outputs and "tools and techniques" (ITTO). The PMBOK primarily covers each of the processes and it's ITTO in detail. You need to understand the concepts related to each of the input, output and "tools and techniques".

10. These are o Initiation o Planning o Execution o Control o Closure Each process is part of one of these five project phases. Also there is a higher risk of failure at the beginning of the project. reviews against a set of metrics are performed. Tasks performed by project sponsor include o Provides financial support o Accepts the project during scope verification o May provide key milestone and deliverables due dates o Does not sign the Project Charter. Project Sponsors are primarily involved in funding the project. o Notified of project plan changes o Are listed in the project team directory. customers. They include project team members. the project may not be allowed to continue.9. Stakeholders have vested interest in the outcome of the project. At the beginning of the project there is less cost and demand for resources. If the project fails to meet these metrics. At the end of each project phase. 11. Stake holders role includes o Distributed information during the project. Further the discipline of Project Management has five process groups. . These phase end reviews are called Stage gates or Phase exits. Tasks performed by the senior management include o o o o Issues the project charter Helps organize the work into projects Helps identify risks Approves the final project plan Stake-holders are all the individuals that are concerned with the project. and other individuals who get impacted by the project. management. 12. It is important to know the process group for each of the 44 processes. o Become risk owners. This is done by Senior Management.

and Outputs of the Project Plan Development process are given in the table below. The knowledge area of Project Integration Management consists of the following seven processes Project Integration Processes Process Develop Project Charter Develop Preliminary Project Scope Statement Develop Project Management Plan Direct and Manage Project Execution Manage and Control Project Work Integrated Change Control Close Project Project Phase Initiating Initiating Planning Execution Control Control Closure Key Deliverables Project Charter Preliminary Project Scope Statement Project Management Plan Deliverables Requested Changes Approved Change Requests Final product 2. Project Management Information System (PMIS) is a system that keeps track of status of all the project tasks. Tools & Techniques Stake holder skills and Knowledge Project Management Information System (PMIS) Earned Value Management (EVM) Outputs Project Plan Other Planning outputs Project Planning Methodology . Project Plan Development Inputs Historical Information Organizational Policy Constraints Assumptions 5. o Written by a Manager higher in authority than Project Manager. deliverables o A project does not start unless it has a Project charter. description. It is used to track the status of the project. During project execution the project team focuses on completing the tasks assigned. 6. Tools and Techniques. A project charter o Formally authorizes the project. At the end of each phase of a project. 4. wrong etc. The Inputs. The exam does not focus on any specific system (for example Microsoft Project ). The Project Manager integrates all the pieces into the project as a whole.Project Integration Management 1. 3. It is required to be completed in order for the project to be completed. o Gives the objectives and business case o Identifies the Project Manager. The lessons learned document defines what was done right. o Includes name. a lessons learned document must be prepared. o Generic enough not to change often. The Senior Management protects the project from changes and loss of resources.

4. crashing. 3. sponsors etc. A Project Plan includes o Project Charter o Budget o Schedule o Resources o Scope Statement o WBS o Responsibility charts/assignments o Management Plans 9. After the project scope has been baselined. Change Control Board is formed to review change requests. A project plan is bought into. Project Plan is developed by Project Manager with inputs from the team. Project baseline refers to the original version of the project plan. Progressive Elaboration involves the process of taking a project from concept to detailed design. When a change request is received. and measure performance of corrective action. Project Plan development is iterative. fast-tracking etc. Project Manager needs to be proactive in looking for deviations from project plan and then take timely corrective action. Meet with management. Meet with the customer if necessary . 11. Kick-off meeting happens after the planning phase and before the project execution. 14. Create alternatives including cutting other tasks.7. 13. stake holders and management. realistic and formal. approved. 8. the following steps must be taken (in this order) 1. and then determine the need for further corrective action. 10. It is typically used to communicate responsibilities of key stake holders. 12. After that the Project Manager needs to evaluate the effectiveness of corrective action. It is used to approve or reject change requests. each requested change must go through a change control review process. Evaluate (assess) the impact of change to the project 2.

