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PMP Notes
PMP Notes
1. If NPV is positive, the project is a good choice, unless a better investment opportunity
exists. Select the project with the highest NPV
2. Higher the IRR, the better.
3. Shorter the payback period, the better.
4. Benefit-cost ration > 1 (benefits greater than costs, else the project is not worth it)
5. Opportunity cost is the cost of the project not selected.
6. Law of Diminishing Returns – After a certain point, adding more input will not produce a
proportional increase in productivity.
1. If NPV is positive, the project is a good choice, unless a better investment opportunity
exists. Select the project with the highest NPV
2. Higher the IRR, the better.
3. Shorter the payback period, the better
If a work activity on a project takes longer than estimated, request corrective action to make
up for the delay.
Work Authorization System – Work is only started when a formal authorization is given.
1. Evaluate (assess) the impact of the project to all aspects of the project.
2. Identify options
a. Cut other activities
b. Re-estimate
c. Compress the schedule
i. Crashing
ii. Fast tracking
3. Get the CR approved internally
4. Get customer buy-in