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Project Fundamentals

Every facet of human life is a project. Every little step we take, from the moment we wake up up
to the time we settle to sleep, is filled with mini projects. It's then not a stretch to assume that the
way we handle actual projects (from work, school, etc.) is reflection of the way we handle the
biggest project there is - our existence. That's why it's doubly important to come up with the
perfect habit of proper planning and management of projects.
This page covers general information about the discipline of project management.
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 project may or may not be a part of a
program, but a program will always have projects.
A portfolio consists of multiple programs. As an example Building a house may be a
project. Building a colony consisting of row of houses is a program. Building a set of
colonies to develop a new city can be considered a portfolio.
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 42 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".
9. Further the discipline of Project Management has five process groups. These are o Initiation
o Planning
o Execution
o Control
o Closure
Each process is part of one of these five project phases. It is important to know the
process group for each of the 42 processes.
10. Project Sponsors are primarily involved in funding the project. 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. This is done by Senior Management.
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

Stakeholders are all the individuals that are concerned with the project. Stakeholders have
vested interest in the outcome of the project. They include project team members,
customers, management, and other individuals who get impacted by the project.
Stakeholders role includes Distributed information during the project.
Notified of project plan changes
Are listed in the project team directory.
Become risk owners.
11. At the end of each project phase, reviews against a set of metrics are performed. If the
project fails to meet these metrics, the project may not be allowed to continue. These
phase end reviews are called Stage gates or Phase exits.
12. Project Life cycle: All projects have four parts in life cycle. These are 1. Starting the project
2. Organizing and preparing
3. Carrying out the project work
4. Closing the project
o
o
o
o

At the beginning of the project there is less cost and less demand for resources. Also
there is a higher risk of failure at the beginning of the project. The risk reduces over the life of
the project. The stakeholder influence is maximum at the beginning of the project and reduces
over the life of the project.
Projects have multiple competing constraints. These are o Scope
o Quality
o Schedule
o Budget
o Resources
o Risk
Different stakeholders may give different priority to these constraints. As an example
budget may be the most important constraint for the project sponsor. Scope may be
important for a customer support engineer, and quality may be important for the testing
team. A project team has to balance the demand of these constraints.
Progressive Elaboration means adding more details in an iterative fashion. Project
Management Plan is developed using progressive elaboration.
Project Management Office (PMO) is a group in an organization providing centralized
project management services. The exact role of PMO may vary across organizations. PMO may
provide services related to project management or may be directly responsible for project
management.
Enterprise Environmental Factors refer to external factors in the company, that may
influence the project. Enterprise Environmental Factors may include cultural factors, political

climate, infrastructure and other external factors within the organization that may impact the
project. Enterprise Environmental Factors are input to many planning processes.

Project Integration Management


This chapter covers key concepts related to Project Integration Management.
1. The knowledge area of Project Integration Management consists of the following seven
processes -

Process
Develop Project Charter

Project Integration Processes


Project Phase
Key Deliverables
Initiating
Project Charter

Develop Project Management Plan Planning

Project Management Plan

Direct and Manage Project


Execution

Execution

Deliverables

Monitor and Control Project Work

Monitoring and
Control

Change Requests

Perform Integrated Change


Control

Monitoring and
Control

Change Requests status


updates

Close Project or Phase

Closure

Final product

2. A project charter
o Formally authorizes the project.
o Gives the objectives and business case
o Identifies the Project Manager.
o Generic enough not to change often.
o Written by a Manager higher in authority than Project Manager.
o Includes name, description, deliverables
o A project does not start unless it has a Project charter.
3. The Inputs, Tools and Techniques and Output of Develop Project Charter process are
given below.
Develop Project Charter process
Inputs
Tools & Techniques
Project Statement of work
Business case
Contract
Enterprise environmental factors
Organizational process assets

Expert judgment

Outputs
Project Charter

4. During project execution the project team focuses on completing the tasks assigned. The
Senior Management protects the project from changes and loss of resources. The Project
Manager integrates all the pieces into the project as a whole.
5. The Inputs, Tools and Techniques, and Outputs of the Develop Project Management Plan
process are given in the table below.
Develop Project Management Plan process
Inputs
Tools & Techniques
Outputs
Project charter

Expert judgment

Project Management Plan

Outputs from planning processes


Enterprise environmental factors
Organizational process assets
6. At the end of each phase of a project, a lessons learned document must be prepared. The
lessons learned document defines what was done right, wrong etc. It is required to be
completed in order for the project to be completed.
7. Project Management Information System (PMIS) is a system that keeps track of status of
all the project tasks. It is used to track the status of the project. The exam does not focus
on any specific system (for example Microsoft Project ).
8. Project Management Plan is developed by Project Manager with inputs from the team,
stakeholders and management. Project Management Plan development is iterative. A
Project Management Plan is bought into, approved, realistic and formal.
9. A Project Management Plan includes o Project Charter
o Budget
o Schedule
o Resources
o Scope Statement
o WBS
o Responsibility charts/assignments
o Management Plans
10. A Project Management Plan consolidates other management plans. These are:
A. Scope management plan
B. Requirement management plan
C. Schedule management plan
D. Cost management plan
E. Quality management plan
F. Process improvement plan
G. Human resource plan
H. Communication management plan
I. Risk management plan
J. Procurement management plan
The Project Management Plan also includes project baselines. These are:

K. Schedule baseline
L. Cost performance baseline
and
M. Scope baseline
Project baseline refers to the original version of the project management plan. Once the
project management plan is baselined, it may only be changed by raising a change request.
Progressive Elaboration involves the process of taking a project from concept to
detailed design.
Kick-off meeting happens after the planning phase and before the project execution. It is
typically used to communicate responsibilities of key stakeholders.
Direct and Manage Project Execution process includes performing the work defined in
the PMP to achieve project goals. The Input, Tools and Techniques and Outputs of this process
are given below.

Inputs

Direct and Manage Project Execution process


Tools & Techniques
Outputs

Project management plan

Expert judgment

Deliverables

Approved change requests

Project management
information system

Work performance
information

Enterprise Environmental
factors

Change requests

Organizational process
assets

Project management plan


updates
Project document updates

Monitor and Control project work process includes tracking and reviewing the progress
of the project. The Input, Tools and Techniques and Outputs of this process are given below.
Monitor and Control project work process
Tools &
Inputs
Outputs
Techniques
Project management plan
Expert judgment
Change requests
Performance reports

Project management plan


updates

Enterprise environmental
factors

Project document updates

Organizational process assets

The change requests that get generated are evaluated as part of the Perform Integrated
Change Control process. The change requests on the project deliverables and project artifacts are
managed in this process. The Input, Tools and Techniques and Outputs of this process are given
below.
Perform Integrated Change Control process
Inputs
Tools & Techniques
Outputs
Project management plan

Expert judgment

Change request status updates

Work performance information

Change control
meetings

Project management plan


updates

Change requests

Project document updates

Enterprise environmental
factors
Organizational process assets
Change Control Board is formed to review change requests. It is used to approve or
reject change requests. After the project scope has been baselined, each requested change must
go through a change control review process.
Project Manager needs to be proactive in looking for deviations from project plan and
then take timely corrective action. After that the Project Manager needs to evaluate the
effectiveness of corrective action, and measure performance of corrective action, and then
determine the need for further corrective action.
When a change request is received, the following steps must be taken (in this order) 0. Evaluate (assess) the impact of change to the project
1. Create alternatives including cutting other tasks, crashing, fast-tracking etc.
2. Meet with management, sponsors etc.
3. Meet with the customer if necessary
The Close Project or Phase is the process of formal completion of all project related
activities. The Input, Tools and Techniques and Outputs of this process are given below.

Inputs
Project management plan
Accepted deliverables

Close Project or Phase


Tools &
Techniques
Expert judgment

Outputs

Final product, service or result


transition
Organizational process assets updates

Organizational process
assets
At the end of each phase of a project, a lessons learned document must be prepared. The
lessons learned document defines what was done right, wrong etc. It is required to be completed
in order for the project to be completed.

Project Scope Management


This chapter covers key concepts related to Project Scope Management.
1. The knowledge area of Project Scope Management consists of the following processes -

Process

Scope Management Processes


Project Group
Key Deliverables

Collect Requirements planning

Requirements document

Define Scope

planning

project scope statement

Create WBS

planning

WBS, WBS dictionary

Verify Scope

Monitoring and Controlling Acceptance deliverables

Control Scope

Monitoring and Controlling Change Requests

2. The knowledge area of Scope Management includes the processes required to ensure
that the project includes all the work, and only all the work required to complete the
project successfully. It is primarily concerned with controlling what is and what is not in
the scope.
3. Project Portfolio Management is the process of project selection. It involves making a
decision about which project an organization should execute.
4. There are two types of project selection methods. These are
o Benefits Measurement
o Constrained Optimization
5. Benefits Measurement project selection methods involve comparing the values of one
project against another. There are the following type of Benefit Measurement project
selection techniques o Murder Boards - This involves a committee asking tough questions from each
project
o Scoring Models - Different projects are given scores based on certain defined
criteria. Project with higher score is selected.
o Benefits Cost Ratio - This technique involves computing benefits to cost ratio
(BCR) for a project. Project with higher BCR is selected.
o Payback period - This technique involves considering how long it takes back to
"pay back" the cost of the project. Inflation or interest earned in not considered in
this technique. A project with lower pay back period is better.
o Discounted Cash Flow - This technique takes into account the interest earned on
the money. The Future Value (FV) of projects is compared.
FV=PV(1+i)n

PV is the present value of the project. A project with higher present value is
better.
Internal Rate of Return (IRR) - A project that has higher IRR is better, as it is
giving higher return on money.