and only all the work required to complete the project successfully. A project with lower pay back period is better. Project Portfolio Management is the process of project selection. 3. The Constrained Optimization techniques are o Linear Programming o Non-Linear Programming o Integer Algorithm o Dynamic Programming o Multi-objective Programming . Constrained Optimization Project selection methods are used for large projects.This technique involves considering how long it takes back to "pay back" the cost of the project. 4. o Internal Rate of Return (IRR) .A project that has higher IRR is better. The Future Value (FV) of projects is compared.Project Scope Management This chapter covers key concepts related to Project Scope Management. A project with higher present value is better. It involves making a decision about which project an organization should execute.This technique involves computing benefits to cost ratio (BCR) for a project. The knowledge area of Project Scope Management consists of the following processes Scope Management Processes Process Scope planning Scope definition Create WBS Scope control Project Phase planning planning planning Control Key Deliverables scope management plan project scope statement WBS. Inflation or interest earned in not considered in this technique. There are two types of project selection methods. o Payback period . Project with higher score is selected.This involves a committee asking tough questions from each project o Scoring Models . o Benefits Cost Ratio . FV=PV(1+i)n PV is the present value of the project. It is primarily concerned with controlling what is and what is not in the scope. These are techniques based on mathematical models. The knowledge area of Scope Management includes the processes required to ensure that the project includes all the work.Different projects are given scores based on certain defined criteria. Benefits Measurement project selection methods involve comparing the values of one project against another. 1. 6. WBS dictionary Acceptance deliverables Requested Changes Scope verification Control 2.This technique takes into account the interest earned on the money. There are the following type of Benefit Measurement project selection techniques o Murder Boards . Project with higher BCR is selected. as it is giving higher return on money. o Discounted Cash Flow . These are o Benefits Measurement o Constrained Optimization 5.

Specifically WBS is input to the following processes o Cost Estimating o Cost Budgeting o Scope control o Activity Definition o Plan Purchases and Acquisitions 13. WBS dictionary explains all the WBS components. Also WBS is input to most of the planning processes. The WBS template can be reused across projects. So if probability of a project's success is 20% and revenue earned if successful is $100000. It is a graphical representation of the hierarchy of the project. then the net value of the project will be $20. Scope Verification Process Inputs Project Scope Statement WBS Dictionary Project scope management plan Deliverables Project Plan Tools & Techniques Inspection Outputs Accepted Deliverables Requested changes Recommended corrective actions . Tools & Techniques. 8.7. Scope Verification happens at the end of each phase. Expected monetary value of a project (or expected value) is equal to probability*impact. 10. Work Breakdown Structure (WBS) is an important part of the exam. 14. A project with higher net value should be selected when performing project selection. It is the customer feedback on a detailed basis. The tools and techniques of the Scope planning process are . 11. Management by Objective (MBO) is a management philosophy with three objectives o Establish unambiguous and realistic objectives o Periodically Evaluate if objectives are being met o Take corrective actions. WBS forces the project team to think through all the levels of the project.Expert Judgment and "Templates. The process has only one output . 8/80 rule for WBS . 12.000. The table below gives inputs. Quality Control focuses on correctness of work. forms and standards". then it is not part of the project. MBO works only if management supports it. If a task is not in the WBS. and Outputs of the Scope Verification process.Project Scope Management Plan. While Scope Verification focuses on customer acceptance.No task should be less than 8 hours or more than 80 hours. 9. The Scope Verification is the process in which the project customer formally accepts the project deliverables.

The knowledge area of Project Time Management consists of the following processes Time Management Processes Process Activity Definition Activity Sequencing Project Phase Planning Planning Key Deliverables Activity List. Tools and Techniques for Activity Duration Estimating process are o Expert Judgment o Analogous Estimating o Parametric estimating o Three point estimating o Reserve analysis . Requested changes Activity Resource Estimating Planning Activity Duration Estimating Planning Schedule Development Schedule Control Planning Control 2.Project Time Management This chapter covers key concepts related to Project Time Management. Milestone list Project Schedule network diagrams Activity resource requirements. Resource breakdown structure Activity duration estimates. Inputs to Activity Definition process are o Enterprise environmental factors o Organizational process assets o Project Scope Statement o WBS o WBS Dictionary o Project Management Plan 3. Schedule model data Performance measurements. 1. The Activity Sequencing process has the following inputs and Tools and Techniques Activity Sequencing Process Inputs Project scope statement Activity List Activity attributes Milestone list Tools and Techniques Precedence diagram method (PDM) or AON Arrow diagram method (ADM) or AOA Schedule Network Templates Dependency determination Approved change requests Applying leads and lags 4. Activity attributes (updates) Project Schedule.

Milestone charts are similar to bar charts but display only major events. They are generally used to track progress and show to the team. An activity in a network diagram is displayed as shown below.5. They display major milestones (for example bridge design completed). There are two type of network diagrams o Activities on Node (or Precedence) o Activities on Arrow (or AOA) Precedence is most commonly used. In the above example Documentation is activity number 2 and is estimated to last 5 days. Typically the date range is displayed in the X-axis and the tasks on the Y-axis. Bar charts do not show task dependencies. 9. . As an example Documentation 2 5 days Project Schedule Network diagram Resource levelling 11. They are used to report status to Management. 8. Activity name Activity Number Estimate 10. Bar charts (or Gantt charts) are used to display tasks and their dates in a graphical fashion. 7. Network diagrams can be used to perform critical path analysis. Network diagrams are used to display activities and their dependencies. Network diagrams can also be used to perform crashing and fast tracking of the project. They are used to display information of the type task 1 is scheduled from date A to date B. The Schedule Development process has the following inputs and Tools and Techniques Schedule Development Process Inputs Organizational process assets Project scope statement Activity List Activity attributes Activity Resource requirements Resource Calendars Activity duration estimates Project Management Plan Risk Register Tools and Techniques Schedule network analysis Critical path method Schedule Compression What-if scenario analysis Critical chain method Project Management Software Applying calendars Adjusting Leads and Lags Schedule Model 6. AON and AOA cannot have loops or conditional relationships.

14. 20.optimistic. Activity on Array (AOA) network diagrams have the following characteristics. PERT utilizes more information than CPM as it considers the "Pessimistic" and "Optimistic" values in addition to the "Most Likely" value in its calculations. o Dummy events are shown with dotted lines. o AOA only uses Finish-To-Start relationship between tasks. Precedence (or Activity on Node) diagrams can be used to display four type of relationship between activities. If a project has more than one critical paths then the risk to the project increases.12. It can support looping. Program Evaluation and Review Technique (PERT) has the following characteristics. Lags are inserted waiting times in between tasks. Slack or Float is the amount of time a task can be delayed without delaying the project. GERT is another type of network diagram. pessimistic and most likely o It can be drawn only using AOA diagrams o It can have dummy events 19. 17. They do not take any time. Tasks on the critical path have zero float. 15. These are o Finish-To-Start o Start-To-Start o Start-To-Finish o Finish-To-Finish Finish-to-start relationship means the dependent activity cannot start until the first activity is finished. . O is the optimistic estimate and M is the most likely estimate. The following are formulae used by PERT Mean = (P + 4M + O)/6 Standard Deviation = (P-O)/6 Variance = ((P-O)/6)2 Here P is the pessimistic estimate. This is the most common way to represent relationships between activities. They show dependencies between tasks. o It uses one time estimate per activity o It can be drawn only using AOA diagrams o It can have dummy events 18. The activities on the critical paths are called critical activities. For example Task B cannot start until three days after task A completes. o It uses three estimates per activity . 16. 21. 13. Resource levelling refers to keeping the resources same across the duration of the project. o PERT and CPM can only be used with AOA. Critical Path Method (CPM) has the following characteristics. Longest path through the network diagram is called the critical path. 22.

The knowledge area of Project Cost Management consists of the following processes Project Cost Processes Process Project Phase Key Deliverables Activity Cost Estimates. 3. It involves estimating each work item and adding the estimates to get the total project estimate. o Regression Analysis is a mathematical model based upon historical information. you use a mathematical model to make an estimate. and so on. less costly methods for accomplishing the same task. There are three type of depreciation techniques. in second year we deduce 4/15. o Sum of year depreciation . o Double-declining balance . Cost Management Plan Cost Baseline Cost Estimates (updates). 1. 4. The Cost Estimation process takes the following inputs o Enterprise environmental factors o Organizational process assets o Project scope statement o WBS o WBS dictionary o Project Management plan Schedule Management plan. Cost baseline (updates) Cost Estimating Planning Cost Budgeting Planning Cost Control Control 2. The total of one to five is fifteen. These are o Straight line depreciation The same amount is deprecated (reduced) from the cost each year. . o Learning Curve model is based upon the principal that the cost per unit decreases as more work gets completed. In first year we deduce 5/15 from the cost. Bottom up estimation is same as WBS estimation. Value Analysis approach is used to find more affordable. Alternative identification process identifies other solutions to an identified problem. It is of two types.In the first year there is a higher deduction in the value . Staffing Management plan. Each year after that the deduction is 40% less than the previous year. In Parametric Modeling Estimation. Risk register 5. 6.twice the amount of straight line.Project Cost Management This chapter covers key concepts related to Project Cost Management. Depreciation is technique used to compute the estimated value of any object after few years. 8.Let’s say the life of an object is five years. Analogous Estimating is an estimating technique with the following characteristics o Estimates are based on past projects (historical information) o It is less accurate when compared to bottom-up estimation o It is a top-down approach o It takes less time when compared to bottom-up estimation o It is a form of an expert judgment 7.