6. Constrained Optimization Project selection methods are used for large projects. These are
techniques based on mathematical models. The Constrained Optimization techniques are
o Linear Programming
o Non-Linear Programming
o Integer Algorithm
o Dynamic Programming
o Multi-objective Programming
7. Expected monetary value of a project (or expected value) is equal to
probability*impact. So if probability of a project's success is 20% and revenue earned
if successful is $100000, then the net value of the project will be $20,000. A project with
higher net value should be selected when performing project selection.
8. 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.
MBO works only if management supports it.
9. Collect Requirements process involves documenting stakeholders needs to meet project
objectives. The Inputs, Tools and Techniques, and Outputs of Collect Requirements
process are given below.

Inputs
Project charter
Stakeholder
register

Collect Requirements Process


Tools & Techniques
Outputs
Interviews
Requirements documentation
Focus groups

Requirements management plan

Facilitated workshops

Requirements traceability
matrix

Group creativity techniques


Questionaires and surveys
Observations
Prototypes
Group decision-making
techniques
10. The Define Scope process involves defining detailed description of the project and major
deliverables. The Input, Tools and Techniques and Output of the Define Scope process
are:

Define Scope Process


Tools & Techniques

Inputs
Project charter

Expert judgment

Outputs
Project scope statement

Requirements documentation Product analysis

Project document updates

Organizational process assets Alternative identification


Facilitated workshops
11. Create WBS is the process of dividing the project deliverables into smaller components.
The Inputs, Tools and Techniques and Outputs of Create WBS process are:

Inputs

Create WBS Process


Tools & Techniques

Project Scope Statement

Decomposition

Outputs
WBS

Requirements documentation

WBS dictionary

Organizational process assets

Scope baseline
Project document updates

12. Work Breakdown Structure (WBS) is an important part of the exam. It is a graphical
representation of the hierarchy of the project. The WBS template can be reused across
projects. WBS forces the project team to think through all the levels of the project. If a
task is not in the WBS, then it is not part of the project.
13. 8/80 rule for WBS - No task should be less than 8 hours or more than 80 hours.
14. WBS dictionary explains all the WBS components. Also WBS is input to most of the
planning processes. 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

15. The Verify Scope is the process in which the project customer formally accepts the
project deliverables. Scope Verification happens at the end of each phase. During the
Verify Scope process customer gives feedback on work performed. While Verify Scope
process focuses on customer acceptance, Perform Quality Control process focuses on
correctness of work.

16. The table below gives inputs, Tools & Techniques, and Outputs of the Verify Scope
process.

Inputs

Verify Scope Process


Tools & Techniques

Project management plan

Inspection

Outputs
Accepted Deliverables

Requirements documentation

Change requests

Requirements traceability matrix

Project document updates

Validated deliverables
17. Control Scope process involves monitoring the status of project and managing scope
changes. The Inputs, Tools and Techniques and Outputs of Control Scope process are:

Inputs
Project management plan

Control Scope Process


Tools &
Outputs
Techniques
Variance analysis
Work performance measurements

Requirements documentation

Change requests

Requirements traceability
matrix

Project management plan updates

Organizational process assets

Organizational process assets


updates

Work performance information

Project document updates

Project Time Management


This chapter covers key concepts related to Project Time Management.
1. The knowledge area of Project Time Management consists of the following processes -

Process

Time Management Processes


Project Phase

Key Deliverables

Define Activities

Planning

Activity List, Milestone list

Sequence Activities

Planning

Project Schedule network


diagrams

Estimate Activity
Resources

Planning

Activity resource requirements,


Resource breakdown structure

Estimate Activity
Durations

Planning

Activity duration estimates

Develop Schedule

Planning

Project Schedule

Control Schedule

Monitoring and
Controlling

Work Performance
measurements,
Change Requests

2. class="basic" The Define Activities process has the following Inputs, Tools and
Techniques and Outputs -

Inputs

Define Activities Process


Tools and Techniques

Scope baseline

Decomposition

Outputs
Activity list

Enterprise environmental factors Rolling wave planning Activity attributes


Organizational process assets

Templates

Milestone list

Expert judgment

3. The Sequence Activities process has the following Inputs, Tools and Techniques and
Outputs

Sequence Activities Process


Tools and Techniques

Inputs

Outputs

Project scope statement

Precedence diagram method


(PDM) or AON

Project schedule network


diagrams

Activity List

Applying leads and lags

Project document updates

Activity attributes

Schedule Network Templates

Milestone list

Dependency determination

Organizational process
assets
4. The Estimate Activity Resources process has the following Inputs, Tools and Techniques
and Outputs Estimate Activity Resources Process
Tools and Techniques
Outputs
Activity resource
Expert judgment
requirements