14. in the first month the project will require $10. SPI refers to Schedule Performance Index.EAC 21. and remember the formulae. You can expect five to ten questions related to Earned Value Management. CPI refers to Cost Performance Index. SV refers to Schedule Variance. 24. BAC refers to Budget at Completion. It is defined as VAC = BAC . Cost baseline refers to what is expected to be spent on the project. It is defined as SPI = EV/PV 20. That is the expenditure is less in the beginning. Estimate at Completion (EAC) refers to the estimated total cost of the project at completion. and the end. VAC refers to Variance at Completion. The tools and techniques used for Cost Estimating are o Analogous estimating o Determine resource cost rates o Bottom-up estimating o Parametric estimating o Project Management software o Vendor bid analysis o Reserve analysis o Cost of quality 23. 11. EAC = BAC/CPI 16. It is defined as CPI = EV/AC If CPI is less than 1. Cost budgeting defines cost estimates across time. It is usually an Scurve.PV Negative cost or schedule variance means that project is behind in cost or schedule. Cost estimating involves defining cost estimates for tasks. These are generally pretty simple once you have good understanding of the concepts.AC 18. CV refers to Cost Variance. For example. It is defined as SV = EV . It is also referred as BCWS (Budgeted Cost of Work Scheduled). Planned Value (PV) refers to what the project should be worth at this point in the schedule. It is related to EAC. The after project costs are called life cycle costs. It is also referred as BCWP (Budgeted Cost of Work Performed). It is also referred as ACWP (Actual Cost of Work Performed). 22. The expenditure is maximum during the middle of the project. Actual Cost (AC) is the actual amount of money spent so far. this means that the project is over budget. 19. The process of Cost budgeting defines time phased cost estimates for the project.AC 17. 13. ETC refers to Estimate to Completion. . It is defined as CV = EV . It is defined as ETC = EAC . 12.9.000. Earned Value (EV) is the physical work completed to date and the authorized budget for that. These formulae are explained below. 10. 15.

Project risks that are negative are called threats. A project risk is a potential source of deviation from the project plan. 5. Work-around refers to how to handle risks that have occurred but are not part of risk response plan. Project risks that are positive are called opportunities.Project Risk Management This chapter covers key concepts related to Project Risk Management. 4. Risks are identified in all phases. It can be used to get inputs on Scope. The knowledge area of Project Risk Management consists of the following processes Risk Management Processes Process Risk Identification Qualitative Risk Analysis Quantitative Risk Analysis Risk Response Planning Project Phase Planning Planning Planning Planning Key Deliverables Risk Management Plan Risk register Risk register (updates) Risk register (updates) Risk related contractual agreements Requested changes Risk Management Planning Planning Risk Monitoring and Control Control 2. 1. They are not in the same room. This happens in risk monitoring and control phase. Delphi technique is most commonly used to obtain expert opinions on technical issues. o Transferring risk Insurance is an example of transferring risk. o The PM tries to build a consensus among the experts. Estimates or Risks. Some characteristics of the Delphi technique are o The experts identities are anonymous. . 3. Project risks can have a negative or positive impact on the project. 6. Non-critical risks should be documented. Responses to threat include -o Reducing the probability of risk o Developing contingency plans o Passively accepting consequences. They should be revisited and reviewed regularly. 7.

the customers expectations are different. Quality must be planned in and not inspected in. Giving extras i.46% 99. According to Deming. The following are tools and techniques for Quality Planning process - . The knowledge area of Project Quality Management consists of the following processes Quality Management Processes Process Quality Planning Project Phase Planning Key Deliverables Quality Management Plan. The aim of quality is to ensure "Conformance to requirements" and "fitness for use". 6. 12. As an example.99% Three sigma 99. The value of sigma of Normal Distribution are given below.000 items can have defects. Based on the above table. Deming suggested a process of Plan-Do-Check-Act to improve quality.Project Quality Management This chapter covers key concepts related to Project Quality Management. 1.73% 9. each process should go through these steps to improve the quality.Apply continuous small improvements to reduce costs and ensure consistency. twenty seven out of 10.e.26% 95. Optimal quality is reached when cost of improvements equals the costs to achieve quality. Quality Policy defines the company goals and how to adhere to them. Quality baseline Requested changes Quality control measurements Perform Quality Assurance Execution Perform Quality Control Control 2. Grade refers to category or rank given to entities having same functional use but different technical characteristics. In three sigma. PMI does not recommend gold-plating. Marginal Analysis .000 items can have defects. 4. we can see that in six sigma one out of 10. Poor grade may be acceptable. Prevention is more important than inspection. The following are inputs to Quality Planning Process o Enterprise environmental factors o Organizational process assets o Project Scope statement o Project management plan 11. Quality Metrics. but poor quality is not. 10. These are important for the exam. Normal Distribution Sigma values Sigma One sigma Two sigma Six sigma Percentage covered 68. Kaizen Theory . This acts as an input to Quality Planning for a project. doing more than the project scope is called gold-plating. 3. 7. 5. for different grades of hotels.You compare the cost of incremental improvements against the increase in revenue made from quality improvements. 8. 13.

then an assignable cause must be found. 17. if there are seven points on one side of mean. 15. and use them to make estimates. The tools and techniques used for Quality Control are o Cause and effect diagram o Control charts o Flowcharting o Histogram o Pareto chart o Run chart o Scatter diagram o Statistical Sampling o Inspection o Defect repair review In Just-In-Time (JIT) Quality.14. . 16. The process of Analogous Estimation involves looking at the history of past projects. Perform Quality Control focuses on correctness of work. Rule of seven : In control charts. o Benefit/Cost Analysis o Benchmarking o Additional quality planning tools o Design of experiments o Cost of quality Quality Assurance is done during execution of the project. It includes inspections. just when they are required. The inputs are made available. This reduces the storage cost. the amount of inventory is zero.structured review of quality activities that identify lessons learned. These lessons learned are used for process improvement. It includes o Process of evaluating overall performance on a regular basis o Re-evaluating quality standards o Quality audits . 18.

o Coercive Power . Roles and responsibilities. Conflicts in the team are caused due to the following reasons in decreasing order of occurrences. and tools and techniques for the Human Resource Planning process Human Resource Planning Process Inputs Enterprise environmental factors Organizational process assets Project Management Plan Activity resource requirements Tools and Techniques Organization charts and position descriptions Organizational Theory Networking 3.Power due to Project Managers position o Technical Power .Project Manager has strong technical skills in the projects domain. The Staffing Management Plan defines when will people get added and removed from the project. Staffing Management Plan Project Staff assignments Team performance assessment Requested changes Human Resource Planning Planning Acquire Project Team Develop Project Team Manage Project Team Execution Execution Control 2. The table below gives the inputs. There are standard conflict resolution techniques available to resolve conflicts. 1. A Project Manager may yield authority over the project team in one of the following ways o Referent . These are (from best to worst) - .The project team is afraid of the power the Project Manager holds. 7. Responsibility Assignment Matrix (RAM) defines who does what.project team knows the PM o Formal Power .Project HR Management This chapter covers key concepts related to Project HR Management. 6. 5. o Schedules o Project Priorities o Resources o Technical Opinions So the most common cause of conflicts in projects are issues related to schedules. The knowledge area of Project HR Management consists of the following processes HR Management Processes Process Project Phase Key Deliverables Organization Chart. Conflicts are best resolved by those in the team. 4.