Inputs
Activity List
Activity attributes

Alternative analysis

Resource breakdown
structure

Resource calendars

Published estimating data

Project document updates

Enterprise environmental
factors

Bottom-up estimating

Organizational process assets

Project Management
software

5. The Estimate Activity Durations process has the following Inputs, Tools and Techniques
and Outputs -

Inputs

Estimate Activity Durations Process


Tools and Techniques

Outputs

Activity list

Expert judgment

Activity attributes

Analogous estimating Project document updates

Activity resource requirements

Parametric estimating

Resource calendars

Three-point estimates

Project scope statement

Reserve analysis

Enterprise environmental factors


Organizational process assets

Activity duration estimates

6. The Develop Schedule process has the following Inputs, Tools and Techniques, and
OutputsDevelop Schedule Process
Tools and Techniques

Inputs

Outputs

Organizational process assets

Schedule network analysis Project Schedule

Project scope statement

Critical path method

Schedule baseline

Activity List

Schedule Compression

Schedule data

Activity attributes

What-if scenario analysis Project document updates

Project Schedule Network diagram Resource levelling


Activity Resource requirements

Critical chain method

Resource Calendars

Scheduling tool

Activity duration estimates

Applying calendars

Project Management Plan Risk Register

Adjusting Leads and Lags

Enterprise environmental factors


7. The Control Schedule process has the following Inputs, Tools and Techniques and
Outputs -

Inputs

Control Schedule Process


Tools and Techniques

Outputs

Project management plan

Performance reviews

Work performance
measurements

Project schedule

Variance analysis

Organizational process assets


updates

Work performance
information

Project management
software

Change requests

Organizational process
assets

Resource leveling

Project management plan


updates

What-if scenario analysis Project document updates


Adjusting leads and lags
Schedule compression
Scheduling tool
8. Bar charts (or Gantt charts) are used to display tasks and their dates in a graphical
fashion. They are used to display information of the type task 1 is scheduled from date A
to date B. Typically the date range is displayed in the X-axis and the tasks on the Y-axis.

Bar charts do not show task dependencies. They are generally used to track progress and
show to the team.
9. Milestone charts are similar to bar charts but display only major events. They display
major milestones (for example bridge design completed). They are used to report status to
Management.
10. Network diagrams are used to display activities and their dependencies. Network
diagrams can be used to perform critical path analysis. Network diagrams can also be
used to perform crashing and fast tracking of the project.
There are two type of network diagrams o Activities on Node (or Precedence)
o Activities on Arrow (or AOA)
Precedence is most commonly used. AON and AOA cannot have loops or conditional
relationships.
11. An activity in a network diagram is displayed as shown below.
Activity name
class="basic"Activity Number Estimate
12. As an example Documentation
2

5 days

13. In the above example Documentation is activity number 2 and is estimated to last 5 days.
14. Precedence (or Activity on Node) diagrams can be used to display four type of
relationship between activities. 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. This is the most common way to represent relationships between
activities.
15. Activity on Array (AOA) network diagrams have the following characteristics.
o AOA only uses Finish-To-Start relationship between tasks.
o PERT and CPM can only be used with AOA.
o Dummy events are shown with dotted lines. They do not take any time. They
show dependencies between tasks.
16. Longest path through the network diagram is called the critical path. The activities on the
critical paths are called critical activities.

17. Lags are inserted waiting times in between tasks. For example Task B cannot start until
three days after task A completes.
18. Slack or Float is the amount of time a task can be delayed without delaying the project.
Tasks on the critical path have zero float.
19. Critical Path Method (CPM) has the following characteristics.
o It uses one time estimate per activity
o It can be drawn only using AOA diagrams
o It can have dummy events
20. Program Evaluation and Review Technique (PERT) has the following characteristics.
o It uses three estimates per activity - optimistic, pessimistic and most likely
o It can be drawn only using AOA diagrams
o It can have dummy events
21. PERT utilizes more information than CPM as it considers the "Pessimistic" and
"Optimistic" values in addition to the "Most Likely" value in its calculations. 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, O is the optimistic estimate and M is the most likely
estimate.
22. GERT is another type of network diagram. It can support looping.
23. If a project has more than one critical paths then the risk to the project increases.
24. Resource levelling refers to keeping the resources same across the duration of the project.

Project Cost Management


This chapter covers key concepts related to Project Cost Management.
1. The knowledge area of Project Cost Management consists of the following processes -

Process

Project Cost Processes


Project Phase

Key Deliverables

Estimate Costs

Planning

Activity Cost Estimates, Basis of


estimates

Determine
Budget

Planning

Cost performance baseline

Control Costs

Monitoring and
Controlling

Work performance measurements

2. Alternative identification process identifies other solutions to an identified problem.


3. Value Analysis approach is used to find more affordable, less costly methods for
accomplishing the same task.
4. The Estimate Costs process takes the following inputs o Scope baseline

Project schedule
Human resource plan
Risk register
Enterprise environmental factors
Organizational process assets
5. Depreciation is technique used to compute the estimated value of any object after few
years. There are three type of depreciation techniques. These are
o Straight line depreciation The same amount is deprecated (reduced) from the
cost each year.
o Double-declining balance - In the first year there is a higher deduction in the
value - twice the amount of straight line. Each year after that the deduction is 40%
less than the previous year.
o Sum of year depreciation - Lets say the life of an object is five years. The total
of one to five is fifteen. In first year we deduce 5/15 from the cost, in second year
we deduce 4/15, and so on.
6. 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. In Parametric Modeling Estimation, you use a mathematical model to make an
estimate. It is of two types.
o Regression Analysis
o
o
o
o
o

is a mathematical model based upon historical information.


Learning Curve model is based upon the principal that the cost per unit
decreases as more work gets completed.
8. Bottom up estimation is same as WBS estimation. It involves estimating each work item
and adding the estimates to get the total project estimate.
9. You can expect five to ten questions related to Earned Value Management. These are
generally pretty simple once you have good understanding of the concepts, and remember
the formulae. These formulae are explained below.
10. Planned Value (PV) refers to what the project should be worth at this point in the
schedule. It is also referred as BCWS (Budgeted Cost of Work Scheduled).
11. Earned Value (EV) is the physical work completed to date and the authorized budget for
that. It is also referred as BCWP (Budgeted Cost of Work Performed).
12. Actual Cost (AC) is the actual amount of money spent so far. It is also referred as
ACWP (Actual Cost of Work Performed).
13. Estimate At Completion (EAC) refers to the estimated total cost of the project at
completion.
14. CPI refers to Cost Performance Index. It is defined as
o

CPI = EV/AC

If CPI is less than 1, this means that the project is over budget.

15. BAC refers to Budget at Completion. It is related to EAC.


EAC = BAC/CPI

16. ETC refers to Estimate to Completion. It is defined as


ETC = EAC - AC

17. CV refers to Cost Variance. It is defined as


CV = EV - AC

18. SV refers to Schedule Variance. It is defined as


SV = EV - PV

Negative cost or schedule variance means that project is behind in cost or schedule.
19. SPI refers to Schedule Performance Index. It is defined as
SPI = EV/PV

20. VAC refers to Variance At Completion. It is defined as


VAC = BAC - EAC

21. The process of Cost budgeting defines time phased cost estimates for the project. For
example, in the first month the project will require $10,000. Cost estimating involves
defining cost estimates for tasks. Cost budgeting defines cost estimates across time.
22. The tools and techniques used for Estimate Costs are o Expert judgment
o Analogous estimating
o Parametric estimating
o Bottom-up estimating
o Three-point estimates
o Reserve analysis
o Cost of quality
o Project Management estimating software
o Vendor bid analysis
23. Cost baseline refers to what is expected to be spent on the project. It is usually an Scurve. That is the expenditure is less in the beginning, and the end. The expenditure is
maximum during the middle of the project.
24. The after project costs are called life cycle costs.

Project Quality Management


This chapter covers key concepts related to Project Quality Management.
1. The knowledge area of Project Quality Management consists of the following processes -

Process
Plan Quality

Quality Management Processes


Project Phase
Planning

Perform Quality Assurance Execution


Perform Quality Control

Key Deliverables

Quality Management Plan,


Quality Metrics
Change Requests

Monitoring and Controlling Quality control measurements

2. The process of Plan Quality includes defining quality requirements of the project and
documenting how the project will ensure compliance. The ITTO of Plan Quality process
are given below.

Inputs

Plan Quality Process


Tools and Techniques

Outputs

Scope baseline

Cost-benefit analysis

Quality management
plan

Stakeholder register

Cost of quality

Quality metrics

Cost performance baseline Control charts

Quality checklists

Schedule baseline

Benchmarking

Process improvement
plan

Risk register

Design of experiments

Project document
updates

Enterprise environmental
factors

Stastical sampling

Organizational process
assets

Flowcharting
Proprietary quality management
methodology
Additional quality planning tools

3. Grade refers to category or rank given to entities having same functional use but different
technical characteristics. As an example, for different grades of hotels, the customers
expectations are different. Poor grade may be acceptable, but poor quality is not.
4. The aim of quality is to ensure "Conformance to requirements" and "fitness for use".

5. Quality Policy defines the company goals and how to adhere to them. This acts as an
input to Quality Planning for a project. Quality Policy is part of Organizational Process
assets.
6. Deming suggested a process of Plan-Do-Check-Act to improve quality. According to
Deming, each process should go through these steps to improve the quality.
7. Kaizen Theory - Apply continuous small improvements to reduce costs and ensure
consistency.
8. Marginal Analysis - You compare the cost of incremental improvements against the
increase in revenue made from quality improvements. Optimal quality is reached when
cost of improvements equals the costs to achieve quality.
9. The value of sigma of Normal Distribution are given below. These are important for the
exam.
Normal Distribution Sigma values
Sigma
Percentage covered
One sigma

68.26%

Two sigma

95.46%

Three sigma 99.73%


Six sigma

99.99%

10. Based on the above table, we can see that in six sigma one out of 10,000 items can have
defects. In three sigma, twenty seven out of 10,000 items can have defects.
11. Giving extras i.e. doing more than the project scope is called gold-plating. PMI does not
recommend gold-plating.
12. Quality must be planned in and not inspected in. Prevention is more important than
inspection.
13. Quality Assurance is done during execution of the project. It includes o Process of evaluating overall performance on a regular basis
o Re-evaluating quality standards
o Quality audits - structured review of quality activities that identify lessons
learned. These lessons learned are used for process improvement.
Perform Quality Assurance involves reviewing the quality requirements and auditing the
results from quality control measurements. Perform Quality Assurance uses data created
during Perform Quality Control.