Some of the main ones are .There are two type of employees. They cannot be trusted and need to be micro managed.there are various levels of needs for an employee. Maslow's Hierarchy of needs. As part of this the project team meets in one room. These level of needs from the highest to lowest are o Self-fulfillment o Esteem o Social o Safety o Physiology o . 9. Employees of type Y. When a lower level is met. McGregory Theory of X and Y . McGregory Theory. This is a motivation factor. The process of problem solving has these steps o Define the cause of the problem o Analyze the problem o Identify solution o Implement a decision o Review the decision. What motivates people is the work itself. 10. This is an example of win-loose situation. 14.Expectancy Theory. growth. They can work independently.Hygiene factors (salary. However good hygiene alone does not improve motivation. he will be good as a project manager.) if not present can destroy motivation. 13. The maximum satisfaction is achieved when the employee reaches the highest level of satisfaction .People accept to be rewarded for their efforts. Maslow's Hierarchy of needs . War room is a technique for team building. cleanliness etc. People put in more efforts because they accept to be rewarded for their efforts. analyze them and find a solution).8. employee attempts to reach the next higher level. and confirm that the problem is solved. are self-motivated. 12.self-fulfillment. Halo Effect is the assumption that because the person is good at a technology. Herzberg Theory . This is an example of loose-loose situation. 15. Problem Solving or Confrontation (look at the facts. o Withdrawal or Avoidance o Smoothing (Emphasize the agreements) o Forcing (Do it my way). recognition etc. Herzberg Theory. This is an example of win-win situation. selfactualization. The motivation factors for employees include responsibility. Employees of type X need to be always watched. o Compromising (Find the middle route). Expectancy Theory . There are many organizational theories. 11. It helps to create a project identity. on the other hand.

there are 45 channels of communication. So if there are ten stakeholders in a project. The total number of communication channels between n stakeholders is n(n-1)/2. Memos. 3. .Project Communication Management This chapter covers key concepts related to Project Communication Management. The knowledge area of Project Communication Management consists of the following processes Communication Management Processes Process Project Phase Key Deliverables Communication Management Plan Organization process assets (updates) Performance Reports Resolved issues Communication Planning Planning Information Distribution Performance Reporting Manage Stakeholders Execution Control Control 2. Communication Management Plan defines how and when the various stakeholders receive information. and communicate with each other. 4. emails are examples of non-formal communication. 1.

Procurement Planning involves build versus buy decisions. 8. Privity is contractual information between customer and vendor . It is a legal document biding to both seller and buyer.Project Procurement Management This chapter covers key concepts related to Project Procurement Management. Sole Source refers to a market condition in which only one qualified seller exists in the market. 6. 3. Force majeure is a powerful and unexpected event. 4. Changes to contract must be in writing and formally controlled. Oligopoly refers to a market condition where very few sellers exist. Proposals Selected Sellers. 1. In De-centralized Contracting a contract administrator is assigned for each project. as in transferring risk. Centralized Contracting refers to a separate contracting office that handles contracts for all projects. such as hurricane or other disaster. 7. A contract is a formal agreement. 5. Procurement Management involves getting work done by people outside the project team. Single Source refers to a market condition in which the company prefers to contract with only one seller. Most Governments back all contracts by providing a court system. Contract can be used as a risk management tool. The knowledge area of Project Procurement Management consists of the following processes Procurement Management Processes Process Project Phase Key Deliverables Procurement Management Plan Contract Statement Of Work. Contract Contract Changes Closed Contracts Plan Purchases and Acquisitions Planning Plan Contracting Request Seller Responses Select Sellers Contract Administration Contract Closure Planning Execution Execution Execution Closure 2. and the action of one seller will have impact on other seller prizes. Evaluation Criteria Sellers list.

2. then it must be brought into notice of all the stake-holders. In such a situation.Code of Professional Ethics This chapter covers PMI's code of Professional Conduct. Lets assume the Project Manager has friendship with one of the vendors. 3. PMP aspirants need to provide accurate and truthful information through out the application process. PMP's Code of Professional Conduct is a document provided by PMI. the Project Manager should let all the stakeholders know. The confidentiality of any intellectual property information that a PMP professional works with. must be maintained. A PMP must not accept any form of inappropriate gifts. As an example of this consider a case where a Project Manager is evaluating some vendors. 7. Any information that a PMP provides to general public must be accurate and truthful. 8. 4. 5. 6. and offer herself to be excluded out of the evaluation process. Similarly a PMP must not offer inappropriate compensation for personal gains. Ethnocentrism is a typical belief that one's culture is superior to the foreigner's culture. Any violations can lead to disciplinary action. If a project team member or the project manager has a conflict of interest. Culture Shock refers to the initial disorientation that a person first experiences when visiting a country other than his own. . 1. to prevent any appearance of impropriety. It is a guide to Project Managers on how to conduct as a professional.

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