Inputs

ITTO of Perform Quality Assurance


Tools and Techniques

Outputs

Project management
plan

Plan Quality and Perform Quality


Control tools and techniques

Organizational process
updates

Quality metrics

Quality audits

Change requests

Work performance
information

Process analysis

Project management
plan updates

Quality control
measurements

Project document
updates

14. Perform Quality Control focuses on correctness of work. It includes inspections. The
inputs, tools and techniques and outputs (ITTO) used for Perform Quality Control
process are -

Inputs

ITTO of Perform Quality Control


Tools and Techniques

Outputs

Project management plan

Cause and effect diagram

Quality control measurements

Quality metrics

Control charts

Validated changes

Quality checklists

Flowcharting

Validated deliverables

Work performance
measurements

Histogram

Organizational process assets


updates

Approved change requests

Pareto chart

Change requests

Deliverables

Run chart

Project management plan


updates

Organizational process
assets

Scatter diagram

Project document updates

Statistical Sampling
Inspection
Approved change requests
review
15. In Just-In-Time (JIT) Quality, the amount of inventory is zero. The inputs are made
available, just when they are required. This reduces the storage cost.
16. Rule of seven : In control charts, if there are seven points on one side of mean, then an
assignable cause must be found.
17. The process of Analogous Estimation involves looking at the history of past projects,
and use them to make estimates.

Project HR Management
This chapter covers key concepts related to Project HR Management.
1. The knowledge area of Project HR Management consists of the following processes -

Process

HR Management Processes
Project Phase
Key Deliverables

Develop Human Resource Plan Planning

Human Resource Plan

Acquire Project Team

Execution

Project Staff assignments

Develop Project Team

Execution

Team performance assessments

Manage Project Team

Execution

Change requests

2. Develop Human Resource Plan process involves identifying and documenting project
roles and responsibilities. The table below gives the inputs, tools and techniques, and
Outputs for the Develop Human Resource Plan process Develop Human Resource Plan Process
Inputs
Tools and Techniques
Outputs
Organization charts and
Enterprise environmental factors
Human resource plan
position descriptions
Organizational process assets

Organizational Theory

Activity resource requirements

Networking

3. Acquire project team process involves identifying and obtaining the team necessary to
execute the project. The table below gives the inputs, tools and techniques, and Outputs
for the Acquire project team process -

Inputs

Acquire project team process


Tools and
Techniques

Outputs

Project management plan

Pre-assignment

Project staff assignments

Enterprise environmental
factors

Negotiation

Resource calendars

Organizational process assets

Acquisition

Project management plan


updates

Virtual teams

4. Develop project team process involves improving the competencies of the team members
and improving teamwork between the team. The table below gives the inputs, tools and
techniques, and Outputs for the Develop project team process -

Inputs

Develop project team process


Tools and Techniques

Outputs

Project staff assignment Interpersonal skills

Team performance assessments

Project management
plan

Training

Enterprise environmental factors


updates

Resource calendars

Team-building
activities
Ground rules
Co-location
Recognition and
rewards

5. Responsibility Assignment Matrix (RAM) defines who does what. The Staffing
Management Plan defines when will people get added and removed from the project.
6. A Project Manager may yield authority over the project team in one of the following
ways o Referent - project team knows the PM
o Formal Power - Power due to Project Managers position
o Technical Power - Project Manager has strong technical skills in the projects
domain.
o Coercive Power - The project team is afraid of the power the Project Manager
holds.
7. Conflicts in the team are caused due to the following reasons in decreasing order of
occurrences.
o Schedules
o Project Priorities
o Resources
o Technical Opinions
So the most common cause of conflicts in projects are issues related to schedules.
8. Conflicts are best resolved by those in the team.
9. There are standard conflict resolution techniques available to resolve conflicts. These are
(from best to worst) o Problem Solving or Confrontation (look at the facts, analyze them and find a
solution). This is an example of win-win situation.
o Compromising (Find the middle route). This is an example of loose-loose
situation.
o Withdrawal or Avoidance

Smoothing (Emphasize the agreements)


Forcing (Do it my way). This is an example of win-loose situation.
10. 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, and confirm that the problem is solved.
11. Manage project team process is the process of tracking team member performance and
managing issues within the team. The table below gives the inputs, tools and techniques,
and Outputs for the Manage project team process o
o

Inputs

Manage project team process


Tools and Techniques

Outputs

Project staff assignments

Observation and
conversation

Enterprise environmental factors


updates

Project management plan

Project performance
appraisals

Organizational process assets


updates

Team performance assets Conflict management

Change requests

Performance reports

Issue log

Project management plan updates

Organizational process
assets

Interpersonal skills

12. War room is a technique for team building. As part of this the project team meets in one
room. It helps to create a project identity.
13. Halo Effect is the assumption that because the person is good at a technology, he will be
good as a project manager.
14. There are many organizational theories. Some of the main ones are - Expectancy Theory,
McGregory Theory, Herzberg Theory, Maslow's Hierarchy of needs.
15. Expectancy Theory - People accept to be rewarded for their efforts. This is a motivation
factor. People put in more efforts because they accept to be rewarded for their efforts.
16. McGregory Theory of X and Y - There are two type of employees. Employees of type
X need to be always watched. They cannot be trusted and need to be micro managed.
Employees of type Y, on the other hand, are self-motivated. They can work
independently.
17. Herzberg Theory - Hygiene factors (salary, cleanliness etc.) if not present can destroy
motivation. However good hygiene alone does not improve motivation. What motivates
people is the work itself. The motivation factors for employees include responsibility,
self-actualization, growth, recognition etc.

18. Maslow's Hierarchy of needs - there are various levels of needs for an employee. When
a lower level is met, employee attempts to reach the next higher level. The maximum
satisfaction is achieved when the employee reaches the highest level of satisfaction - selffulfillment. These level of needs from the highest to lowest are
o Self-fulfillment
o Esteem
o Social
o Safety
o Physiology

Project Communication Management


This chapter covers key concepts related to Project Communication Management.
1. The knowledge area of Project Communication Management consists of the following
processes class="basic"Communication Management Processes
Process
Process Group
Key Deliverables
Identify Stakeholders
Initiating
Stakeholders register
Plan Communications

Planning

Communication Management
Plan

Distribute Information

Executing

Organization process
assets updates

Manage Stakeholders
Expectations

Executing

Change requests

Report Performance

Monitoring and
Controlling

Performance Reports

2. Communication Management Plan defines how and when the various stakeholders
receive information, and communicate with each other.
3. Memos, emails are examples of non-formal communication.
4. The total number of communication channels between n stakeholders is n(n-1)/2. So if
there are ten stakeholders in a project, there are 45 channels of communication.
5. The Identify Stakeholders process involves identifying all persons and organizations that
may impact the outcome of project. Project stakeholders may include customers, project
team, project sponsor and other persons involved in the project. During stakeholder
analysis the power and interest of the stakeholders is plotted with Interest on X-axis and
Power on Y-axis. The Inputs, Tools and Techniques, and Output of Identify Stakeholders
process is given below.

Project Charter

Identify Stakeholders
Tools &
Outputs
Techniques
Stakeholder analysis Stakeholder register

Procrement documents

Expert judgment

Inputs

Stakeholder management
strategy

Enterprise environmental
factors
Organizational process assets
6. Plan Communications process involves determining what kind of information should be
shared with which project stakeholder. This is documented in the Communication
management plan. Also documented is how and when the communication needs to be
shared with stakeholders. The Inputs, Tools and Techniques, and Output of Plan
Communications process is given below.

Inputs

Plan Communications Process


Tools & Techniques

Outputs

Stakeholder register

Communication requirements Communications


analysis
management plan

Stakeholder management
strategy

Communication technology

Enterprise environmental
factors

Communication models

Organizational process
assets

Communication methods

Project document updates

7. Throughout the project duration, information is shared with stakeholders as planned. This
sharing of information is part of the Distribute Information process. The Inputs, Tools
and Techniques, and Output of Distribute Information process is given below.

Inputs

Distribute Information
Tools & Techniques

Project management plan Communication methods


Performance reports
Organizational process
assets

Information distribution
tools

Outputs

Organizational process assets


updates

8. As part of the Manage Stakeholder Expectations process, the project manager works with
the stakeholders, understands and addresses their needs and expectations. The Inputs,
Tools and Techniques, and Output of Manage Stakeholder Expectations process is given
below.

Inputs

Manage Stakeholder Expectations Process


Tools & Techniques
Outputs

Stakeholder register

Communication
methods

Organizational process assets


updates

Stakeholder management
strategy

Interpersonal skills

Change requests

Project management plan

Management skills

Project management plan updates

Issue log

Project document updates

Change log
Organizational process assets
9. The Report Performance process involves sharing the project status reports and
measurements with appropriate stakeholders.

Inputs

Report Performance Process


Tools & Techniques

Outputs

Project Management Plan

Variance analysis

Performance reports

Work performance
information

Forecasting methods

Organizational process assets


updates

Work performance
measurements

Communication
methods

Change requests

Budget forecasts

Reporting systems

Organizational process assets

Project Risk Management


This chapter covers key concepts related to Project Risk Management.
1. The knowledge area of Project Risk Management consists of the following processes -

Process

Risk Management Processes


Project Phase

Key Deliverables

Plan Risk Management

Planning

Risk Management Plan

Identify Risks

Planning

Risk register

Perform Qualitative Risk


Analysis

Planning

Risk register updates

Perform Quantitative Risk


Analysis

Planning

Risk register updates

Plan Risk Responses

Planning

Risk related contract


decisions

Monitor and Control Risks

Monitoring and
Controlling

Risk register updates

2. A project risk is a potential source of deviation from the project plan. Project risks can
have a negative or positive impact on the project. Project risks that are negative are called
threats. Project risks that are positive are called opportunities.
3. Responses to threat include -o Reducing the probability of risk
o Developing contingency plans
o Passively accepting consequences.
o Transferring risk
Insurance is an example of transferring risk.
4. Non-critical risks should be documented. They should be revisited and reviewed
regularly.
5. Risks are identified in all phases.
6. Work-around refers to how to handle risks that have occurred but are not part of risk
response plan. This happens in risk monitoring and control phase.
7. Delphi technique is most commonly used to obtain expert opinions on technical issues. It
can be used to get inputs on Scope, Estimates or Risks. Some characteristics of the
Delphi technique are o The experts identities are anonymous. They are not in the same room.
o The PM tries to build a consensus among the experts.

Project Procurement Management


This chapter covers key concepts related to Project Procurement Management.
1. Procurement Management involves getting work done by people outside the project team.
Project Procurement Management includes administering contracts and change control
process to manage contracts or purchase orders. The knowledge area of Project
Procurement Management consists of the following processes -

Process
Plan Procurements

Procurement Management Processes


Project Phase
Key Deliverables
Planning

Procurement Management Plan

Conduct Procurements Execution

Selected Sellers, Procurement contract


award

Administer
Procurements

Monitoring and
Controlling

Change requests

Close Procurements

Closure

Closed procurements

2. The Plan Procurement process involves build versus buy decisions. The Inputs, Tools and
Techniques, and Outputs of Plan Procurement process are listed in the table below.

Inputs
Scope baseline

Plan Procurement process


Tools and
Outputs
Techniques
Make-or-buy analysis Procurement management plan

Requirements documentation

Expert judgment

Procurement statements of
work

Teaming agreements

Contract types

Make-or-buy decisions

Risk register

Procurement documents

Risk-related contract decisions

Source selection criteria

Activity resource requirements

Change requests

Project schedule
Activity cost estimates
Cost performance baseline
Enterprise environmental
factors
Organizational process assets

3. A contract is a formal agreement. It is a legal document biding to both seller and buyer.
Changes to contract must be in writing and formally controlled. Most Governments back
all contracts by providing a court system.
4. The process of Conduct Procurement involves receiving seller responses, selecting a
seller, and awarding a contract. During this process bids or proposals from sellers are
evaluated, and one or more seller is selected to execute the work.

Inputs

Conduct Procurement process


Tools and Techniques

Outputs

Project Management Plan

Bidder conferences

Selected sellers

Procurement documents

Proposal evaluation
techniques

Procurement contract award

Source Selection criteria

Independent estimates

Resource calendars

Qualified seller list

Expert judgment

Change requests

Seller proposals

Advertising

Project management plan


updates

Project documents

Internet search

Project document updates

Make-or-buy decisions

Procurement negotiations

Teaming agreements
Organizational process
assets
5. Sole Source refers to a market condition in which only one qualified seller exists in the
market.
Single Source refers to a market condition in which the company prefers to contract with
only one seller.
Oligopoly refers to a market condition where very few sellers exist, and the action of one
seller will have impact on other seller prizes.
6. Bidder conferences are meetings between buyer and sellers before the bid is submitted.
The conference is used by buyers to provide consistent information to all sellers.

7. The process of Administer Procurement involves managing procurement relationships


and ensuring the seller performance meets the procurement requirements.

Inputs

Administer Procurement process


Tools and Techniques

Outputs

Procurement documents

Contract change control


system

Procurement documentation

Project management plan

Procurement performance
reviews

Organizational assets updates

Contract

Inspection and audits

Change requests

Performance reports

Performance reporting

Project management plan


updates

Approved change requests Payment systems


Work performance
information

Claims administration
Records management system

8. Contract can be used as a risk management tool, as in transferring risk.


9. Centralized Contracting refers to a separate contracting office that handles contracts for
all projects. In De-centralized Contracting a contract administrator is assigned for each
project.
10. Force majeure is a powerful and unexpected event, such as hurricane or other disaster.
11. Privity is contractual information between customer and vendor.
12. The process of Close Procurement involves completing each procurement. The process
involves verifying that all planned work as per the contract has been completed.

Inputs

Close Procurement process


Tools and Techniques

Outputs

Project management plan

Procurement audits

Closed procurements

Procurement
documentation

Negotiated settlements

Organizational process
updates

Records management
system

Code of Professional Ethics


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